                               AUSTIN    ~~.TExarn
  GWALD    C. MANN
*TrORNEYcaENERAx.




      Hon. Bert Ford, Administrator
      Texas Liquor Control Board
      Austin, Texas
      Dear Sir:
                                        Opinion No. O-299
                                        Re: A refund or deduction for the
                                             amount of tax paid on broken
                                             bottles, which contain beer, to
                                             brewery.
               Your request for an opinion on the question as is here-
      in stated has been received by this office.
                    Yours letter reads, in part, as follows:
                "I would appreciate an interpretation as to
           whether or not bottles of beer that are broken
           upon which the tax has been paid or, bottles of
           beer that are broken upon which the tax has not
           been paid and are stored in the brewery, shall
           entitle the brewery to a refund or a deduction
           for the amount of tax paid on those broken
           bottles which contain beer."
                    Article 667-23 of the Penal Code reads as follows:
                "(a) There is hereby levied and assessed
           a tax at the rate of One Dollar and Twenty-four
           Cents ($1.24) per barrel on all beer sold, stored,
           distributed, transported, or held for the purpose
           of sale in this State whether namufactured in or
           imported fnto this State. Bald tax shall be paid
           and evidenced by placing stamps, which the State
           Treasurer is herein authorized to provlde in the
           denominations required, on each origlnal package
           as defined in this Article; provided, further,
           that at the time said stamp is affixed the person
           affixing the stamp shall with Indelible Ink or
           stamp cancel the same by placing the date and the
           licensee's full name or initials upon said
           revenue stamp.
Hon. Bert Ford,'Adminlstrator, page 2    0 -299


        "(b) It is the purpose and intent of this
   Act to require the tax to be paid and the stamp
   evidencing same to be affixed on the first sale,
   distribution, storage, or transportation and at
   the source, to the end that it will preclude any
   person evading the payment of this tax. Any per-
   son in poaseaslon of beer that has not been
   stamped in accordance with the provisions hereof
   shall be held to be In violation of this Article
   and liable for the taxes hereln provided and the
   penalties for such violation.
        "(c) On beer imported into this State the
   duty of payment of the tax and affixing and
   cancelling the stamp as required herein shall
   rest primarily upon the importer, and it Is here-
   by declared to be unlawful to import beer into
   this State unless and until said tax has first
   been paid and the stamp evidencing such payment
   has been first affixed and cancelled as required
   by this Act. It is provided, however, that a
   holder of a manufacturer's license who imports
   beer into this State for rebottling purposes
   shall not be required to affix the State tax
   stamps to the container In which he receives
   the same, and that the same may be transported,
   delivered and stored by him without the State
   tax stamps being affixed to the containers there-
   of, but in all instances where beer is imported
   into this State for rebottllng purposes the im-
   porter thereof shall be required by rule and
   regulation of the Board to make and keep such
   records and submit such reports as amy be re-
   quired, to the end that it will preclude any
   person from evading the payment of the proper
   tax.
        "(d) On beer manufactured In this State
   the duty of paying the tax and affixing and
   cancelling the stamo as requFred herein shall
   rest primarily upon the manufacturer, and it-is
   hereby declared to be unlawful for any manufacturer
   to transport any beer or to deliver to any person
   any beer to be transported away from the brewery
   of said manufacturer unless and until tax has
   first been paid and the tax stamp evidencing such
   payment has been first affixed and cancelled as
   required by this Act; provided, however, that no
   person holding a Manufacturer's License Ln this
   State shall be required to affix stamps on any
Hon. Bert Ford, Administrator, page 3    o-299


    containers of beer stored in the brewery where
    same is brewed OP being transported therefrom
    to a point outside of this State.'l
        "(e) Tax.stamp of proper denomination shall
   be placed on each original package as herein
   defined upon which the stamp is required to be
   affixed, in such a way that the original package
   cannot be conveniently and practically opened
   without mut-ilatingor defacing said stamp;
   provided, however, that as to packages where
   thisrequirement is in the judgment of the Board
   impractical the Board shall have authority by
   regulation to require the affixing of the stamp
   in any manner it may deem necessary for the pro-
   tection of the revenue due to the State.
        "(f) It shall be unlawful to transport to
   destinations in this State any beer upon which
   tax has not been paid and such payment evidenced
   by stamps affixed and cancelled as required by
   law.
        "(g) If any person has paid the tax on any
   beer and affixed tax stamps to the containers
   thereof and thereafter said beer is shipped out of
   Texas for consumption, a claim for refund may be
   made upon paying a fee of Five Dollars ($5) to the
   Board at.the time and in the manner prescribed by
   the Board or Administrator. So much of any funds
   derived hereunder as may be necessary, not to
   exceed two (2) per cent thereof, is hereby appro-
   prLated for such purpose. The Board may pro-
   mulgate rules and regulations generally for the
   enforcement of this provision.
        n(h) No bottled beer shall be stored.in
   this State except it be in a container or
   original package bearing the proper tax stamp,
   unless the same is exposed for sale by a retailer
   or is being cooled for sale by a retailer, ex-
   cept when the same is legally in the possession
   of the ultimate consumer,
        "(i) Except as may be otherwise provided
   by rule and regulation of the Board no person
   shall be authorized to purchase any beer tax
   stamps herein provided unless he is a holder of
   a Manufacturer's or Distributor's License; pro-
   vLded however, that the holder of a Manufacturer's
Hon. Bert Ford, Administrator, page 4     o-299



   or Distributor's License may designate as his agent
   for the purchase of stamps any manufacturer or
   wholesaler located outside the State whose products
   are imported into this State by the holder of such
   license; and the State Treasurer shall make no sale
   of beer tax stamps to any person not authorized to
   purchase same.
         "(j) The Board shall from time to time inspect
   the records of manufacturers, importers, or dis-
   tributors to ascertain whether there has occurred any
   evasion of the tax imposed by this Article upon beer
   sold, stored, distributed, transported, or held for
   the purpose of sale in this State. It la hereby de-
   clared to be the law that as to all beer sold,
   stored, distributed, transported or held for the pur-
   pose of sale in this State and for which the tax has
   not been paid and evidenced aa required by law prior
   to the first such act, the tax hereby imposed shall
   be double the amount of tax required to be paid upon
   beer that is stamped before Its first sale, storage,
   distribution, or transportation in this State; and
   any person who shall sell, store distribute, trans-
   port, or hold for purpose of sale any unstamped beer
   shall be in violation of the law and may be held
   liable for the tax that may be found to be due to
   the State. Any receipts or sales or record of receipt
   or sales of beer by any person In quantity exceeding
   the amount of beer for which tax stamps have been
   purchased by such person from the Board shall be
   prima facie evidence of the sale of beer without
   payment of the tax thereon.
        "(k) It'shall be unlawful for any person to
   open any container of beer having a stamp thereon
   without then and there mutilating or otherwise de-
   ,faclngsuch stamp so that it cannot be again used;
   and
        "(1) It shall be a violation of law for any
   person to attach to any container of beer or to
   possess any stamp that has been theretofore attached
   to a different container, or to use for the packing
   of beer, or to possess for such purpose any con-
   tainer bearing a stamp that has theretofore been
   used for the delivery of beer unless the stamp re-
   quired by.law to cover the previous sale or delivery
   has thereafter been defaced, mutilated, or removed.
Hon. Bert Ford, Administrator, page 5       o-299



         “(m) Any payment of taxes upon beer found
    to have been sold, stored, or transported before
    payment thereof, voluntarily or as a result of
    seizure and sale shall not excuse any person from
    penalites provided for failure to pay taxes and
    evidenced such payment by the application of
    stamps as required in this Article.”
         Section (b) of Article 667-23,   supra, specifically
provides that -
         “It is the purpose and intent of this Act
    to require the tax to be paid and the stamp
    evidencing same to be affixed on the first sale,
    distribution, storage, or transportation and at
    the source to the end that it will preclude any
    person evading the payment of this tax. * * * *’
         Section (e) of the above quoted.Statute, provides that
the -
         “Tax Stamp of proper denomination shall be
    placed on each original package as herein defined
    upon which the stamp is required to be affixed.
    * * * Y”

         Section (h) of Article 667-23,   supra, provides that -
        “No bottled beer shall be stored in this
   State except it be in a container or original
   package bearing the proper tax stamp, unless the
   same is exposed for sale by a retailer or is
   being cooled ‘for sale by a retailer, except when
   the same Is legally In t.hepossession of the
   ultimate consumer.
         After a careful search of the statutes, we do not’find
any statutory provision which provides that the brewery shall be
entitled to a refund or a deduction for the amount of tax paid
on broken bottles, which contain beer, when such bottles were
broken while in the possession of the brewery.
         In view of the foregoing statutes you are respectfully
advised that it Is the opinion of this department that a brewery
is not entitled to a refund or a deduction for the amount of tax
paid on broken bottles, which contain beer, upon which the tax
has been paid or bottles of beer that are broken upon which the
tax has not been paid and are stored in the brewery.
Hon. Bert Ford, Administrator,   page   6    o-299


         Trusting that the foregoing answers your    inquiry, we
remain
                              Yours very truly,
                           ATTORNEY GENWAL    OF TEXAS

                              By s/Ardell Williams
                                   Ardell Williams
                                   Assistant
AW/omb/wc
Approved Opinion Committee By s/RWF Chairman
APPROVED JUL 6, 1939
s/W.F. Moore
FIRST ASSISTANT
ATTORNEY GENERAL
