Untitled Texas Attorney General Opinion

. . 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$) of the total considerationpaid or to be paid for said vehicle at said retail sale. The tax shall be the obliga+,< ' tlon of and be pald by the perscin,firm or aorporai tlon operating said motor vehicle upon,the public highways to this State. "Article V(1) of Article 7359a (Vernon'sCivil Statutes) provides for a credit under certain Instances. Article V(1) reads as follows: -1177- Hon. Robert S. Calvert, page 2 (M-241) "Each purchaser liable for a use tax on tangible personal property shall be entitled to full credit for the combined amount or amounts of legally lmpos~edsales or use taxes. pa~ldby h3m with respect to the same property to another state and any subdivisionthereof. Thencredit shaIl,be .eppIiedfirst against the amount of eny use:4x$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 -118&