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