Untitled Texas Attorney General Opinion

OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN Honorable George H. Sheppard Comptroller of Pub110 AOoounts Austin, Texas Dear Sirr opinion No. o-5163 Ret Applioab The raotsi eet out i request or Uaroh 25, 1943, are, brlerly, these: *se in this State on which it pays the ohaln store tax. le bualmas, sbll- ing its produots to II. It neither owns, independent dealerr. It haa, however, maay or’ thr prcfduote whioh it aells. over the Uealar’e nmae, by the oompany. Suoh lshing euoh oatalogs to has the prirtlege o? order- pan order blanks whioh are er aoospts euoh order, and if fills the sue. In the event oak, he aende it to the nearest the request that the merohandlso be In the event that the dealer aeads ay, the oompany malls the merohandise dlreot to the of the dealer, or dlrsot to the dealer, i if this be req . In neither event does the ouetomer bo- oome lia$l& to the ooapany, but in either event he is lfeble to the dealer through whom he ordered the merohandlso. The dealer, Boweror, la l&&le to the oompany ior all merohsndfse rrhipped through him. The aompany turnlaher the dealer no tinanoiel, oredit or oolleotioa faoflitiesj nor is the dealer under any obligation to purohaae any merohendlee front the oompany. '761 Honorable George H. Sheppard, page 2 Under the foregoing feat situation you request the opinion o? this department es to whethar the oompeny whloh ?urnishea the oatalog to the dealer is liable for the payment OS e ohaln atore tax upon the dealer’s ntore. Seotlon 1 of Artlolo 11116, Vernon’s Texas Penal Gode, known as the Chain Star@ Tax Ian, provides: *That from and after the paneage or this &ot it shell be unlewfw& ?or any parson, agent, reoeirer, tru4t44, rim, corporation, a68ooletioa or copartnership, either torolgn or domestlo, to Operate, maintain, open OT eatabllah any store or meroantila eatabllshment In thla State without first having obtained a lioense 80 to do from the CIomptroller of Publio Aooounte a6 hereinafter provided.” Seotloa 6 o? the same aot provides that: “The prorlsions o? this Aot shell be ooaafrued to apply to every person, agent reoeiver, trauiter, rirm, oorporatlon, oopartnerehip or alisoo i atlon, either daaestio or foreign, which la oontr6lled or held with other8 by majority stook ownerehip or ultlmataly oontrolled or dlrroted by one management or eseooletlon 0r titlmate management.* Under the ieote stated w6 are o? the opinloa that the oompany neither operates, mainte I am, opens nor establisher the storo o? the independent dealer within the terma o? Sootlon 1 quoted above. We are al80 o? the opinion that the oompany neither oontrole or holds with others b majority stook ownorehip, nor ultimately oontrols or direote ?iy one management or aeaoolatlon o? ultimate mauagament the dealerte &ore. Thta being true, the oompanyi o? ooiirae, is not liable for payment of the ohain store tax upon any euoh dealerr’ atoree. la ass'me that your inquiry was prompted by the opinion reoently rendered in tha oeae o? Montgomery, Ward k Company v. State, not yet reported, where the eourt held that order o??loes owned and opertited by the oompany, where goods were shipped upon order OS the ouatomer to the order o??loe for hia aoosptemee or rejeotion, were storea within the meaning of the ohein store tax law. That ease was deolded UPOPthe theory that tie $?ctls:W?'~WN goods paseed et the order o??lae;ldM the sale was therefore made at the order o??ioe, and that therefore the order o??lse aonstl- tutad a atore within the meaning of the term Wjiore* a> 3aZi&ed !P Seotion 7 o? the aot. Ia that oaaa, however, the order o?::loes themselves were owned by the $axpaysr. It 7’62 Honorable George R. Sheppard, page 3 In thia oeae the stores are not owned by the oompany, but by the dealers. The only sales made by the oompany are to the dealers. Suoh sales as are made by the oompany are made from their oompany owned stores and not from the store of the dealer. We are therefore of the opinion that the dealer who maintains and operates the store is the person liable for pey- n4nt of the obain store tax. We rlsh to point out, however, that this opinion is oonrined 4xoluslvely to the taot sltuatlon prraenuod herein. I? there be other faota, not presented to ua, whioh rendor the dealers’ atoms subject to the oontrol of the oompany, then the exiatenoe of such raots might require e di?rerent answer to your qusetloa. Trusting that the above fully anawdrs your inquiry, we are ! . Vary truly your0 ATTORNXY GENERAL OF TEXAS .. Powler Roberts Ass iatant