Hon. Robert S. Calvert Comptroller ofPublic Accounts Capitol Station Austin, Texas Opinion No. S-47
Re: Application ofArticle 111Id. V.P.C.. as amended, the chain 

### store tax, upon concession Dear 

### Sir: stands within carnivals.

Your letter dated **May** 15. 1953, makes inquiry ofthe applic~ability ofthe State’s chain store tax upon concession standa opcrating within carnivals. Iquote from your letter which reads:

*Inone instance the entire carnival is operated by one individual. This individual operator pays a carnival tax and also pays a cigarette license fee. Is this carnfval operated by one individual subject to the store tax? Ifso, is he liable for one store tax or **for a** tax upon each place within the area where goods, wares and merchandise are sold?
*In **another** instance the owner and 

### operator of the carnival leases **the** places; **such as.**  **restaurants.** hamburger stands, curio and gift shops, tovarious individual operators. Are these individual lessees subject to an individual chain store tax, or is the **carnival** operator subject to a chain store tax covering these places? Would it mahe any difference inthe application ofthe chain store tax ifthe carnival were atraveling carnival or circus ?” This office is ofthe opinion that a carnival which maintains stands that sell goods, wares and merchandise is a .store* withinthe purport of the chain store tax and payment 

### ofa carnival ts* 

### and cigarette license fee neither affects its denomination as astore nor entitles itto any exemption, Art. lllld, Sets. 5(a), 7, V.P.C., as amended.

Is the carnival operator subject to the pyramiding store tax computed upon each individnal stand within the carnival **area?** ‘Since theAttorney General’s letter opinion toyour department ofApril 2, 1938. the Comptroller’s Office has adher.ed to the ‘under one 

### roof” doctrine. The question ofwhether an owner or operator of adepartment store was subject toatax on each individnal department was answered inthe negative holding that as long as the operations 

### were confined under one 

### roofHon. Robert S. Calvert, page 2 (S-47)

only one store taxwas payable. The doctrine’s reference to “roof” was illusory and it is our opinion that various carnival stands operated by an individual within a confined space and managed as a single unit is subject to only one tax.

The doctrine appar,ently originated from a statement made in the leading chain store tax case, Tax Commissioners v. Jackson, 283 U.S. 527 (1931). Inthe Jackson case. the taxpayer insisted that there was no substantial variance of operation between chain stores and department stores and that the chain store tax w~as an arbitrary classification. The Supreme Court stated on page 536:

‘While it is true that large department stores reap many ofthe advantages and employ many ofthe methods of a chain store group, such as large capital, buying in quantity, and the ability to command the highest type ofmanagement, it is, nevertheless, evident that, whereas a department store spreads its efforts over anumber of differ,ent sorts of shops under one roof, the chain store owner concentrates its energy upon the conduct ofbut one kind of stores located in many neighborhoods. Obviously, greater specialination inmanagement and methods is possible inthe latter type of enterprise than intheformer, whose management, however capable, must after all con~sist of many separate types each devoted toa single store similar to an independent retail store. The mass buying done by a chain store owner for anumber ofunits selling the same goods, is not comparable tothe individuated purchasing ofa department store for its grocery, its shoe, its drug, and each of its other departments. Itis not tobe expected that the management problems ofstores, essentially separate and differing entirely in the character oftheir business, under the aegis ofa single department store, will be the same as those involved inthe intensive selling ofa chain store owner operating an equal number ofunits all devoted to a single line ofbusiness.” The verbiage was carried into Texas’ leading chain store tax case, Hurt v. Cooper, 130Tex. 433, 110 S.W.2.d 896 (1937); certified questions disposed ofin 113 S.W.Zd 929 (Tex. Civ. App. 1938).

It is impossible toanticipate all ramifications of this rule. Inour opinion the carnival maintaining various stands within a confined area operated by one person as a single unit (i.e., integrated bookkeeping, common purchasing, etc.), is subject to only one store tax as a single unit.Hon. Robert S. Calvert, page 3 (S-47)

Individual operation and management ofthe concessions by different lessees changes the status ofthe carnival stands. The sta**tute** levies atax upon every person operating or maintaining one or mor,e stores. Art. 111Id, Se- V.P.C., as amended. It is our opinion that each stand by virtue ofthe above facts would be subject toa separate store tax. Restaurant and hamburger stands so oprrated come within the exemption provided by Section 5(a) ofArticle 111Id, as amended, and are taxable Under Section 5(c) ofArticle 11lid.

There is no differentiation tobe made between atraveling and permanent carnival. This office has previously stated *a store is a store, whether mobile or immobile.” Atty. Gen. Op. O-7361 (1946).

SUMMARY Carnivals are subject tothe tax levied byArticle 111Id, V.P.C., as amended. Stands owned and operated by one person as a single unit are liable for atax for one store only. Ifthe concessions are leased tovarious persons, the different stands are each subject to a store tax. The mobility of the carnival of itself does not affect its status as a StOTe 

### or stores. Yours very truly, APPROVED:
W. V. Geppert Taxation Division JOHN BEN SHEPPERD Attorney General

Ci K. Richards By@LdM Reviewer William W. Guild Assistant ,Robert S. Trotti Firs,t Assistant John Ben Shepperd Attorney General WWG,:mg