Untitled Texas Attorney General Opinion

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