              TIHE     A'ITORNEY                 GENERAL
                           OP?%ZXAS
                        Auwrr~.        T-s       78711




                                  July 1,     1975


The Honorable Joe Resweber                           Opinion No.   H-   639
~Harrie County Attorney
Harris County Courthouse                             Re: Whether the rtate and
Houaton, Texan 77002                                 local sales tax must be collected
                                                     on items sold to inmates of the
                                                     Harris County Jail and Harris
                                                     County RehabilitQtion   Center
                                                     from commirraries     located at
                                                     each facility.

Dear Mr.   Resweber:

         You have asked for our opinion as to whether commissaries,located
within, the Harrio County Jail and the Harris County Rehabilitation   Center
muat collect the state and local sales tax on items sold to the iamates of
theoe facilities.  You explain the operation of the commirsaries    aa follows:

               These commissaries       operate independently and auton-
               omously at each location.       The Humble Rehabilitation
               Center is outside the boundaries        of the City of Houston,
               and not in any other city, while the Downtown Jail is in
               the City of Houston.     The items sold in both are what
               would normally be expected, .cigarettes,         soft drinks,
               candies,    coneumables,   toiletries,    and other such
               items which might be normally         subject to sales tax.
               Sales are made only to inmates and not to anyone
               else.    Each commissary     is individually    responsible
               for its own purchasing and stocking.         Any proceeds
               from such sales beyond those needed for re-stocking
               are applied to the purchase of amenities         which would
               otherwise not be available,      for the exclusive    use land
               benefit of those legally confined in the detention center
               or jail.




                                  p.   2811
The Honorable     Joe Resweber     - Page    2   (H-639)




         Your question concerns       only the applicability   of the tax laws to the
sales made by the Commissaries           and not the legal status   of the Commissaries
otherwise.     Attorney General Opinion C-67 (1963) held that the Sheriff of
Tarrant County might supply necessary           articles  to prisoners   “at cost” but
that a profit making commissary         in the Tarrant County jail was unauthorized,
Since you have advised us that any proceeds above the cost of maintaining an
inventory are used to supply amenities         which wculd otherwise,be       unavailable
to prisoners     and which the county is not otherwise obligated to provide;          we
assume without deciding that Attorney General Opinion C-67 is inappiicable
in this case.
         Article   20.02,   Taxation-General,     imposes a statewide,      “limited
sales tax at the rate of four percent (4%) on the receipts from the sale at
retail of all taxable items.     . . ” which are subject to taxation under the
Limited Sales,      Excis’e and Use Tax Act, -articles     20.01 et seq, Taxation-
General.

        Articles  1066c, V. T. C. S., known as the “Local Sales and Use Tax
Act”,  imposes   a local sales tax “of one percent (1%) on the receipts from
the sale at retail of all taxabie items within any city adopting such tax which
items are subject to taxation by the State of, Texas under the Limited Sales,
Excise and Use Tax Act. ” Sec. 2B, art. 1066~.       The City of Houston has
adopted the local tax.

        The retailer or seller of the items taxable under either Act is
responsible   for the collection of the tax or taxes at the time of the sale.
Article  20.021   of the Limited Sales,  Excise and Use Tax and section 6A of
the Local Sales and Use Tax Act.

         Exemptions  from the imposition   of either the state or local tax are
contained in article 20.04 of the Limited Sales,     Excise and Use Tax Act, and
it is necessary  to consider if the commissariesfall      within any of the exemp-
tions.

         It sho.uld.firat, be observed,     that, while sales to a county and, other
political subdivisim      of the State are exempt from the%position       of the sales
tax, article 20.04,      subsection   (H)(4), sales by a county or ,other political
subdivision are not exempted from the tax under any provision of article
20.04.




                                   p, 2812
.   -




        The Honorable   Joe Resweber    - Page   3   (H-639)




            However,   another exemption,   found in subsection  (F) (3), has been
    applied to jail commissaries   by the Comptroller   of Texaa, the state officer
    charged with administering   the state and local sales tax laws.     This provision
    exempto!

                    .’ Meals and food products (including soft drinks and
                       candy) for human consumption when served to patients
                       and inmates of hospitals ‘and other institutions
                       licensed by the State for the care of human beings.

             Jails are authorized      by state statute   and the Texas State Department
    of Health is empowered      to insure compliance       with the statutory sanitation and
    health provisions    applicable    to jails.   V. T. C. S., art. 5115. And the word
    “license”   is defined by Webster’s        Third New International    Dictionary  (1967)
    as “a right or permission       granted.in accordance      with law by a competent
    authority to engage in some business or occupation,             to do some act, or to
    engage in some transaction        . . . ‘0 a definition that could apply to the
    operation of a jail.   Also see House Bill 272 enacted by the 64th Legislature
    (1975).

              Where the meaning of a statute is doubtful, the construction       placed
    on it by the officer or ageney charged with administering       the statute is entitled
    to weight.    Calvert v. Kadane, 427 S. W. 2d 605 (Tex. Sup. 1968).         As noted
    above, the Comptroller    of Texas is empowered     to administer     the sales tax
    and has interpreted   the exemption contained in subsection      F(3) by memorandum,
    dated May 26, 1974, to E. J. Castillo,     Director  of Field Operations      for the
    Comptroller    from Fred Russ,    Director  of the Comptroller’s     Sales Tax
    Division.    The memorandum     provided in part:

                        It is requested that you have each District   Office check
                        with the county jails in the State to determine   if commis-
                        saries are operating and making taxable sales to inmates.

                        If such sales are made and a tax is not charged on taxable
                        items sold, the commissary   tpgst’secure  a permit,  poet
                        bond and pay tax due, penalty and interest for prior’quarters.

                        .   .   .

                        Food items including     soft drinks and candy are exempt   from
                        the tax under Article    20.04 (F)(3).



                                         p.   2813
I   -




    The Honorable     Joe Resweber    - Page   4   (H-639)




              We adopt the Comptroller’s   interpretation     of the applicability     of the
    sales   tax as applied to jail commiaaaries.

            Accordingly,   the commissaries   involved must collect the state wide
    sales tax as levied by the Limited Sales,   Exdre and Use Tax Act on all items
    sold except food items including soft drinkr and candy.    In addition,   the Harris
    County Jail, which ia located in the City of Houston,  must collect the city sales
    tax imposed by the Local Sales and Use Tax Act.     However,    the Rehabilitation
    Center,  not being located within Houston, need not collect the city sales tax
    since the place of the sale determines  whether a tax is due.    V. T. C. S., art.
    1066c, section 6B(l).

                                     S’UMMARY

                     The commissary     of the Harris County jail must collect
                     the state and city sales tax on all items sold except for
                     food, soft drinks and candy.    The commissary    of the
                     County Rehabilitation   Center must collect the state sales
                     tax on all items sold except food, soft drinks and candy,
                     but need not collect the city sales tax.

                                                       Very   truly    youxr,




                                                   u   Attorney       General   of Texas




                                 rst Assistants




    Opinion   Committee

    jwb




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