Hon. Robert S. Calvert         opinion No. ww-338
Comptroller of Public Accounts
Capitol Station                Re: Whether the Hotor Vehicle
Austin, Texas                       Sales Tax levied by
                                   Article 7047K, V.C.S.,
                                    applies where an auto-
                                   mobile dealer secures
                                    a motor vehicle from a
                                   manufacturerto be used
                                   by a salesman for demon-
                                    stration purposes when
                                   no considerationIs
Dear Mr. Calvert:                   involved?
            In your letter request you submit to us the following
question:
          "Where an automobile dealer has secured
     a vehicle from the manufacturerand has the
     manufacturer'scertificateand wishes to let
     a salesman have the vehicle to use for demon-
     stration purposes, and no considerationwas
     Involved,would the tax be due?"
            Section 3 (b) of Article 7047K,   V.C.S., provides:
          "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 exclusive
     purpose of resale and not for use."
           Article 7OJ+7Konly levies the tax upon a "sale" of
 a motor vehicle. If the transfer of the motor vehicle to the
 automobile dealer constitutesa "sale" the tax will apply as
,you state the motor vehicle Is to be used for "demonstration
 purposes." The dealer did not acquire same for the exclusive
 purpose of resale, but acquired It-for use, that Is for use
 as a demonstrator. Attorney General's Opinion O-3742. How-
 ever, you state that "no considerationwas involved." This
 being true there was not a "sale" involved. Even if the
 transactioncould be ,termeda sale, no tax would be due for
Hon. Robert S. Calvert,, page 2 (~~-338)


the simple reason that 1.1s of the sale price--whichIs
nothing--amountsto a tax of .OOOO.
                         SUMMARY
            The motor vehicle sales tax levied by
            Artlole 7047K, V.C.S., does not apply
            to transactionswhere an automobile
            dealer, without a consideration,acquires
            a motor vehicle from a manufacturer to
            be used as a demonstrator.
                              Yours very truly,
                               WILL WILSON
                               Attorney Qeneral of Texas



                                   W. V. GCeppert
                                   Assistant
wvff:gs
APPROVED:
OPINION COMMITTEE
Qeo. P. Blackburn, Chairman
J. C. Davis, Jr.
Milton Richardson
Leonard Passmore
REVIEWEDBOR THE ATTORNEYGENF3AL
BY
     James N. Ludlum
