Hon. Robert S. Calvert
Comptroller   of Public Accounts
Capitol Station
Austin, Texas                            Opinion No. S-47

                                         Re:   Application  of Article  111 Id.
                                               V.P.C..  as amended, the chain
                                               store tax, upon concession
Dear Sir:                                      stands within carnivals.

                  Your letter dated May 15. 1953, makes inquiry of the
applic~ability of the State’s chain store tax upon concession   standa op-
crating within carnivals.     I quote from your letter which reads:

                   *In one instance the entire carnival is operated
            by one individual.    This individual operator pays a
            carnival tax and also pays a cigarette license fee.     Is
            this carnfval operated by one individual subject to the
            store tax?   If so, is he liable for one store tax or for
            a tax upon each place within the area where goods,
            wares and merchandise      are sold?

                    *In another instance the owner and operator      of
            the carnival leases the places; such as. restaurants.
            hamburger     stands, curio and gift shops, to various in-
            dividual operators.    Are these individual lessees     sub-
            ject to an individual chain store tax, or is the carnival
            operator subject to a chain store tax covering these
            places?     Would it mahe any difference    in the applica-
             tion of the chain store tax if the carnival were a travel-
            ing carnival or circus ? ”

                 This office is of the opinion that a carnival which main-
tains stands that sell goods, wares and merchandise       is a .store*  with-
in the purport of the chain store tax and payment of a carnival ts* and
cigarette license fee neither affects its denomination     as a store nor en-
titles it to any exemption,  Art. lllld,   Sets. 5(a), 7, V.P.C.,   as amended.

                  Is the carnival operator subject to the pyramiding store
tax computed upon each individnal stand within the carnival area?        ‘Since
the Attorney General’s      letter opinion to your department of April 2, 1938.
the Comptroller’s     Office has adher.ed to the ‘under one roof” doctrine.
The question of whether an owner or operator of a department store was
subject to a tax on each individnal department was answered in the nega-
tive holding that as long as the operations were confined under one roof
Hon. Robert   S. Calvert,   page 2 (S-47)




only one store tax was payable.    The doctrine’s reference to “roof”
was illusory and it is our opinion that various carnival stands op-
erated by an individual within a confined space and managed as a
single unit is subject to only one tax.

                 The doctrine appar,ently originated from a statement
made in the leading chain store tax case, Tax Commissioners      v.
Jackson, 283 U.S. 527 (1931).   In the Jackson case. the taxpayer in-
sisted that there was no substantial variance of operation between
chain stores and department   stores and that the chain store tax w~as
an arbitrary  classification. The Supreme Court stated on page 536:

                  ‘While it is true that large department stores
          reap many of the advantages and employ many of the
          methods of a chain store group, such as large capital,
          buying in quantity, and the ability to command the high-
          est type of management,      it is, nevertheless,     evident
          that, whereas a department store spreads its efforts
          over a number of differ,ent sorts of shops under one
          roof, the chain store owner concentrates          its energy
          upon the conduct of but one kind of stores located in
          many neighborhoods.       Obviously,    greater   specialina-
          tion in management      and methods is possible in the
          latter type of enterprise    than in the former,      whose
          management,      however capable, must after all con~sist
          of many separate types each devoted to a single store
          similar to an independent retail store.         The mass buy-
          ing done by a chain store owner for a number of units
          selling the same goods, is not comparable           to the indi-
          viduated purchasing of a department store for its gro-
          cery, its shoe, its drug, and each of its other depart-
          ments.    It is not to be expected that the management
          problems     of stores, essentially   separate and differing
          entirely in the character of their business,         under the
          aegis of a single department store, will be the same
          as those involved in the intensive selling of a chain
          store owner operating an equal number of units all
          devoted to a single line of business.”

The verbiage was carried into Texas’ leading chain store tax case,
Hurt v. Cooper,  130 Tex. 433, 110 S.W.2.d 896 (1937); certified ques-
tions disposed of in 113 S.W.Zd 929 (Tex. Civ. App. 1938).

                 It is impossible to anticipate all ramifications  of this
rule.  In our opinion the carnival maintaining various stands within a
confined area operated by one person as a single unit (i.e., integrated
bookkeeping,   common purchasing,    etc.), is subject to only one store
tax as a single unit.
Hon. Robert   S. Calvert,   page 3 (S-47)



                 Individual operation and management     of the concessions
by different lessees   changes the status of the carnival stands.      The sta-
tute levies a tax upon every person operating    or maintaining one or
mor,e stores.   Art. 111 Id, Se-        V.P.C., as amended.    It is our op-
inion that each stand by virtue of the above facts would be subject to a
separate store tax. Restaurant     and hamburger   stands so oprrated
come within the exemption provided by Section 5(a) of Article        111 Id,
as amended, and are taxable Under Section 5(c) of Article      11 lid.

                There is no differentiation to be made between a travel-
ing and permanent carnival.   This office has previously  stated *a store
is a store, whether mobile or immobile.”    Atty. Gen. Op. O-7361   (1946).


                                  SUMMARY

                 Carnivals   are subject to the tax levied by Article 111 Id,
V.P.C.,  as amended.     Stands owned and operated by one person as a
single unit are liable for a tax for one store only. If the concessions
are leased to various persons,     the different stands are each subject to
a store tax. The mobility of the carnival of itself does not affect its
status as a StOTe or stores.

                                            Yours   very   truly,

APPROVED:                            JOHN BEN SHEPPERD
                                       Attorney General
W. V. Geppert
Taxation Division
                                            By@LdM
Ci K. Richards
Reviewer                                      William W. Guild
                                                 Assistant
,Robert S. Trotti
Firs,t Assistant

John Ben Shepperd
Attorney General

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