E QXORNEY GENERAL 

..oFAUSTIN aa. TEXAS 

., WVILL WILSON 

ATTGRNEYGENERAr. . April 2, 1959, 

Hon. V. L. Ramsey 

Chalrman;Committee'on 

Revenue and,Taxatlo~n Re:. Constitutionality of 

House of Representatives House Bill No. 67, 56th 

The State of Texas Leg*, Repealing the Tax 

Austin, Texas Exemption Accorded Cigarettes'sold at Federal 

Military Installations 

Dear Mr. Ramsey:, Within the State. 

We quote from your opinion requests as follows: 

Opinion No. ~~-582 

"The committee requests to be advised on the question 

as to whether or not this proposed Bill [H. B. 67_7 

contravenes the Federal Constitution, any Federal 

statute, or any court decision with regard to taxing 

a:Federal instrumentality and specifically would this 

Bill be constitutional?" 

:, 

House Bill 67 has as Its single purpose the repeal of 

Chapter 14, Acts of the 47th'Leg., Regular Session, 1941, 

as last amended by ch. 27.5, Acts of the &&h Leg., Regular 

Session, 1943, 'which fs,codlfied as Article 7047c-3, V,A.C.S. 

Article 7047c-3 accords exemption from the State cigarette tax to: (1) all sales by "Post, Camp or Unit Exchanges 

established and operated within the State of Texas, by the 

United States Military, Naval or Marine forces and not otherwise, on Military, Naval or Marine Posts; Cmps or Reservations," to "~officers,..soldiers, sailors, n-urses, or marines 

of the United States Army, Navy or Marine Corps"; (2) all 

sales by any authorized branch of a Post, Cs~p or Unit 

Exchange established for the exclusive benefit of officers, 

soldiers, sailors, nursea or marines in fhe.Army, Navy or 

Marine Corps.or on a?~thorized military maneuvers; and (3) 

all sales to,any such Post, Canp, or Unit Exchange under the 

conditions and for the purposes .specifi::d in (1) and (2) 

above by a cigarette distributor licensed in Texas. 

Tne'obviousintentlon of H.B. 67 is to allow imposition 

of the cigarette taxon all sales to or by Post, Camp or Uni,t 

Exchanges on Federal installations, or authorized branches 
-Ron. V. L. Ramsey, Page 2, Opinion No. ww-582 

thereof. "You are advised that this cannot be accomplished, 

Irrespective of the'repeal, vel non, of Article 7047c-3, 

V.A.C.S. 

-- 

Title 4, U.S.C.'Aap' Seotion 105(a), provides as follows: 

"No person shall be relieved from liability for 

payment of, ,colleotion of, or accounting for any 

sales .or use"tax levied by any State, or by any duly 

constituted taxkig authority therein, having jurls- 

,diction to levy 'such~ atax, on the ground that the 

sale,or use, wlfh'respect to which such tax is levied, 

occurred in whole or in part within a Federal area; 

and such 'State or taxing authority shall have full 

jurisdiotionand p,ower to levy and collect any such 

tax in any Federal.area within such State to the same 

ext,ent and with the ssme effect as though such area 

wasnot a Federal area." 

Then power to levy sales or use‘ taxes under the foregoing 

provision is Limited by Title 4,'U.S.C.A., Section 107, which 

provides:.,.... ; 

"(a) The provisions of Sections 105 and 106 of this 

title shall not be deemed to authorize the levy or 

collection of any tax on or from the United States 

or any instrumentality thereof, or the levy or Collection of any tax with respectto sale, purchase, 

~tot"h"~e~~~t~fe",a~~i~~e, p;;sg;np',"pe;ty E;,;zf 

toany 

"(b) A~person shall,be deekezto bk an authorized 

purchaser under this section only wlth*respect to 

purchases which he is permitted to make from commissaries, ship's stores, or voluntary unincorpor-; 

ated organizations of personnel of any branch of 

the Armed Forces of the,United States, under regulations,promulgated by the departmental Secretary 

having jurisdiotion over such branch." 

The case of Falls City Brewing Company v. Reeves, 40 F. 

Sup. 35 (USDC, W,D, Ky. 1941) held that a'post exchange was 

a governmental Instrumentality, and, pursuant to Section 107, 

above, accorded it exemption from 'State taxes imposed on the 

"sale of malt beverages. 

The'llmitation imposed by,Tltle 4, 'U,S.C,A., Section 107, 

as construed by the Falls City Brewing Company case, is controlling in the present situation. The State of Texas cannot 

1 
~~ Hon.,V. L,~Ramsey, Page 3, Opinion NO. w-582 

levy or collect the cigarette tax on any sales to any Federal 

Post, Camp or Unit Exchange or authorized branch thereof; or 

on any sales: by such instrumentality to any~ "authorized purchaser." llthough'the~purpose,for which repeal of Article 

‘70470-3 was proposed contravenes the foregoing principles, 

such repeal will, In and of Itself, have no effect whatsoever. "' 

The existing.'Federal law will not be affeoted regardless of 

whether or not Article 7047c-3 is repealed; therefore, the . 

question of.the constitutionality of such'repeal, Is immaterial. 

This opinion is not in conflict with Attorney General's, 

. ,Oplnlon No. WW-354. That opinion dealt witbthe authority of 

manufacturers or distributors to sell and ,le&Lver beer in 

military establlshme?&s, and the.authority of the State to 

-grant refunds on taxes on such' sales ,under, the provisions Qf 

Art; 667 V.P.C.'. Incident to the d.ebision of-such 'qu%stiona 

,the opinion 'states that "under the Duck Amendment, . . .the 

State of Texas may impose sales or use taxes on sales or uses 

occurring withinthe Federal area, regardless of the fact that 

the State has ceded exclusive jurisdiction over the area to 

the Federal Government." Section 107 of the Buck Amendment 

was not quoted,or referred to in W-354, in that.the:question ~ 

of .taxabillty of sales to, or'by.Fi?deral lnstrumentalitfcs. 

was not involved, .and the oplnio'n 'ah$uld not be const'rued'as '. 'M 

lndioatlng that such sal& are taxable. 

SUMMARY 

Under Title 4, U.S.C.A., Section 107, as 

.oonstrued by Falls City Brewing Company v. 

,peeves. the State Has no Dower to levv or col- 

-the cigarette tax on'sales made to Post 

Exchanges, or by such Exchanges to authorized 

purchasers. Repeal of Article 7047c-3, vel 

non, will have no' effect upon the law asT 

xsts in this regard. 

WILL WILSON 

Attorney Gene::al of Texas 

.JNP:bct 

APPROVED 

OPINION COMMITTEE .: 

Geo. P. Blackburn, Chairman 

C. Dean Davis . 

Riley Eugene Fletcher 

REVIEWED FOR THE ATTORNEY GENERAL 

Bye: W. V., Geppert