                  a.      -




       WILL    WI&SON
    AITOHNES       GENERAL.
                                                        February   12,   1962

         HonorabU         Vernon D. Adcock                           Opinion No. W-1259
         County        Attorney
         Dawson County                                               Re:    Liability    of non-profit
         P. 0. Box 359                                                      hospital   auxiliary   to
         Lamesa, Texas                                                      collect   and report the
                                                                            sales tax on sale of
                                                                            cold &Inks etc.,      the
                                                                            proflte   from such sales
                                                                            being used for charitable
         Dear Mr. Adcock:                                                   purpose.
                You have asked whether or not a non-profit    hospital
         auxiliary   Is required to collect    and report the sales tax on
         the sale of cold drinks, candy, c&e and sandwlohes, sold from
         a concession   counter in the county owned hospital,     the profits
         from such sale being used to carry on their charitable        work.
         Ye assume that no part of,the      net earnings of this organization
         Inures to the benefit   of any private shareholder     or Individual.
               The Limited Sales, Excise and                             Use Tax Act was enacted by
          the 57th Legislature,   First Called                           Session, as Article  I,
4     .*- X: B: No:. 20,. Chapter 24; page 71,                           to be codified  as Articles
          20.01 to 20.17, Inclusive,    Chapter                          20, Title 122A, Taxatlon-
          Qeneral, V.C.S.
                  Article              20.02        of the Act reads       In part as follows:
                            “There Is hereby Imposed upon each
                         separate sale at retail    of tangible
                         personal property made within this State
                         a limited sales 4zx at the rate of two
                         per cent (2$) of the sale price of each
                         Item or article   of tangible personal prop-
                         erty when sold at retail     Ih .thIs State.
                            “CA) Method of Collection  and Rate of
                         Limit&d Sales Tax.  The tax hereby imposed
                         shall be collected by the retailer  from
                         the consumer.
                              II
                                   .    .   .   .   ’   &phasls     addedJ
                 A “Retailer” la defined In paragraph                             (J)   (1)   (a)   of Article
          20.01,; which read8 in part as follows:
                        Honorable      Vernon 0. Adoook,                 Page 2           Opinion   No, WY-1259


                                         “Every,seller  engaged In the bushes6
              .:
                                      of making sales of tangible personal
                                      p*operty for storage,    use or other con-
                                      .sumption. . . . n
                            “A “Sale” Is defined  in paragraph                        (K) of Article        20.01,
                        which rqads in part as follows:
                                                                           and Includes    =w
                                                                           possession,.    . .
                                      of tangible             personal     property for    a con-      “’
         .                            sideration.
                   ‘.

                                        “(2)     ‘Sale’             Includes:     i
          ,                                      ,I
                                                      .   .    .



               ;                                 “(c)              The furnishing,  preparing or
                                                                   serving of food, meals, or drinks.
                                                      I
                                                 If. . . . ”

                                  Paragraph (F) of Article                 20.04 reads    In part as follows:
                                        ..“There are exempted from the computation
                                      of the amount of the taxes imposed by this
                                      Chapter, the receipts   from the sale. . .
,   ..                  .,~   .       ?f +ny tangible ,p.ersonal property &. . .-./
         ..
                                        n. . .

                                        "(5)     Any -organization    created for.  , .
                                                 charitable.    . .purpoBes, provided
                                                 no part of the earnings of any such
                                                 organization    Inures to the benefit
                                                 of any private    shareholder   or
                                                 Individual. ’
                             The purpose for which the profits from the sales are to
                        be used Is not the factor under the act which detezmlnes’whether
                        or not the tax must be collected.
                              The tax Imposed by the Limited gales, Brclse and Use Tax
                        Act Is Imposed on the purchaser.       Uhlle your letter   does not
                        state who the purchasers are, we assume ~they would be classified
                        as the “general public.”       Since such a olassIflcatIon     carries
                        no exemption from the act, the purchaeers        would be requlred to
                        pay the tax.     The organization,   acting as the ‘Retailer’,      would
                        be required, to collect    the tax, using the bracket system found
         ~              in Article   20.02, and to make the quarterly      reports to the
              *.        Comptroller provided for In Article       20.05.
Honorable   Vernon D. Adcock,       Page   3          Opinion No. WW-1259



       We do not have sufficient    Information to determine whether
or not the auxl~lary Is such a charitable       organization,   aa Is
referred   to in paragraph (P) (5)of Article       20.04.   But even
If we assume that .It Is, the exemption from the tti I8 for
sales to the charitable     organization,   that I@, when the organl-
eatlon’Ta   the purchaser.
      We hold, therefore,     that the hospital  auxiliary,   which
operatee   a concession   stand In the county owned hospital,      selling
Oold drinks, candy, cake and sandwlohes to the general public,
Is required to collect     the sales tax from Its customers In
accordance   with Article    20.02 of the Limited Sales, Excise and
Use Tax Act, and to make reports to the Comptroller         In accordance
with Article   20.05of said Act.

                               SUMMARY
                   A non-profit     hospital    auxiliary,
            which operates a oonceselon          etand In a
            county owned hospital,        selling    cold drinks,
            candy, cake and sandwiches to the general
            public,   Is required to collect         the pales
            tax from Its customers,         as provided by
            Article   20.02, and make reports .to the
            Comptroller au provided        by Article      20.05,
            of the Limited Sales, Excise and Use Tax
            Act, (Articles      20 .Ol to 20:.17, Inclusive,
            Chapter 20, Title 122A, TaxatIon-Qeneral,
            V.C.S.).
                                       Yours very truly,
                                       WILL WILSON
                                       Attorney Qener&l of Texas



                                               Alley Eugene Fletcher
REP/cm                                         Assistant

 APPROVED:
 OPINION COWMITTBg:
‘W. V. Oeppert, Chairman
Vernon Teof an :
Tom McFarllng
Harry P. Hewell
Dudley HcCalla                         RBVIRUNDFOR THE ATTORNEY 0gNERA.L
Bill Robleon                           8~:~ Houghton Brownlee, Jr.
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