### E TCGENERAL

.‘

. OF XAs

December 6, 1962

Honor&&e ~JimU, Thompson OpinionNo, WW-1489 CountyAttorney Lamar County Ra: Whether paragraph (H) of Paris, Texas Article 20.04, Chapter 2O;Title 122A, Taxation General (the aales tax), exsmpts both the seller and ths purchaser from all the taxes of Chapter 20 undsr the submitted Dear Mr. Thompson: fact6.

You requested the opinion of this office upon the following question:
*Downparagraph (HI of Article 20.01, of Chapter 20,,Title 122A,Vernon's Texas Civil Statutes (the-TexasLimited Salee, Excise and Use TaxAct), exempt both the sellerand the purchaserOFconsumer from all of the taxes ' imposedby that Act where tangible personal property to be used in this State is purchased at retail and delivered by ths seller to the puraha8er pursuant to a valid written contract executed prior to September 1, 1961, the contract being a contract of sale of tangiblepersonal **property** in a certain fixed quantity at a certain fixsdipricewith delivery to be on certain fixed datea after September 1, 1961, and notice of such contract and the exclusion claimad under paragraph (HIhaving been duly given by the taxpayer to the Comptrolleron or before the lapse of one hundred and twenty (120)days from the date of the passage of the Act?"
The Texae Limited Sales, Excise and Use Tax Act is, of course, new to the law of Texas and we are not aware of any reported case8 construing the effect of paragraph (H). The question presented is entirely one of statutory construction. Therefore,we muat use the rules of statutory construction.epplicable.totaxetion statutes..- -

. Hkmorablo Jim N: Thompson, Page 2 ,(W'ft-1'+89)

Article 1.01,Title 122A, Taxation General,Vernon's Civil Statutes, states that:

"Unless specificallyaltered by this Act or unless the context,requires,otherwise,the provision8 of Article8 10, 11, 12, 14, 22 and 23, Revised Civil Statute8 of Texas, and of Acts, Fiftieth Legislature, 1947, Chapter 359, compiled
as Texae Civil Statutes,Article 23a (VernonJs 1948) apply to this'Act.*
Article 10, Vernon’s Civil Statutes,provides general rules for statutory constructionand directs the courts to look diligently for the intentionof the Legislaturewith a view to the old law, the evil and the remedy. It further directs that-statutoryprovisions,shallbe liberally construedwith a view to effect their objects and to promote justice. The provisions~of.Articles11, 12, 14, 22 and 23 are not applicable.to the present question,

It is well settled,that,the.intentionof the Legislature is the paramount conaiderationinconstruing a statute, because such intention is the law itself. 5 Tex. 566,

, 58 Tex. 334 50 Tex. 18, from,thewords, phrase or paragraph under consideration,rules of construction become unnoceseary. The word8 of paragraph (H)are sufficiently clear to reveal the,intent of the Legislature.~

"(HI Writtencontracts and Bids Executed Prior to the EffectiveDate of this Chapter. There are exempted from the taxes imposed by this Chapter the receipts from the sale, use or rental of, and the **storage** use or other consumptionin this State of, tangible personal property (i3used for the performance of a written contract entered~intoprior to the effectivedate of this Chapt.er~or. (ii)pursuant to the obligation of a bid or bids uubmitted prior to the effectivedate of thisChapter,which bid or bids could not be altered or withdrawn on or after that date and which bid or bids and contract entered into pursuant thereto are.at a fixed prioe not subject to change or edification by reason of a tax imposed by this Chapter.

."Provided,however, that.notice of such contract 

### or bid 

### by **reason** of which 

### an,exclusionis claimed under ,thi8 paragraph (H)must .begiven by the taxpayer to theiionorablo Jir N. Thompson, Page.3 (WW-ls89)

- f ,COarptroller

on or bsfore tha'~'lapse of,on,ehundred and twenty (120) days from.the~.date of passage : of this Chapter."
The requirement,ofnotice.to the Comptrollerwithin one hundred and twenty (120)days is met in the situationposed by your question and its effect need not be considered.

We believe that-paragraph (H) exempts both the seller and the purchaser **or** consumer from all the-taxes imposedby Chapter 20 where tangible personal pro erty to.be Used in this~state i? purchased at retail and de1 vered.by the seller to the purchaser E pursuant to a velid written contract.exeoutedprior to,September 1, 1961, with delivery to be~on certain,fixed dates after September 1, 1961, ina certain fixed quantity at a certain fixed price.

While we believe that the plain,words of paragraph (HIare sufficiently clear to reveal the intention.of,theLegislature, it must be remeabered tha? wevery**word of**  6 statute is presumed to have been used for a purpose and a cardinal rule of statutory construction requires that each~swOmice, clause, phrase and word be given effect if reasonably possible." Eddins-Walche Butane Co. v. Calvert, 156 Tex. 507, 298 S.W.ld 93, 96 (1967) iti 39 T Statptes, Section 112, and authori& c%ed thi%itf' . 208 Fur;hermore, **a** likrsl **oonstruction,** as directed by Article 10,Vernon's Civil St&tUtOSi means to give to the words **of.6** statute their generally accopted waningi Maryland Cas. Co, v. Smith, 40 S.W.2d 913 (Civ, App; 19311,

Paragraph (R)begina, "There hre exempted from the taxes imposed by this Chaptar e a ." It will be noted that the wr *taxer" IB used in tns plural form, and must therefore relate to all taxes irapossdby Chapter 20.. namsly the sales, excise, and use taxes a If the exuption had been meant~to apply to lea8 than all taxes, limiting terms would have beenused, The language "by this Cha term is obviously broad and 

### l pplies.toany tax imposed by any art cle within **Chapter 20.**  **f** Ths exemption then is from,all taxes imposedby any mrt **of Chaptar**  20. -

;-. This broad sxamption. 6pplia&% "the receipt8 from the sale, use or rental of, and the storage use or other consumption in this
wise broad. State of, tangble rrsonal property D 0 0: Th$a languagon:zc;i;;; l se ler is exempted from liability on his from tha sale, usa OFrental of" tangible personal~property,and the buyor or oomsoyr ir sxeaptmd from a-use-tax on "the storage use or other aoammptioa-bt this **State~of,** tangibls personal ProwW Q. To s6y that ths buyer or consumer is not exempted from aHonorable Jim N. Thompson, Page 4 (WW-1489)

use tax,ir to insert restrictive.or limiting language in the statute where, none actually existso Tbe.words "storageuse or other conrurption"

### arevew broadand are in,noway limitedby the plain 

### (~otis of.thestatute to-certain types-of~use or particular types of consumption,



### The language,exaninedabove is broad and general. The limitations imposed in paragraph (Ii) are'categorized in twosconditions. The first is that the property must be "used for the performance of a written contract entered into prior tomthe.effectivedate of this Chapter

. , .and whach contract entered 

### intopursuant thereto are at's fixed.~price not's;bject to,change or modificationby reason of a 

### tax imposedby this Chapter." bids and does not 

### concernus here, The second condition pertains to It is readily apparent that this limiting clause is both narrow and precise, and we must assume that if further limitationswere intended they would be equally explicit, To qualify for the exemption from 

### the taxesof Chapter 20, one must have entered into a-contract concerning the-tangiblepersonal property in question prior to the 

### effectivedate of the Chapter, September 1; 1961, and the contract pricemust 

### notbe subject to change because of taxes leviedby this Chapter 20. These requisites have.apparentlybeen met by the contract,describedin your question.

There appears to beno-official record of the intent of Legislatorsin wording paragraph (Ii) 

### as they did, other than the words of thp statute itself,

An examination of a contrary construction of paragraph (H) proves the,correctnessof our conclusions, The Texas Supreme Court 

### has statedthat in the event that Yhe.intention of the Legislature is so inadequately or vaguely expressed that the court must resort to con8truction, it is prosperto considsr~the results and consequences of 

### anyproposed constructioniand the,courtwill, if possible, place upon the statute a construction

### whichwill not result in injustice, oppression)hardshipi or inconvenience,unreasonableness,prejudice to public,antere8t,or absurd coneequences,n National Suret Corporation.v.Ladd, 131 Tax. 295, 116 S,W,2d 600, 603 (1936 eating 59 Corpus J Uris. 969. 9

The 

### sale8tax is~imposed **by** Article 20.02 on retail sales. The responsibility for paying the tax,to~the State is that of the retailer,but Article 20.02, Section (A) states that the tax is to 

### be collected fqom the.consumer. 

### taxburdenat all by the If.para raph (Ii) is to relieve any exceptionconta ned,therein,

B it will eliminate the tax paid by the consumer-rather thanmerely eliminate the aollection of the,tax by the~retailer. If paragraph 

### (HIis construed to exempt,property from only the~sales tax and~not exempt it from

### a use tax on the consumer; the.effect.is to give.no~reliefHonorable 

### Jim 1. Thompson,Page 6 tWW-1489)

et all. Rather, tha same amount of tax would be paid by the consumer and the only effect would be to call the tax by another name, i.e., a use 

### taxrather than l~ealeetax. Therefore, if 

### paragraph(Ii)

is to be,given effect ae~an exemption from “the 

### tax88imposed by this Chapter," the proper interpretation,in our opinion, of the Legislature's intent is that both the seller and the purtihaeer

or consumer are to be exempt from all taxes imposed by Chapter 20when the limiting requirements of magraph (H)are met. To construe paragraph (Hl otherwisewould be to ignore the rule quoted above from Eddins-WalchsrButane Co. v. Calvert, eupra :

‘, SUMMARY
Paragra Varnon’s p" (Ii) of Article 20.04,Taxation 

### General, Civ 1 Statutes, exempts both~the seller and purchaser orooneumer from all the taxes imposed by Chapter 20,when tangible 'personalproperty is sold 

### pursuantto a written.contruct,enteredinto prior to 

### S*ptember,l,1961,providedthatthe expressconditions of paragraph (H) are met.

JAP:ca Youra very truly,

WILL WILSON Attor ey

9 General of Texas

By: 4zuQYPq*
eAlbert Pruett, Jr. Assistant Attorney General

APPROVED:

OPINION COMMITTEE Y. V. Oeppert, Chairman 

### BillAllen Arthur Sandlin L. P, Lollar Thou8 H. Peterson

REVIEWED FORTHE ATTORNEY GENERAL BY: Leonard Passmore