Court Opinion

ID: 4134787
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:54:50.178479+00
Date Added: 2024-06-11T14:35:03.599181
License: Public Domain

Honorable   Robert S. Calvert               Opinion   No. C-674
Comptroller    of Public Accounts
Austin,   Texas                             Re:   Permit fee on cigarette
                                                  vending machines on
Dear Mr. Calvert:                                 military  reservations.

          By letter   of March 15, 1966,    you request           an opinion   of
this   office   on the following  question:

             "Are cigarette       vending machines owned and
             operated    by a concessionaire      on a military
             reservation      subject   to the permit fee under
             Article    7.09,   Title   122An Taxation-General,
             Vernon Is Clvll Statutes.

          It is our understanding   that only cigarettes      upon which
the necessary     State tax has been affixed   are sold from the
cigarette    vending machines on the military     reservations;     that
cigarettes     exempt from tax are only sold to authorized       personnel
by Post,    Camp, or Unit Exchanges established      and operated    by
the Armed Forces.

          The military    authorities       require  the concessionaire
I,
  . . . to pay all license         fees,    and comply with all municipal,
state    or Federal    laws, rules,      ordinances,    and regulations
relating     to the preservation        of the public    health  or applica-
ble to the business        carried    on under this agreement,       and to
assume complete      and sole liability         for all Federal,    state and
local    taxes applicable      to the property,      income and transactions
of the concession."

          Article    7.39,   Title   122A, Taxation-General,        Vernon’s
Civil   Statutes,     requires     every distributor,      wholesale   and
retail    dealer    in this State now engaged or who desires              to
become engaged in the sale or use of cigarettes                 upon which
a tax is required        to be paid,     to file   an application     for a
cigarette     permit as a distributor,          wholesale   dealer   or retail
dealer,    and to forward with said application,             In the case of
a retail     dealer   a fee of five dollars.          Coin-operated     cigarette
or tobacco      products   vending machines shall be Issued a retail

                                  - 3246-
Hon.   Robert     S   Calvert,   Page 2 (C-674)

dealers    permit.    Said perm,it shall    provide   that the same is
revocable     and shall be forfeited      or suspended if the conditions
of issuance     are not complied    with,   or upon any violation       of the
provisions     of the Cigarette    Act or any reasonable      rule or regu-
lation    adopted by the Comptroller.        If a permit is revoked,        for-
feited    or suspended,   the dealer    Is prohibited     from selling    clga-
rettes    from such place of business       until a new permit is granted
or the suspension      of the old permit removed.         The Treasurer
of the State may refuse       to sell   stamps to any person who has
not obtained     a permit to engage in business        as a distributor
or to any distributor      whose permit has been revoked or suspended
until    such permit has been reinstated        or a new permit issued.
         This office  has heretofore   held that a retail     permit
was required    for each cigarette   vending machine.     Attorney
Generals   Opinion No. WW-212 (1957).

          From the foregoing     it appears that the provisions        of the
cigarette     law insofar  as the permit Is concerned        is regulatory
in nature and designed       to prohibit      the operation  as a specified
dealer    except under certain      conditions    prescribed   by the legis-
lature    and primarily   regulated     in such a manner to guarantee
as nearly as possible       the payment of the taxes due on cigarettes
sold.

         Having determined     that the legislature   intended   that
every person selling     cigarettes   be required   to have a permit
before   engaging In such business,     what is the effect,    if any,
of selling    cigarettes   from vending machines on military      reser-
vations?

           Section    105 of Chapter 4, U. S. Code, and being a portion
of what is commonly known and referred        to as the “Buck Act,”
specifically       provides:

                “(a)      No person shall    be relieved    from
                liability     for payment of, collection        of,
                or accounting        for any sales or use tax
                levied     by any State,    or by any duly con-
                stituted     taxing authority     therein,    having
                jurisdiction       to levy such a tax, on the
                ground that the sale or use, with 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      jurisdiction   and power to levy

                                      -3247-
Hon.   Robert    S. Calvert,      Page 3 (C- 674)

              and collect any such tax in any Federal
              area within such State to the same extent
              and with the same effect   as though such
              area was not a Federal   area."

          In the absence        of the above Federal Statute,              the State
of Texas would be without             authority     to levy taxes on military
reservations      which had been ceded to the United States                     without
reserving     the taxing authority.             Adams v. Calvert,         396 S.W.2d
948 (Tex.Sup.       1965).      In this caseexas                              was seek-
ing to collect       an occupation        tax on 'coin      operated     machines"
levied    by Article     13.02,     Taxation-General        of Vernon's       Civil
Statutes.      As the Buck Act only authorized                the States      to levy
and collect      sales and use taxes where exclusive                 jurisdiction
was ceded by a State,           the Court stated:          "Once exclusive         juris-
diction    is ceded,only        those State and local          taxes authorized
by the Buck Act, 4 U.S.C.             Sections     104-110,    may be levied
against    property     in the Federal         enclave."      The cigarette        tax
is a sales and use tax and the Buck Act clearly                      authorizes       the
States to levy and collect              such tax.      The Buck Act expressly
states    that the State's         jurisdiction       to collect     the sales and
use taxes shall be "to the same extent and with the same effect
as though such area was not a Federal area."                      Such language
clearly    gives the State of Texas the unquestioned                    right    to
collect    the permit fee set forth             in Article     7.09,    Taxation-
General,     Vernon's     Civil    Statutes,     as the permit requirement
is incidental       to and In furtherance           of the collection         of the
sales and use tax on cigarettes.

                               SUMMARY

              Cigarette    vending machines owned and
          operated    by a concessionaire      on a military
          reservation     are subject    to the permit fee
          under Article      7.09, Title   122A, Taxatlon-
          General,    V.C.S.

                                                  Yours    very   truly,

                                                  WAGGONER
                                                         CARR

GCC/fb                                                Assistant

                                   -3248-
Hon.   Robert   S. Calvert,   page   4 (C- 674)

APPROVED:

OPINION COMMITTE
W. V. Geppert,    Chairman
Marietta    Payne
Bill  Allen
James Broadhurst
Malcolm kick

APPROVEDFOR THE ATTORNEYGENERAL
BY:  T B. Wright

                                     -3249-