                                                                        I.   ,~       .   3

                                                            i   ,   i         ;   ,       ;




         THE    ATTORNEY            GENERAL

                     OF     TIWAS




                          October 23, 1957

Honorable Robert S. Calvert
Comptrollerof Public Accounts
Capitol Station
Austin 11, Texas
                                    Opinion NO. ww-286
                                    Re:   Whether or not transpor-
                                          tation agencies should
                                          be required to have a
                                          cigarettepermit in order
                                          to dispose of damaged or
                                          salvage cigarettesthat
                                          they may acquire from
                                          time to time due to re-
                                          fusal to accept the
                                          cigarettesby the con-
Dear Mr. Calvert:                         slgnee.
       You ask the opinion of this office.uponthe question
presented in your letter of September 19, 1957, the pertinent
part of which is as follows:
                 "At various times during the past common
      carriers that transport tax-free cigaretteshave
      had delivery refused on these cigarettesby the
      consignee due to damage, etc. We have been
      requiring the transportationagency to take out
      a cigarette permit in order to dispose of these
      cigarettes.      The type of permit required from
      the transportationagency depended on the manner
      in wh-lchthey intend to dispose of the clga-
      rettes,     either retail or wholesale.
             "At the present time the Panhandleand
      Santa Fe Railway Company have a case of damaged,
      unstamped, cigarettesin the unclaimed freight
      warehouse at Amarillo. They are aware of the
      fact that these cigaretteshave to be stamped
      with tax revenue stamps but contend that they
      should not be required to have a cigarette
      permit in order to dispose of the cigarettes.
Honorable Robert S. Calvert, Page 2 (W'W-286)


             "I nil1 appreciate it if you will
      advise me as to whether or not In your
      opinion transportationagencies should
      be required to have a cigarettepermit
      in order to dispose of damaged or sal-
      vage cigarettesthat they may acquire from
      time to time due to refusal to accept the
      cigarettesby the consignee."
       Section 4 of Article 7047c-1;Vernon's Civil Statutes,
Is In part as follows:
             "Every distributor,wholesale
      dealer and retail dealer in this State
      now engaged or who desires to become
      engaged, in the sale or use of clga-
      rettes upon which a tax is required
      to be paid, shall, tithln thirty (30)
      days from the date this law becomes
      effectlve,filewith the Comptroller
      an applicationfor a cigarette permit
      as a distributor,wholesale dealer or
      retail dealer, as the case may be, said
      applicationto be accompaniedby a fee
      of Twenty-five ($25.00) Dollars if for
      a distrlbutorlspermlt, or a fee of
      Fifteen ($15.00)Dollars if for a whole-
      sale dealer's permit, or a fee of Five
      ($5.00) Dollars if for a retail dealer's
      permit."
       It thus appears that if the common carrier, under the
circumstancesstated in your letter, Is a distributor,whole-
sale or retail dealer, tithln the meaning of the taxing statute,
a permlt Is required.
       The Statute defines distributor,wholesale dealer and
retail dealer in the language following:
             "'Distributor'shall mean and Include
      every person in this State who manufactures
      or produces cigarettesor who ships, trans-
      ports, or Imports into this State or in any
      manner acquires or possesses cigarettesand
      makes a 'first sale' of the same in this State;
      the said term shall also include everyperson
      in this State who in any manner acquires or
      possesses unstamped cigarettesfor the purpose
      of making a 'first sale' of the same within
Honorable Robert S. Calver, Page 3 (~286)


      this State.
             "'WholesaleDealer' shall mean and ln-
      elude every 'person'other than a distributor
      or a salesman in the employ of a manufacturer
      and handling only the products of his employer
      who engages In the business or selling or dls-
      trlbuting cigarettes in this State for the pur-
      pose of resale.
             "'Retail Dealer' shall mean and include
      every person other than a distributoror
      wholesale dealer who shall sell, distribute,
      or offer for sale or distributionor possess
      for the purpose of sale or distribution,
      cigarettes irrespectiveof quantity or smount
      or the number of sales or distributions;. . .'
       We believe that the Intent of the Legislature,as evi-
denced by the language of the statute defining distributor
and retail dealer, cannot reasonablybe construed as Importing
an exception to the operation of the statute for the benefit
of a common carrier. If such common carrier, after having
acquired possession of cigarettes,makes a "first sale" of
the commodity in this State, or distributesor offers for
sale or distribution,then the common carrier has subjected
himself to the regulationsImposed by the statute. We are
of the opinion that transportatlon~agencies must have a
cigarettepermit In order to dispose of damaged or salvage
cigarettesthat they may acquire from time to time due to
refusal to accept the cigarettesby the consignee.
                      SUMMARY

                A common carrier who
                acquires ownership of
                unstamped cigarettesIn
                its usual end customary
                operations of transporting
                for hire is not excepted
                from the o eration of
                Article 70$7c-1, Tex. Civ.
                Stat. (Vernon, 1948), and
                is required to secure a
Honorable Robert S. Calve&, page 4 W-286)


                 petit In order to sell
                 such cigarettes.
                                  Very truly yours,
                                  WILL WIISON
                                  Atto-ey General oi Texas


                                  By&A!w,
                                     33.Ii.Tirmnins,.Jr.
                                     Assistant
BHT:WSIIl

'APPROVED:
OPINION COMMITTEE
Gee. P. Blackburn, Qlairman'
Milton Richardson
Wayland C. Rlvers, Jr.
