THEAYTORNEY GENERAL 

'OF-WAS 

W’ILL WIILSON 

*-l-rORNEY GICNERAL 

May 23, 1961 

Honorable Coke R. Stevenson 

Administrator 

Texas Liquor Control Board 

Austin, Texas 

Dear Mr. Stevenson: 

Opinion No. WW-1067 

Re: Whether a person who solicits 

and takes orders in Texas for 

liquor that is stored in a 

United States Custom Bonded 

warehouse, underthe facts 

submitted, is required to procure a permit under Article 1, 

Section 4(a) of the Texas 

Li uor Control Act (Article 

66&(a), V ernon's Penal Code)? 

Your request for an opinion reads as follows: 

"We are confronted with the following situation. 

A person seeks to establish a United States Bonded 

Warehouse in the State of Texas for the purpose of 

supplying liquor to individual travelers destined for 

foreign countries, and for the purpose of supplying 

liquor to sea-going vessels, and for the purpose of 

exporting liquor. In so doing he expects to avoid 

Federal taxes and State taxes on this commodity. To 

conduct this business it will, of course, be necessary 

for him to solicit and take orders for liquor within 

the State of Texas. 

"Section &(a) of Article 1 of the Texas Liquor 

Control Act provides as follows: 

'It shall be unlawful for any person 

to manufacture, distill, brew, sell, possess 

for the purpose of sale, import into this State, 

export from this State, transport, distribute, 

warehouse, store, solicit orders for, take 

orders for, or,for the purpose of sale to bottle, 

rectify, blend, treat, fortify, mix, or process 

any liquor in any wet area without first having 

procured a permit of the class required for such 

privilege.' 
Honorable Coke R. Stevenson, Page 2 (hWl067) 

"Without raising the question of whether 

the tax of the State of Texas may be so avoided 

we are of the opinion that this person will violate 

the above quoted Section of the Texas Liquor Control 

Act if he engages in this business in the State of 

Texas without first having procured a proper permit 

issued by the Texas Liquor Control Board. 

"We respectfully request your valued opinion 

on the following question: 

"Does a person who solicits and takes orders 

in Texas for liquor that is stored in a United States 

Custom Bonded warehouse for the purpose of supplying 

individual travelers destined for foreign countries or 

for the purpose of supplying sea-going vessels or for 

the purpose of exportation violate Section 4(a) of 

Article 1 of the Texas Liquor Control Act, if he does 

so without first having procured a proper permit issued 

by the Texas Liquor Control Board?" 

The Commerce Clause, Article 1, Section 8, Clause 3 of the 

Constitution of the United States, says: 

"The Congress shall have power to lay and 

collect Taxes, Duties, Imposts and Excises, to pay 

the Debts and provide for the common Defense and 

general Welfare of the United States; but all 

Duties, Imposts and Excises shall be uniform throughout the United States; 

II . . . 

'ITo regulate Commerce with foreign Nations, and 

among the several States, and with the Indian Tribes." 

The Import-Export Clause, Para. 2, Article 1, Section 10, 

reads as follows: 

I, D . . 

"NO State shall, without the Consent of the 

Congress, lay any Imposts or Duties on Imports or 

Exports, except what may be absolutely necessary 

for executing its inspection Laws; and the net Produce 

of all Duties and Imposts, laid by any State on Imports 

or Exports, shall be for the Use of the Treasury of the 

United States; and all such Laws shall be subject to 

the Revision and Control of the Congress. 
Honorable Coke R. Stevenson, Page 3 (WW-1067) 

I, 1, . . . 

Section 2 of the Twenty-First Amendment - Repeal of Prohibition Amendment - of the Constitution of the United States reads as 

follows: 

"Section 2. The transportation or importation 

into any State, Territory, or possession of the United 

States fordelivery or use therein of intoxicating 

liquors in violation of the laws thereof, is hereby 

prohibited." 

The State of Texas has the right to tax or regulate intoxicating beverages moving into or through the State of Texas in the 

exercise by the State of Texas of its police power, Gordon v, Statq, 

310 S.W.2d 328 (Tex.Crim. 1956), Judgment Affirmed, 355 U.S. 369, 

Rehearing Benied,.,355 U.S. 967; Carter v. Vyinia, 321 U.S. 

(1944), Affirming 181 Va. 306, 24 S E 2d 56 . Therefore, any 

131, 

intoxicating beverages moving from ih;! United States Custom Bonded 

Warehouse through the State of Texas afterthe importation into the 

State of Texas has.been completed, by passing through United States 

Customs Inspection or the equivalent thereof, are subject to regulation by the State of Texas. 

The U. S. Supreme Court has held that, since the Twenty-First 

Amendment, each state has the right to prohibit orregulate the importation of intoxicating liquors for delivery or use therein unlimited 

by the Commerce Clause. Indianapolis Brewing Co. v. Liquor Control 

Commission, 305 U.S. 391 (19391. Joseph S. Finch & Co. Y. McKittrick, 

Attornev General. 305 U.S, 395 11939). __.. It has also held that since 

the adoption of ihe Twenty-First Amendment the "Equal Protection 

Clause" is inapplicable to intoxicating liquors imported into a 

state. Mahbney Liquor Control Commission v. Joseph Trinemrp., 

304 U.S. 401 (1938). 

While it has been held that the Twenty-First Amendment does 

not apply to intoxicating beverages transported through a-state, 

Collins v. Yosemite Park & CurrvCo., 304 U.S. 578 (1938), it seems 

clear that the Twenty-First Amendment overrides the Commerce Clause 

or any other part of the Constitution in conflict with the TwentyFirst Amendment where the intoxi,cating beverages are imported into 

a state fordelivery or use in said state. While the fact that an 

item maintains its character as a "foreign import" might remain 

important in the determination of the extent of the police powers 

of the state, the question of whether~ or not an item maintains its 

character as an import is not importantto the applicability or 

non-applicability of the Twenty-First Amendment since the purpose of 
Honorable Coke R. Stevenson, Page 4 (~~-1067) 

the Twenty-First Amendment is to allow the regulation and control of imports by the various states, 

In the present case the intoxicating beverages will be 

imported into the State of Texas and if delivery or use of said 

beverages occures within the State of Texas, the Twez-First 

Amendment requires that the laws of the State of Texas be 

followed., Under the fact situation which you present for our 

consideration you do not state whether delivery or use occurs 

within the State of Texas; however, if the ships being supplied 

or upon which the individual being supplied travels are within 

the territorial bounds of the State of Texas when the beverages 

are delivered by the person selling the beverages from the United 

States Custom Bonded Warehouse it would seem clear that the State 

of Texas has the right to regulate such transaction since it falls 

within the area contemplated by the Twenty-First Amendment. If 

delivery or use does not OCCUT within the State of Texas, but the 

goods are shipped out of the United States without a sale or 

delivery occurring and while the goods maintain their character as 

a foreign import such transactions would not be subject to regulation by the State of Texas. 

In the exercise of its authority to regulate, the State of 

Texas is clearly allowed to exact a license fee for the privilege 

of importing, possession, distributing, or any other activity 

connected with intoxicating beverages. State Board of Equalization 

of California v. Young's Market Co., 299 U.S. 59 (1936). In those 

areas which Texas has the right to regulate the traffic in liquor, 

Texas has done so by the passage of the Texas Liquor Control Act 

and any action in the areas mentioned above of a commercial nature 

without first procuring a permit of the class required from the 

Texas Liquor Control Board would be a violation of the Texas Penal 

Code, 

SUMMARY 

A person who solicits and takes orders in Texas 

for liquor that is stored in a United States 

Custom Bonded Warehouse, under the facts submitted, is required to procure a permit under 

Article 1, Section 4(a) of the Texas Liquor 

Control Act. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 
. 

Honorable Coke R. Stevenson, Page 5 (WW-1067) 

UL \ 

BY 

Cecil Cammack, Jr. -9 

Assistant Attorney General 

CC:ca 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Virgil Pulliam 

L. P. Lollor 

Maston Courtney 

Dudley .McCalla 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: Morgan Nesbitt