Court Opinion

ID: 4141168
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:07:37.26751+00
Date Added: 2024-06-11T14:49:44.630125
License: Public Domain

OFFICE OF THE ATTORNEY GENERAL OF             TEXAS

                                        AUSTIN

    Honorable George H. Sheppard
    Comptroller of Pub110 AOoounts
    Austin, Texas
    Dear Sirr
                              opinion      No. o-5163
                              Ret       Applioab

                 The raotsi eet out i                   request    or Uaroh 25,
    1943, are,    brlerly,  these:
                                                          *se in this State
                                                           on which it pays
    the ohaln store tax.                                   le bualmas,    sbll-
    ing its produots to                                   II. It neither owns,
                                                          independent dealerr.
    It haa, however,                                      maay or’ thr prcfduote
    whioh it aells.                                    over the Uealar’e nmae,
                                                    by the oompany. Suoh
                                                   lshing euoh oatalogs to
                                                  has the prirtlege o? order-
                                            pan order blanks whioh are
                                         er aoospts euoh order, and if
                                          fills      the sue.     In the event
                                       oak, he aende it to the nearest
                                   the request that the merohandlso be
                                   In the event that the dealer aeads
                              ay, the oompany malls the merohandise
    dlreot to the              of the dealer, or dlrsot to the dealer,
i   if this be req         . In neither event does the ouetomer            bo-
    oome lia$l& to the ooapany, but in either event he is lfeble
    to the dealer through whom he ordered the merohandlso.               The
    dealer,    Boweror, la l&&le    to the oompany ior all merohsndfse
    rrhipped through him. The aompany turnlaher the dealer no
    tinanoiel,    oredit or oolleotioa     faoflitiesj      nor is the dealer
    under any obligation    to purohaae any merohendlee front the
    oompany.
                                                                                    '761

     Honorable   George H. Sheppard,    page 2

               Under the foregoing feat situation   you request the
     opinion o? this department es to whethar the oompeny whloh
     ?urnishea the oatalog to the dealer is liable   for the payment
     OS e ohaln atore tax upon the dealer’s  ntore.
               Seotlon 1 of Artlolo 11116, Vernon’s         Texas Penal Gode,
     known as the Chain Star@ Tax Ian, provides:
                *That from and after the paneage or this &ot it shell
          be unlewfw& ?or any parson, agent, reoeirer,           tru4t44,  rim,
          corporation,   a68ooletioa     or copartnership,    either torolgn
          or domestlo, to Operate, maintain, open OT eatabllah            any
          store or meroantila eatabllshment        In thla State without
          first  having obtained     a lioense 80 to do from the CIomptroller
          of Publio Aooounte a6 hereinafter        provided.”
                 Seotloa   6 o? the same aot provides     that:
               “The prorlsions    o? this Aot shell be ooaafrued to apply
          to every person,     agent    reoeiver,    trauiter, rirm, oorporatlon,
          oopartnerehip    or alisoo i atlon,   either   daaestio  or foreign,
          which la oontr6lled     or held with other8 by majority stook
          ownerehip or ultlmataly       oontrolled     or dlrroted  by one
          management or eseooletlon        0r titlmate    management.*
                Under the ieote stated     w6 are o? the opinloa that the
     oompany neither operates,   mainte I am, opens nor establisher  the
     storo o? the independent dealer within the terma o? Sootlon 1
     quoted above.   We are al80 o? the opinion that the oompany neither
     oontrole or holds with others b majority stook ownorehip, nor
     ultimately  oontrols or direote ?iy one management or aeaoolatlon
     o? ultimate mauagament the dealerte      &ore.  Thta being true, the
     oompanyi o? ooiirae, is not liable    for payment of the ohain store
     tax upon any euoh dealerr’ atoree.
             la ass'me that your inquiry was prompted by the opinion
 reoently rendered in tha oeae o? Montgomery, Ward k Company v.
 State, not yet reported,    where the eourt held that order o??loes
 owned and opertited by the oompany, where goods were shipped upon
 order OS the ouatomer to the order o??loe for hia aoosptemee or
 rejeotion,   were storea within the meaning of the ohein store tax
 law.    That ease was deolded UPOPthe theory that tie $?ctls:W?'~WN
 goods paseed et the order o??lae;ldM       the sale was therefore  made
 at the order o??ioe,    and that therefore   the order o??lse aonstl-
 tutad a atore within the meaning of the term Wjiore* a> 3aZi&ed !P
 Seotion 7 o? the aot.     Ia that oaaa, however, the order o?::loes
 themselves were owned by the $axpaysr.

It
                                                                             7’62

Honorable   George R. Sheppard,    page 3

           In thia oeae the stores are not owned by the oompany,
but  by the dealers.    The only sales made by the oompany are to
the dealers.    Suoh sales as are made by the oompany are made
from their oompany owned stores and not from the store of the
dealer.   We are therefore   of the opinion that the dealer who
maintains and operates the store is the person liable for pey-
n4nt of the obain store tax.
           We rlsh to point out, however, that this opinion
is oonrined 4xoluslvely   to the taot sltuatlon prraenuod herein.
I? there be other faota, not presented to ua, whioh rendor the
dealers’ atoms    subject to the oontrol of the oompany, then the
exiatenoe of such raots might require e di?rerent answer to your
qusetloa.
            Trusting    that the above fully    anawdrs your      inquiry,
we    are
                  ! .
                                               Vary    truly   your0

                                        ATTORNXY GENERAL OF TEXAS
                         ..

                                                      Powler Roberts
                                                             Ass iatant