Hon. Robert S. Calvert opinion No. ww-338
Comptroller of Public Accounts
Capitol Station Re: Whether the Hotor Vehicle
Austin, Texas Sales Tax levied by
Article 7047K, V.C.S.,
applies where an auto-
mobile dealer secures
a motor vehicle from a
manufacturerto be used
by a salesman for demon-
stration purposes when
no considerationIs
Dear Mr. Calvert: involved?
In your letter request you submit to us the following
question:
"Where an automobile dealer has secured
a vehicle from the manufacturerand has the
manufacturer'scertificateand wishes to let
a salesman have the vehicle to use for demon-
stration purposes, and no considerationwas
Involved,would the tax be due?"
Section 3 (b) of Article 7047K, V.C.S., provides:
"The term 'retail sale' or 'retail sales'
as herein used shall Include all sales of motor
vehicles except those whereby the purchaser
acquires a motor vehicle for the exclusive
purpose of resale and not for use."
Article 7OJ+7Konly levies the tax upon a "sale" of
a motor vehicle. If the transfer of the motor vehicle to the
automobile dealer constitutesa "sale" the tax will apply as
,you state the motor vehicle Is to be used for "demonstration
purposes." The dealer did not acquire same for the exclusive
purpose of resale, but acquired It-for use, that Is for use
as a demonstrator. Attorney General's Opinion O-3742. How-
ever, you state that "no considerationwas involved." This
being true there was not a "sale" involved. Even if the
transactioncould be ,termeda sale, no tax would be due for
Hon. Robert S. Calvert,, page 2 (~~-338)
the simple reason that 1.1s of the sale price--whichIs
nothing--amountsto a tax of .OOOO.
SUMMARY
The motor vehicle sales tax levied by
Artlole 7047K, V.C.S., does not apply
to transactionswhere an automobile
dealer, without a consideration,acquires
a motor vehicle from a manufacturer to
be used as a demonstrator.
Yours very truly,
WILL WILSON
Attorney Qeneral of Texas
W. V. GCeppert
Assistant
wvff:gs
APPROVED:
OPINION COMMITTEE
Qeo. P. Blackburn, Chairman
J. C. Davis, Jr.
Milton Richardson
Leonard Passmore
REVIEWEDBOR THE ATTORNEYGENF3AL
BY
James N. Ludlum