      _-
                                                                  R-124




                                AWLWIN    ~s.Texae
PRICE   DANIEL
.4TTORNEYGmiER‘4l
                                  February   21,    1947


           Honorable George H. Sheppard
           Comptroller  of Public Accounts
           Austin, Texas                   Opinion         No. V-36

                                              Re:     Liability    for the
                                                      one (1) per cent
                                                      Motor Vehicle      Re-
                                                      tail Sales Tax
                                                      levied    by Art.   7047k,
                                                     ,V.A.C.S,, where motor
                                                      vehicles    owned by a
                                                      partnership     are trans-
                                                      ferred    to the oorpora-
                                                      tion.
           Dear Sir:

                      IOU have requested      the opinion   OS this Depert-
           ment on the above-captioned       question  based upon the Sol-
           lowing factual  situations:

                        (I) W. B. Kline and hia wife as partners           have
           formed a corporation       known as Pridgen-Kline       Company, Ine,
           with a capital      stock of $100,000,    of’which    W, B. Kline
           owns 499 shares,      his wife Louella    P. Kline,     owns 499
           8hare8, and W. R. Carruth         and L. 0, Jenkins each own one
           share,   the latter    two stockholders    not being members OS
           the former partnership0        Motor vehicles     formerly   owned
           by the partnership       of a book cost OS #25,990,40       and of a
           depreciated     value OS )7,699!22     have been transferred      by
           the partnership      members to the corporation       for a consid-
           eration   paid or exchanged by the corporation           of $7,669,22,

                       (2)   In the second situation     E. G. Morrison    and
           F. D, Breedlove,    a partnership,    have Sormed'a corporation
           known as Morrison Br08~ Construction        Company with a capi-
           tal stock of $50,000.00      OS which B. C. Morrison      owns 74
           shares,  F, D. Breedlove      owns 24 shares,   and Yr, Morrisonps
           wife and Mr. Kline's     wiSe each own one share,      the respec-
           tive wives not being member8 of the former partnership0
           The partnershin    owned redo118 motor vehicles       of the book
           value of #53,607,04     with an original,   cost value OS
           $80,075U920     The corporation    purchased from the partner-
           ship all fixed    assets, except    real estate   for a cash down
                                        .

                                                                               -1




Honorable    George      B. Sheppard,         Page 2       (V-36)



payment and a chattel  mortgage note                   for the balance of
the book  value of the ffxed  assets.                   No stock ws8 fssu-
ed for the value of any vehicles-

          The pertinent   parts of Artids  7047k, V.A.C.S.,
being Acts 1941, 47th Legislature,   Page 269, Chapter 184,
Article VI s are as Sollows:

            “Section    l-(a)     There is hereby levied
     a tax upon evtiry retail          sale of every motor
     vehicle     sold in this State,         such tax to be
     equal to one (1) per cent of the total                consid-
     eration     paid, or to be paid to the seller           by
     the buyer, which consideration              shall  include
     the amount paid or to be paid for said motor
     vehicle     and all accessories         attached  thereto
     at the time of the sale,           whether such consid-
     eration     be in the nature of cash, aredit,             @r
     ej;Trsz?T-other          property,      or a combination
     rf-theseT--     In the event the consideration            re-
     GgTy           the seller    includes      any tax imposed
     by the Federal Government,             then such Federal
     tax shall      be deducted     fyu-ur:,such consideratfon
     for the purpose of compui;ing the amount of tax
     levied    by this Article        upon such retail      salt

              “Section        2 u There is hereby levied                  a use
      tax upon every motor vehicle                      purchased at re-
      tail    sale outsid~e of this State and brought in-
      to thl.s %tste for use u.pum thi: public                        bfnhways
      thereof       by a resident         :,I’ t,nis State or by firms
      or corporati.ons            domiciled      !>r doins business           in
      this State*          Su@h tax shall             be equal to one (1)
      per cent of the total               consideration           paid or to
                         (.,.~..
      p,e__paid      ._, _ ,.~(
                    Pm
           .- ...__.“         ,I,~,m~~‘xj’&~j~v~j
                                              ~.%&~t
                                                .,._-.9 H’
                                                         .-.jTret pj1 1 sale,
      The tnx ShR*i           bc~ i;i;& etLigati3n            of e3,T-d
      by the person:            firm,   or cornorstion            operating
      said mot,or vrbicle             upon the public            hiphways of
      this State..

             ‘Y,ection   3,(a)     The term psalcs or ssalesi
      as herein      used shall    Elude       instalment    and
      credit    sales s and the exchange of property,             as
      weli as the sale thereof          for mone
      Ztransaction-EiXZZ5.u~            ----M&i
                                             a 57 e
      iCtTTiii%EZFy’~“~~CG pas sessi?Tii of property           is
      transferred      but the seller       retains    title  as
      security     for t~he payment of the price shall be
      deemed a sale.,”         (Emphasis ours) E
.-.


                                        _..


      Honorable       George   H. Sheppard,   Page 3     (V-36)



                   Under each of the foregoing       statements     of
      fact,, whiah are based upon information          obtnined   from
      each of the corporations,       there has been a salb as
      defined   in Section    3(a) above,   since   the .motor vehicles
      In each case were sold to the corporation?            by the part-
      nerships    either~for   money or by .an erchann            .EEi~
      under th.e worditnx of the statut~e anmhxne                   oer
      cent tax levied      gy Section  l(a)   of Article    7047k should
      be paid by ench of the pnrtnershlps         upon the value cl
      the motor vehicles      sold to the respective       corp0ratSnn.s.
      The amount of taxes to be allocated         to each vehfcle
      should be ascertained       from the books and reaords ,of ea’oh
      of the   corporations.



                  Under the eiven facts,      where corporation
            acquired   motor vehicles    from partnership    for
            A consideration    as defined    in Article   7047k,
            V.A.C.S.,    the tax as prescribed     ln said article
            must be psid~ by the seller,

                                              Yours    very   truly

                                        ATTORNEYGENERALOF TEXAS



                                        BY @Y@d
                                            c, K,. ‘Rf@herds
                                                       Assistant




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