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 1954may be allowed now as a credit against apurchase of cigarette Dear Mr. James: stamps.

You have certified the following facts for opinion by this Department:

"InAugust, 1953, theAssociated Grocers of San Antonio, Texas, purchased the assets of the Merchants Wholesale, Inc., ofKenedy, Texas. Included in the fixed assets of theMerchants Wholesale, Inc., was a Pitney-Bowes cigarette taxmachine together with the taxmeter. In thismeter the gross amount of $1,320.80 of unused tax (3,302units or 33,020 impressions) was transferred or sold toAssociated Grocers. "OnSeptember 1, and September 30, 1953, we suggested to theMerchants Wholesale, to return themeter tous or to advise us if thismeter was transferred to Associated Grocers. No reply was received to our letters norwas themeter returned tous at that time.
"OnNovember 24, 1953, Mr. Lowell Gault, Auditor for the Cigarette Tax Division of the State Comptroller's Department, made a final audit of the Merchants 'Wholesaleand advised us that themachine and themeter was transferred toAssociated Grocers in San Antonio. Mr. Gault further advised that Associated Grocers would re-new the lease of themeter and would purchase a cigarette distributor's permit touse themeter. About twomonths later, Associated Grocers returned themeter to us with no instructions or advice concerning the meter.Honorable Jesse James, page 2 Opinion No. ~-688

"ThisDepartment held thismeter intact until August 30, 1954, atwhich 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 themeter and PitneyBowes service man checked themeter out of service. The difference between these amounts is the discount allowed on the purchase of cigarette stamps ormeter 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 creditmemorandum invoice was issued, we respectfully request your opinion if this credit nowmay be allowed against apurchase 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 thepayment of the cigarette taxby impression of "taxmeter stamps", Unless otherwise specifically provided in the cigarette tax act, allprovisions relating to cigarette tax stamps apply to "taxmeter stamps."

In 1955, the Legislature raised the rates atwhich 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 ormanufactured new cigarette tax stamps. Article 7047c-1, Sec. 3(a). Itwas further provided inArticle 7047c-1, Sec. 3(c):

"The State Treasurer ishereby 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 thenew denomination. After the effective date of thisAct, every person having inhis possession stamps of the old denomination shall send them to the Treasurer for exchange at face value for stamps of the newtdenomination. Such exchange shall bemade within thirty (30)days after the effective date of this Act.
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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 shallbe void I!

. . . . Inview of the above quoted provision, it is obvious that your question must be s.r,swered in thenegative. By allowing a credit for taxmeter stamps issued prior to 1955 against apresent purchase of cigarette tax stamps, your department would, in effect, be exchanging such stamps for stamps of thenew denomination. Since old taxmeter 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 togive a credit for the taxmeter stamps against apurchase of new cigarette tax stamps, you also state that onMay 22, 1959, you received a letter from Associated Grocers seeking a refund of theunused cigarette tax. Since it is expressly provided that the taxmeter stamps in question are void, it is implicit that no refund for such stamps could bemade. However, there appears tobe an additional reason why a refund isunauthorized. Sec. 3(l) of Art. 7047c-1, states:

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. . .Provided further, that the Treasurer shall be authorized tomake refunds onunused stamps onunbroken sheets of not less than one hundred (100) stamps each to theperson who purchased.said stamps only when proof satisfactory to said Treasurer is furnished that any stamps upon which a refund isrequested were properly purchased from said Treasurer andpaid for by theperson requesting such refund."
From the facts inyour letter, it is obvious that the Associated Grocers cannot furnish proof that theypersonal purchased the stamps in question from the Treasurer. Consequently, a refund isnot 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 apresentpurchase of cigarette tax stamps, nor can any refund bemade thereon. Further,Honorable Jesse James, page 4 Opinion No. WW-688

the State Treasurer isprohibited from making arefund on cigarette tax stamps to anyone other than theperson who actually purchased such stamps from the Treasurer.
Yours very truly,
WILL WILSON Attorney General of Texas 

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Assistant JNP:cm APPROVED: OPINION COMMITTEE: George P.Blackburn, Chairman
C.K. Richards Howard Mays
REVIEWED FOR THE ATTORNEY GENERAL BY: W.V. GEPPERT