## TB[EL%TORNEY GENERAL OPTEXAS

April 24, 1959
Honorable Robert S. Calvert Opinion No. W-606 Comptrollerof PublicAccounts Capitol Station Re: Whether a garage carrying Austin, Texas a stock of parts for installationon customers' automobiles for repair la subjectto the store tax leviedby Article lllld, Vernon's Penal Code, and Dear Sir: related questions. We quote fromyour opinion request as follows: "I will thank you to advise this Departmentwhether or not a garage that operatesunder any one or all of the four following conditions is subject to the Store Tax as levied by Article llllD,Vernon's,Annotated Penal Code of Texas. "1. Where a garage carriesa stock of parts for the primary use of installationon customers' automobiles for repair and the customers are billed separately for the parts and for the labor. In some cases theparts are not billed separately from the labor but as a complete job. "2. Where a garage does not carryparts in its stockbut on repair or maintenance jobs securesor obtainsparts from otherplaces of business and installs same in customers' cars as repairs, billing the customers separately forparts and for labor. "3. Where a garage carries in stock automobile parts primarily for use in repairs in the shop but does make an occasional sale of theseparts. 

### "4. Where a garage carriesa stock of tires but does not make independent sales of such tires. He does install such tires on customers' cars and makes a charge for the tires but no charge for labor. In some instances there is an exchangemade for the customer's old tires and the difference for the new tires paid In cash."Hon. Robert S. Calvert, Page 2 (OpinionNo. 606)

The portions of Article 11116,V.P.C., relevant to this opinion are as follows: Section7: "The term 'store'as used in this Act shall be construed to mean and include any store or stcres or any mercantile establishmentor establishmentsnot speailical~y exemptedwithin this Act which are owned, operated,maintained, or controlledby the same person, agent, receiver, trustee,

firm, corporation, copartnershipor association, either domestic or foreign, in which goods, wares, or merchandise of any kind are sold, at retail or wholesale." Section 5(a): II

. . .Providedthat the term 'store, stores,mercantile establishment,and mercantile establishments,'whenever used in this Act shall not include:.

. .garages;. . ." Section 5(c): "All. .establishments. .exempted.
. .by this Act shall file an application'asrequired by Sections 2 and 4 of this Act. If they meet the requirementsof this Act for exemption,they shallpay an exemption fee of Four Dollars ($4) for one store and Nine Dollars ($9) for each additional store in excess of one." The provisions of Article 5 quoted above apply only to garages which qualify as "stores" under Section7 of Article lllld, V.P.C. Garages which make no sales,but render "service" only, do not come within the affirmative operations of Article lllld; consequently,the provisions of Section 5, supra, are inapplicable to such garages. See Attorney QeneraFsTpinion No. v-1389 (1952),a copy of which is annexedhereto. The test of a store is whether sales of goods, wares or merchandise are made at the place in question. Hurt v. Cooper, 130 Tex. 433, 110 S.W. 2d 896 (1937);Mont ornery EZ-'iZiCompany

v. State, 169 S.W. 2d 997, ?r-l?&&e affirme Y(5 S.W. 2d 218 (1943). StandardOil Company of Texas v. State, 142 S.W. 2d 519 (Tex.Civ.App.1940, error refused) and Humble Oil and Refining Companyv. State, 158 S.W. 2d 336 (Tex.Civ.App.1942 error refused) dealt with the contention that service stati&s which sold automobile accessories,which were installed on the customer's automobileat the time of sale,were not required to pay the store tax because of the provision of Section 5 of Article lllld 'that the term 'store,Hon.,Robert S. Calvert, Page 3 (OpinionNo. WW-606)

stores,mercantile establishment,or mercantile establishments' wheneverused in this Act shallnot include:.

. .anyplace of business engaged exclusively in the storing, selling,or distributing of petroleumproducts and servicingof motor vehicles;.
. .I'(Emphasisadded). The court in each of these cases held that the service stations in question were "stores" within the meaning of Article lllld; the fact that the accessories were installed on the automobiledid not make the transaction purely a "service," so as to qualify the service station for exemption. We regard the foregoing cases as controlling in the present situation. If a garagemakes sales of parts in connectionwith its operations, it is a "store" within the meaning of Section7 of Article lllld; the fact that suchparts are installedupon the automobile in the course of repair is immaterial, This conclusion is not altered in cases where a garage submitsa bill without detailing the respective charges for serviceand forparts.1 In view of the preceeding discussion,we hold.that the garages in each of the four situationsyou describe are "stores" within the meaning of Article lllld,V.P.C., and are required to file an applicationand paysan exemption fee under the terms of Section 5(c) thereof.
SUMMARY Garageswhichmake Sales of parts in connectionwith their course of business in making repairs are "stores"within themeaning of the Article lllld,V.P.C., and are required to obtain an exemption licenseunder the terms of Section 5(c) of saidArticle. The fact that theparts are installed on the customer's automobile is immaterial. This

' In this connection see Western Companyv. Sheppard, 181 S.W. 2d 850 (Tex.Civ.App.19443ror refused),which Involved the cons&r&ion of the Act levying a tax upon service rendered in connectionwith acidizing wells, etc. The court said that the sale of acid or materials in connectionwith such service was a separable item and "no good reason appearswhy those engaged in such business could not and shouldnot segregate in each instance a fixed charge for such service from the sales prices of theirmaterials at the well head. In the absence ofHon. Robert S. Calvert, Page 4, (OpinionNo. WW-606)

conclusion Is not altered in cases where a garage submits a bill without detailing the respective charges forparts and labor. Very truly yours,

WILL WILSON Attorney General

Assistant JNP:bct APPROVED: OPINION COMMITTEE: Geo. P. Blackburn, Chairman David R. Thomas J. Milton Richardson Marvin H. Brown, Jr. Robert T. Lewis Richard 0. Jones FWED F'OR

THE ATTORNEY GENERAL : W. V. Geppert

1 (Con't) such segregationand the fixation of a specific service charge, since the statute expressly taxes only the service,regardless of the dominant element of value of the materials used, themost reasonable and practical method of arriving at the service chargewould be the difference between the fair and reasonablemarket value of the acid delivered at the well head and the total gross charge; or if suchmarket value cannot be so established,then its actual or intrinsic value at the well head."