Court Opinion

ID: 4136397
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:13:08.396251+00
Date Added: 2024-06-11T14:26:00.658096
License: Public Domain

E       QXORNEY            GENERAL

                                   ..oF-

                                   AUSTIN     aa. TEXAS
     ., WVILL WILSON
     ATTGRNEYGENERAr.         .
                                           April 2, 1959,

             Hon. V. L. Ramsey                 Opinion No. ~~-582
             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 Ciga-
                                                    rettes'sold at Federal
                                                    Military Installations
             Dear Mr. Ramsey:,                      Within the State.
                   We quote from your opinion requestsas follows:
                   "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 ciga-
             rette 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 other-
:,           wise, on Military, Naval or Marine Posts; Cmps or Reserva-
             tions," 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?~thorizedmilitary 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
                                                                  1

-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 .oruse"tax levied by any State, or by any duly
      constituted taxkig authority therein, having jurls-
     ,diction to levy 'such~
                           a tax, 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 'Stateor taxing authority shall have full
      jurisdiotionand p,owerto levy and collect any such
      tax in any Federal.area within such State to the same
      ext,entand with the ssme effect as though such area
      wasnot a Federal area."
      Thenpower 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 Col-
     lection 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 com-
      missaries, ship's stores, or voluntary unincorpor-;
      ated organizations of personnel of any branch of
      the Armed Forces of the,United States, under regu-
      lations,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 'Statetaxes 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 con-
 trolling in the present situation. The State of Texas cannot
 ~~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 pur-
   chaser." 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.'Federallaw 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&Lverbeer 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.ebisionof-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 .taxabilltyof sales to,or'by.Fi?derallnstrumentalitfcs.
   was not involved, .and the oplnio'n'ah$uldnot 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::alof 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