                                 December     18. 1974

The Honorable   Bernard Solomon                     Opinion   No. H-     479
Criminal District Attorney
P. 0. Box 776                                       Re: When under article 7150f,
Marshall,  Texas   75670                            V. T. C. S. rak materials
                                                    purchased   outside the atate
                                                    are exempted from taxation
                                                    as property moving in inter-
                                                    state commerce.

Dear Mr.   Solomon:

        We have received your request concerning    the construction  of
article 7150f, V. T. C. S., which provides a tax exemption for property
moving in interetate  commerce.

       Article   7150f 16 ae follows:

                      All property consigned to a conrignee         in this
                 State from outside this State to be forwarded          to a
                 point outside this State, which is entitled under
                 the tariffs.    rules, and regulations    approved by
                 the Interetate Commerce        Commierion      to be for-
                 warded at through rater, from the point of origin
                 to the point of destination.     if not detained within
                 this State for a period of more than ninety (90)
                 day@, shall be deemed to be property moving in
                 inter&ate     commerce,     and no such property shall
                 be subject to taxation in this State: provided,         that
                 gooda, wares and merchandise,           whether or not
                 moving on through ratee, shall be deemed to move
                 in interetate    commerce,     and not subject to taxation
                 in this State if not detained more than nine (9) months
                 where such goods, waree and merchandioe              are 80
                 held for aneembly,      storage, manufacturing,       proceseing




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    The Honorable    Bernard   Solomon     page 2    (H-479)




                     or fabricating   purposes;  providing further that
                     personal property consigned for sale within this
                     State must be assessed     as any other personal
                     property.    Provided further,    that all laws and
                     parts of laws in conflict herewith are hereby repealed
                     to the extent of such conflict only.

              The first portion of the statute exempts some property consigned
    to one in this State when it is entitled to pass through the State at
    through      rates subject to a 90 day limitation.     The second portion of the
    statute exempts some property detained for less than nine months for
    the purpose of assembly,         storage,  manufacturing,    processing,    or
    fabrication.       While thie portion is not expressly    limited to consigned
    materiale,      it is our opinion that the statute should be so construed.
    Ordinarily      “a proviso is limited to the clause that next precedes       it
    and to which it is attached . . . I’ White v. City of Quanah. 28 S. W.
    1065 (Tex. Sup. 1894); Fenet v. McCuistion,          147 S. W. 867 (Tex. Sup.
    1912); Galveston & W. Ry. Co. v. City of Galveston,             155 S. W. 273
     (Tex. Civ. App. --Galveston         1913, no writ).  In addition,    tax exemptions
    are to be strictly construed against the exemption.            Radio Bible Hour,
    Inc. v. Hurst-Euless        Independent School District,     341 S. W. 2d 467
     (Tex. Civl App. --Ft.        Worth 1960, writ ref. n. r. e.); Citv of Amarillo
    v. Love,      356 S. W. 2d 325 (Tex. Civ. App. --Amarillo          1962, writ ref.
    n.r.e.).      The second portion of article 7150f should ther-efore be construed
    as modifying the first portion and consequently          exempts only consigned
    goods.     The third portion of article 7150f expressly        states that goods
    consigned for sale within this State are not exempted from taxation.

             Whether property is consigned    rather than sold is a question of
    fact.   Consigned property is that which is deposited with another for
    care or sale, title to which remains with the consignor.       Sturm v.
    w,       150 U.S. 312 (1893); Dittmar v. Norman,      118 Mass. 319 (Sup.
    Jud. Ct. Mass. 1875); Rolker v. Great Western Ins. Co., N.Y.,             4
    Abb. App. Dec. 76 (N. Y. 1866); Edwards v. Baldwin Piano Co., 83
    So. 915 (Fla. 1920); F. F. Ide, Mfg. Co. v. Sager Mfg. Co., 82 Ill. App.
    685 (Ill. 1899).  Therefore,   article 7150f excepts from taxation only
    that property deposited with another for care, processing,        or sale
    outside this State, title to which is not transferred   to the recipient  of
    the property.




                                          p. 2177
The Honorable     Bernard    Solomon      page 3        (H-479)




         The different time limitations        of article 7150f are applicable      to
different dispositions      of the property consigned.        If the property is
consigned for the primary purposes of assembly,                storage,  manufacturing,
processing,     or fabrication,    the nine month limitation is applicable;
however,    if the property is consigned for some other primary purpose,
such as transportation       or sale, the 90 day limitation is applicable.          The
primary use of the property,         as distinguished    from an incidental use,
determines     the extent to which it is exempt from taxation.            Attorney
General Opinion H-342 (1974). Hilltop Village,            Inc. v. Kerrville     Independent
School District,     426 S. W. 2d 943 (Tex. Sup. 1968).
                                           SUMMARY

                      If property ‘is not’consigned it does not qualify
                  for the tax exemption provided in article 7150f.
                  Consigned property is that which is deposited
                  with another for care or sale, title to which
                  remains with the consignor.

                                                         Very truly yours,




                                                /   /   Attorney   General   of Texas

APPROVED:




DAVID M. KENDALL,           First   Assistant




C. ROBERT HEATH,            Chairman
Opinion Committee




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