THEA~ORNEY GENERAL 

OFTEXAS 

AUSTIN ~x.TEXAR 

WII.LFVIJ%ON 

A’ITORNE’.Y GENEWAX. August 18, 1959 

Honorable Jesse James Opinion No. WW-688 

State Treasurer 

Treasury Department Re: Whether a credit memoState of Texas randum invoice issued 

Austin, Texas by the State Treasurer 

in 1954 may be allowed 

now as a credit against 

a purchase of cigarette 

Dear Mr. James: stamps. 

You have certified the following facts for opinion 

by this Department: 

"In August, 1953, the Associated Grocers of 

San Antonio, Texas, purchased the assets of the 

Merchants Wholesale, Inc., of Kenedy, Texas. 

Included in the fixed assets of the Merchants 

Wholesale, Inc., was a Pitney-Bowes cigarette 

tax machine together with the tax meter. In 

this meter the gross amount of $1,320.80 of 

unused tax (3,302 units or 33,020 impressions) 

was transferred or sold to Associated Grocers. 

"On September 1, and September 30, 1953, we 

suggested to the Merchants Wholesale, to return 

the meter to us or to advise us if this meter 

was transferred to Associated Grocers. No reply 

was received to our letters nor was the meter 

returned to us at that time. 

"On November 24, 1953, Mr. Lowell Gault, Auditor 

for the Cigarette Tax Division of the State Comptroller's Department, made a final audit of the 

Merchants 'Wholesale and advised us that the machine and the meter was transferred to Associated 

Grocers in San Antonio. Mr. Gault further advised 

that Associated Grocers would re-new the lease of 

the meter and would purchase a cigarette distributor's permit to use the meter. About two months 

later, Associated Grocers returned the meter to 

us with no instructions or advice concerning the 

meter. 
Honorable Jesse James, page 2 Opinion No. ~-688 

"This Department held this meter intact until 

August 30, 1954, at which time we issued a credit 

memorandum invoice No. 40906 in the gross amount 

of $1.,320.80 and a net amount of $1,281.80 covering the unused tax in the meter and PitneyBowes service man checked the meter out of service. 

The difference between these amounts is the discount allowed on the purchase of cigarette stamps 

or meter impressions. 

"Since that time this credit of $1,281.80 has 

been carried on our records and no advice or 

information was received from Associated Grocers 

until May 22, 1959. On that date a letter request 

was received seeking a refund for this unused 

cigarette tax. 

"Since almost five years have passed since the 

credit memorandum invoice was issued, we respectfully request your opinion if this credit now may 

be allowed against a purchase of~cigarette tax 

stamps," 

Section 2a of the Cigarette Tax Act (Article 7047c-1, 

V.A.C.S.) empowers the Comptroller to authorize licensed 

cigarette distributors to evidence the payment of the cigarette 

tax by impression of "tax meter stamps", Unless otherwise 

specifically provided in the cigarette tax act, all provisions 

relating to cigarette tax stamps apply to "tax meter stamps." 

In 1955, the Legislature raised the rates at which 

cigarettes were taxed. See Article 7047c-1, Sec. 2, and 

Sec. 2a. To facilitate the rate change the cigarette tax 

stamp board was directed to design and have printed or manufactured new cigarette tax stamps. Article 7047c-1, Sec. 3(a). 

It was further provided in Article 7047c-1, Sec. 3(c): 

"The State Treasurer is hereby required to 

redeem at face value any unused cigarette 

tax stamps lawfully issued prior to such change 

in denomination and in the possession of any 

bona fide owner, by exchanging at face value 

cigarette tax stamps for cigarette tax stamps 

of the new denomination. After the effective 

date of this Act, every person having in his 

possession stamps of the old denomination shall 

send them to the Treasurer for exchange at face 

value for stamps of the newt denomination. Such 

exchange shall be made within thirty (30) days 

after the effective date of this Act. . . . 
. - 

Honorable Jesse James, page 3 Opinion No. WW-688 

After the expiration of thirty days from the 

effective date of this Act, stamps of the old 

denomination shall be void I! 

. . . . 

In view of the above quoted provision, it is 

obvious that your question must be s.r,swered in the negative. 

By allowing a credit for tax meter stamps issued prior to 

1955 against a present purchase of cigarette tax stamps, 

your department would, in effect, be exchanging such stamps 

for stamps of the new denomination. Since old tax meter 

stamps are void, and since they were not exchanged within 

thirty days from the effective date of the rate change, your 

department has no authority to allow such a credit. 

Though your specific question concerns your authority 

to give a credit for the tax meter stamps against a purchase 

of new cigarette tax stamps, you also state that on May 22, 

1959, you received a letter from Associated Grocers seeking 

a refund of the unused cigarette tax. Since it is expressly 

provided that the tax meter stamps in question are void, it 

is implicit that no refund for such stamps could be made. 

However, there appears to be an additional reason why a 

refund is unauthorized. Sec. 3(l) of Art. 7047c-1, states: 

II 

. . .Provided further, that the Treasurer 

shall be authorized to make refunds on unused 

stamps on unbroken sheets of not less than 

one hundred (100) stamps each to the person 

who purchased.said stamps only when proof 

satisfactory to said Treasurer is furnished 

that any stamps upon which a refund is requested 

were properly purchased from said Treasurer 

and paid for by the person requesting such 

refund." 

From the facts in your letter, it is obvious that 

the Associated Grocers cannot furnish proof that they personal 

purchased the stamps in question from the Treasurer. Consequently, a refund is not authorized under the act. 

SUMMARY 

Tax meter stamps issued prior to the 

effective date of the 1955 cigarette tax 

rate change became void thirty days after 

the effective date of such change; consequently, the stamps cannot be exchanged 

for or allowed as a credit against a present purchase of cigarette tax stamps, nor 

can any refund be made thereon. Further, 
Honorable Jesse James, page 4 Opinion No. WW-688 

the State Treasurer is prohibited from 

making a refund on cigarette tax stamps 

to anyone other than the person who actually 

purchased such stamps from the Treasurer. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

Byw 

Assistant 

JNP:cm 

APPROVED: 

OPINION COMMITTEE: 

George P. Blackburn, Chairman 

C. K. Richards 

Howard Mays 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: W. V. GEPPERT