THEAYTORNEY GENERAL
'OF-WAS
W’ILL WIILSON
*-l-rORNEY GICNERAL
May 23, 1961
Honorable Coke R. Stevenson Opinion No. WW-1067
Administrator
Texas Liquor Control Board Re: Whether a person who solicits
Austin, Texas and takes orders in Texas for
liquor that is stored in a
United States Custom Bonded
warehouse, underthe facts
submitted, is required to pro-
cure a permit under Article 1,
Section 4(a) of the Texas
Li uor Control Act (Article
Dear Mr. Stevenson: 66&(a), V ernon's Penal Code)?
Your request for an opinion reads as follows:
"We are confronted with the following situation.
A person seeks to establish a United States Bonded
Warehouse in the State of Texas for the purpose of
supplying liquor to individual travelers destined for
foreign countries, and for the purpose of supplying
liquor to sea-going vessels, and for the purpose of
exporting liquor. In so doing he expects to avoid
Federal taxes and State taxes on this commodity. To
conduct this business it will, of course, be necessary
for him to solicit and take orders for liquor within
the State of Texas.
"Section &(a) of Article 1 of the Texas Liquor
Control Act provides as follows:
'It shall be unlawful for any person
to manufacture, distill, brew, sell, possess
for the purpose of sale, import into this State,
export from this State, transport, distribute,
warehouse, store, solicit orders for, take
orders for, or,for the purpose of sale to bottle,
rectify, blend, treat, fortify, mix, or process
any liquor in any wet area without first having
procured a permit of the class required for such
privilege.'
Honorable Coke R. Stevenson, Page 2 (hWl067)
"Without raising the question of whether
the tax of the State of Texas may be so avoided
we are of the opinion that this person will violate
the above quoted Section of the Texas Liquor Control
Act if he engages in this business in the State of
Texas without first having procured a proper permit
issued by the Texas Liquor Control Board.
"We respectfully request your valued opinion
on the following question:
"Does a person who solicits and takes orders
in Texas for liquor that is stored in a United States
Custom Bonded warehouse for the purpose of supplying
individual travelers destined for foreign countries or
for the purpose of supplying sea-going vessels or for
the purpose of exportation violate Section 4(a) of
Article 1 of the Texas Liquor Control Act, if he does
so without first having procured a proper permit issued
by the Texas Liquor Control Board?"
The Commerce Clause, Article 1, Section 8, Clause 3 of the
Constitution of the United States, says:
"The Congress shall have power to lay and
collect Taxes, Duties, Imposts and Excises, to pay
the Debts and provide for the common Defense and
general Welfare of the United States; but all
Duties, Imposts and Excises shall be uniform through-
out the United States;
II
. . .
'IToregulate Commerce with foreign Nations, and
among the several States, and with the Indian Tribes."
The Import-Export Clause, Para. 2, Article 1, Section 10,
reads as follows:
I,
D . .
"NO State shall, without the Consent of the
Congress, lay any Imposts or Duties on Imports or
Exports, except what may be absolutely necessary
for executing its inspection Laws; and the net Produce
of all Duties and Imposts, laid by any State on Imports
or Exports, shall be for the Use of the Treasury of the
United States; and all such Laws shall be subject to
the Revision and Control of the Congress.
Honorable Coke R. Stevenson, Page 3 (WW-1067)
I,
. . .1,
Section 2 of the Twenty-First Amendment - Repeal of Prohibi-
tion Amendment - of the Constitution of the United States reads as
follows:
"Section 2. The transportation or importation
into any State, Territory, or possession of the United
States fordelivery or use therein of intoxicating
liquors in violation of the laws thereof, is hereby
prohibited."
The State of Texas has the right to tax or regulate intoxica-
ting beverages moving into or through the State of Texas in the
exercise by the State of Texas of its policepower, Gordon v, Statq,
310 S.W.2d 328 (Tex.Crim. 1956), Judgment Affirmed, 355 U.S. 369,
Rehearing Benied,.,355U.S. 967; Carter v. Vyinia, 321 U.S. 131,
(1944), Affirming 181 Va. 306, 24 S E 2d 56 . Therefore, any
intoxicating beverages moving from ih;!United States Custom Bonded
Warehouse through the State of Texas afterthe importation into the
State of Texas has.been completed, by passing through United States
Customs Inspection or the equivalent thereof, are subject to regula-
tion by the State of Texas.
The U. S. Supreme Court has held that, since the Twenty-First
Amendment, each state has the right to prohibit orregulate the impor-
tation of intoxicating liquors for delivery or use therein unlimited
by the Commerce Clause. Indianapolis Brewing Co. v. Liquor Control
Commission, 305 U.S. 391 (19391. Joseph S. Finch & Co. Y. McKittrick,
Attornev General. 305 U.S, 395 11939).
__.. It has also held that since
the adoption of ihe Twenty-First Amendment the "Equal Protection
Clause" is inapplicable to intoxicating liquors imported into a
state. Mahbney Liquor Control Commission v. Joseph Trinemrp.,
304 U.S. 401 (1938).
While it has been held that the Twenty-First Amendment does
not apply to intoxicating beverages transported through a-state,
Collins v. Yosemite Park & CurrvCo., 304 U.S. 578 (1938), it seems
clear that the Twenty-First Amendment overrides the Commerce Clause
or any other part of the Constitution in conflict with the Twenty-
First Amendment where the intoxi,catingbeverages are imported into
a state fordelivery or use in said state. While the fact that an
item maintains its character as a "foreign import" might remain
important in the determination of the extent of the police powers
of the state, the question of whether~or not an item maintains its
character as an import is not importantto the applicability or
non-applicability of the Twenty-First Amendment since the purpose of
Honorable Coke R. Stevenson, Page 4 (~~-1067)
the Twenty-First Amendment is to allow the regulation and con-
trol of imports by the various states,
In the present case the intoxicating beverages will be
imported into the State of Texas and if delivery or use of said
beverages occures within the State of Texas, the Twez-First
Amendment requires that the laws of the State of Texas be
followed., Under the fact situation which you present for our
consideration you do not state whether delivery or use occurs
within the State of Texas; however, if the ships being supplied
or upon which the individual being supplied travels are within
the territorial bounds of the State of Texas when the beverages
are delivered by the person selling the beverages from the United
States Custom Bonded Warehouse it would seem clear that the State
of Texas has the right to regulate such transaction since it falls
within the area contemplated by the Twenty-First Amendment. If
delivery or use does not OCCUT within the State of Texas, but the
goods are shipped out of the United States without a sale or
delivery occurring and while the goods maintain their character as
a foreign import such transactions would not be subject to regula-
tion by the State of Texas.
In the exercise of its authority to regulate, the State of
Texas is clearly allowed to exact a license fee for the privilege
of importing, possession, distributing, or any other activity
connected with intoxicating beverages. State Board of Equalization
of California v. Young's Market Co., 299 U.S. 59 (1936). In those
areas which Texas has the right to regulate the traffic in liquor,
Texas has done so by the passage of the Texas Liquor Control Act
and any action in the areas mentioned above of a commercial nature
without first procuring a permit of the class required from the
Texas Liquor Control Board would be a violation of the Texas Penal
Code,
SUMMARY
A person who solicits and takes orders in Texas
for liquor that is stored in a United States
Custom Bonded Warehouse, under the facts sub-
mitted, is required to procure a permit under
Article 1, Section 4(a) of the Texas Liquor
Control Act.
Yours very truly,
WILL WILSON
Attorney General of Texas
.
Honorable Coke R. Stevenson, Page 5 (WW-1067)
BY UL\
Cecil Cammack, Jr.-9
Assistant Attorney General
CC:ca
APPROVED:
OPINION COMMITTEE
W. V. Geppert, Chairman
Virgil Pulliam
L. P. Lollor
Maston Courtney
Dudley .McCalla
REVIEWED FOR THE ATTORNEY GENERAL
BY: Morgan Nesbitt
Untitled Texas Attorney General Opinion
Combined Opinion