- ;.
Hon. Robert S. Calvert Opinion No. W-365
Comptroller of Public Accounts
Capitol Station Re: Is the tax levied by
Austin 11, Texas Article 7047-l appli-
cable: To tne sale of
all three of these Items,
that Is, speakers, ampli-
fiers, and tuners when
sold as a single unit?
Dear Mr. Calvert: And related questions.
You request the opinion of this office upon the
above-captioned matter. House Bill 630 of the Regular
Session of the Fifty-fourth Legislature, presently codified
as Article 7047L-1 of Vernon's Civil Statutes, imposes a
tax upon the sale, distribution and use of radio and tele-
vision sets in this State in the following language:
"Sec. 2. (a) There is hereby levied
and shall be collected and paid upon the
sale, distribution, or use of radios and
television sets in this State an excise
tax equal to two and two-tenths per cent
(2.2%) of the retail sale price of each
such radio or television set sold, distrl-
buted or used in Texas.
"Every retailer who makes a sale or
distribution of a radio or television set
in Texas to the user shall add the amount
of said tax to the selling price which
said tax shall be collected from the pur-
chaser or recipient of such radio or tele-
vision set at the time of such sale or
distribution, and said tax shall be reported
and paid to the State of Texas at the time
and in the manner hereinafter provided. . .'
Radios and televisions are defined for the purpose
of the Act as follows:
"(a) 'Radios' shall mean the apparatus
Hon. Robert S. Calvert, page 2 (wW-3f5)
or devices commonly known and sold as radios
or radio receiving sets and shall include any
instrument, apparatus or mechanical contrivance
constructed, assembled or designed to receive
oral, musical and similar sound broadcasts
transmitted by radio broadcasting stations.
"(b) 'Television Sets' shall mean the
apparatus or devices commonly known and sold
as television sets or TV sets, and shall in-
clude any instrument, apparatus or mechanical
contrivance constructed, assembled or designed
to receive television broadcasts transmitted
or projected to such sets by television broad-
casting stations or systems."
This tax is collected by the retailer but paid by
the purchaser. Retailer is defined by the Statute in the
following language:
"(c) 'Retailer' shall mean and include
every person in this State who manufactures,
produces, or in any other manner acquires
or possesses radios and television sets for
the purpose of making a resale, use, or dis-
tribution of the same in this State to the
user, and it shall also include every person
in this State who ships, transports or im-
ports any radio or television set into this
State and makes the first distribution of,
use by, or sale to the user of same in this
State."
You request us.to advise you specifically if the
tax Is owing under the circumstances contained in your
letter of December 5, 1957, from which we quote as follows:
"We are experiencing some difficulty
in administering H.B. 630, Acts of the
Regular Session of the 9th Legislature,
in determining the application of the tax
to sales of certain items now referred to
in the industry as 'Hi Fi.' Hi Fi, among
other things, consists of speakers, audio-
amplifiers, and electronic tuners. Each
of these items or components is a separate
unconnected unit. No two of the units can
receive and reproduce a broadcast signal.
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Hon. Robert S. Calvert, page 3 (~~-3651
It takes all three unit6 to accomplish that
result, and even ,a11three units cannot do
so without being oonnected and Installed
together; No sales of television sets nor
radio sets in the usual sense are involved
in these questions. The tuner nould operate
with a pairof headphones and reoeive both
standard and FM broadcasts.
11
. . . I shall thank you to answer the
following questions: Is the tax levied by
Article 7047-l applicable:
"(a) To the sale of all three of these
items, that is, speakersj amplifiere, and
tuners when sold as a single unit?
"(b) Is the tax applicable to the sale
of all three of these items when sold to-
gether and Installed as a unit?
"(c) Is the tax applicable to the sale
of only one or two of these items when sold
separately?
"(d) Is the tax applicable to the sale
of the tuner (which can receive by the ad-
ditional headphone,but cannot reproduce)
with one of the other items?"
The tax accrues upon the first sale made in this
State of radios and television sets, We must,,therefore,
determine, if under the various conditions mentioned in
your letter, if a radio or television set is comprehended
within the statutory definition of these terms. The defini-
tions of radios and televisions, as set out in the Statute
are substantially in accord with the generally accepted
meaning of these terms as understood by the publid generally.
"Radios" or "radio reoeiving sets" are interchangeable and
synonymous terms, and so are "televisions" and "television
receiving sets", and no tax is due unless there is a sale
of a radio or a radio receiving set or a television or
television receiving set as defined by Statute&
The purchaser of speakers and amplifiers in single
items, is in no sense the purchaser of a radio or television
set within the purview of the statutory definition.
Hon. Robert S. Calvert, page,4 (W-365)
We, therefore, answer,in the negative your question
in subsection (a), except as to "tuners held to be taxable
in answer to subsection (d)";
For the same reason we answer subdivision (b) in
the negative, unless the respective parts are assembled by
the retailer or seller into a radio or television set and
sold and purchased as a completed unit.
For the same reason we answer subdivision (c) in
the negative.
Upon the facts submitted by you, we hold that a
"tuner" is taxable because it is within the statutory defi-
nition of a radio. It is capable of receiving sound and is
a unit when purchased. The only thing necessary to be added
is an amplifier, but without an amplifier under the facts
submitted it is capable of recelvlng through earphones.
The amplifier only adds to the volume of the sound. We,
therefore, answer subdivision (d) in the affirmative.
A short answer to your questions (a), (b), and
(c) is that none of-the component parts, such as speakers,
amplifiers, etc., purchased separately constitute a radio
or radio receiving set or a television or television re-
ceiving set, hence are not taxable.
Neither is a tax applicable unless,the purchase
embraces a completed unit capable of receiving sound from
a radio transmission station or capable of receiving sound
and video from a television transmission station.
The tax is imposed upon the sale of completed
radlo and television sets and not upon the,manufacture or
assembling of the parts so as to constitute a complete
radio or television set.
We pass next to that part of your opinion request
pertaining to the installation of High Fidelity music system
by contractors in the building of homes. For clearness we
quote your question, as follows:
"A High Fidelity music system is in-
stalled by a contractor in the building
of a home and includes the aforementioned
component parts and alsoincludes phono-
graph reproducing equipment or a TV chassis.
Hon. Robert S. Calvert, page 5 (W-365)
"(a) What portion, if any of this equip-
ment is taxable; and when and where does the
tax accrue?"
From the facts submitted by you, it appears that
the contractor installs a completed radio or television
set in the building constructed by him for the owner and
obviously makes a charge therefor, and this regardless of
whether it be what is commonly referred to as a turnkey
job or upon a cost plus basis or in whatever manner the
contractor is paid. The contractor makes a retail sale
of a radio or television set which under the Statute is
taxable.
There is no exemption found in the Statute cover-
ing radio and television sets installed by a contractor in
a house as is true with radios in"t
3 alled in automobiles upon
which a tax has been paid (Article 7047k V.C.S.). It must
be assumed that the Legislature incorporated in the Act all
of the exemptions it intended. The price charged for such
radio or television set installed by a contractor in a
building should not be too difficult to ascertain, and
when ascertained the gross receipts tax, as provided in
the Statute, is imposed thereon, the same to be paid by
the purchaser to the contractor who in turn should make
proper accounting for the fax to t:ieSt;t:~.
SUMMARP
The purchaser of separate componen'
parts necessary to complete or 'build
a radio or television set is cc; sib-
ject to the Gross Receipts t.~.x?.ri&)sed
upon the sales of radio OI :2i.:?~:!
,.,:-on
sets under Article 70&7L-1 i'.i'.S,,for
the reason there is no sa.1.e
r;,?a radio
or television set as defined in the
Statute. The tax is upon the sale of
radio and television sets and not upon
the manufacture or assembling of the
parts into a radio or television set.
Under the facts submitted a "tuner"
is a complete radio set because it is
capable of receiving sound and the
addition of an amplifier is merely
for the purpose of increasing the
volume of the sound.
Hon. Robert S. Calvert, page 6 (W-365)
A radio or television set installed
by a contractor in a building is
subject to the gross receipts tax
imposed upon the retail sales of
radios and televisions as defined
by the Statute. The tax is owing
by the owner of the building as
the purchaser and should be collect-
ed by the contractor and accounted
for by him to the State.
Very truly yours
WILL WILSON
Attorney General of Texas
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By:
Assistant Attorney General
LPL:gs
APPROVED:
OPINION COMMITTEE
George P. Blackburn, Chairman
J. Mark McLaughlin
Ralph Rash
F. C. Jack Goodman
REVIEWED FOR THE ATTORNEY GENERAI,
BY W. V. GEPPERT