October 20, 1955
Hon. Robert S. Calvert Opinion No. S-178
Comptroller of Pubiic Accounts
State of Texas Re: Interpretation of Chapter
Austin, Texas 522, Acts of the 54th Legis-
lature, 1955, levying excise
taxes and requiring permits
in connection with the sale
Dear Mr. Calvert: of radios and television sets.
You have directed our attention to House Bill No. 630
(Ch. 522, Acts 54th Leg., R.S., 1955, p. 1607). stating that your de-
partment is having difficulty in interpreting Sections l(e) and 2(a),
and have submitted to us for our opinion the following questions:
“Will a Distributor be required to qualify as a
Retailer and be liable for the tax herein provided
for a Retailer if said Distributor shall sell a radio
or television set to any person not, holding a valid
permit as required by this Act?
“Section 2(a) provides: ‘that the tax imposed
herein shall not apply to radios installed in new mo-
tor vehicles upon which a tax imposed by Chapter
184, Article VI, Acts of the Regular Session of the
Forty-Seventh Legislature, as amended, has been
paid or is required to be paid.’ Will this tax app!y
to Radios sold to be installed in New Cars or Used
r Cars? Will Car Dealers be required to secure a
. retailer’s permit?
i
“A concern manufactures and sells a bicycle
with a radio attached. This bicycle and radto are
sold as a single unit. Would this sale be taxable?
If so, would the tax be based on the value of the
radio or on the total value of the sale? ”
Section l(e) of H. B. No. 630 reads as follows:
” ‘Distributor’ shall mean and include every
person other than a retailer who engages in the
Hon. Robert S. Calvert, Rage 2 (Opinion No. S-178)
business of distributing or selling radios and/or
television sets within this State. If any distributor
shall sell, use or distribute a radio or television
set as a gift, award or reward to any personnot
holding a valid permit as required by this Act,
said distributor shall qualify as a retailer arid be
liable for and shall be requ’ired to pay over to the
State of Texas, at the time ‘and%in the manner here-
in provided for a retailer, the tax on such radio
and television set.” .’
A careful reading of this section gives the interprTetati&
that the words “gift, award or reward” limit or restrict the mean-.
jng of the word “sell” to apply only where the sale was made for
the purpose of a gift, award or reward. Therefore, it is our opin-
ion that% distributor who sells, uses or distributes a radio or
te~levision set to any person not holding a retailer’s permit for use
as a ~glft, award or reward, and not for resak, must qualify as a
retailer and be liable for the tax thereon, but s\rchTrequirement
does not apply in the case of a distributor who sells to any person
for the purpose of resale.
Chapter 184, Article VI, Acts of the Regular Session of
th 47th. Legislature, as amended, has been codified as Article
704R. Vernon’s Civil Statutes. Section la of Article 7047k pro-
vides for a tax upon every retail sale of every motor vehicle sold
in this State, such ta% to be equal to 1.1 percent of the total,con-
sideration paid or to be paid to the seller by the buyer, which con-
sideration shall include the amount paid or to be paid for said
motor vehicle and all accessories, iuhicb would include radios,
attached thereto at the time of sale. Section 2a of H. 8. 630 ex-
empta from taxation radios installed ln new cars on which a motor
vehicle retail sales tax has been OF is required to be paid. It is
our opinion that the tax levied under H. B. 630 applies to retail
Saks of uninstalled car radios which are sold for installation in
a’motor vehicle aft er the time of the first retail sale of the vehi-
cle. It is our further opinion that car dealers who make such
retail sales of car radios will be required to secure a retailer’s
permit under the provisions of Section 5(a) of H. B. 630.
You point out that a concern is manufacturing a bicycle
with a radio attached and that the bicycle and radio are sold as a
single unit. It is our opinion that the value of the radio separate
and apart from the value of the bicycle should be ascertained and
the tax provided for in H. 8. 630 should be levied on the ascer-
tained value of the radio alone.
Bon. Robert S. Calvert, page 3 (Opinion NO. 8-178)
1
SUMMARY
..
A distributor who seils, uses or distributes a
radio or television set to any person not holding a
retailer’s permit for use ‘asa gift, award or reward,
and not for resale, must qualify as a retailer and be
luble for the tax thereon, but such’requirement
does not apply in the case of a distributor who sell,
to any person for the purpose of resale. B. B. 630,
Ch. 522, Acts 54th Leg., R.S.‘, 1955, p. 1607.
~The tax levied under the provisions of H. B. 630
applies to retail sales of uninstalled car radios which
are sold for installation in a motor vehicle after the
time of the first retail sale of the vehicle. scar dealers
who make such retail sales of car radios will be re-
quired to secure a .retailer’s permit under the provi-
sions of Section 5(a) of H. .B. 650.~
The tax-levied by H. B. 630 would,apply only to
the value of the radio attached to a bicycle,
I’
Yours very truly,
APPROVED:
JOHN BEN S,+PPERD
L. P. Lollar
Taxation Division
Mary K. Wall
Reviewer L. W. Gray
Assistant
William W. Guild
Reviewer
‘Davis Grant
.Special Reviewer
Will D. Davfs
Special Reviewer
Robert S. Trotti
First Assistant
John Ben Shepperd
Attorney General