# TIHE A'ITORNEY GENERAL OP?%ZXAS
Auwrr~. T-s 78711

July 1, 1975 

### TheHonorable Joe Resweber 

### ~Harrie CountyAttorney Harris CountyCourthouse Houaton, Texan 77002 Opinion No. H- 639 Re: Whether 

### thertate and local sales tax must be collected onitems sold to inmates of **the** 

### Harris CountyJail and Harris County RehabilitQtion Center from 

### commirraries located at each facility. 

### Dear **Mr.** Resweber:

You have asked for our opinion as towhether commissaries,located within,the Harrio County Jail and the Harris County Rehabilitation Center muat collect the state and local sales tax onitems sold to the iamates of theoe facilities. You explain the operation of

### thecommirsaries aa follows:

These commissaries operate independently and autonomously at each location. The Humble Rehabilitation Center is outside 

### theboundaries ofthe City ofHouston, **and** not in any other city, while the Downtown Jail is in the City ofHouston. The items sold in both are what would normally be expected, .cigarettes, soft drinks, candies, coneumables, toiletries, and other such items which might be normally subject to sales tax. Sales are made only to inmates and not to anyone else. Each commissary is individually responsible for its own purchasing and stocking. Any proceeds from such sales beyond those needed for re-stocking are applied to the purchase ofamenities which would otherwise not beavailable, for the exclusive use land benefit ofthose legally confined in the detention center orjail.

p. 2811The Honorable Joe Resweber - Page 2 (H-639)

Your question concerns only the applicability ofthe tax laws to the sales made by the Commissaries and not the legal status ofthe Commissaries otherwise. Attorney General Opinion C-67 (1963) held that the Sheriff of Tarrant County might supply necessary articles to prisoners “at cost” but that a profit making commissary in the Tarrant County jail was unauthorized, Since you have advised us that any proceeds above the cost ofmaintaining an inventory are used to supply amenities which wculd otherwise,be unavailable toprisoners and which the county is not otherwise obligated to provide; we assume without deciding thatAttorney General Opinion C-67 is inappiicable in this case.

Article 20.02, Taxation-General, imposes a statewide, “limited sales tax at the rate offour percent (4%) onthe receipts from the sale at retail ofall taxable items.
. .” which are subject to taxation under the Limited Sales, Excis’e and Use Tax Act, -articles 20.01 et seq, TaxationGeneral.Articles 1066c, V. T. C.S., known as the “Local Sales and Use Tax Act”, imposes alocal sales tax “of one percent (1%)onthe receipts from the sale at retail ofall taxabie items within any city adopting such tax which items are subject to taxation by the State of,Texas under the Limited Sales, Excise and Use Tax Act. ” Sec. 2B, art. 1066~. The City ofHouston has adopted the local tax.

The retailer or seller ofthe items taxable under either Act is responsible for the collection ofthe tax or taxes at the time ofthe sale. Article 20.021 ofthe Limited Sales, Excise and Use Tax and section 6A of the Local Sales and Use Tax Act.

Exemptions from the imposition of either the state or local tax are contained in article 20.04 ofthe Limited Sales, Excise and Use Tax Act, and it is necessary to consider if the commissariesfall within any ofthe exemptions. Itsho.uld.firat, be observed, that, while sales to a county and,other political subdivisim ofthe State are exempt from the%position ofthe sales tax, article 20.04, subsection (H)(4), sales by a county or ,other political subdivision are not exempted from the tax under any provision ofarticle 20.04.

p, 2812. -

The Honorable Joe Resweber - Page 3 (H-639)

However, another exemption, found in subsection (F)(3), has been applied tojail commissaries by the Comptroller of Texaa, the state officer charged with administering the state and local sales tax laws. This provision exempto!

.’ Meals and food products (including soft drinks and

candy) for human consumption when served to patients and inmates ofhospitals ‘and other institutions licensed by the State for the care ofhuman beings. Jails are authorized by state statute and the Texas State Department ofHealth is empowered to insure compliance with the statutory sanitation and health provisions applicable tojails. V. T. C.S., art. 5115. And the word

“license” is defined by Webster’s Third New International Dictionary (1967) as “a right or permission granted.in accordance with law by a competent authority to engage in some business or occupation, to do some act, or to engage in some transaction
. . .‘0 a definition that could apply to the operation ofajail. Also see House Bill 272 enacted by the 64th Legislature (1975). Where the meaning ofa statute is doubtful, the construction placed onit by the officer or ageney charged with administering the statute is entitled toweight. Calvert v. Kadane, 427 S.W. 2d 605 (Tex. Sup. 1968). As noted above, the Comptroller of Texas is empowered to administer the sales tax and has interpreted the exemption contained in subsection F(3) by memorandum, dated May 26, 1974, to E. J. Castillo, Director ofField Operations for the Comptroller from Fred Russ, Director ofthe Comptroller’s Sales Tax Division. The memorandum provided in part:

Itis requested that you have each District Office check with the county jails in the State to determine if commissaries are operating and making taxable sales toinmates. Ifsuch sales are made and atax is not charged ontaxable items sold, the commissary tpgst’secure a permit, poet bond and pay tax due, penalty and interest for prior’quarters.

. . . Food items including soft drinks and candy are exempt from the tax under Article 20.04 (F)(3).

p. 2813I -

The Honorable Joe Resweber - Page 4 (H-639)

We adopt the Comptroller’s interpretation ofthe applicability ofthe sales tax as applied tojail commiaaaries.

Accordingly, the commissaries involved must collect the state wide sales tax as levied by the Limited Sales, Exdre and Use Tax Act onall items sold except food items including soft drinkr and candy. Inaddition, the Harris County Jail, which ia located in the City ofHouston, must collect the city sales tax imposed by the Local Sales and Use Tax Act. However, the Rehabilitation Center, not being located within Houston, need not collect the city sales tax since the place ofthe sale determines whether atax is due. V.T. C.S., art. 1066c, section 6B(l). S’UMMARY

The commissary ofthe Harris County jail must collect the state and city sales tax onall items sold except for food, soft drinks and candy. The commissary ofthe County Rehabilitation Center must collect the state sales tax onall items sold except food, soft drinks and candy, butneed not collect the city sales tax. Very truly youxr,

rst Assistants

Opinion Committee jwb 

# u Attorney General of Texas

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