TIHE A'ITORNEY GENERAL
OP?%ZXAS
Auwrr~. T-s 78711
July 1, 1975
The Honorable Joe Resweber Opinion No. H- 639
~Harrie County Attorney
Harris County Courthouse Re: Whether the rtate and
Houaton, Texan 77002 local sales tax must be collected
on items sold to inmates of the
Harris County Jail and Harris
County RehabilitQtion Center
from commirraries located at
each facility.
Dear Mr. Resweber:
You have asked for our opinion as to whether commissaries,located
within, the Harrio County Jail and the Harris County Rehabilitation Center
muat collect the state and local sales tax on items sold to the iamates of
theoe facilities. You explain the operation of the commirsaries aa follows:
These commissaries operate independently and auton-
omously at each location. The Humble Rehabilitation
Center is outside the boundaries of the City of Houston,
and not in any other city, while the Downtown Jail is in
the City of Houston. The items sold in both are what
would normally be expected, .cigarettes, soft drinks,
candies, coneumables, toiletries, and other such
items which might be normally subject to sales tax.
Sales are made only to inmates and not to anyone
else. Each commissary is individually responsible
for its own purchasing and stocking. Any proceeds
from such sales beyond those needed for re-stocking
are applied to the purchase of amenities which would
otherwise not be available, for the exclusive use land
benefit of those legally confined in the detention center
or jail.
p. 2811
The Honorable Joe Resweber - Page 2 (H-639)
Your question concerns only the applicability of the tax laws to the
sales made by the Commissaries and not the legal status of the Commissaries
otherwise. Attorney General Opinion C-67 (1963) held that the Sheriff of
Tarrant County might supply necessary articles to prisoners “at cost” but
that a profit making commissary in the Tarrant County jail was unauthorized,
Since you have advised us that any proceeds above the cost of maintaining an
inventory are used to supply amenities which wculd otherwise,be unavailable
to prisoners and which the county is not otherwise obligated to provide; we
assume without deciding that Attorney General Opinion C-67 is inappiicable
in this case.
Article 20.02, Taxation-General, imposes a statewide, “limited
sales tax at the rate of four percent (4%) on the receipts from the sale at
retail of all taxable items. . . ” which are subject to taxation under the
Limited Sales, Excis’e and Use Tax Act, -articles 20.01 et seq, Taxation-
General.
Articles 1066c, V. T. C. S., known as the “Local Sales and Use Tax
Act”, imposes a local sales tax “of one percent (1%) on the receipts from
the sale at retail of all taxabie items within any city adopting such tax which
items are subject to taxation by the State of, Texas under the Limited Sales,
Excise and Use Tax Act. ” Sec. 2B, art. 1066~. The City of Houston has
adopted the local tax.
The retailer or seller of the items taxable under either Act is
responsible for the collection of the tax or taxes at the time of the sale.
Article 20.021 of the Limited Sales, Excise and Use Tax and section 6A of
the Local Sales and Use Tax Act.
Exemptions from the imposition of either the state or local tax are
contained in article 20.04 of the Limited Sales, Excise and Use Tax Act, and
it is necessary to consider if the commissariesfall within any of the exemp-
tions.
It sho.uld.firat, be observed, that, while sales to a county and, other
political subdivisim of the State are exempt from the%position of the sales
tax, article 20.04, subsection (H)(4), sales by a county or ,other political
subdivision are not exempted from the tax under any provision of article
20.04.
p, 2812
. -
The Honorable Joe Resweber - Page 3 (H-639)
However, another exemption, found in subsection (F) (3), has been
applied to jail commissaries by the Comptroller of Texaa, the state officer
charged with administering the state and local sales tax laws. This provision
exempto!
.’ Meals and food products (including soft drinks and
candy) for human consumption when served to patients
and inmates of hospitals ‘and other institutions
licensed by the State for the care of human beings.
Jails are authorized by state statute and the Texas State Department
of Health is empowered to insure compliance with the statutory sanitation and
health provisions applicable to jails. V. T. C. S., art. 5115. And the word
“license” is defined by Webster’s Third New International Dictionary (1967)
as “a right or permission granted.in accordance with law by a competent
authority to engage in some business or occupation, to do some act, or to
engage in some transaction . . . ‘0 a definition that could apply to the
operation of a jail. Also see House Bill 272 enacted by the 64th Legislature
(1975).
Where the meaning of a statute is doubtful, the construction placed
on it by the officer or ageney charged with administering the statute is entitled
to weight. Calvert v. Kadane, 427 S. W. 2d 605 (Tex. Sup. 1968). As noted
above, the Comptroller of Texas is empowered to administer the sales tax
and has interpreted the exemption contained in subsection F(3) by memorandum,
dated May 26, 1974, to E. J. Castillo, Director of Field Operations for the
Comptroller from Fred Russ, Director of the Comptroller’s Sales Tax
Division. The memorandum provided in part:
It is requested that you have each District Office check
with the county jails in the State to determine if commis-
saries are operating and making taxable sales to inmates.
If such sales are made and a tax is not charged on taxable
items sold, the commissary tpgst’secure a permit, poet
bond and pay tax due, penalty and interest for prior’quarters.
. . .
Food items including soft drinks and candy are exempt from
the tax under Article 20.04 (F)(3).
p. 2813
I -
The Honorable Joe Resweber - Page 4 (H-639)
We adopt the Comptroller’s interpretation of the applicability of the
sales tax as applied to jail commiaaaries.
Accordingly, the commissaries involved must collect the state wide
sales tax as levied by the Limited Sales, Exdre and Use Tax Act on all items
sold except food items including soft drinkr and candy. In addition, the Harris
County Jail, which ia located in the City of Houston, must collect the city sales
tax imposed by the Local Sales and Use Tax Act. However, the Rehabilitation
Center, not being located within Houston, need not collect the city sales tax
since the place of the sale determines whether a tax is due. V. T. C. S., art.
1066c, section 6B(l).
S’UMMARY
The commissary of the Harris County jail must collect
the state and city sales tax on all items sold except for
food, soft drinks and candy. The commissary of the
County Rehabilitation Center must collect the state sales
tax on all items sold except food, soft drinks and candy,
but need not collect the city sales tax.
Very truly youxr,
u Attorney General of Texas
rst Assistants
Opinion Committee
jwb
p. 2814