THE ATTORNEYGENERAL
ow TEXAS
February 17, 1960
Honorable Robert S. Calvert Opinion No. VW-801
Comptroller of Public Accounts
Capitol Station Re: What aales or use tax,
Austin, Texas if any, is levied where
a motor vehicle manu-
facturer leases vehicles
which it has produced to
its own employees within
this State, without options
Dear Mr. Calvert: to purchase?
Your letter requesting our opinion upon the above question
reads in part as follows:
“Ford Motor Company as requested informa-
tion regarding their tax status In the State
of Texas under the following circumstances.
Ford Motor Company, an automobile manufacturer,
Is contemplating leasing automobiles of their
own manufacture to certain company employees.
The company, located outside the State of Texas, ,,
would lease and register the vehicle, stand
responsible for its mainttnance and repair,
in return for a stipulated monthly rental paid
directly to the company by the lessee-employee
located in the Stat2 of Texas. The lease would
not contain an option to purchase.
“Question: What tax, if any, should the tax
assessor-collector levy on a vehicle owned by
a vehicle manufacturer and leased to a company
employee to be used in the State of Texas,
with no option to sell? Who would be liable .
for the tax? Where should it be paid?”
It Is our conclusion that no sales or zse tax is due upon
such a transaction.
Chapter 6 Title 122A-Taxation-General (H.B. 11, 56th
Leg., 3rd C.S.1 provides for retail sales and use taxes upon
motor vehicles. Article 6.01 levies a tax u on every retail
sale (as defined in Article 6.05 (1) and (2), ‘i of a motor vehicle
in this State. Article 6.03 levies a use tax upon every motor
vehicle purchased at retail sale olltside the State and bra-ught
Honorable Robert S. Calvtrt, Page 2 Opinion No. m-801
into the State for use by a resident or by a person, firm, or
corporation domiciled or doing business in the State. Neither
of these Articles apply in the present situation because no
retail sale, tither within or without the State, has occurred.
See Attorney General’s Opinions Nos. O-3583 and V-1044.
Article 6.04 levies a “New Resident Use Tax” upon any
person making application for the initial certificate of title
to a vehicle In this State. While no sale Is required for this
Article to operate, still the Legislature has clearly expressed
its intent as to the scope of the provision by the closing
sentence, which reads : “It Is the purpose of this Subsection
to impose a use tax upon motor vehicles brought into this State
by Sew residents of? this State." Neither the lessor nor the
lessee in the present case are new residents of the State;
therefore, this Article is likewise inapplicable.
Our conclusion makes it unnecessary to consider the second
and third parts of your question.
This opinion is, of courst, limited to the specific fact
situation presented; that is, tht bona fide leasing of stlf-
produced vehiclts by a manufacturer to Its own employees within
the Statt, the employees having no option to purchase and title
remaining In the manufacturer. Any departure from these facts
might product a dlffertnt rtsult. Set Attornty General’s Opinion
No. WW-711.
SUMMARY
Where a manufacturer of motor vehicles
leases vehicles which It has productd to its own
employees wlthln this State, rttainlng title,
with no option to purchast in the lessees, then
no retail salts or use tax is due upon such
leasing under Chapter 6, Titlt 122A-Taxatlon-
General, R.C.S.
Your8 very truly,
WILL WILSON
APPROVED: Attorney, General of Texas
OPINION COMMITTEE:
W. V. Geppert, Chairman
W. R. Scruggs
B. H. Tlmmlns, Jr.
Linward Shivtrs
Martin DtSttfano JRI:cm
REVIEWEDFOR THR ATTORRRY
GXWERAL
By: