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### July 31, 1957

Hon. Robert S. Calvert OpinionNo. WW-212 Comptroller of Public Accounts Capitol Station Re: Whether or not a partiAustin, Texas cuiarmanner of issuing cigarettepermits for cigarettevendingmachines would be permissibleunder the provisions of the Dear Mr. Calvert: CigaretteTax Law

Your opinion request dated July 

### 17, 1957,is as follows: "Quoted below is an outline of the

procedure t.hat

certain cigarettevending machine operators would like to follow in regard to their cigarettepermits:
"'Duri,ng

the past several years we have noted an increasingnumber of cigarette machines staying in our shot not selling e~l.garettes

and have givei.some thought about decreasing the cost of the permits for thesemachines.
ML We desire to use a plan whereby the cigarettedealerspermit will be identified by a machine cabinet lumber which we will place on a metal tag znd attach to each machine on location sel~ling cigarettes. We feel that the :nspectionof a machine can be made more readily Ln that the corresponding machine number will be placed on the outside of a machine cabinet in plain view rather than using t~he

unit number which often is not in view until the cabinet door has been opened. We feel that by using this plan we will not have to handle the permits nearly as much as before, thereby reducing the chances of losing or misplacing.Hon. Robert S. Calvert Page 2 (WW-212)

"'We plan to replace the old permits coming due eachmonth with permits carrying our new machine cabinetnumbers. For until themachine is placed on location at which time we will request a permit with a new machine cabinet number. "'Rather than requesting duplicate permits for all of our cigarettemachines with the new cabinet numbers at one time, we plan to renew the old permits coming due eachmonth with permits carrying the new cabinet numbers for only machines on location selling cigarettes. Thus after one year we will have allmachines on locationnumbered with a cabinetnumber and a correspondingcigarettedealers permlt attached. Ourmachines not on location and not selling cigaretteswill not have a cabinet number or a cigarettedealers permit until such time as they be placed on location to sell cigarettes. When we take amachine to a location to sell cigaretteswe will place a cabinet number and a corresponding permit on themachine. By not having to purchase permits for the machines not on location,we expect to save a considerable sum ofmoney.'" If we understand y~ourrequest correctly,you want us to advise you upon the question which we state as follows: May a Retail Dealer of cigarettes selling and distributingby vendingmachines transfer a Retail Dealers Permitwhich has been issued for the operation for a particular vendingmachine to anothermachine without taking out a new permit.
We are concernedhere only with Retail Dealers, Retail Dealers Permits and vendingmachines.

Sue-Sec.d of Section 1 of Art. 

### 7047~ -1Vernon's Civil Statute defines a place of business as follows:

"'Place of Business' Is construed to mean and include any place where cigarettes are sold or where cigarettesare stored or-_ -

Hon. Robert S. Calvert Page 3 (W-212)

kept for the,purpose of sale or consumption; or If sold from any vehicle, train, or cigarettevendingmachine, the vehicle, train or cigarettevendin -T-+ machine on which or from which **suc** cigarettes are sold shall constitutea place of business." (Rnphasisadded) Sub-sec. o of Section 1 of Art. 7047c-1V.C.S., defines a Retail Dealer as follows:

"'RetailDealer' shallmean and include everyperson other than a distributor or wholesale deal~er who shall sell, distribute, or offer for sale or distribution or possess for the purpose of sale or distribution, cigarettes irrespectiveof quantity or amount or the number of sales or distributions;and it shall also mean and include every person other than a distributor or wholesaledealer who distributes or disposes of cigarettes in unbroken individual packages or in quantities of ten (10) or more as gifts or prizes or in any other manner of distribution or disposalwhere no sale is involved."
It is, therefore, quite apparent that a cigarette vending machine is within the statutorydefinition a "place of business" and that each separate machine is a separate place of business.

Sec. 4 of Article 7047@-1, as follows: 

### v.c.s,, provides in part
.

"Every retail dealer in this State now engaged or who desfres to bec'omeengaged, in the sale or use of cigarettes upon which a tax is required to be paid, shall,within thirty (30)days from the date this law becomes effective, file with the Comptroller an application for a cigarettepermit as a retail dealer, said application to be accompaniedby a fee of Five ($5.00)Dollars. Each vendingmachine must have a serialnumber as provided in Section 4 as follows:Hon. Robert S. ,Calvert Page 4 (WW-212)

"If the application Is for a permit to sell cigarettes from or by means of a cigarettevendingmachine, train, automobile or other vehicle, the serialnumber of saidvendingmachine, the make, motor number and Statehighway license number of said automobile or other vehicle and the name of the railway company and number of said train shall be shown on the applications." (Emphasisadded) The manufacturer's serialnumber on vendingmachines is the onlymeans of identification of the particularvendingmachine and we think by referring to the serialnumber in the statute evidences a legislative intent that no transfer of a permit is permissible from one vending machine to another bearing a different serialnumber. Clearly, the manufacturers serialnumbermay not be changed, and by the same reasoning the permit granted for the opertion of a particularvendingmachine may not be transferred to'another bearing a different serialnumber.

No where in the statute is there definite authorization for the transfer or assignment of permits once issued by the Comptroller;nor is there justification for concluding that it is reasonably inferred. On the other hand there is a definiteprohibition against assignments, for the statute specifically says in Section 4,,that upon the receipt of the application for the permit

. . . the comptroller shall issue to every distributor,wholesale dealer or retail dealer for theplace of business designated, a non-assignable consecutivelynumbered permit, designating the kind of permit and authorizing the sale of cigarettes in this State." Each permit is issued for a period of 12 months andmust be renewed every 12 months.

Suppose a Retail Dealer .operated4 drug stores each with a Retail Dealer's Permit to sell and distribute cigarettes. Each one would be a separateplace of business and would require separatepermits. The statutewould not authorize the transfer of the permit of one store to another. The samewould apply to four vendingmachine's, if owned and operatedby the same Retail Dealer, for each vending machine is as distinctivelya separateplace of business as each storewould be.

You are, therefore, advised that the answer to the question which we have stated Is in the negative. OnOe a permit is issued for a particularvendingmachine which-. -

Hon. Robert S. Calvert Page 

### 5 (NW-212)

is seriallynumbered itmay not be changedby transfer or assignment to anothermachine even though all of the machines are owned and operatedby the same Retail Dealer.
SUMMARY The permit Issued by the Comptroller for the sale and distribution of cigarettesby a Retail Dealermaking sale and distribution by vendingmachinesmay not be transferred from one vendingmachine to another. Each vendingmachine must bear themanufacturer's serialnumber and is under the statute a separateplace of business and a permit granted for the operation of a particular vending machine bearing a definite serial numbermay not be transferred to another machine with a different serialnumber.
Yours very truly
WILL WILSON Attorney General

LPL;fb
APPROVED: OPINION COMMITTEE: H. Grady Chandler, Chairman
W. V. Geppert Wallace Finfrock
B. H. Timmins, Jr. REVIEWED FOR THE ATTORNEY GENERAL BY: George P. Blackburn