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TRIE .L-ITNBRNEY GENERAL OF TEXAS

AKXWX-IN, -l-lzxAs 78711 June 5, 1968

HonorableRobert S. Calvert OpInIonNo. M-241 Comptrollerof Public Accounts State Capitol Eulldlng Re: Applicabilityof credit Austin, Texas provision of Article 7359a, V.C.S. to mator vehicle use taxes Imposed by Article, Dear Mr. Calvert: 6.01(2), Taxatio++eneral
Your letter requestingthe opinion of this office on the above questionreada as follows:

"The Comptrollerhereby request8your official opinion regarding the applicationof the Motor Vehlole Sales and vase

Tax, Chapter 6, Title 122A, TaxatlonGeneral, Texas Civil Statutes,as amended, 1925. Article 6.01.(2) and (3) (Taxation-General) provide for a use tax upon any person bringing a motor vehicle into the State for use upon the public highways. Article 6.01(2) reads as follows:

"There Is hereby levied a use tax upon every motor vehiclepurchasedat retail sale outside this State and brought into this State for use upon the public highwaysby any person, firm or corporation who is a residentpf this State or who is domiciled or doing business in this State. The tax Imposed by this subsection. shall be equal to two per cent (2$) of the total consideration

paid or to be paid for said vehicle at said retail sale. The tax shall be the obliga+,< ' tlon of and be pald by the perscin, firm or aorporai tlon operatingsaid motor vehicle upon,thepublic highways to this State.
"Article V(1) of provides for a credit reads as follows: Article 7359a under certain (Vernon'sCivil Statutes)

Instances. ArticleV(1)

-1177-Hon. Robert S. Calvert,page 2 (M-241)

"Eachpurchaser liable for a use tax on tangiblepersonalproperty shall be entitled to full credit for the combinedamount or amounts of legally lmpos~ed sales or use taxes. pa~ld by h3m with respect to the same property to another state and any subdivisionthereof. Then credit shaIl,be .eppIied first against the amount of eny use:

4x$xdue.'

then state.~ end wiy unused portion of the c.redlt shall be then applied against the amount of any use tax due a subdivision. "Under the above~prov~lslon, la the person who has paid a e-ales

taxin. another &ate on the,,purchase of a motor vehicle entitled to,,a. credit aga-lnst

the Texas tax on.the use.of~ ,the motor vehicle In this State. SecoMIy, is- the person entitled to the same credit against the u~se taxlevied by Article 6.01(3) which reads~

as follows:~ "There is herebyylevied a use tax In the sum of Fifteen DoLIars- (.$15) upon anyperson making applicationfor the initial certificate. of title on a motor. vehicle which wes previously~ registered In hls~

name-, .inany other .Stste,or foreign cauntry.'It ls'the-purpoa~~of-this,-sub-- section to lmpoee a.uee~~tax upon motor vehicles brought into this State .by~new residentsof this Stete.",-

(perenthes~ls-

ou-rb)’
At the outset we note that the two taxes imposedby subsections (2) and (3) of Article 6.01 are alternativein the,,ser8@e that if one tax Is lmposed, then the other tax Is not lmpoeed~. By Section 1 of Article 7359a, the State of Texas adopted~ the MultistateTax Compact,which became effective In Texas June 13, 1967. One of the expresspurposes of the Compact, es set out In Article I, is to avoid duplicativetaxation. While some provisionsof~the Compactapply only to tax situations lnvolving states which are parties to the Compact,paragraph 1 of Article V of the Compact Is not so limited. Paragraph 7 of Article II of the Compact defines "sales tax" and paragraph 8 furtherprovides:. .

Hon. Robert S. Calvert,page 3 (~-241)

"'Use tax' means a nonrecurringtax, other than a sales tax, which (a) is Imposed on or with respect to the exercise or enjoyment of any right or power ‘overtangiblepersonalproperty incident to the ownershla, possessionor custody of that property or the leading of the property from another includingany consumption,

keeping,retention, or other use of tangiblepersonalproperty and (b) is complementary to a sales tax." The taxes Imposedby subsections (2) and (3) of Article 6.01 clearly are use tslxes with-the definition just quoted. Inasmuch as subsection (1) of Article 6.01 l&es a tax upon every retail sale of every motor vehicle sold In Texas, the use taxes levi&d by the next two subsectionsare complementary to a sales tax. Paragraph (b)!of "Nothing In II

. . .
the r.$~tr%% fuel, other than Article XI of the Compactprovides: -

this compact shall be construedto:

to ar#! tax or fixed f&i Imposed for of a motor vehicle or any tax on motor a sales tax.
. .' While Article 6.04 directs Texas county tax collectorsto refuse to accept for registrationor transferany motes? vehicle until the tax Imposed by Article 6.01 Is paid, we are of the opinion that this does not ,have the,effectof convertingthe use tax Imposed by Article 6.01 Into a "ta$ or fixed fee imposed for the registrationof a motor vehicle"within the meaning of that term as used in the Compact. The statutory construction applicableIn such a case requires a strict coryltructlon against the taxing authorityand a liberal constructionin favor of ,the $axpayeti.Texas UnemploymentComoensationComm. vs. Bass, 137 Tex. 1, 151 S.W.2d 567 (1941). This conclusionis prompted first by the fact that Texas law Imposes other and separate .feesfor 6 certificatesof title and registration. Secondly,Article XII of the Compactdirect? that It shall be liberallyconstruedso as to effectuate Its purposes, one of which Is, as noted above, to avoid duplicativetaxation. Furthermore,a construction df a statute authorizingdouble taxation should not be adopted unless the la Tex.Jur.%?d

13 ?F uage used admits of no other construction. 54'

, Sec. 21, Taxation, and cases cited. In the event

-1179-Hon. Robert 9. Calvert,page 4 (~-241)

it be contendedthat Article 6.01 conflictswith the Compact Law In Article 7359a, the Compact Law will prevail to the extent of any conflict. State BX rel Dyer vs. Slma; 341 U.S. 522 (1951).
In answer to your specificquestions,we are of the opinion that the credit provided for In paragraph 1 of ArticleV of Article 7359a should be allowed to a person who as a purchaserhas paid legally imposed stiles or uge taxes on a motor vehicle to another state and thereafterbecom&s subject to the tax imposed by either subsection (2) or subseotlon (3) of Articl& 6.01.
SUMMARY The creditprovided for In paragraph 1 o,f ArticleV of Article 7359a, Vernon's Civil Statutes, should,be allowed to a person who as a purchaserhas paid legallyImposed sales or use taxes on a motor vehicle to another state and thereafterbecomes subject to the tax Imposed by either subsection (2) or subsection (3) of Article 6.01, Taxation-General.
very truly, 

# :p+== MARTIN neral of Texas Preparedby Nell Williams AssistantAttorneyQeneral
APPROVED: OPINION COMMITTEE

, Hawthorne Phillips,Chairman

Kerns Taylor, Co-Chairman Narlo Q. Ob$edo Ben Harrison Robert C. Crouch CharlesRose
A. J. CARUBBI,JR. ExecutiveAssistant

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