                  “PlHR   Li    oxc~E:Y     GENEKAE

                               OFTEXAS

GERALD C. MANN
X-B
AlTORNEY   DB!xu*HAI.




      Honorable George H. Sheppard
      Comptroller of Public Accounts
      Austin, Texas

      Dear Sir:                     Opinion No. o-3486
                                    ,Re: Use tax levied by Article 6,
                                         House Bill 8, Forty-seventh
                                         Lsgislature.  ~

      In your letter of August 12, 1941, you request the opinion
      of this department in response to three questions, viz:

      "1. If owners of commercial vehicle whose resident and home
      office Is in N. M. brings truck to Texas for purpose of
      commercial hauling for an unspecified length of time and
      applies for Texas License for that purpose, is he due to
      pay the 1% use tax, if so on what basas do we compute same,
      as the truok may be six years old or three months old.

      *2.  If a resident of N. M. and has been a resident for
      either thirty daysor three years and moves to Texas and
      applies for Texas lioense and the fact may be that he bought
      his car either, before May lst, 1941, or sinae that date, is
      he due to pay a use tax If so on what bases to be figured,

      “3.  If individual, firm or corporation doing business in
      another State such as Major Oil Companies, brings a car into
      Texas either permanently or for a period of time and applies
      for Texas License, is he due to pay the 1% use tax, If so
      what bases are tax to be computed on."

      Section 1 of Article 6, H. B. 8, &Tth'Leg., levies a tax
      upon all sales of motor vehicles sold in this state, the tax
      being 1% of the sales price. Then Section 2 thereof provides:

      "Sec. 2.  There is hereby levied a use tax upon every motor
      vehicle purchased at retail sale outside of this state and
      brought into this State for use upon the public highways
      thereof by a resident of this State or byfirms  or
      corporations domiciled or doing business in this State. such
      tax shall be equal to one (1) per cent of the total con-
      sideration paid or to be paid for said vehicle at said retail
      sale. The tax shall be the obli,sation of and be paid by the
                                                            -   .




Honorable George H. Sheppard, Page 2, o-3486



person, fimn, or corporation operating said motor vehicle
upon thepublic highways of this State."

While the use tax is levied by Section-2 against (1)
residents of this State, (2) firms and corporationsdomiciled
in this State, and (3) firms and corporations doing business
in this State, it makes no levy of the tax against an indivi-
dual person who is a non-resident of Texas, although doing
business in this atate. For, an individual person is neither
a corporation nor a firm. 10 Tex. Jur. 5’86; Bodson vs.
Warren Hdw. Co., 162 S, W. 952; our opinion No. o-3545.   SO
far asyour first question relates to an individual person,
our answer is that no use tax is due.

As respects firms and corporations our answer to such question
is a partially different one. As already noted the tax is
levied against a firm or corporation doing business in this
State, which has purchased a motor vehicle outside the State
and brings the same into this State for use upon the public
highways.  This would apply to a foreign corporation or a
firm domiciled outside this State. As to vehicles purchased
since May 1, 19419 the effedtive date of H. B. 8, our answer
to your first question, as it relates to firms and corporations,
is that the tax is due. The statute provides only one measure
of the tax, which is one per cent of the purchase price of the
car. 'The tax must be computed on that basis.

We have reached the conclusion, however, that when the vehicle
was purchased prior to May 1, 1941p the use tax is not due.
We have heretofore held that Section 1, levying the tax on
sales made within the State, does not apply a,a to sales made
prior to the effective date of H. B. 89 although not registered
until after that time. Opfnion No. O-3495.

The use tax levied in Section 2 is compensatory to the sales tax
levied by Section 1. One of Its effects must be that retail
ssll,ers,.in Texas will be helped to compete upon terms of
equality with retail dealers in other states who are exempt
from a sales tax or any corresponding burden.   Another effect,
or at least another tendency, must be to avoid the drain upon
the revenues of the State, buyers not being tempted to place
their orders in other states in the effort to escape payment
of the tax on local sales. Similar compensating tax statutes
have been sustained by thecourts, but in all suchcases that we
have found where the statute was sustained the court was able to
point out and did po!lnt out and emphasize the fact that the
complementary tax was fair and non-discriminatory.   Henneford
vs. sil-it*Mason Co., 81 L, Ed. 814> 300 U.S. 577; State vs. Pope,
195 23. 346, La.; Williamsburg Power Plant Corp. vs. City of
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        Honorable George H. Sheppard, Page 3, O-3486



        New York, 7. N. Y. 5. (2) 326, aff. 20 N. E. (2d) 12. See
        also, Vancouver Oil Co. vs. nenneford, 49 Pac. (2) 14, Wash.;
        Nat'1 Linen Ser. Corp. vs. state Tax Corn., 186 So.  78, Ala.;
        Sonneborn vs. Keeling, 67 L. Ed. 1095, 262 U. S. 50 k ; Douglas
        Aircraft Co. vs. Johnson,, 90 Pac. (2) 572, Cal.; Continental
        Supply Co. vs. People, 88 Pac. (2) 488, Wyo.

        The principle of equality would demand that the tax levied
        in Section 2 should not operate as to vehicles purchased
        prior to the effective date of the Act, since Section 1, the
        portion of the Act to which Section 2 is complementary, does
        not apply to vehicles purchased prior to that date. we believe
        that Section 2 is susceptible of that construction and we do
        so construe it.
    We gather that your second question relates only to a private
    individual. For reasons sufficiently appearing above we answer
    that question in this way: if this person's Change of domicile
    precedes his application for the car license he will be
    required to pay the use tax, if he has purchased the vehicle
    on or since May 1, 1941. If he is a non-resident at the time
    of application he may register without paying the tax. In
    any event he may register his car without paying the use tax,
    if he purchased it prior to May 1, 1941. The measure of the
    tax is one per cent of the price he paid for the car.

        We presume that your third question has reference to persons
        resident in this State and to firms and corporations domiciled
        or doing business in this State. If so, the answer is: the
        tax will be due as to vehicles purchased on or after May 1,
        1941, but not as to those acquired before that date. In those
        cases where the tax is due it will be based on the price paid
        for the vehicle by the applicant.

        Our answer to your fifth question in our opinion No. O-3519
        had reference to individual persons only, not to firms or
        corporations domiciled or doing business in this State.
                                          Yours very truly
                                      ATTORNEY GENERAL OF TEXAS

        APPROVED AUG. 22,1941          s/ Glenn R. Lewis
        s/ Gerald C. Mann
        ATTORNEY GENERAL OF TEXAS     3~
                                                  Glenn R. Lewis
                                                       Assistant

        GRL:ej/cg                   Approved Opinion Committee
                                    BY JHS, Chairman
