_- 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: IOUhave requested the opinion OSthis Depertment on the above-captioned question based upon the Sollowing factual situations:

(I) W. B. Kline and hia wife as partners have formed acorporation knownas 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 ownone share, the latter two stockholders not being members OS the former partnership0 Motor vehicles formerly owned by the partnership of abook 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, apartnership, have Sormed'a corporation knownas Morrison Br08~ Construction Companywith a capital stock of $50,000.00 OSwhich B. C. Morrison owns 74 shares, F, D. Breedlove owns 24 shares, andYr, Morrisonps wife andMr. Kline's wiSe each ownone 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 anda chattel mortgage note for the balance of the book value of the ffxed assets. Nostock 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 VIsare as Sollows:

“Section l-(a) There is hereby levied atax 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 2u 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.pumthi: public bfnhways thereof bya resident :,I’t,nis State or by firms or corporati.ons domiciled !>rdoins business in this State* Su@htax shall be equal to one (1) per cent of the total consideration paid or to p,e__paid Pm

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11sale, .-. ..__ .“._, .,._ -. .-. 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 sand the exchange of property, as weli as the sale thereof for mone ----M&i Ztransaction-EiXZZ5.u~ a57 e iCtTTiii%EZFy’
~“~~CG passessi?Tii of property is transferred but the seller retains title as security for t~hepayment 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.anerchann 

### underth.eworditnx 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 Aconsideration 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

OFTEXAS



## BY @Y@d c,K,.‘Rf@herds Assistant

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