_-
R-124
AWLWIN ~s.Texae
PRICE DANIEL
.4TTORNEYGmiER‘4l
February 21, 1947
Honorable George H. Sheppard
Comptroller of Public Accounts
Austin, Texas Opinion No. V-36
Re: Liability for the
one (1) per cent
Motor Vehicle Re-
tail Sales Tax
levied by Art. 7047k,
,V.A.C.S,, where motor
vehicles owned by a
partnership are trans-
ferred to the oorpora-
tion.
Dear Sir:
IOU have requested the opinion OS this Depert-
ment on the above-captioned question based upon the Sol-
lowing factual situations:
(I) W. B. Kline and hia wife as partners have
formed a corporation known as Pridgen-Kline Company, Ine,
with a capital stock of $100,000, of’which W, B. Kline
owns 499 shares, his wife Louella P. Kline, owns 499
8hare8, and W. R. Carruth and L. 0, Jenkins each own one
share, the latter two stockholders not being members OS
the former partnership0 Motor vehicles formerly owned
by the partnership of a book cost OS #25,990,40 and of a
depreciated value OS )7,699!22 have been transferred by
the partnership members to the corporation for a consid-
eration paid or exchanged by the corporation of $7,669,22,
(2) In the second situation E. G. Morrison and
F. D, Breedlove, a partnership, have Sormed'a corporation
known as Morrison Br08~ Construction Company with a capi-
tal stock of $50,000.00 OS which B. C. Morrison owns 74
shares, F, D. Breedlove owns 24 shares, and Yr, Morrisonps
wife and Mr. Kline's wiSe each own one share, the respec-
tive wives not being member8 of the former partnership0
The partnershin owned redo118 motor vehicles of the book
value of #53,607,04 with an original, cost value OS
$80,075U920 The corporation purchased from the partner-
ship all fixed assets, except real estate for a cash down
.
-1
Honorable George B. Sheppard, Page 2 (V-36)
payment and a chattel mortgage note for the balance of
the book value of the ffxed assets. No stock ws8 fssu-
ed for the value of any vehicles-
The pertinent parts of Artids 7047k, V.A.C.S.,
being Acts 1941, 47th Legislature, Page 269, Chapter 184,
Article VI s are as Sollows:
“Section l-(a) There is hereby levied
a tax upon evtiry retail sale of every motor
vehicle sold in this State, such tax to be
equal to one (1) per cent of the total consid-
eration paid, or to be paid to the seller by
the buyer, which consideration shall include
the amount paid or to be paid for said motor
vehicle and all accessories attached thereto
at the time of the sale, whether such consid-
eration be in the nature of cash, aredit, @r
ej;Trsz?T-other property, or a combination
rf-theseT-- In the event the consideration re-
GgTy the seller includes any tax imposed
by the Federal Government, then such Federal
tax shall be deducted fyu-ur:,such consideratfon
for the purpose of compui;ing the amount of tax
levied by this Article upon such retail salt
“Section 2 u There is hereby levied a use
tax upon every motor vehicle purchased at re-
tail sale outsid~e of this State and brought in-
to thl.s %tste for use u.pum thi: public bfnhways
thereof by a resident :,I’ t,nis State or by firms
or corporati.ons domiciled !>r doins business in
this State* Su@h tax shall be equal to one (1)
per cent of the total consideration paid or to
(.,.~..
p,e__paid ._, _ ,.~(
Pm
.- ...__.“ ,I,~,m~~‘xj’&~j~v~j
~.%&~t
.,._-.9 H’
.-.jTret pj1 1 sale,
The tnx ShR*i bc~ i;i;& etLigati3n of e3,T-d
by the person: firm, or cornorstion operating
said mot,or vrbicle upon the public hiphways of
this State..
‘Y,ection 3,(a) The term psalcs or ssalesi
as herein used shall Elude instalment and
credit sales s and the exchange of property, as
weli as the sale thereof for mone
Ztransaction-EiXZZ5.u~ ----M&i
a 57 e
iCtTTiii%EZFy’~“~~CG pas sessi?Tii of property is
transferred but the seller retains title as
security for t~he payment of the price shall be
deemed a sale.,” (Emphasis ours) E
.-.
_..
Honorable George H. Sheppard, Page 3 (V-36)
Under each of the foregoing statements of
fact,, whiah are based upon information obtnined from
each of the corporations, there has been a salb as
defined in Section 3(a) above, since the .motor vehicles
In each case were sold to the corporation? by the part-
nerships either~for money or by .an erchann .EEi~
under th.e worditnx of the statut~e anmhxne oer
cent tax levied gy Section l(a) of Article 7047k should
be paid by ench of the pnrtnershlps upon the value cl
the motor vehicles sold to the respective corp0ratSnn.s.
The amount of taxes to be allocated to each vehfcle
should be ascertained from the books and reaords ,of ea’oh
of the corporations.
Under the eiven facts, where corporation
acquired motor vehicles from partnership for
A consideration as defined in Article 7047k,
V.A.C.S., the tax as prescribed ln said article
must be psid~ by the seller,
Yours very truly
ATTORNEYGENERALOF TEXAS
BY @Y@d
c, K,. ‘Rf@herds
Assistant
CKR/l h: j rb
Untitled Texas Attorney General Opinion
Combined Opinion