Auk an. TEXAS 

August 7, 1952 

. . i 

Hon. Robert S. Calvert Opinion No. V-1498 

Comptrolle~r of Public Accounts 

Austin, Texas Re: Applicability of the $15.00 

motor vehicle use tax to a 

vehicle brought into this, 

,Dear Mr. Calvert: 

State from a non-title State 

and sold to a dealer for resale. 

. 

1 

‘. Your request for the opinion of this, office is upon substan- 

’ tilly the following facts: 

-* 

?-Iouse Bill No. 285, ,Section VII, Motor Vehicle Sales Tax, 

-Section 2 (b) reads as follows: 

‘(b) When a person makes application for the initial 

certificate of title in this State on a particular motor 

vehicle, he shall pay a use tax on that motor vehicle. .- 

‘in the sum of Fifteen Dollars ($15). No certificate’of 

title ore motor vehicle registration for such motor 

vehicle shall be issued until the use tax imposed by 

this subsection has been paid. However, a parson is 

.not liable for the ~tax imposed by this subsection if the 

sales or use tax i posed by any other provision of 

this Act has been previously paid upon such motor 

vehicle. It c is the urpose of this subsection to impose 

a use tax upon motor vehicles brought into this State 

by.new residents of this State.’ 

*The Automobile Dealers Association has questioned the instructions given by this Department to the Tax AssessorCollectors. in regard to the collection of the $15.00 use tax. 

. We have said it. must be paid on a motor vehicle purchased 

by a person while a resident of another State who later brings 

the car to Texas and sells it to a Texas Dealer who is purchasing it for resale only and’not for use; that is, where the 

car comes from a non-title State, and for that reason a title 

I must be obtained by the owner before he sells it to the Deal- 

! 

“You will please advise if we have correctly construed the 

law, in that the tax of $15.00 should be paid on a car pur- 
. 

I 

I - 

644. 

Hon. Robert S. Calvert, page 2 (V-1498) 

, 

chased by a person in another State which does not 

issue certificates of title, while he is a resident 

thereof, and who later brings the car to Texas and / 

sells it to a Dealer who is purchasing it for resale 

only. and not for use.* 

In answering your question we must first determine 

whether or not a car brought into thii State by a nonresident 

for the purpose of sale to a dealer and not for useis required 

to be registered and a certificate of title obtained as a prerequisite to making the sale to the ‘dealer. We have reached the 

conclusion that, under the admitted facts presented in your letter, one who brings a car into the State for the purpose of sale 

to a.dealer and not for use is an importer and gpverned by the 

. provisions.of Sections 10. 17, 23, 27, 29, and 30 of Article 1436-l. 

Vernon’s Penal Code. These articles provide respectively as 

follows: 

‘See. 10. The term ‘Used car’ means a motor 

vehicle that has been the subject of a first sale whether 

witbin this State or elsewhere.” 

: ‘Sec. 17. The term ‘Importer’ means any person, 

except a manufactur,er. who brings any used motor 

vehicle into this State for the purpose of sale within 

this State. * 

*Sec. 23. The term ‘Importer’s kertiiicate’ means 

the certificate on form to be prescribed by the Department for each used motor vehicles brought into this State 

for the purpose of sale within this State, and such importer’s certificate must be accompanied by such evidence .of title to the motor vehicle as the Department 

may, from time to time, require in order to show a 

good title and the names and addresses of mortgagees.” 

*&cc. 27. Before selling or disposfn~g of any motor 

vehicle required to be registe’red or licensed in this 

State on any highway or public place within this State, 

except with dea1e.r.s metal or cardboard license number thereto attached as now provided by law, the owner shall make application to the designated agent in 

the county of his domicile upon form to be prescribed 

by the Department for a certificate of title for such 

motor vehicle..” 

‘Sec. 29. No such d~esignated agent shall issue a 

receipt for a certificate of title to any used motor vehicle imported into this State for the purpose of sale 
Hon. Robert S. Calvert, page 3 (V-1498) 

within this State without deliveryto him by the applicant of an importe~r’s certificate properly assigned 

by the importer upon form to be prescribed by the 

Department.” 

%ec. 30. Before any motor vehicle brought into 

this State by any person, other than a manufacturer or 

importer, and which is required to be regfstered or 

licensed within this State, can be bargained, sold, 

transferred, or delivered with intent to pass any interest therein or encumber by any lien, application 

on form to be prescrfbed by the Department must be 

made to the designated agent of the county wherein 

the transaction is to take place for a certificate of 

‘title, and no such designated agent shall issue a receipt ~unttl and unless the applicant shall deliver to * 

him such evidence of title as shall satisfy the desig- 

-. ~nated agent that the applic~ant is the owner of such 

‘motorvehicle, and that the same is free of liens except such as may be disclosed on an affidavit inform 

e to be prescribed by the Department.’ 

Such a car has been subject to a first sale, and hence 

is a used car within the ~definition of, a used car contained in 

Section 10 of Article 1436-1. A person bringing such a car into 

the State is, under the definition of Section 17, an importer. An 

importer is required as a prerequisite to making a sale in this 

State to comply with Section 23 of the Act by obtaining an importer’s certificate upon the form prescribed by the Highway 

Department. 

Section 29 of tie Article forbids the tax assessorcolle’ctfon from issuing’s certificate of title upon tiny used 

motor vehicle imported into the State for the purpose of sale 

within the State without delivery by the ,applicant of an importer*s certificate properly assigned by the importer upon 

the form prescribed by the Highway Department. Section 30 

of the Act exempts from the reqnirement of registration a used 

_~ car brought into the State by an importer for the purpose of 

sale and not for use by the importer upon the highways. 

All that’is required of a person bringing a used car 

from without the State into the State for the purpose of sale to 

a dealer is that the importer secure an importer’s certificate 

with the necessary information prescribed by the Department 

to be furnished by the importer, which certificate is required 

to be assigned to the purchaser or dealer. In other words, an 

importer is not required to register the car as a necessary 

prerequisite to making the sale to the dealer, but is required 
c 

h 

Hon. Robert S. Calvert, page 4 (V-1498) 

to deliver and~assign to the dealer, the purchaser, the proper 

importer’s certificate when he makes the~sale. 

When the dealer makes a sale of such an imported 

car. it will of course then become subject to the sales tax 

prescribed by Section 1 (a) of Article 7047-k. V.C.S.. for the 

‘same would then constitute a retail sale as provided for in 

this sec.tLon of the taxing act. 

Our answer to your question is based upon the assumption that no use upon the highways of this State is made by the 

importer prior to sale to the dealer except such as necessary 

for delivery to the dealer by the importer. If, however, the importer makes any use of the highways in the imported motor 

vehicle other than to deliver it to the’dealer, such use would 

subject the importer to liability for registration and the neces- 

: sfty of obtaining a certificate of title. ‘The owner of a used 

motor vehicle brought into this State and used upon the high- 

‘ways by him would no longer be an importer within the purview 

: of the A& and would be governed by the othe~r provisions of the 

istatute requirfng registration and obtaining a certificate of title 

tand any sale made by him in the State would be a taxable sale and 

isubject to the tax imposed by Section 1 (a) of Article 7047-k, V.C.S., 

which provides as follows: 

‘Section 1. (a) ,There is hereby levied a tax upon 

every retaii sale of every’motor vehicle sold in this 

State, s~uch tax to be equal tol.l%of the total consideration paid or to be paid to the seller by the buyer, which 

consideration shall include the amount paid or to be paid 

from said motor vehicle and all accessories attached 

‘thereto at the time of the sale, whether such consideration be in the nature of cash, credit, or exchange of other 

property, or a combination of these. In the event the consideration received by the seller includes any tax imposed by the Fede~ral Government, then such Federal tax 

shall be deducted from such consideration for the purpose 

of computing the amount of tax levied by this Article upon 

such retail sale.’ (Emphasis added.) 

The problem will be more easily understood by the simple 

statement that a car imported into this State under an importer’s 

ce’rtificate and sold to a dealer for resale and not for use occupies 

the same status in so far as registration and taxes are concerned 

as a new car in the hands of the dealer. Upon sale by the dealer 

of’such an imported car it becomes subject to registration and 

totbe sales tax provided in Section 1 (a) of Article 7047-k, supra. 

The use tax prescribed in Sections 2 and 5a of Article 7047-k has 

no application to such transaction. 
- 

Hon. Robert S. Calvert, page 5’(V-1498) 

SUMMARY 

, 

A car purchased outside the State and brought 

into the State for sale to a dealer and not for use is 

an imported car, and the owner must procure and 

assign.to the dealer an importer’s certificate as a 

necessary prerequisite to making the sale. Such a 

car is not required to be registered nor the sales 

tax paid tbereon by the importer, but the car must 

be registered and the sales tax paid when it is sold 

by the dealer upon the same basis as a new car, as 

prescribed by Section 1 (a) of Article 7047-k. and is 

‘not subject to the use tax prescribed by Sections 2 

and 5 (a) of Article 7047-k. The use tax has no application to such sale. 

Yours very truly, 

APPROVED: PRICE DANIEL 

* Attorney General 

.W. V. Genoert 

Taxation -Division 

E. Jacobson 

Reviewing Assistant 

Charles D. Mathews 

First Assistant 

BY Xc2G-J 

- L. % Lollar 

Assistant, 

LPL mm