The Attorney General of Texas
June 12, 1980
MARKWHITE
Attorney General
Honorable Bob Bullock Opinion No. NW-195
Comptroller of Public Accounts
LBJ State Office Build@ Re: Sales tax exemption for in-
Austin, Texas 78744 dustrial development corporations
or medical development corpora-
Honorable Gerald R. Brown tions.
Executive Director
Texas Industrial Commission
Box 12728, Capitol Station
Austin, Texas 78711
Gentlemen:
You tive asked whether tangible personal property purchased by an
industrial development corporation or medical development corporation is
subject to sales and use tax if:
1. the property is to be Incorporated into a project
to be leased or sold to non-exempt persons or
organizations, or
2. the property is to be used in constructing a
project to be leased or sold to non-exempt
persons or organizations?
If the answer to these questions is yes, Mr. Brown pases three
additional questions. Authority to create and administer industrial and
medical development corporations is found in the Development Corporation
A& of 1979, article 5190.6, V.T.C.S. Section 32 of the Act provides in
pertinent part that “. . .the corporation, all properties at any time owned by
it, the income therefrom, and all bonds issued by it, their transfer, and the
income therefrom shall be exempt from all taxation by the state.”
(Emphasis added). -
You suggest that the answer may be affected by MW-94 (1979) which
involved sales tax exemption for property leased by an exempt organization
to a non-exempt commercial entity. That opinion, however, involved
construction of article 20.04(Y), Taxation-General, which required that the
property be improved -for an exempt organization. There is no such
p. 631
Honorable Bob Bullock &
Honorable Gerald R. Brown - Page Two (MW-195)
requirement in section 32 of article 5190.6, V.T.C.S., which simply exempts the
corporation from all taxation. In light of the specific statutory exemption, we believe
property purchased by an industrial development corporation is not stiject to the sales
and use tax even though the property may be sold or leased to a non-exempt organization.
You have not asked and we do not make any determination on exemptions under any other
taxes.
Since the answer to both questions is in the negative, we need not address Mr.
Brown’s questions.
SUMMARY
Tangible personal property purchased by an industrial development
corporation or medical development corporation is exempt from
the sales and use tax.
Very truly yours,
Attorney General of Texas
JOHN IV. FAINTER, JR.
First Assistant Attorney General
TED L. HARTLEY
Executive Assistant Attorney General
Prepared by Bob Gammage &
C. Robert Heath
Assistant Attorneys General
APPROVED:
OPINION COMMITTEE
C. Robert Heath, Chairman
Jon Bible
Bob Gammage
Susan Garrison
Rick Gilpin
Myra McDaniel
p. 632