October 27, 1988

Honorable Bob Bullock Opinion No. JR- 973 Comptroller of Public Accounts L.B.J. State Office Building Re: Austin, Texas Whether a non-profit

78774 organization that sells taxable itemsmust.pay the $25annual fee for a sales tax permit (RQ-1503)

Dear Mr. Bullock:

You present the following information and ask .the following question:

A non-profit museum and historical society has produced and is selling a cookbook. While they have been properly collecting sales tax on the sales of the cookbook, they have asked if the Legislature intended to require organizations such astheirs to pay the $25annual sales tax permit fee.

Since there are numerous non-profit organizations who are involved in selling a very limited number of items to support their activities, I hereby request your official opinion as towhether non-profit organizations are required topay the $25 annual sales tax fee.

You indicate inyour request letter that the non-profit organization'properly has been collecting the sales tax on the items that it sel1s.l You askwhether a non-profit

1. from the While section 151.310 of the Tax Code does exempt

reach of the tax certain qualifying religious, educational, purchase or public service organizations when they

items that would otherwise be taxable,, the (Footnote Continued)

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organization must pay the prescribed $25 sales tax permit renewal fee in an instance in which ithas been issued a sales tax permit properly inthe first instance and it sells items that are taxable. We understand you to refer to an organization that fallswithin subsection (a) of section 151.310, Tax Code, subdivisions (1) or (21, that ares.not selling items pursuant to an auction, as permitted by subsections (c) and (d). We conclude that a non-profit organization that sells taxable items isrequired topay the annual $25 fee for a renewal of its sales tax permit.

The Limited Sales, Excise, and Use Tax iscodified at chapter 151 of the Tax Code. Section 151.201 of the Tax Code governs the issuance of sales tax permits and provides:

(a)The comptroller shall issue to an applicant who qualifies under Section 151.202 of this code and under Subchapter G of this chapter [sections 151.251 - 151.262, governing sellers and retailers providing security for the payment of the taxes imposed by the chapter] and who pays to the comptroller the permit fee in the amount provided by this section a separate permit for each place ofbusiness inthis state.
(b)The holder of apermit shall display itconspicuously intheplace ofbusiness to which itapplies.

(c)Apermit isvalid only for the person and the place ofbusiness towhich itapplies and isnonassignable.

(d)3 3 e it
. oes not annlv to the issuance of a temnorary permit under Section 151.252 of this code. (Emphasis added.)

Section 151.202 of the Tax Code governs the application forapermit; subsection (a)provides:

(Footnote Continued) exemption does not reach taxable items that such organization itself sells, except only as provided ty section 151.310. Thus, even if the organizations about which you inquire fell within section 151.310, that fact would not be dispositive ofyour question. I

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.-. Aperson desiring to be aseller in this state shall file with the comptroller an application for a permit for each place of business. (Emphasis added.)

%eller" isdefined forpurposes of the chapter at section 151.008, which provides:

(a) 'Seller' or 'retailer'means a person engaged inthe business of making sales of taxable items of akind the receipts from the sale ofwhich are included inthemeasure of the sales oruse tax imposed by this chapter.
(b) 'Seller' and 'retailer include:
(1)aperson inthe business of making sales at auction of tangible personal property owned by another: the person or by

(2)anerson whomakes more than two sales of taxable itemsdurina a 12-month period, including sales made in the capacity of an assignee forthe benefit of creditors or receiver or trustee in bankruptcy; and

(3) a person regarded by the comptroller as a seller or retailer under Section 151.024 of this code. (Emphasis added.)

We assume that the non-profit organization about which you inquire fallswithin the underscored language of (b)(Z) and isa llsellerl*

forpurposes of this chapter.

Section 151.2021 of the code governs the issuance of renewal permits andprovides:

(a)Apermit issued under this subchapter isvalid for one year from the date of issuance or renewal. An application for the renewal of a permit must be filedwith the comptroller not later than the 30th day before the expiration date. The comptroller on a showing ofgood cause by the holder may permit the~late renewal of apermit.

p. 4952Honorable Bob Bullock -Page 4 (JM-973)

(b)The fee forthe renewal of aDermit is the same as for an initial Dermit asDrovided @Y Section 151.201ld) of this code.
(c)Forpurposes of this section, apermit is issued on the date the permit is issued under Section 151.201 of this code or reissued under Section 151.204, whichever is later. The date a temporary permit is issued isnot considered to be the date the permit is issued.
(d)Apermit ineffect on the date this section becomes effective must be renewed under this section before the first anniversary ofthe date onwhich the permit
was issued that occurs after the end of the month inwhich the section becomes effective. If the date the permit was issued cannot be determined, January 1, 1988, isconsidered to be the anniversary date onwhich the permit must be renewed under this subsection. This subsection expires January 1, 1990. (Emphasis,added.)

There is no language ineither section 151.201 or 151.2021 of the Tax Code to indicate that the legislature intended that there be any exception to the payment of a renewal fee for a sales tax permit. Nor is there any indication of such legislative intent in the legislative history of the bill that added the feeprovisions for the first time. See Gov't Code, 9 311.023 (Authorizing an examination of legislative history inorder to determine the legislative intent, even inan instance inwhich the statute isnot ambiguous.)

Prior to 1987, section 151.201 of the code required the comptroller to issue without charge a sales tax permit to each qualifying applicant foreach place ofbusiness. House Bill No. 61,which was enacted at the Second Called Session of the ,70th Legislature, amended, inter alia, section 151.201 of the code and added section 151.2021. Acts 1987, 70th Lag., 2nd C-S., ch. 5,art. 1,Pt. 5, 05 1, 2, at 22. Taken together, the amendments removed from the comptroller the authority to issue sales tax permits without charge and imposed a fee of $25 for the issuance of the initial permit and a feeof $25 foreach annual permit renewal. The "Bill Analysis" prepared forthe House Committee onNays andMeans onHouse BillNo. 61and for the committee substitute for House Bill No. 61does not indicate any intention on the .-.

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part of the legislature that permit renewal fee. there be any exception to the Indeed the "Bill not mention these specific amendments. Analysis" does
61, 70th Leg., 2nd C.S. (1987). BillAnalysis, Tex. H.B.

Accordingly, we conclude sions should be that the renewal fee proviconstrued instance in aswritten,

which a and that, in an

non-profit organization properly has been issued a sales tax permit because its activities fall within the section 151.008 (b)(Z) definition of "seller,~~ the organization must pay the $25renewal feeprescribed by section 151.2021 of the Tax Code.

SUMMARY

Inan instance inwhich a non-profit organization properly has been issued a sales tax permit because itsactivities fallwithin the section 151.008(b)(Z) definition of "seller," the organization must pay the $25 renewal feeprescribed by section 151.2021 of the Tax Code.

JIM MATTOX Attorney General of Texas

MARY KELLER First Assistant Attorney General

LOUMCCREARY Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY Special Assistant Attorney General

RICK GILPIN Chairman, Opinion Committee
Prepared byJimMoellinger Assistant Attorney General

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