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.\ OFFICE OF THE ATI-ORNEY GENERAL OF TEXAS

-- AUSTIN 0-o.MNW*-aAv Eonomble George H. Shepperd Caaptgwller of Public Aacowite AdIn8 Texas

mar sirr of OholJl store I operatedby

This 18 Itn answer to your re ~ovrpbsr

25, 1941, In whioh you re quertlons t

on the ahaln ,andwhl&4ls eea ae lnoidontao&.red thmugh

rade-ln

arJpliraoer

ion under Section 5 or the classificationund8r Seotlon5a3 "QueryThree. Suppose it be held thst the ooapany stort*sln nuch mm11 towns vould be Uabls for the ohaln etore tsrx If they sold any OF 411 of the above 

### typetasde-In appllaaoea,

**oould** they legltiorrrtel~ **dlrpcre** of auah trbde-ia

appllmeea by merely tmasforrlng them to tovna ofnore thans,ooo pepulatianvlwaw the cgp~xalaalruadyp.syw$ the ahaLa atore t&x anawh

"Query Four. **Aaatm~ing**

thbt thla **veuld** be a legltlmate

way **of** dispoalng

of euoh Wade-In a plirntea, thenwould ouch atoroain tovm of mom &a 3,000population

whfah l - o a l m b dy p s)-in gt b o h b in **aton tax**  **under Seotion**  **58** of Artlelolllld P.O.)be lisbleto pay a duplleate tax under Soatlcm by rea5 aon of ita dlapoaltlon of trade-in owodltles vhluh are neither gas or eleotrloal qpllmaoea but 8re appllanoes

auoh 08 lae box refrlgoratora, oil, ooal or keroaeae

bumen? "
The pertinent

part of Artlole7060 **as** amended, **Act8** 1941, 47th **Legialaire,** Rowe Bill Ho. 8, Article v, seation1, read8b8 fOllov8 I

**“ And**  protlded **rUrth8p thfit**  **utll%tlea p8** * **bn** oceupatlon tax und6r thleAptlele -11 n& hnwfter be required

to y the lioeimefee impoaedin **Artialo** 5a,.House

Bill o. 18, Chapter400,Aota of pclrtyLB0 **fourth Leglalrture,**  fop **t&** privilege 

### of r&l* pa and eleotrio

appllaneea

and 

### rtr for the repriM theroof, lntouna of three kJiLu%d (~,Ooo o-;w in pcpulatlon

aoccrding

to the lfktt

pnoed L cenaua
.’ Query One. **Aaaumiag** that the aton in lerrrted ia a **tovn Of**  lea8 than 3*000 population, la oxbmpt fram the ohala Itore tax **undetr Article**  7060, aa amended, and ia eng8gad la the ~elllng **or** metural

gas appllmow, aa inai&M,aZ to it8 utility bualnera,

end, baceptatrade-In

appliuraea

af~ a part of tha sale Flee of it8 Zrbtumbl

go9 appU.anoea,

it la our opinioatht au ox atoro ia entitledto sell aueh trade-in 6ppl%w#ea vlthmt **subfesting** Itself to the chain store tax,

The acaeptanae

of au& trade-in

appl¶maees,

lia part pa?- sexit of the **sale** price of the new a llamea, la a part of the **oonaldsratlm for**  **the** sale and ia 03 yba l?ialdent Of th.4 bualmJaa of the seller. He la equally euthoriacd

to oonvertsuah trade-In

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Bopombble GeorgeH. shepphtrd, Page 3 

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into aaah a8 he wouldb8 to a*11 **for** aesh in the flnt l&aace, so long ead0n.l~ aolmger tho OOCOptUtce cad UlO af awh trade-la

rppllanoea,

la only l.wUlentel to hl8 pr%whrybual- -88 of Purnlah~~ nDtvrs2 gas SM sellingasturPl g86 appllamer.

Our guprmm Courthaa raid:
"The same pemm or corpontloamay oerry cn several

QlffezeRt

bu6lnea8e8, and, of wura6, aa? ba taxed inrespeat ofe8eh~ but* th48L6gtsl*ture has defined

md taxedena bualaear, It la not to k raamed that it ham lnteaded to &gala tu the use business u&w unother mme, nor la it to be rammed that It has intended to tax, aa a dlatinet bualneaa, vhloh la a mere lnoldent of imother

business that vhlchh8a beendeflnedsnd tuedraa whole." Texas Co. vs. St@ams, 100 Tex. 620g 103 S. W. 481.

The faata **outllaod** In your **Inquiry** !bdle@te **that** the **nller fmgager**  **in the**  selling of the meraheadl 88 laqulnd ebaut aalr inoldeatally

end oooariosP1~ for tha purpose of oonvo~tiag tt.u ule prloe of bir nevme~&WMlae Late mh. Such eollia(t bow Saoidentaltoh.lrmalabu8inoar andhehvfng~lndljpald 4n oeoupatlon tax for the privilege of eoaduatlng

that bumlwea, vo are of the oplnloa and **hold that**  **ho** does **not w**  **roeh** selling of tide-la merehend¶.re aubjeat htiaelt to She &da mtcn tax.
**la n#Qhlag**  **this 801L81?l8iCNL,**  **Ye are**  **Rot Iuwadfu**  **of tho**  deofr;ton

**la tho**  **c88e of**  **Stendaml** 011 co. of mxaa V8. state, 142 8. W. 519, ln whluhwrit of erxor wea refumd, whme2.nthe aouzttild thst even thoughdefendant was engaged,

prSmarlly, in storing,

arlliagor distributing petroleum

pmduota mad l

r- *Icingof motor vehialea, in order to oame tithln chs 

### l xem p tl c a of **Seistloa** 5 it mat be sngag la wmh bualaeaa. That cese,hovevec, pnamta a t fact altuatlon from the matterhere **under** dlaoua~ioa. Then, the seller was qagpd la oae type of bualneaa obviously vlthln the o.mmptlonl It was e&so engagedin anotherand entirely differentbus&moss aot vlthln the exmptlon. Here ow mller la engagedin tbo business of aelliag sppllaaceaurd pets obvlosaly wItMa the oxemptlon

provided

Ln Article7060. Ia mak hla "x, rralee

he rametlmea

takes trade-lam6rcheadlaenot with the exemptloa. He hea the privilege of selling,

for vhlehprivilege he ha paid.It filloVa **thet** he hre the prlvllege to collectthe eel*prlee - $0 map the benefitsOS hle aarlee. In order to do 80 he **muat** oa?ert his trade-in merchandise

into o&ah. He cl&a

only do that w eolliag

those trade-ina. He debits in suchmerahandlae &y gg m incldent

to hle bualness. Ye thiak such salesme authirlaed~
I@vlw thus Baswered four firstqueatlon, it heoomer unmmrreary to enswerpur atherqueatlonr.

Yours very txulr