1 

## R-894
THE A’ITORNEY GENERAL.

‘09~ TEXAS

November 24, 1947
Ron. George H. Sheppard Comptroller of Public Accounts Austin, Texas Opinion No. V-4j$i Re: The appllcablllty of the 1%motor vehicle use tax whenautomobiles are exchanged outside Texas by Texas residents for use In ~theState

. Dear Sir : Youhave requested the opinion of this Department in answer to the following questions:

“Youwill please edvise this departTent whether or not the 1%Motor Vehicle Use ,x should be paid by e resident of Texas whogoes outside the State andpurohases a motor vehicle, and brings It back Into Texas for use upon our public highvays, in the following cases:

“1. In regard to the 1%Motor Vehicle Use Tax to be charged onmotor vehicles that are purchased outside of this State by a resident of the State andbrought Into Texas for use upon our public hlghvags, a motor vehicle having a value of $1,500.00 is evenly traded for another motor vehFcle having a value of $1,500.00, andthe resident of Texas brings the motor vehicle, for which he traded in another State, back Into Texas for use upon our highways. Should the tax be paid?

“2. 

### Aresident of Texas trades a motor vehlcle having a value of l,OOO.OO for a motor ve: ~” hlcle havin8a value of t1,500.00, paying the&fference of 500.00 in cash, and brings the $1,500.00 motor vehicle back into Texas for use upon our highvags. Mustthe tax be paid on the $1,500.00 motor vehlcle?Hon. Geo. H. Sheppard, Page

“3. The resident vehicle having a velue

___ _ _ 2 (no. v-439)

,

vehicle mvmg a value of Texas trades a motor of l,OOO.OOfor a motor of sOO.00andreceives

_ _t

_ __. ._ adifference of $200.00 in casn, and brings the $800.00 vehiole back into Texas for use upon our ;gps * Must a tax be paid onthe $800.00 veThe answers to your questions mustbe governed by the provisions of Article VI, Chapter 184, Acts of the 48th Legislature, Regular 3esslon, 1941, page 269, knownas the

“OmnibusTaxBill” andcodified as Artlole 7047k, V. C. 3. Thepertinent ,~seatlons OSthe above Article are as follovs:

“Sectlon 1. (a) There Is hereby levied a tax upon every retail sale of every motor vehicle sold in this State, such tax to be equal to one (1) per cent OSthe total consideration paid or to be paid to the seller by the buyer, which consideration shall include the amountpaid 

### orto be paid SrcPsaid motor vehicle and all accessories attached thereto at the time OSthe sale, whether such consideration be in the nature 

### ofcash, credit, or exchange of other property, or a combination OSthese. In the event the consideration received b7 the seller Includes any tax imposed by the Federal Government, then such Federal tax shall be deducted from such conslderatlon for the purpose of computing the amount of tax levied by this Article uponsuah retail sale.

“(b) In all cases OSretail sales Involvingthe exchange of motor vehicles, the party transferring the title to the motor vehicle having the greater value shall be considered the seller, andnotax is

. imposed upon the transfer of a motor vehicle traded In upon the purchase price OSsome other sotor vehlcle. “Sec. 2.. There fs hereby levied a use tax upon. ‘

. every motor vehicle purchased at retail mts.$de
~‘, of this State and brought into this State for use upon the public highways thenof bya resident OSthis State or by Sims OFc In this State. cent of the tota said vehicle et said retail sale. The tax shall be the obligation of andbe paid by the persod, firm, or Oorporation operating said motor vehicle upon the public hlghways of this State.

.Hon. Gee., Ii. Sheppard - Page 3 (Ho. V-439)

‘Sea. 3. (a) Theterm ‘aale’ 

### or ‘saleaf as herein used shall Include lnstalment and credit sales, and the exohange OSproperty, as well as the sale thereof for money, every closed transaction constituting .asale. Thetransaotlon whereby the possession OSproperty Is transferred but the seller retains title as security for the payment OSthe price shall be deemed.asale.

“(b) Theterm ‘retail sale’ or ‘retail aales’ aa herein used shall Include all sales of motor vehicles except those whereby the purchaser acquires a motor vehiole for the exclusive purpose of resale and not for use.

“(0) The term ‘mOtOrvehicle’ as herein used shall meanevery self-propelled vehicle In, 

### orby which, any person or property Is 

### ormaybe transported upon a public highway, except devices moved only by humanpower or used exclusively upon stationary rails or tracks; but this definition shall not Include traotors used exclusively to pull farm machinery or rosdbulldlng mschinery.

“Sec. 4. The license fees and taxes imposed by or under this Article shall be in addition to any and all license fees and taxes imposed by or under any other law of this State.

“Se0

. 5. The taxes levied la this Article shall be oollected by the Assessor and Collector of Taxes of the county in which any such motor vehicle is first registered or first transferred after such a sale; the Tax Collector shall refuse to accept for registration 

### orfor transfer any motor vehicle until the tax thereon is paid.

‘@When a tax becomes due on a motor vehicle purchased outside of this State and brought into this State for use upon the highvays, the person, firm, or corporation operating said motor vehicle upon the public hlghvays of this State shall pay the tax Imposed by Section 2 to the TaxCollector of the county In which such motor vehicle is to be registered. Thetax shall be paid at the time application Is q ade.Sor registration of said motor vehicle, and the Tax Collector shall refuse to issue the registration license until the tax Is paid.

.Hon. Geo. If. Sheppard, Page 4 (Ho. V-439)

%ec. 5rJ. At the time the tax herein levied is paid to said TaxCollector the pwchaser shall file with aald Tax Golleotor the affidavit OSsuch DurChrrSer(or if a corporation the atfldavlt of the President, Vice President, Secretrry, 

### orManager) setting forth the then value in dbllars of the total con&era

fi oelved by such seller or his nominee. whether In moneyor other thing OSvalue.” (Emphas,ls added) It vi11 be noted that the situations referred to in your three questions all Involve the exchange of motor vehicles; and if these exchange8 had taken plrce within the State OSTexas, the tax would be based uponSection 1 of the Act, being a “sales” tax. However, the tax imposed by Section 21s.a “use” tax as is disclosed by the speolflc verbiage above emphasised andwhich Is based uponthe “total consideration paid or to be paid for said vehicle at such retail sale.”

,Hoprovision is contained in Section 2similar to Section l(b), although the term “retell sale” is used without any quallSlcatlon throughout the act except a8 qualified in Section 1. Sir&e Section 1 Imposes a “sales” tax and Section 2 imposes a “use” tax, each mustbe viewed in the light of the intention of the:Leglslature at the time the law was enacted. I.

.,. Both thb sa,les. tax andthe use tax are revenue
. measureg. HOWeW?rj .lt 18 awell-known principle of law thst the essential’ bases for-,these two taxes are entirely different. The sales tax is based uponthe sale of the property within the state, the tax liability accruing at the time of the actual sale of the property. The use tax Is based uponthe use within the state of the property, vhioh 3.spurchased outside of the state, and the tax liability accrues uponthe first use of the property within the state. These principles of law are too well knownto necessitate the citation of authorities.

IS the Legislature had intended to apply the methods of 

### l scertalnlng the bait3 of taxes due uponthe retail sales InVolved In the exchs aotment of Section l(b 7 e of property, as wasdone by the ento the use tax levied by Section 2, it could have easily edcted Section 2(b) In similar terms cr if the Legislature had desired to apply the 

### samebasiswhere the exchange of property Is Involved as to both the sale8 andEon. Gee. Ii. Sheppard, Page 5 (lo. V-439)

use taxes, It could have included it in the general definitions to AbeSound in Section 3 OSthe Act. 

### However, it did neither of these things; therefore, the presumption mustexist that the method OSoomputatlon of all retall sales involved the exchange of property prescribed In Section l(b) Is applicable only to retail sales OS motor vehicles sold Inthis State as provided In Sec. 1 (6). Section 5a provides that whenthe tax herein levied, i.e., both under Sections 1 and 2, Is paid to the tax collector, the purchaser shall file with the tax collector an affidavit setting forth “the then value in dollars of the total consideration received or to be recelved by such seller or his nominee, either In moneyor other thing of value.”

Based upon the foregoing construction OSthe Act and psrtlcularlg the emphasized portion of Section 5a, supra, the answers to your questtons are as Sollovs:

1. on the sum’of The 1%

### motorvehicle use tax should be paid

$1,500.00, being the total consideration recelved by the seller In payment of the motor vehicle to be used uponthe highways of Texas.

2. on the sumof ceived by the used uponthe The 1%motor vehicle use tax should be paid

$1.500.00. being the total consideration reseiier In-paymekt of the motor vehicle highways of Texas. to be

3. The 1%motor vehicle use tex should be on the sumof $800.00, being the total consideration celved by the seller in payment of the motor vehicle used uponthe highvays of Texas. paId

### reto be
SUMMARY Aresident of this State, whogoes without the State and there trades his motor vehicle for another motor vehicle which he brings Into this State for use uponthe public highways thereof, is required to pay the use tax Imposed.. Hon. Geo. Ii. Sheppard, page 6 (V-439)
by Section 2, Art. 7047kV.C.S., upon such vehicle calculated onthe total consldentlon, measured In dollars, received by the person from whomhe acquired such vehicle.

Yours very truly ATTORRHY

GXVRRAL

9p,‘PEXILS.

C. K:.Richards AssLstant

. ATTORNEY GENERAL

.

. .