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.

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. Your request for the opinion of this,office is upon substan- ’tilly thefollowing 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 inthis State on a particular motor vehicle, he shall pay a use tax onthat motor vehicle. .- ‘inthe sum of Fifteen Dollars ($15). No certificate’of title oremotor 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 uponsuch motor vehicle. c

It 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 itfor resale only and’not for use; that is, where the car comes from a non-title State, andfor that reason a title I must be obtained by the owner before he sells it to the Deal- !

“You will please advise ifwe 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 Statewhich does not

issue certificates of title, while he is a resident thereof, andwho later brings the car to Texas and / sells it to a Dealer who is purchasing it for resale only. andnotfor use.* Inanswering 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 notfor useis required tobe 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 inyour letter, onewho brings a car into the State for the purpose of sale to a.dealer and notfor use is an importer and gpverned by the

. provisions.of Sections 10. 17, 23, 27, 29, and 30 ofArticle 1436-l. Vernon’s Penal Code. These articles provide respectively as follows:

‘See. 10. The term ‘Used car’ means a motor vehicle thathas been the subject of afirst 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 onform to be prescribed by the Department for each used motor vehiclesbrought into this State for the purpose of sale within this State, and such importer’s certificate must be accompanied by such evidence .oftitle to the motor vehicle as theDepartment 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~gof 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 uponform to be prescribed by the Department for a certificate of title for such motor vehicle..”

‘Sec. 29. No such d~esignatedagent shall issue a receipt for a certificate of title to any used motor vehicle imported into this State for the purpose of saleHon. Robert S. Calvert, page 3 (V-1498)

within this Statewithout deliveryto him by the applicant of animporte~r’s certificate properly assigned by the importer uponform to be prescribed by the Department.” %ec. 30. Before any motor vehicle brought into this Stateby any person, other thana manufacturer or importer, andwhich is required tobe 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 onform tobe prescrfbed by the Department must be made to the designated agent ofthe county wherein the transaction is totake place for a certificate of

‘title, andno 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-

-. ~natedagent that the applic~antis 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 afirst sale, andhence is a used car within the~definitionof,a used car contained in Section 10ofArticle 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 upontheform prescribed by theHighway Department.

Section 29 of tie Article forbids the tax assessorcolle’ctfon from issuing’s certificate of title upontinyused motor vehicle imported into the State for the purpose of sale within the Statewithout delivery by the,applicant of animporter*s certificate properly assigned by the importer upon the form prescribed by the Highway Department. Section 30 of theAct 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 uponthe 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 tobe furnished by the importer, which certificate is required tobe 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, butis requiredc

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 animported car. itwill of course thenbecome subject to the sales tax prescribed by Section 1(a) ofArticle 7047-k. V.C.S.. for the

‘same would then constitute a retail sale as provided for in this sec.tLonofthe taxing act.

Our **answer** to your question is based upon the assumption that no use uponthe 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 thanto 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 uponthe high-

‘ways by him would no longer be animporter within the purview :ofthe A& andwould be governed by the othe~rprovisions of the istatute requirfng registration and obtaining a certificate oftitle tandany sale made by him in the Statewould be a taxable sale and isubject tothe tax imposed by Section 1 (a) ofArticle 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 tobe equal tol.l%of the total consideration paid or tobe paid tothe seller by thebuyer, which consideration shall include the amount paid or tobe 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 theFede~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) ofArticle 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 andbrought

into the State for sale to a dealer and notfor 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 uponthe same basis as a new car, as prescribed by Section 1(a) ofArticle 7047-k. and is

‘not subject to the use tax prescribed by Sections 2 and 5 (a) ofArticle 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,

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