Honorable George H. Sheppard
"48kaptroller of Public Accounts
Austin, Texas
Dear Sir: Opiniin No. O-37 2
Re: uFomobile ales Tax levied
byArticle VI of House Bill
No. 8, Forty-seventh Legis-
lature.
In your letter of June 23, 1941, you request our
opinion in response to the follcwing three questions:
"Should the one per cent tax bo'paid on a
new motor vehicle registered by the dealer in
the company's name, such as Johnson Motor Com-
pany where said motor vehicle is to be used for
demonstration purposes?
"Would the tax be payable on a second hand
motorvehicle registered in the dealer's name
fcr demonstration purposes where said motor ve-
hicle had been purchased by the dealerin a
trade; that is, where he traded another motor
vehicle to John Doe for the total consideration
of $1,000,$500 of the amount being in cash and
the. eachsnge of John Doe's motor vehicle having
a value of $500. John Doe's traded-in car be-
in,g the one registered by the dealer for demon-
stration purposes."
i In connectionwith your first two questions it
is noted that you do not give us any information concerning
what consideration, if any, passes in connection with the
transactions inquired about. The tax levied by Article VI
of House Bill No. 8, Forty-seventh Legislature, is a tax
equal to one per cent of the tctal consideraticn paid or to
be paiN to the seller by the buyer. In Section 3(b) it is
provided that "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 ex-
clusive purpose of resale and not for use.e We answer your
Honorable George H. Sheppard, page 2 O-3742
:.-@!&stquestion by saying that if Johnson Motor Company pur-
chases the automobile in question the tax will have to be
paid. The vehicle has not been acquired for the exclusive
purpose of resale but is to be used for a time for demon-
stration purposes, that is in the business of the Johnson
Motor Company, before it is sold by the latter. However,
if the company which the Johnson Motor Company represents
furnishes this demonstration car without requiring the latter
to pay for the same there will be no tax due. Your second
question is answered in the same way. Clearly the vehicle
is not acquired for the exclusive purpose of resale and the
tax will be due if a consideration passes in connection with
the transfer.
In connection with your third question rye direct
attenticn to Section 1 (b) providing that "in all cases of
retail sales involving the exchange of motor vehicles the
party transferring the title to the motor vehicle having the
greater value shall be considered the seller and nc tax is
imposed upon the transfer of a motor vehicle traded-in upon
the purchase price of some other motor vehicle." The traded-
in vehicle mentioned in your third questicn is thus expressly
taken out of the operation of the taxing statute. The use
to which it may be ,put is immaterial. That question is answer-
ed in the negative.
Yours very truly
ATTORNEY GENERAL OF TEXAS
BY Glenn R. Lewis
Assistant
GRL:LM/-pam
APPROVED JIJL 11, 1941
GROVER SELLERS
FIRST ASSISTANT
ATTORNEM GENERAL
APPROVED OPINION COMMITTEE
BY BWB, CHAIRMAN
Untitled Texas Attorney General Opinion
Combined Opinion