_- 

R-124 

PRICE DANIEL 

.4TTORNEY GmiER‘4l 

AWLWIN ~s.Texae 

February 21, 1947 

Honorable George H. Sheppard 

Comptroller of Public Accounts 

Austin, Texas Opinion No. V-36 

Re: Liability for the 

one (1) per cent 

Motor Vehicle Retail Sales Tax 

levied by Art. 7047k, 

,V.A.C.S,, where motor 

vehicles owned by a 

partnership are transferred to the oorporation. 

Dear Sir: 

IOU have requested the opinion OS this Depertment on the above-captioned question based upon the Sollowing factual situations: 

(I) W. B. Kline and hia wife as partners have 

formed a corporation known as Pridgen-Kline Company, Ine, 

with a capital stock of $100,000, of’which W, B. Kline 

owns 499 shares, his wife Louella P. Kline, owns 499 

8hare8, and W. R. Carruth and L. 0, Jenkins each own one 

share, the latter two stockholders not being members OS 

the former partnership0 Motor vehicles formerly owned 

by the partnership of a book cost OS #25,990,40 and of a 

depreciated value OS )7,699!22 have been transferred by 

the partnership members to the corporation for a consideration paid or exchanged by the corporation of $7,669,22, 

(2) In the second situation E. G. Morrison and 

F. D, Breedlove, a partnership, have Sormed'a corporation 

known as Morrison Br08~ Construction Company with a capital stock of $50,000.00 OS which B. C. Morrison owns 74 

shares, F, D. Breedlove owns 24 shares, and Yr, Morrisonps 

wife and Mr. Kline's wiSe each own one share, the respective wives not being member8 of the former partnership0 

The partnershin owned redo118 motor vehicles of the book 

value of #53,607,04 with an original, cost value OS 

$80,075U920 The corporation purchased from the partnership all fixed assets, except real estate for a cash down 
. 

-1 

Honorable George B. Sheppard, Page 2 (V-36) 

payment and a chattel mortgage note for the balance of 

the book value of the ffxed assets. No stock ws8 fssued for the value of any vehiclesThe pertinent parts of Artids 7047k, V.A.C.S., 

being Acts 1941, 47th Legislature, Page 269, Chapter 184, 

Article VI s are as Sollows: 

“Section l-(a) There is hereby levied 

a tax upon evtiry retail sale of every motor 

vehicle sold in this State, such tax to be 

equal to one (1) per cent of the total consideration paid, or to be paid to the seller by 

the buyer, which consideration shall include 

the amount paid or to be paid for said motor 

vehicle and all accessories attached thereto 

at the time of the sale, whether such consideration be in the nature of cash, aredit, @r 

ej;Trsz?T-other property, or a combination 

rf-theseT-- In the event the consideration reGgTy the seller includes any tax imposed 

by the Federal Government, then such Federal 

tax shall be deducted fyu-ur:, such consideratfon 

for the purpose of compui;ing the amount of tax 

levied by this Article upon such retail salt 

“Section 2 u There is hereby levied a use 

tax upon every motor vehicle purchased at retail sale outsid~e of this State and brought into thl.s %tste for use u.pum thi: public bfnhways 

thereof by a resident :,I’ t,nis State or by firms 

or corporati.ons domiciled !>r doins business in 

this State* Su@h tax shall be equal to one (1) 

per cent of the total consideration paid or to 

p,e__paid Pm _ (., .~.. ,.~( ,I, ~,m~~‘xj’&~j~v~j ~.%&~t 9 H’jTret pj 1 1 sale, 

.- . ..__ .“._, .,._ -. .-. 

The tnx ShR*i bc~ i;i;& etLigati3n of e3,T-d 

by the person: firm, or cornorstion operating 

said mot,or vrbicle upon the public hiphways of 

this State.. 

‘Y,ection 3,(a) The term psalcs or ssalesi 

as herein used shall Elude instalment and 

credit sales s and the exchange of property, as 

weli as the sale thereof for mone 

Ztransaction-EiXZZ5.u~ ----M&i a 57 e 

iCtTTiii%EZFy’~“~~CG pas sessi?Tii of property is 

transferred but the seller retains title as 

security for t~he payment of the price shall be 

deemed a sale.,” (Emphasis ours) E 
.-. 

_.. 

Honorable George H. Sheppard, Page 3 (V-36) 

Under each of the foregoing statements of 

fact,, whiah are based upon information obtnined from 

each of the corporations, there has been a salb as 

defined in Section 3(a) above, since the .motor vehicles 

In each case were sold to the corporation? by the partnerships either~for money or by .an erchann 

under th.e worditnx of the statut~e anmhxne 

.EEi~ 

oer 

cent tax levied gy Section l(a) of Article 7047k should 

be paid by ench of the pnrtnershlps upon the value cl 

the motor vehicles sold to the respective corp0ratSnn.s. 

The amount of taxes to be allocated to each vehfcle 

should be ascertained from the books and reaords ,of ea’oh 

of the corporations. 

Under the eiven facts, where corporation 

acquired motor vehicles from partnership for 

A consideration as defined in Article 7047k, 

V.A.C.S., the tax as prescribed ln said article 

must be psid~ by the seller, 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

BY @Y@d 

c, K,. ‘Rf@herds 

Assistant 

CKR/l h: j rb