GENEEAL,

Honorable Robert S. Calvert Comptrollerof Public Accounts State of Texas Austin, Texas OpinionNo. C-454
Re: Whether the Comptroller of PublicAccountswill be required to collect the difference in tax of 3 centsper 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 requestingan opinion on the above captionedmatter.
We quote the following from your letter:

"The 59th Regular Session of the Texas Legislaturepassed 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 $3.50per thousand on cigarettes in addition to the tax leviedby Article 7.02; therefore, changing the cigarette rate from 8q! to ll$ per package or 80$ to $1.10per carton. "This departmentrequests an official opinion from you as to what effect the passing of House Bill #1181 will have upon Article 7.08 of Chapter 7. Will this department be required to collect the difference In tax of 3$ per package on the cigarettes stamped at the old rate on hand as of the closing of business on June 30, 1965?

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HonorableRobert S. Calvert, Page 2 OpinionNo. 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:

"ANACT amendingArticle 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:

"Section1. 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: 'Article7.06. AdditionalTax. l(l) In addition to the tax leviedby 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 thousandand Three Dollars and Fifty Cents ($3.53)per thousand on those weighingmore than three (3)pounds per thousand on all cigarettesused or otherwise disposed of in this State for any purpose whatsoever. The tax shall be paid only once by theperson making the 'firstsale" in this State and shall become due and payable as soon as such cigarettesare subject to a 'first sale" in Texas, it being intended to impose the tax as soon as such cigarettesare received by any person in Texas for the purpose ofmaking a "first sale" of same. No person, however, shall be required to pay a tax on cigarettes brought into this State on or abouthis person in quantities of forty (40)

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cigarettes or less when such cigaretteshave had the individual packages or the seals thereofbroken and when such cigarettesare actually used by said person and not sold or offered for sale. '(2) Payment of the tax shall be evidenced by stampspurchased from the Treasurer and securely affixed to each individualpackage of cigarettes covering the tax thereon as imposed by this Chapter:provided that such stampsmay be purchased and affixed to such individualpackages of cigarettes by a manufacturer of cigarettes outside this State, in which case no furtherpayment of tax shall be required:provided, further, that such stamps shall not be required to be purchased and affixed to sample packages of cigarettes containingno more than five (5) cigarettesper package, when themanufacturer of the cigarettesreports 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 derivedunder 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 collectedunder this Articlemay be credited daily to the Omnibus Clearance Fund hereafter referred to in this Act and on the first day of each month following the collectionof 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-firstday of August of each year; it being specificallyunderstood that no portion of the said net

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revenues of this Article shall remain or be distributedunder the provisionsgoverning the said ClearanceFund.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 statutereveals 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 cigarettesrather 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 ispaid by any otherperson, such payment shall be consideredan advancepayment and shall thereafterbe added to the price of the cigarettesand 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 "CigaretteTax Law," the Legislaturehas provided a comprehensiveplan for the levy, administration,and enforcement of that law. For example,Article 7.36 imposes a penalty on whoever shallmake a first sale of any cigaretteswithout the proper stamp being affixed to each package. Art. 7.35 imposes the duty of collection,supervision, enforcement of the taxes and penalties of theprovisions of the entire Chapter on the Comptrollerand gives that officer the power and authority tomake and publish rules and regulations for the enforcement of said Chapter. Art. 7.08 provides the procedure and basis for collectionof the taxes leviedunder Art. 7.02 and 7.06. Paragraph (3) of Article 7.08, inpart,

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provides: !I

. . .Everyretail dealer and wholesale dealer having cigarettes to which stamps of the old denominationare affixed in his stock in quantities of two thousand (2,300)or more on the effective date of this Chapter shall immediately inventorythe same and file a report of such inventory to the Comptroller and attach to such inventorya cashier's checkpayable 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 administrativeconstructionof this Chapter, as amended and levyingan additional tax is in accordwith the interpretation we make of the statute in question. The Legislaturehas amended the statute on severalprior occasions (1955and 1959) and used the identical language of theprior statute as it has done on this occasion. The Legislaturehas met numerous times since the departmental construction and administrationof the Chapterby the Comptroller,and the Legislature is presumed to have had such constructioninmind in amending the statuteherein being construed. Isbellv. GulfUnion Oil Co., 147 Tex. 6, 209 S.W.2d 762, 766 (1943):Calvertv. Fisher, 1953, error ref.). 259 S.W.2d 944 (Tex.Civ.App.

The amended Art. 7.36 (HouseBill 1181), being an excise revenuemeasure, 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 collectingmoney 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 Amendmenthere was obviouslydesignedand 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 theplace 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

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texts. The general Calvert, Page 

### 6 Opinion No. C- 

### 454

rules relating to constructionof statutes

. . ..._ . apply to such a statute as tnis imposing a license or excise tax, and all theprovisions of the Act should be considered and construed as a whole to the end that all parts may be harmonizedwhereverpossible. 

### 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 $3.50per thousand on all persons "makingthe first sale" in Texas on and after July 1, 

### 1.965, and that payment thereof "shallbe evidenced by stamps purchased from the Treasurer and securely affixed to each individualpackage 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 penaltiesprovided in Art. 

### 7.36 of Chapter 7. The language of the statute is broad enough and its objectgeneral enough to reach conditions,persons, subjects, and businesswithin itspurview and scope and coming into existence subsequent to thepassa e of the Amended enactment. 50 Am.Jur., Statutes., Sect. 237; %2 C.J.S. Statutes, Sec. 319; Sutherland-StatutoryConstruction,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 

### 153Tex. 

### 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 centsper package on cigarettes stamped at the old rate on hand b$ one who aftermidnight, June 30, 

### 1965,makes a "first sale

. You also ask the related question of whether theprocedures 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 interpolatedto intend and mean, in effect, "the effective date of this Chapter, as amended," in accordancewith the well settled general rules or canons of statutory construction. If some proceduralprovision in Art. 7.08

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cannot be harmonized ormade applicable to the enforcementof the new tax levy, then we believe the Comptrollerhas the power and authority tomake andpublish the necessary rules and regulations to effect the collectionprocedures, as authorizedand contemplatedIn Art. 7.35(l). Under Art. 7.08 (l), the Comptroller is expresslygiven the authority to design the tax stamps In such size and denominationas may be needed to carry out thepurposes of Chapter 7.

The Comptrollerof PublicAccounts will be required to collect the dlfference In tax of three centsper package on cigarettesstamped at the old rate on hand aftermidnight 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 collectionof the additional tax as levied. Very trulyyours, WAGGONER CARR Attorney General

KBT:dl
APPROVED: OPINION COMMITTEE
W. V. Geppert, Chairman Arthur Sapdlin Harold Kennedy Robert L. Lemens Jack Goodman
APPROVEDFOR THE ATTQRNEY GENERAL By: T. B. Wright

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