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                 TRIE    .L-ITNBRNEY                GENERAL
                              OF       TEXAS
                          AKXWX-IN,    -l-lzxAs   78711


                              June 5, 1968



    Honorable Robert S. Calvert                   OpInIonNo. M-241
    Comptrollerof Public Accounts
    State Capitol Eulldlng                        Re: Applicabilityof credit
    Austin, Texas                                     provision of Article 7359a,
                                                      V.C.S. to mator vehicle use
                                                      taxes Imposed by Article,
    Dear Mr. Calvert:                                 6.01(2), Taxatio++eneral
         Your letter requesting the opinion of this office on the above
    question reada as follows:
                 "The Comptrollerhereby request8 your official
           opinion regarding the application of the Motor Vehlole
           Sales and vaseTax, Chapter 6, Title 122A, Taxatlon-
           General, Texas Civil Statutes, as amended, 1925. Article
           6.01.(2) and (3) (Taxation-General)provide for a use tax
           upon any person bringing a motor vehicle into the State
           for use upon the public highways. Article 6.01(2) reads
           as follows:
                    "There Is hereby levied a use tax upon
               every motor vehicle purchased at retail sale
               outside this State and brought into this State
               for use upon the public highways by any person,
               firm or corporationwho is a resident pf this
               State or who is domiciled or doing business in
               this State. The tax Imposed by this subsection.
               shall be equal to two per cent (2$) of the total
               considerationpaid or to be paid for said vehicle
               at said retail sale. The tax shall be the obliga+,< '
               tlon of and be pald by the perscin,firm or aorporai
               tlon operating said motor vehicle upon,the public
               highways to this State.
                "Article V(1) of Article 7359a (Vernon'sCivil Statutes)
           provides for a credit under certain Instances. Article V(1)
           reads as follows:




                                      -1177-
Hon. Robert S. Calvert, page 2 (M-241)


              "Each purchaser liable for a use tax on
         tangible personal property shall be entitled
         to full credit for the combined amount or
         amounts of legally lmpos~edsales or use taxes.
         pa~ldby h3m with respect to the same property
         to another state and any subdivisionthereof.
         Thencredit shaIl,be .eppIiedfirst against the
         amount of eny use:4x$xdue.'
                                   thenstate.~
                                             end wiy unused
         portion of the c.redltshall be then applied
         against the amount of any use tax due a sub-
         division.
          "Under the above~prov~lslon,la the person who
     has paid a e-alestaxin. another &ate on the,,purchase
     of a motor vehicle entitled to,,a.
                                      credit aga-lnstthe
     Texas tax on.the use.of~,themotor vehicle In this
     State. SecoMIy, is-the person entitled to the same
     credit against the u~setaxlevied by Article 6.01(3)
     which reads~as follows:~
              "There is herebyylevieda use tax In the
         sum of Fifteen DoLIars-(.$15)upon anyperson
         making application for the initial certificate.
         of title on a motor. vehicle which wes previously~
         registered In hls~name-,.inany other .Stste,or
         foreign cauntry.' It ls'the-purpoa~~of-this,-sub--
         section to lmpoee a.uee~~tax   upon motor vehicles
         brought into this State .by~newresidents of this
         Stete.",-(perenthes~ls-ou-rb)’

     At the outset we note that the two taxes imposed by sub-
sections (2) and (3) of Article 6.01 are alternative in the,,ser8@e
that if one tax Is lmposed, then the other tax Is not lmpoeed~.
     By Section 1 of Article 7359a, the State of Texas adopted~
the Multistate Tax Compact, which became effective In Texas
June 13, 1967. One of the express purposes of the Compact, es
set out In Article I, is to avoid duplicativetaxation. While
some provisions of~the Compact apply only to tax situations ln-
volving states which are parties to the Compact, paragraph 1 of
Article V of the Compact Is not so limited.
     Paragraph 7 of Article II of the Compact defines "sales tax"
and paragraph 8 further provides:
.     .




    Hon. Robert S. Calvert, page 3 (~-241)


               "'Use tax' means a nonrecurringtax, other than
          a sales tax, which (a) is Imposed on or with respect
          to the exercise or enjoyment of any right or power
          ‘overtangible personal property incident to the owner-
          shla, possession or custody of that property or the
          leading of the property from another including any
          consumption,keeping, retention, or other use of
          tangible personal property and (b) is complementary
          to a sales tax."
         The taxes Imposed by subsections (2) and (3) of Article 6.01
    clearly are use tslxeswith-the definition just quoted. Inasmuch
    as subsection (1) of Article 6.01 l&es a tax upon every retail
    sale of every motor vehicle sold In Texas, the use taxes levi&d
    by the next two subsectionsare complementaryto a sales tax.
          Paragraph (b)!of Article XI of the Compact provides: -
               "Nothing In this compact shall be construed to:
               II
                . . .
                           to ar#! tax or fixed f&i Imposed for
          the r.$~tr%%     of a motor vehicle or any tax on motor
          fuel, other than a sales tax. . .'
         While Article 6.04 directs Texas county tax collectors to
    refuse to accept for registrationor transfer any motes?vehicle
    until the tax Imposed by Article 6.01 Is paid, we are of the
    opinion that this does not ,havethe,effect of converting the
    use tax Imposed by Article 6.01 Into a "ta$ or fixed fee imposed
    for the registrationof a motor vehicle" within the meaning of
    that term as used in the Compact. The statutory construction
    applicable In such a case requires a strict coryltructlonagainst
    the taxing authority and a liberal constructionin favor of ,the
    $axpayeti. Texas Unemployment ComoensationComm. vs. Bass, 137
    Tex. 1, 151 S.W.2d 567 (1941). This conclusion is prompted first
    by the fact that Texas law Imposes other and separate.feesfor 6
    certificatesof title and registration. Secondly, Article XII
    of the Compact direct? that It shall be liberally construed so
    as to effectuate Its purposes, one of which Is, as noted above,
    to avoid duplicative taxation. Furthermore,a constructiondf
    a statute authorizing double taxation should not be adopted
    unless the la uage used admits of no other construction. 54'
    Tex.Jur.%?d13?F, Sec. 21, Taxation, and cases cited. In the event



                                -1179-
    Hon. Robert 9. Calvert, page 4 (~-241)


    it be contended that Article 6.01 conflictswith the Compact Law
    In Article 7359a, the Compact Law will prevail to the extent of
    any conflict. State BX rel Dyer vs. Slma; 341 U.S. 522 (1951).
         In answer to your specific questions,we are of the opinion
    that the credit provided for In paragraph 1 of Article V of Article
    7359a should be allowed to a person who as a purchaser has paid
    legally imposed stilesor uge taxes on a motor vehicle to another
    state and thereafterbecom&s subject to the tax imposed by either
    subsection (2) or subseotlon (3) of Articl& 6.01.
                                 SUMMARY
             The credit provided for In paragraph 1 o,fArticle V
        of Article 7359a, Vernon's Civil Statutes, should,be
        allowed to a person who as a purchaser has paid legally-
        Imposed sales or use taxes on a motor vehicle to another
        state and thereafterbecomes subject to the tax Imposed
        by either subsection (2) or subsection (3) of Article
        6.01, Taxation-General.
                                             very truly,

                                                  :p+==
                                                  MARTIN
                                                 neral of Texas
    Prepared by Nell Williams
    Assistant Attorney Qeneral
    APPROVED:
    OPINION COMMITTEE
,
    Hawthorne Phillips, Chairman
    Kerns Taylor, Co-Chairman
    Narlo Q. Ob$edo
    Ben Harrison
    Robert C. Crouch
    Charles Rose
    A. J. CARUBBI, JR.
    Executive Assistant




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