Mr.ReaganHuffmsn ~&ion No. W- 598 

Chairman Liquor Regulation 

Coinmltlree Re: 

House of Representatives .~ 

Constitutionality 

H.B. 57, 56 Leg., 

Austin, Texas latlng to whether 

not the State may 

2917 

Of 

reor 

tax 

Dear Mr. Huffman: 

beer sold to and oonsumed on MllltsrgReservatlons within-the 

State. 

We quote from your opinion request as follows: 

"Pursuant to'.a motion duly.made and.passed 

by the Liquor Regulation Committee, I am 

herewith submitting to you the original 

H.B. 57 for' an opinion as to its constltutiona1ity. 

"The specific question involved. is whether 

or not the State of Texas may tax beer whloh 

Is sold to and consumed on Military Reservatlons within this State." 

Section 1 of B.B.' 57 amends Article 667-2&(d) 

V.P.C. to omit the exemption and refund provision pertaining 

'to beer "shipped to any installation of the National Military 

Establishment, wherein the State of Texas has ceded police 

jurlsdlctlon, for consumption by military personnel within 

'said installation." Section 2 omits the exceptlon.of ."mllltary 

beer consigned to military installations" from the requirement 

that all beer shipped into this State be consigned to.the holder 

of a Manufacturer's,,General DIstrIbutorIs, Branch Distributor's 

or Local Distributor's license, and adds the sentence2 

"Nothing in this seotlon Bhall prohlbit'the" 

holders of a Manufaoturerls, General Dlstrl-. 

'butor.'s. Branch Dlstrlbutor+s. or Looal Dlstrlbutor's Lloense to sell beer, on whloh the 

tax 'thereon levied In Seotlon 2 F sio mlole 

raf'the Te~q~~l%~~en rid, 

EEdKlqrnmen Iiiiin~l~slnte. 

Sta~.phasls added) 

-- 

~. : 
2918 

Mr. Reagan Huffman, page 2 (Opinion No. w-598) 

Article 667-23, V.P.C., provides: 

"There is hereby levied and assessed a tax 

at the rate of $1.37 per barrel on the first 

zhof all beer manufactured &Texas and 

lmwrW-A2n 

this Setate." (Emphks adm 

-- mall imported into 

Title 4, U.S.C.,A., Section 105 grants to the States 

the power to levy and collect sales and use taxes within 

Federal.areas. S.ection 107(a) states that this shall not 

be deemed to authorize the levy or collection off w tax o-n 

or from the United States or any Instrumentality therz. 

or the, levy ar collection of any tax with respect -- to & 

or u of tangible personal. property sold 

orany instrumentality.thereof to,any 

authorlzed~~purchaser. (Section 107(b) defines "authorized 

purchaser.") 

The foregoing provisions are controlling. The state 

may not tax importations ~of beer by any Federal Government 

Instrumentality; nor.may It tax "first sales" of beer to,.ang 

Government instrumentality, or by such. Instrumentality to 

"authorized persons." 

w-582. 

See Attorney General's Opinion No. 

The State has the authority to tax all other "importak~ 

tlons'. and'first sales," 

tions" and "first sales" 

regardless of whether such "importa-,.~ 

occurred within Federal areas. For 

the reasons stated In the Attorney General's Opinion cited, 

supra, no issue of constitutionality is raised by repeal of theexemption and refund provisions regarding beer shipped to Mill? 

tary Establishments. 

.The specific question ig~your opinion request was 

whether or not the State may tax beer which Is sold to and 

consumed on Military Reservations. However, Section 2 of 

H.B. 57 raises another issue so intimately related to this 

problem ,that It must.,also be considered, i.e., the validity ' 

o-f the amendment to.,Section 29 of Article 667, V.P.C. The 

amendment Is designed to aid collection of the tax on beer 

sold to Military Establishments. Omission of the exemption 

of 'military beer cons~igned to military Installations" from 

the requirement that all beer imported into the State be consigned to the holder of one of the enumerated permits in effect.,, 

requires a permit for the importation of beer into m?.litary 

establlshmentst In cases where~the State of Texas has ceded 

police jurlsdlctlon to the Unl,ted States, the State is without, 

power to Issue or require the.purchase of permits or licenses': 

sInbe .such permits nor licenses are imposed under the State's 

Police Power to control~the tilcoholio beverage business. AttO* 

General's Opinion No. WW-354, O-3216. See.also Collins v. Voz' 
bh-. Reagan Ruffman,.page 3 .. ,(Opinlon No..WW-598) 

mite Park & Curry Company, 304 U.S. 518 (1938). Since the 

state cannot require the licensing of a consignee within a 

Federal area In which police jurisdiction has been ceded, It 

cannot accomplish the ssme result Indirectly by ,requlrlng that 

all beer Imported Into the state be consigned to the holder of 

a license. Further, such a requirement would constitute an 

undue Interference with Interstate commeroe. The case of 

Murphy v. Dove, 249 Fed. 2d 783 (U.S. D.C. 1957, Cert.Den. 

355 U.S. 9%) contains the following statement on point: 

"Since Kansas does not have territorial 

jurisdiction to regulate liquor In the Federal 

enclave ,lt has no authorityto impose revenue 

measures concerning liquor which are Inseparable 

from such regulatory aspects of-the~Act. The 

effect of what It seeks to do by the regulatory 

provisions of Its 1aw.l.s to make Impossible the 

purchase 'or sale of llawr on the.Reservatlon. 

or Importation of iiquor in Interstate 0ommerEe 

Into the Reservation. Such-a construction would 

not only place a burden on irrterstate~cosunarce 

of liquor to the Reservation but would star, It 

,,.,,_ 

Texas be 

respects . 

Therefore, the requirementthatall beer imported Into 

consigned to the holder of a license Is Inoperative as 

beer consigned to military establishments in which pollc~ 

JU??iFKliCtiOn has been ceded. 

entirely. In Johnson v. Yellow CabTransl5 Com- 

~~;lO~Clr., 137 F; 26 274 279 we sa&d that 

state has no pow& to'forbld the transporta~l&'ln Interstate commerce of Intoxicating 

liquor through Its territorial boundarles.~ and 

that a State r... ..has no jurlsdlotion to require 

or grant permits for the Importation of intoxicating 

liquors into. . . ."a reservation." [Emphasis 

added) 

The last sentence of the amended Seotlo,n 29 implicitly 

requires the payment of taxes on all beer sold to Federal C(overnment lnstrument~ltles. .Such a requirement is in direct conprovision Is void. 

SUMMARY 

The State my not.,ta$ lmportations~ of beer by 

any Federal Qoverhment ~Ins:trumentallty~,nor ,, ,' .;. . 
2920 

Mr. Reagan Huffman, Page 4 (Opinion No. W-598) 

may It tax "first sales" of beer to any Government Instrumentality, or by sudh Instrumentality 

to any "authorized purchaser." The State has 

the authority to $ax all other "importations" 

and "first sales regardless of whether such 

"importations" 0; "first sales" occurred within 

Federal areas. 

The State has no power to require the licensing 

of consignees of beer in Federal areas where 

police jurisdiction has been ceded, and cannot 

Indirectly accomplish the same result by requiring that all beer imported into the State 

be consigned to the holder of a license; such 

a requirement is further unconstitutional as 

constituting an undue Interference with interstate commerce. Therefore, the requirement that 

all beer imported into Texas be consigned to 

'the holder of a license is inoperative as respects 

beer shipped to consignees within military establishments in which police jurisdiction has been 

ceded. .~. 

The implicit requirement of the iast sentence 

of Section 2, H.B. 57, that taxes be paid on 

all beer sold to Federal Government instrumentalities Is In direct contravention of the 

constitutional prohibition against taxation of 

the Federal Government by the State Government 

embodied In Title 26, U.S.C.A., Section 107, 

and is void. 

Yours very truly, 

WILL WILSON 

JNP:cm 

APPROVED: 

OPINION COMMITTEE: 

Geo. P. Blackburn; Chairman 

C. Dean Davis 

C. K. Richards 

Elmer McVey 

Linward Shivers 

REVIEWED FOR THE ATTORNEY GENERAL 

By: W. V. CtEPPWT