                        The Attorney                General          of Texas
                                             June    12,    1980
MARKWHITE
Attorney General


                   Honorable Bob Bullock                         Opinion No. NW-195
                   Comptroller of Public Accounts
                   LBJ State Office Build@                       Re: Sales tax exemption for in-
                   Austin, Texas 78744                           dustrial development corporations
                                                                 or medical development corpora-
                   Honorable Gerald R. Brown                     tions.
                   Executive Director
                   Texas Industrial Commission
                   Box 12728, Capitol Station
                   Austin, Texas 78711

                   Gentlemen:

                          You tive asked whether tangible personal property purchased by an
                   industrial development corporation or medical development corporation is
                   subject to sales and use tax if:

                                1.   the property is to be Incorporated into a project
                                     to be leased or sold to non-exempt persons or
                                     organizations, or
                                2.   the property is to be used in constructing a
                                     project to be leased or sold to non-exempt
                                     persons or organizations?

                          If the answer to these questions is yes, Mr. Brown pases three
                   additional questions.     Authority to create and administer industrial and
                   medical development corporations is found in the Development Corporation
                   A& of 1979, article 5190.6, V.T.C.S. Section 32 of the Act provides in
                   pertinent part that “. . .the corporation, all properties at any time owned by
                   it, the income therefrom, and all bonds issued by it, their transfer, and the
                   income therefrom      shall be exempt from all taxation by the state.”
                   (Emphasis added).     -

                          You suggest that the answer may be affected by MW-94 (1979) which
                   involved sales tax exemption for property leased by an exempt organization
                   to a non-exempt commercial entity.         That opinion, however, involved
                   construction of article 20.04(Y), Taxation-General, which required that the
                   property be improved -for an exempt organization.        There is no such




                                                    p.     631
Honorable Bob Bullock &
Honorable Gerald R. Brown - Page Two      (MW-195)




requirement   in section 32 of article 5190.6, V.T.C.S., which simply exempts the
corporation from all taxation.  In light of the specific statutory exemption, we believe
property purchased by an industrial development corporation is not stiject to the sales
and use tax even though the property may be sold or leased to a non-exempt organization.
You have not asked and we do not make any determination on exemptions under any other
taxes.

     Since the answer to both questions    is in the negative,   we need not address Mr.
Brown’s questions.

                                       SUMMARY

           Tangible personal property purchased by an industrial development
           corporation or medical development corporation is exempt from
           the sales and use tax.

                                           Very truly yours,




                                           Attorney General of Texas

JOHN IV. FAINTER, JR.
First Assistant Attorney General

TED L. HARTLEY
Executive Assistant Attorney General

Prepared by Bob Gammage &
C. Robert Heath
Assistant Attorneys General

APPROVED:
OPINION COMMITTEE

C. Robert Heath, Chairman
Jon Bible
Bob Gammage
Susan Garrison
Rick Gilpin
Myra McDaniel




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