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                                                                              .,
Hon. Franklin Perry, Chairman
Committee    on Constitutional Amendments
House of Representatives
52nd Legislature
Austin, Texas                    Opinion,No.     V-1155.

                                    Re: ,Effect of the proposed conati-
                                         tutional prohibition against -
                                         levying a general sales tax
                                         upon existing sales taxes and
Dear   Mr.   Perr.y:                     future specific sales taxes.

              You have requested our opinionon     that por~tion :of’-Com-
mittee Amendment     No. 1 to Rouse Joint Resolution    No. 1, Acts 52nd
Leg.,, R.S. 1951, proposing an amendment to Section 1 of Article,VIII
of the Constitution  of Texas, reading as follows:    :

               1.
                 . ~. . the Legislature shall never levy d’geksral
       sales   tax upon the, people of this State; . . . ”

              Your request presents two questions.:   first, the effect
of the, proposed constitutional amendment    upon the validity of the
existing “sales taxes” of~this State; and s,econd, its effect ,upon any
“sales taxes “~that may be enacted in the future..

              A review of “sales tax”. legislation   in the different States
during recent-years    re’flects a great variation in the types of sales
taxes which have been ‘imposed.      The decisions    as to the exact na-
ture of the taxes which have been ter,med “sales taxes” are not in
harmony.     Such taxes have been &scribed      by the. cpurts.,as ,occupa-
tion taxe,s, privilege  taxes, income ‘taxes,~ excise taxes, and, in rare
instances,   as property taxes.. It has. been said that “the difficulties
in attempting to reduce the term ‘sales tax,:’ to a.ny ,single all-inclu-
sive formula appear to be insurmountable.”         47 Am. Jur. 194, Sales
Tax, Sec. 1.

              Thus, it kapparent   that the difficulty in answering your
first question lies in a determinqtioqof    what, existing taxes ,in this
State are in fact “sales taxes.”   Certainly the motor fuel taxes 1 and



 1 In State v. City of El Paso, 135 Tex. 359, 143 S.W.Zd 366 (1940),
it was held that the motor fuel tax levied by Article  7065a-2,  V.C.S.,
(repealed   in 1941 but similar to that now levied under Article  7065b-
2) was a “use” tax and not an occupation tax.
259   Hon. Franklin     Perry,         Page   2 (V-l   155)



      many of the occupation taxes, such as the gross production taxes
      levied on the occupations   of producing gas, oil, or sulphur, (Arts.
      7047b, 7057a, and 7047b(40b),    V.C.S.) would not be considered    as
      being within the prohibition of the proposed amzndment,      even though
      such taxes may be pass d on to the consumer.         The Le islature
      has imposed use taxes; 5 stamp taxes;4    and license fees ! under the
      police power of the State for regulatory   purposes.   In our opinion
      taxes of this nature would not be repugnant to a constitutional    pro-
      hibition against a general sales tax.




      2 It was held in Att’y Gen. Op. V-1027        (1950) that the taxes levied
      byH;B.‘3,    Acts 51st Leg.; 1st C.S. 1950, ch. 2, p. 10, on oil pro-
      duction, gas production,      sulphur production,    telephone gross re-
      ceipts, gas, electric,    and water company gross receipts,         carbon
      black production,     cement distributors,     motor carrier    gross receipts,
      oil well servicing,    insurances gross receipts,     and chain stores are
      occupation taxes within the meaning of Sec. 3, Art. VII of the Con-
      stitution of Texas.     This’ opinion was based on the authority of Pro-
      ducers’ Oil Co. v. Stephens, 99 S.W. 157 (Tex. Civ. App. 1906)~;
      State v. Humphrey,      159 S.W.2d 162 (Tex. Civ. App. 1941); W. R.
      Davis, Inc. v. State, 142 Tex. 637, 180 S.W.Zd 429 (1944); Oliver
      Iron Mining Co. v. Lord, 262 U.S. 172, 43 S.Ct. 526 (1922); Dallas
      Gas Co. v. State, 261 S.W. 1063 (1924); State Tax Commission              v.
      Hughes Drug Co., 293 S.W. 944 (KY. Civ. App. 1927); United North
      & South Dev. Co. v. Heath, 78 S.W.2d 650 (Tex. Civ. App. 1934);
      Gaar, Scott & Co. TV. Shannon, 115 S.W. 361 (Tex. Civ. App. 1909);
      Philtex Chemical Co. v. Sheppard, 219 S.W.2d 1010 (Tex. Civ. App.
      1949); Trinity Portland Cement Co. v. State, 144 SW.2d             329 (Tex.
      Civ. App. 1940); Texas Consolidated         Transp. Co,. v.:State,   210 S.W.
      2d 891 (Tex. Civ. App. 1948); Cobb v. Harrington,           144 Tex. 360, 190
      S.W.Zd 790 (1945); Southern Realty Corp. v. McCallum,             65 F.2d 934
      (1933); Western Co. v. Sheppard, 181 S.W.2d 850 (Tex. Civ. App.
      1944); Sheppard v. Rotary Engineering          Co., 208 S.W.2d 656 (Tex.
      Civ. App. 1948); Kansas City Life Ins. Co. v. Love, 101 Tex. 531,
      109 SW. 863 (.1908); Hurt v. Cooper,         113 S.W.2d 929 (Tex. Civ. App.
      1938); Hurt v. Cooper,      130 Tex. 433, 110 SW.2d       896 (1937); Sec.
      30-002,   C.C.H.;   Attorney General’s     Opinions O-4731 and O-4847;
      Edward Brown h Sons v. McColgan,            128 P.2d 1,86, 53 Cal. App.2d.
      504.

      3 Article   7065b-2,      V.C.S.,       is an example.

      4,Article   7047c-l,,V.C.S.,            is an example.

      5 Article   7047d,     V.C.S..      is an example,
,’




     Hon. Franklin   Perry,   Page 3 (V-1155)                 ~,:   ;/   ;




                   The most familiar and ~~generally recognized        retail
     sales taxes in Texas are the “luxury excise?          taxes le&ed.by    Ar-
     ticle 70475 V.C.S.,    on the sale of new cosmetics,       radios, televi-
     sion sets, and playing cards, and the “motor vehicle retail sales”
     tax levied by Article    7047k, V.C.S.      It was held in Att’y Gen. Op.
     0-4403-A    (1942) on the authority of Lash’s       Products Company v.
     United States, 278 U.S. i75 (1928) that the tax imposed by Article
     m471 was a “gross receipts”        tax and not a sales tax. The motor
     vehicle sales tax levied by Article      7047k combines the features of
     both a retail sales tax and a use tax. As has been previously
     pointed out, there. is doubt as to the exact classificatiorrof       these
     and similar taxes, ,but it is clear that such taxes are at the most
     “selective  ~sale taxes” and not u eneral ” and would not.fall within
     the proposed constitutional     proh 7m---!
                                             t on against a general sales tax.

                   The proposed amendment would be adopted. in contern* ’
     elation of existing tax statutes and such statutes therefore would
     not be held invalid unless clearly inconsistent     with the provisions
     of the proposed amendment.       11 Am. Jur. 642, Constitutional     Law.,
     Sec. 36; 9 Tex. Jur. 420, Constitutional     Law, Sec. 9. Great weight
     is attached to the opinion of the Legislature     as to its own powers
     and as to the legislative  interpretation   of a constitutional provi-
     sion.   11 Am. Jur. 699, 790, Constitutional    Law, Sets. 79, 129; 9
     Tex. Jur. 439, 480, 482, Constitutional     Law, Sets. 27, 61, 62. It is
     to be assumed that the Legislature      in adopting H.J.R. No. 1, as a-
     mended, would not expect it to result in the repeal of any present
     tax statute.

                  It is, therefore, our opinion that the passage by the Leg-
     islature and adoption by the people of H.J.R. No. 1, as amended,
     would not affect the validity of the existing tax statutes above re-
     ferred to.

                  With regard to yonr second question, we must advise
     that we are unable to answer it categorically.      It would be specula-
     tion on our part to attempt to anticipate the types of taxes that may
     be imposed by future Texas Legislatures.       It is not unreasonable
     to observe that the courts of this State may find, after a period of
     years, that numerous so-called    “selective   taxes” would have the
     cumulative effect of a general sales tax and thus hold that some or
     all of such taxes are invalid under the proposed constitutional      a-
     mendment.     This is a matter, however,    upon which we do not pass
     at the present time for the reasons herein stated.


                                 SUMMARY
                                        f
                   The adoption of the proposed amendment to Sec-
            tion, 1 of Article VIII of the Constitution of Texas pro-
Hon. Franklin   Perry,   Page 4 (V-1155)-   /



      hibiting the levy of a general sales, tax would not
      affect the validitvof  the existing tax statutes in this
      State.

                                            Yours    very   truly,

                                            PRICE      DANIEL




APPROVED:

W. V. Geppert                                       ,..Assistant
Taxa,tion Division                                                   .’

.Charles D. Mathews
 First,Assistant

Price Daniel
Attorney General

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