No direct taxes were levied by any of the revolutionary governmental bodies, because of the delay involved in their establishment and operation, the state of confusion existing in the country, and the inchoate condition of land titles.2 Upon the establishment of the permanent government improved conditions made the adoption of a system of direct taxation practicable, and Kennedy, the Englishman, writing in 1841, felt justified in saying that Texas had "set the example of resorting to direct in preference to indirect taxation."3

The act of June 12, 1837, which was the first direct tax measure, provided simply that an ad valorem tax of 1/2 of 1% should be levied on all "real, personal, or mixed" property.4 It was especially provided, however, that cattle and horses belonging to citizens of the United States should pay $1 per head.5 The act of May 24, 1838, enumerated the property that should be subject to the direct tax, and the list included only land, slaves, horses over two in number, cattle over twenty-five in number, watches, clocks, and pleasure carriages.6 The rate remained at 1/2 of 1%. In 1839 land certificates were singled out for specific taxes, the amount varying with the quantity of land.1 Up to 1840 the only specific taxes levied were those on live stock belonging to non-residents, and land certificates. In 1840, however, this method of taxation was very much extended. Only land, buildings in towns, and money loaned, became subject to ad valorem rates, while upon slaves, livestock, pleasure carriages, watches, and clocks there were levied specific taxes. Merchandise was reached by a tax on sales, and merchants were subject also to license taxes, as were hotel, restaurant, and boarding-house keepers, liquor dealers, and owners of billiard tables, nine-pin alleys, and games of such kind. The ad valorem rate was 1/2 of 1% on land whose owners were citizens of the republic, and 1% on land whose owners were nonresidents and on land held by an agent or attorney for another.2 For the remainder of the period of the republic, the practice of enumerating the property that was subject to taxation and imposing ad valorem rates on real property and specific rates on personal property was followed. The notable act of February 5, 1842, departed from the rule only in making pleasure carriages subject to an ad valorem instead of a specific rate. Besides imposing a tax of $3 per year on each horse kept exclusively for racing, and reducing considerably all rates, this act also adopted a curiously variable ad valorem rate. In the acts of 1837 and 1840 the ad valorem rate was the same on all kinds of property, except where the land was held by non-residents or by agents or attorneys. The act of 1842, however, levied a rate of 1/10 of 1% on land owned by residents, 1/5 of 1% on that owned by nonresidents, 1/4 of 1% on town lots and improvements and money loaned at interest, and 1/2 of 1% on pleasure carriages.1

1 It is not possible to state separately how much was derived from tonnage dues and how much from other charges for the period ending-January 1, 1846. The receipts from these sources for other years are not separated from customs receipts, and the latter are vitiated, therefore, to the amount of the former.

2 Art. 20 of the "Plan and Powers of the Provisional Government" provides that the governor and council shall have the power to adopt a system to meet the exigencies of the country. Gammel, op. cit., vol. 1, p. 909.

3 History of Texas, vol. 2, p. 363.

4 Sec. 1; Gammel, op. cit., vol. 1, p. 1319.

5 Sec. 7. This was repealed by the act of January 16, 1840, but was restored by the act of February 3, 1845.

6 Sec. 8; Gammel, op. cit., vol. 1, p. 1514.

1 These certificates represented the right to the location of land. The specific taxes levied were: on a certificate for less than 640 acres, $1; for 640 acres and less than 1280, $2; for 1280 acres and less than one-third of a league, $3; for one-third of a league and less than one league, $4; for one league and labor, $5. Act of January 26, 1839, sec. 8; ibid., vol. 2, p. 141.

2 Act of January 16, 1840; ibid., pp. 183-202. The property subject to specific taxes was as follows: Each horse kept exclusively for riding, $10; for riding or carriage, $1; every stud or jack, the price of a stand; all other horses and mules, except four each for every farmer or laboring man, 25 cents a head; cattle over twenty-five in number, 10 cents a head; pleasure carriages, $1 for each wheel; slaves under fifteen years of age, $1 per head; slaves between fifteen and fifty years of age, $3; slaves over fifty years, $2; gold watches, $3 each; silver watches, $1; clocks with metal works, $3; clocks with other than metal works, $1; every pack of playing cards sold, given away, loaned or otherwise disposed of, $3. The practice of discriminating against land held by an agent was begun by the act of January 26, 1839, which imposed a double tax on it; ibid., p. 140.

As is to be seen from the preceding account, considerable property was exempt from taxation. The act of 1837 included all property, but in that of 1838 only those things were subject which were enumerated, and improvements upon land, household and kitchen furniture, wearing apparel, and all that is understood as intangibles, were omitted from the enumeration. In the act of January 16, 1840, improvements upon land in towns were made taxable, but those upon 'agricultural lands, and other property not specifically set forth in the act, were expressly exempted.2 From 1838 to 1845 livestock below a certain number were exempted, and in 1841 one saddle horse became tax free to each member of a volunteer company organized in certain frontier counties.3 It was the practice also from 1839 to exempt the property of colleges and universities either for five years or for an undefined period.4 It was not until 1845, however, that legal exemption of property held for religious purposes was made.5