“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 consideration 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 

in this State, 

and corporationsdomiciled 

in this State, 

and (3) firms and corporations doing business 

it makes no levy of the tax against an individual person who is a non-resident of Texas, although doing 

business in this atate. 

a corporation nor a firm. 

For, an individual person is neither 

10 Tex. 

Warren Hdw. Co., 

Jur. 5’86; Bodson vs. 

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. 

since May 1, 

As to vehicles purchased 

19419 the effedtive date of H. B. 8, our answer 

to your first question, 

is that the tax is due. 

as it relates to firms and corporations, 

The 

of the tax, 

statute provides only one measure 

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., 

195 23. 346, La.; 

81 L, Ed. 814> 300 U.S. 577; State vs. 

Williamsburg Power Plant Corp. vs. City of 

Pope, 
. - 

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. 

Sonneborn vs. Keeling, 67 L. Ed. 1095, 262 U. S. k 

78, Ala.; 

50 ; 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