“PlHR Li oxc~E:Y GENEKAE
OFTEXAS
GERALD C. MANN
X-B
AlTORNEY DB!xu*HAI.
Honorable George H. Sheppard
Comptroller of Public Accounts
Austin, Texas
Dear Sir: Opinion No. o-3486
,Re: Use tax levied by Article 6,
House Bill 8, Forty-seventh
Lsgislature. ~
In your letter of August 12, 1941, you request the opinion
of this department in response to three questions, viz:
"1. If owners of commercial vehicle whose resident and home
office Is in N. M. brings truck to Texas for purpose of
commercial hauling for an unspecified length of time and
applies for Texas License for that purpose, is he due to
pay the 1% use tax, if so on what basas do we compute same,
as the truok may be six years old or three months old.
*2. If a resident of N. M. and has been a resident for
either thirty daysor three years and moves to Texas and
applies for Texas lioense and the fact may be that he bought
his car either, before May lst, 1941, or sinae that date, is
he due to pay a use tax If so on what bases to be figured,
“3. If individual, firm or corporation doing business in
another State such as Major Oil Companies, brings a car into
Texas either permanently or for a period of time and applies
for Texas License, is he due to pay the 1% use tax, If so
what bases are tax to be computed on."
Section 1 of Article 6, H. B. 8, &Tth'Leg., levies a tax
upon all sales of motor vehicles sold in this state, the tax
being 1% of the sales price. Then Section 2 thereof provides:
"Sec. 2. There is hereby levied a use tax upon every motor
vehicle purchased at retail sale outside of this state and
brought into this State for use upon the public highways
thereof by a resident of this State or byfirms or
corporations domiciled or doing business in this State. such
tax shall be equal to one (1) per cent of the total con-
sideration paid or to be paid for said vehicle at said retail
sale. The tax shall be the obli,sation of and be paid by the
- .
Honorable George H. Sheppard, Page 2, o-3486
person, fimn, or corporation operating said motor vehicle
upon thepublic highways of this State."
While the use tax is levied by Section-2 against (1)
residents of this State, (2) firms and corporationsdomiciled
in this State, and (3) firms and corporations doing business
in this State, it makes no levy of the tax against an indivi-
dual person who is a non-resident of Texas, although doing
business in this atate. For, an individual person is neither
a corporation nor a firm. 10 Tex. Jur. 5’86; Bodson vs.
Warren Hdw. Co., 162 S, W. 952; our opinion No. o-3545. SO
far asyour first question relates to an individual person,
our answer is that no use tax is due.
As respects firms and corporations our answer to such question
is a partially different one. As already noted the tax is
levied against a firm or corporation doing business in this
State, which has purchased a motor vehicle outside the State
and brings the same into this State for use upon the public
highways. This would apply to a foreign corporation or a
firm domiciled outside this State. As to vehicles purchased
since May 1, 19419 the effedtive date of H. B. 8, our answer
to your first question, as it relates to firms and corporations,
is that the tax is due. The statute provides only one measure
of the tax, which is one per cent of the purchase price of the
car. 'The tax must be computed on that basis.
We have reached the conclusion, however, that when the vehicle
was purchased prior to May 1, 1941p the use tax is not due.
We have heretofore held that Section 1, levying the tax on
sales made within the State, does not apply a,a to sales made
prior to the effective date of H. B. 89 although not registered
until after that time. Opfnion No. O-3495.
The use tax levied in Section 2 is compensatory to the sales tax
levied by Section 1. One of Its effects must be that retail
ssll,ers,.in Texas will be helped to compete upon terms of
equality with retail dealers in other states who are exempt
from a sales tax or any corresponding burden. Another effect,
or at least another tendency, must be to avoid the drain upon
the revenues of the State, buyers not being tempted to place
their orders in other states in the effort to escape payment
of the tax on local sales. Similar compensating tax statutes
have been sustained by thecourts, but in all suchcases that we
have found where the statute was sustained the court was able to
point out and did po!lnt out and emphasize the fact that the
complementary tax was fair and non-discriminatory. Henneford
vs. sil-it*Mason Co., 81 L, Ed. 814> 300 U.S. 577; State vs. Pope,
195 23. 346, La.; Williamsburg Power Plant Corp. vs. City of
. -
Honorable George H. Sheppard, Page 3, O-3486
New York, 7. N. Y. 5. (2) 326, aff. 20 N. E. (2d) 12. See
also, Vancouver Oil Co. vs. nenneford, 49 Pac. (2) 14, Wash.;
Nat'1 Linen Ser. Corp. vs. state Tax Corn., 186 So. 78, Ala.;
Sonneborn vs. Keeling, 67 L. Ed. 1095, 262 U. S. 50 k ; Douglas
Aircraft Co. vs. Johnson,, 90 Pac. (2) 572, Cal.; Continental
Supply Co. vs. People, 88 Pac. (2) 488, Wyo.
The principle of equality would demand that the tax levied
in Section 2 should not operate as to vehicles purchased
prior to the effective date of the Act, since Section 1, the
portion of the Act to which Section 2 is complementary, does
not apply to vehicles purchased prior to that date. we believe
that Section 2 is susceptible of that construction and we do
so construe it.
We gather that your second question relates only to a private
individual. For reasons sufficiently appearing above we answer
that question in this way: if this person's Change of domicile
precedes his application for the car license he will be
required to pay the use tax, if he has purchased the vehicle
on or since May 1, 1941. If he is a non-resident at the time
of application he may register without paying the tax. In
any event he may register his car without paying the use tax,
if he purchased it prior to May 1, 1941. The measure of the
tax is one per cent of the price he paid for the car.
We presume that your third question has reference to persons
resident in this State and to firms and corporations domiciled
or doing business in this State. If so, the answer is: the
tax will be due as to vehicles purchased on or after May 1,
1941, but not as to those acquired before that date. In those
cases where the tax is due it will be based on the price paid
for the vehicle by the applicant.
Our answer to your fifth question in our opinion No. O-3519
had reference to individual persons only, not to firms or
corporations domiciled or doing business in this State.
Yours very truly
ATTORNEY GENERAL OF TEXAS
APPROVED AUG. 22,1941 s/ Glenn R. Lewis
s/ Gerald C. Mann
ATTORNEY GENERAL OF TEXAS 3~
Glenn R. Lewis
Assistant
GRL:ej/cg Approved Opinion Committee
BY JHS, Chairman
Untitled Texas Attorney General Opinion
Combined Opinion