. .
TRIE .L-ITNBRNEY GENERAL
OF TEXAS
AKXWX-IN, -l-lzxAs 78711
June 5, 1968
Honorable Robert S. Calvert OpInIonNo. M-241
Comptrollerof Public Accounts
State Capitol Eulldlng Re: Applicabilityof credit
Austin, Texas provision of Article 7359a,
V.C.S. to mator vehicle use
taxes Imposed by Article,
Dear Mr. Calvert: 6.01(2), Taxatio++eneral
Your letter requesting the opinion of this office on the above
question reada as follows:
"The Comptrollerhereby request8 your official
opinion regarding the application of the Motor Vehlole
Sales and vaseTax, Chapter 6, Title 122A, Taxatlon-
General, Texas Civil Statutes, as amended, 1925. Article
6.01.(2) and (3) (Taxation-General)provide for a use tax
upon any person bringing a motor vehicle into the State
for use upon the public highways. Article 6.01(2) reads
as follows:
"There Is hereby levied a use tax upon
every motor vehicle purchased at retail sale
outside this State and brought into this State
for use upon the public highways by any person,
firm or corporationwho is a resident pf this
State or who is domiciled or doing business in
this State. The tax Imposed by this subsection.
shall be equal to two per cent (2$) of the total
considerationpaid or to be paid for said vehicle
at said retail sale. The tax shall be the obliga+,< '
tlon of and be pald by the perscin,firm or aorporai
tlon operating said motor vehicle upon,the public
highways to this State.
"Article V(1) of Article 7359a (Vernon'sCivil Statutes)
provides for a credit under certain Instances. Article V(1)
reads as follows:
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Hon. Robert S. Calvert, page 2 (M-241)
"Each purchaser liable for a use tax on
tangible personal property shall be entitled
to full credit for the combined amount or
amounts of legally lmpos~edsales or use taxes.
pa~ldby h3m with respect to the same property
to another state and any subdivisionthereof.
Thencredit shaIl,be .eppIiedfirst against the
amount of eny use:4x$xdue.'
thenstate.~
end wiy unused
portion of the c.redltshall be then applied
against the amount of any use tax due a sub-
division.
"Under the above~prov~lslon,la the person who
has paid a e-alestaxin. another &ate on the,,purchase
of a motor vehicle entitled to,,a.
credit aga-lnstthe
Texas tax on.the use.of~,themotor vehicle In this
State. SecoMIy, is-the person entitled to the same
credit against the u~setaxlevied by Article 6.01(3)
which reads~as follows:~
"There is herebyylevieda use tax In the
sum of Fifteen DoLIars-(.$15)upon anyperson
making application for the initial certificate.
of title on a motor. vehicle which wes previously~
registered In hls~name-,.inany other .Stste,or
foreign cauntry.' It ls'the-purpoa~~of-this,-sub--
section to lmpoee a.uee~~tax upon motor vehicles
brought into this State .by~newresidents of this
Stete.",-(perenthes~ls-ou-rb)’
At the outset we note that the two taxes imposed by sub-
sections (2) and (3) of Article 6.01 are alternative in the,,ser8@e
that if one tax Is lmposed, then the other tax Is not lmpoeed~.
By Section 1 of Article 7359a, the State of Texas adopted~
the Multistate Tax Compact, which became effective In Texas
June 13, 1967. One of the express purposes of the Compact, es
set out In Article I, is to avoid duplicativetaxation. While
some provisions of~the Compact apply only to tax situations ln-
volving states which are parties to the Compact, paragraph 1 of
Article V of the Compact Is not so limited.
Paragraph 7 of Article II of the Compact defines "sales tax"
and paragraph 8 further provides:
. .
Hon. Robert S. Calvert, page 3 (~-241)
"'Use tax' means a nonrecurringtax, other than
a sales tax, which (a) is Imposed on or with respect
to the exercise or enjoyment of any right or power
‘overtangible personal property incident to the owner-
shla, possession or custody of that property or the
leading of the property from another including any
consumption,keeping, retention, or other use of
tangible personal property and (b) is complementary
to a sales tax."
The taxes Imposed by subsections (2) and (3) of Article 6.01
clearly are use tslxeswith-the definition just quoted. Inasmuch
as subsection (1) of Article 6.01 l&es a tax upon every retail
sale of every motor vehicle sold In Texas, the use taxes levi&d
by the next two subsectionsare complementaryto a sales tax.
Paragraph (b)!of Article XI of the Compact provides: -
"Nothing In this compact shall be construed to:
II
. . .
to ar#! tax or fixed f&i Imposed for
the r.$~tr%% of a motor vehicle or any tax on motor
fuel, other than a sales tax. . .'
While Article 6.04 directs Texas county tax collectors to
refuse to accept for registrationor transfer any motes?vehicle
until the tax Imposed by Article 6.01 Is paid, we are of the
opinion that this does not ,havethe,effect of converting the
use tax Imposed by Article 6.01 Into a "ta$ or fixed fee imposed
for the registrationof a motor vehicle" within the meaning of
that term as used in the Compact. The statutory construction
applicable In such a case requires a strict coryltructlonagainst
the taxing authority and a liberal constructionin favor of ,the
$axpayeti. Texas Unemployment ComoensationComm. vs. Bass, 137
Tex. 1, 151 S.W.2d 567 (1941). This conclusion is prompted first
by the fact that Texas law Imposes other and separate.feesfor 6
certificatesof title and registration. Secondly, Article XII
of the Compact direct? that It shall be liberally construed so
as to effectuate Its purposes, one of which Is, as noted above,
to avoid duplicative taxation. Furthermore,a constructiondf
a statute authorizing double taxation should not be adopted
unless the la uage used admits of no other construction. 54'
Tex.Jur.%?d13?F, Sec. 21, Taxation, and cases cited. In the event
-1179-
Hon. Robert 9. Calvert, page 4 (~-241)
it be contended that Article 6.01 conflictswith the Compact Law
In Article 7359a, the Compact Law will prevail to the extent of
any conflict. State BX rel Dyer vs. Slma; 341 U.S. 522 (1951).
In answer to your specific questions,we are of the opinion
that the credit provided for In paragraph 1 of Article V of Article
7359a should be allowed to a person who as a purchaser has paid
legally imposed stilesor uge taxes on a motor vehicle to another
state and thereafterbecom&s subject to the tax imposed by either
subsection (2) or subseotlon (3) of Articl& 6.01.
SUMMARY
The credit provided for In paragraph 1 o,fArticle V
of Article 7359a, Vernon's Civil Statutes, should,be
allowed to a person who as a purchaser has paid legally-
Imposed sales or use taxes on a motor vehicle to another
state and thereafterbecomes subject to the tax Imposed
by either subsection (2) or subsection (3) of Article
6.01, Taxation-General.
very truly,
:p+==
MARTIN
neral of Texas
Prepared by Nell Williams
Assistant Attorney Qeneral
APPROVED:
OPINION COMMITTEE
,
Hawthorne Phillips, Chairman
Kerns Taylor, Co-Chairman
Narlo Q. Ob$edo
Ben Harrison
Robert C. Crouch
Charles Rose
A. J. CARUBBI, JR.
Executive Assistant
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