 Honorable George H. Sheppard
"48kaptroller of Public Accounts
 Austin, Texas

Dear Sir:                   Opiniin No. O-37 2
                            Re:   uFomobile  ales Tax levied
                                 byArticle VI of House Bill
                                 No. 8, Forty-seventh Legis-
                                 lature.

          In your letter of June 23, 1941, you request our
opinion in response to the follcwing three questions:

           "Should the one per cent tax bo'paid on a
      new motor vehicle registered by the dealer in
      the company's name, such as Johnson Motor Com-
      pany where said motor vehicle is to be used for
      demonstration purposes?

            "Would the tax be payable on a second hand
      motorvehicle   registered in the dealer's name
      fcr demonstration purposes where said motor ve-
      hicle had been purchased by the dealerin   a
      trade; that is, where he traded another motor
      vehicle to John Doe for the total consideration
      of $1,000,$500 of the amount being in cash and
      the. eachsnge of John Doe's motor vehicle having
      a value of $500. John Doe's traded-in car be-
      in,g the one registered by the dealer for demon-
      stration purposes."
      i     In connectionwith  your first two questions it
 is noted that you do not give us any information concerning
 what consideration, if any, passes in connection with the
  transactions inquired about. The tax levied by Article VI
  of House Bill No. 8, Forty-seventh Legislature, is a tax
  equal to one per cent of the tctal consideraticn paid or to
  be paiN to the seller by the buyer. In Section 3(b) it is
  provided that "the term retail sale or retail sales as herein
  used shall include all sales of motor vehicles except those
  whereby the purchaser acquires a motor vehicle for the ex-
  clusive purpose of resale and not for use.e We answer your
 Honorable George H. Sheppard, page 2 O-3742




:.-@!&stquestion by saying that if Johnson Motor Company pur-
 chases the automobile in question the tax will have to be
 paid. The vehicle has not been acquired for the exclusive
 purpose of resale but is to be used for a time for demon-
 stration purposes, that is in the business of the Johnson
 Motor Company, before it is sold by the latter. However,
 if the company which the Johnson Motor Company represents
 furnishes this demonstration car without requiring the latter
 to pay for the same there will be no tax due. Your second
 question is answered in the same way. Clearly the vehicle
 is not acquired for the exclusive purpose of resale and the
 tax will be due if a consideration passes in connection with
 the transfer.

           In connection with your third question rye direct
 attenticn to Section 1 (b) providing that "in all cases of
 retail sales involving the exchange of motor vehicles the
 party transferring the title to the motor vehicle having the
 greater value shall be considered the seller and nc tax is
 imposed upon the transfer of a motor vehicle traded-in upon
 the purchase price of some other motor vehicle."  The traded-
 in vehicle mentioned in your third questicn is thus expressly
 taken out of the operation of the taxing statute. The use
 to which it may be ,put is immaterial. That question is answer-
 ed in the negative.

                              Yours very truly

                              ATTORNEY GENERAL OF TEXAS

                              BY         Glenn R. Lewis
                                              Assistant

 GRL:LM/-pam

 APPROVED JIJL 11, 1941
 GROVER SELLERS
 FIRST ASSISTANT
 ATTORNEM GENERAL

 APPROVED OPINION COMMITTEE
 BY BWB, CHAIRMAN
