GENEEAL, 

Honorable Robert S. Calvert 

Comptroller of Public Accounts 

State of Texas 

Austin, Texas 

Opinion No. C-454 

Re: Whether the Comptroller 

of Public Accounts will 

be required to collect 

the difference in tax 

of 3 cents per package 

on cigarettes stamped 

at the old rate on hand 

as of the closi~ng of 

business on June 33, 

1965, and related 

near Sir: question. 

We are in receipt of your letter requesting an opinion on 

the above captioned matter. 

We quote the following from your letter: 

"The 59th Regular Session of the Texas 

Legislature passed House Bill #1181 

(copy attached) which amended Article 

7.06 of Chapter 7, Title 122A, TaxationGeneral, Vernon's Texas Civil Statutes, 

requiring an additional tax In the 

amount of $3.50 per thousand on cigarettes in addition to the tax levied by 

Article 7.02; therefore, changing the 

cigarette rate from 8q! to ll$ per 

package or 80$ to $1.10 per carton. 

"This department requests an official 

opinion from you as to what effect the 

passing of House Bill #1181 will have 

upon Article 7.08 of Chapter 7. Will 

this department be required to collect 

the difference In tax of 3$ per package 

on the cigarettes stamped at the old 

rate on hand as of the closing of 

business on June 30, 1965? 

-2155- 
: . 

. 

Honorable Robert S. Calvert, Page 2 Opinion No. C-454 

"If we are required to collect this 

additional tax, please advise if the 

procedures in Article 7.08 are 

applicable for the collection." 

The caption of House Bill No. 1181 reads: 

"AN ACT amending Article 7.C6, Title 

122A, Taxation-General, Revised Civil 

Statutes of Texas, 1925, as added; 

levying an additional tax on cigarettes; 

providing an effective fate; and 

declaring an emergency.' 

The first two Sections of this Act read as follows: 

"Section 1. Article 7.06, Title 122A, 

Taxation-General, Revised Civil Statutes 

of Texas, 1925, as added by Chapter 1, 

Acts of the 56th Legislature, Third 

Called Session, 1959, is amended to read 

as follows: 

'Article 7.06. Additional Tax. 

l(l) In addition to the tax levied by 

Article 7.02 herein, there is hereby 

imposed a tax of Three Dollars and Fifty 

Cents ($3.50) per thousand on cigarettes 

weighing not more than three (3) pounds 

per thousand and Three Dollars and Fifty 

Cents ($3.53) per thousand on those 

weighing more than three (3) pounds per 

thousand on all cigarettes used or otherwise disposed of in this State for any 

purpose whatsoever. The tax shall be 

paid only once by the person making the 

'first sale" in this State and shall 

become due and payable as soon as such 

cigarettes are subject to a 'first sale" 

in Texas, it being intended to impose 

the tax as soon as such cigarettes are 

received by any person in Texas for the 

purpose of making a "first sale" of 

same. No person, however, shall be 

required to pay a tax on cigarettes 

brought into this State on or about his 

person in quantities of forty (40) 

-2156- 
Honorable Robert S. Calvert, Page 3 Opinion No. C-454 

cigarettes or less when such 

cigarettes have had the individual 

packages or the seals thereof broken 

and when such cigarettes are actually 

used by said person and not sold or 

offered for sale. 

'(2) Payment of the tax shall be 

evidenced by stamps purchased from 

the Treasurer and securely affixed to 

each individual package of cigarettes 

covering the tax thereon as imposed 

by this Chapter: provided that such 

stamps may be purchased and affixed to 

such individual packages of cigarettes 

by a manufacturer of cigarettes outside this State, in which case no 

further payment of tax shall be 

required: provided, further, that 

such stamps shall not be required to 

be purchased and affixed to sample 

packages of cigarettes containing no 

more than five (5) cigarettes per 

package, when the manufacturer of the 

cigarettes reports and pays the tax 

thereon directly to the State. 

‘(3) The net revenue derived from the 

tax levied under this Article shall be 

credited to the General Fund of this 

State. Provided, no portion of the 

revenues derived under this Article 

shall be set aside to any fund for 

the administration and enforcement 

of the cigarette tax law of this State. 

Provided, further, the net revenues 

collected under this Article may be 

credited daily to the Omnibus Clearance 

Fund hereafter referred to in this Act 

and on the first day of each month 

following the collection of the net 

revenues derived under this Article, 

the said net revenues shall be credited 

to the General Fund, except that the 

net revenues derived under this Article 

during the month of August of each year 

shall be credited to the General Fund 

on the thirty-first day of August of 

each year; it being specifically understood that no portion of the said net 

-2157- 
Honorable Robert S. Calvert, Page 4 Opinion No. C-454 

revenues of this Article shall 

remain or be distributed under the 

provisions governing the said 

Clearance Fund. t 

"Sec. 2. This Act shall take effect 

on July 1, 1965." 

Section 3 Is the emergency clause of the bill and is 

omitted because not pertinent to your inquiry. 

Examination of this amendatory statute reveals that it is 

virtually an identical tax levy in all respects as imposed 

the existing Art. 7.06, except that the tax levied is $3.50 

by 

per thousand on the cigarettes rather than the existing $2.00 

per thousand. 

The Legislature, by Art. 7.02(3), has previously declared 

that, 

"The impact of the tax levied by 

this Chapter is hereby declared to 

be on the vendee, user, consumer, 

or possessor of cigarettes in this 

State and when said tax is paid by 

any other person, such payment shall 

be considered an advance payment and 

shall thereafter be added to the 

price of the cigarettes and recovered 

from the ultimate consumer or user." 

Art. 7.41 declares the nature of the tax to be an excise or 

use tax. 

By Chapter 7, known as the "Cigarette Tax Law," the Legislature has provided a comprehensive plan for the levy, administration, and enforcement of that law. For example, Article 

7.36 imposes a penalty on whoever shall make a first sale of 

any cigarettes without the proper stamp being affixed to each 

package. Art. 7.35 imposes the duty of collection, supervision, 

enforcement of the taxes and penalties of the provisions of the 

entire Chapter on the Comptroller and gives that officer the 

power and authority to make and publish rules and regulations 

for the enforcement of said Chapter. Art. 7.08 provides the 

procedure and basis for collection of the taxes levied under 

Art. 7.02 and 7.06. Paragraph (3) of Article 7.08, in part, 

-2158- 
Honorable Robert S. Calvert, Page 5 Opinion No. C-454 

provides: 

!I 

. . .Every retail dealer and 

wholesale dealer having cigarettes 

to which stamps of the old 

denomination are affixed in his 

stock in quantities of two thousand 

(2,300) or more on the effective 

date of this Chapter shall immediately 

inventory the same and file a report 

of such inventory to the Comptroller 

and attach to such inventory a 

cashier's check payable to the State 

Treasurer in a sum equal to the 

amount of additional tax due on such 

cigarettes computed at the new rate 

provided in this Chapter. . . ." 

The administrative construction of this Chapter, as amended 

and levying an additional tax is in accord with the interpretation 

we make of the statute in question. The Legislature has amended 

the statute on several prior occasions (1955 and 1959) and used 

the identical language of the prior statute as it has done on 

this occasion. The Legislature has met numerous times since the 

departmental construction and administration of the Chapter by 

the Comptroller, and the Legislature is presumed to have had 

such construction in mind in amending the statute herein being 

construed. Isbell v. Gulf Union Oil Co., 147 Tex. 6, 209 S.W.2d 

762, 766 (1943): Calvert v. Fisher, 

1953, error ref.). 

259 S.W.2d 944 (Tex.Civ.App. 

The amended Art. 7.36 (House Bill 1181), being an excise 

revenue measure, when subject to construction, must be construed 

as most effectually to accomplish the legislative intent. They 

are to be interpreted fairly for the state, justly for the 

citizen, and liberally construed so as to effectuate their 

purpose of collecting money in aid of revenue. 54 Tex.Jur.2d 

165, Taxation, Sec. 41. 

We do not find any ambiguity or obscurity as to legislative 

intent in the above statute. 

The Amendment here was obviously designed and intended 

to alter Art. 7.06 only in the amount of tax to be levied on 

the first sale by all parties subject thereto after the close 

of business on June 33, 1965. Art. 7.06, as amended, thus 

becomes a part of the original Chapter 7 and takes the place 

of the prior Art. 7.06. 53 Tex.Jur. 136, Statutes, Sec. 90: 

82 C.J.S. 411, Statutes, Sec. 243; and cases cited in said 

-2159- 
Honorable Robert S. 

texts. The general 

Calvert, Page 6 Opinion No. C- 454 

rules relating to construction of statutes . . . .._ . apply to such a statute as tnis imposing a license or excise 

tax, and all the provisions of the Act should be considered 

and construed as a whole to the end that all parts may be 

harmonized wherever possible. 36 Tex.Jur.2d 630, Licenses, 

Sec. 37; 53 C.J.S. 492, Licenses, Sec. 13; and cases cited 

in said texts. 

We think the expressed intent of the Legislature in 

Section 1, sub-section (1) and (2) of House Bill 1181, is to 

levy an additional cigarette tax of $3.50 per thousand on all 

persons "making the first sale" in Texas on and after July 1, 

1.965, and that payment thereof "shall be evidenced by stamps 

purchased from the Treasurer and securely affixed to each 

individual package covering the tax thereon as imposed by 

this Chapter. . . ." Therefore, any sale by any person on 

or after July 1, 1965, must be evidenced by the proper stamp 

paid for at the new rate levied, and any other sale is outlawed and subject to the penalties provided in Art. 7.36 of 

Chapter 7. 

The language of the statute is broad enough and its 

object general enough to reach conditions, persons, subjects, 

and business within its purview and scope and coming into 

existence subsequent to the passa e of the Amended enactment. 

50 Am.Jur., Statutes., Sect. 237; % 2 C.J.S. Statutes, Sec. 

319; Sutherland-Statutory Construction, Vol. 2, 3rd Ed., 

Sec. 5102; Browder v. U. S. of America, 312 U.S. 335, 85 L. 

Ed. 862, 61 S.Ct. 599 (1941); Oil Well Drilling Co. v. 

Associated Indemnity Corn 

153 Tex. 153, 264 S.W.2d 657 

258 S.W.2d 523, 529, Affirmed, 

(1954). 

We therefore answer your first question in the affirmative, and the Comptroller is required to collect the difference in tax of three cents per package on cigarettes stamped 

at the old rate on hand b$ one who after midnight, June 30, 

1965, makes a "first sale . 

You also ask the related question of whether the procedures in Art. 7.08 are applicable for collection. We 

answer this question in the affirmative also, being of the 

opinion that the procedures therein are adequate and 

pertinent. The numerous date references therein to the 

,'effective date of this Chapter" should be harmonized and 

interpolated to intend and mean, in effect, "the effective 

date of this Chapter, as amended," in accordance with the 

well settled general rules or canons of statutory construction. If some procedural provision in Art. 7.08 

-2160- 
Honorable Robert S. Calvert, Page 7 Opinion No. C-454 

cannot be harmonized or made applicable to the enforcement of 

the new tax levy, then we believe the Comptroller has the 

power and authority to make and publish the necessary rules 

and regulations to effect the collection procedures, as 

authorized and contemplated In Art. 7.35(l). Under Art. 7.08 

(l), the Comptroller is expressly given the authority to design 

the tax stamps In such size and denomination as may be needed 

to carry out the purposes of Chapter 7. 

The Comptroller of Public Accounts 

will be required to collect the dlfference In tax of three cents per 

package on cigarettes stamped at the 

old rate on hand after midnight June 

30, 1965, under House Bill No. 1181, 

mending Art. 7.06, Title 122A, 

Taxation-General. The procedures In 

Art. 7.08 would be generally appllcable for the collection of the 

additional tax as levied. 

Very truly yours, 

WAGGONER CARR 

Attorney General 

KBT:dl 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Arthur Sapdlin 

Harold Kennedy 

Robert L. Lemens 

Jack Goodman 

APPROVED FOR THE ATTQRNEY GENERAL 

By: T. B. Wright 

-t161-