                                                                                  ..   i
                                             Auk       an. TEXAS




                                             August 7, 1952


                Hon. Robert S. Calvert                 Opinion No. V-1498
                Comptrolle~r of Public Accounts
                Austin, Texas                          Re:   Applicability of the $15.00
                                                             motor vehicle use tax to a
                                                             vehicle brought into this,
                                                             State from a non-title State
               ,Dear Mr. Calvert:                            and sold to a dealer for resale.
                                                                                    .
    1
     ‘.                       Your request for the opinion of this, office is upon substan-
               ’tilly    the following facts:
          -*
                         ?-Iouse Bill No. 285, ,Section VII, Motor Vehicle   Sales Tax,
                        -Section 2 (b) reads as follows:

                              ‘(b) When a person makes application for the initial
                              certificate of title in this State on a particular motor
                             vehicle, he shall pay a use tax on that motor vehicle.        .-
                             ‘in the sum of Fifteen Dollars ($15). No certificate’of
                              title oremotor vehicle registration for such motor
                             vehicle shall be issued until the use tax imposed by
                              this subsection has been paid. However, a parson is
                            .not liable for the ~taximposed by this subsection if the
                              sales or use tax i posed by any other provision of
                             this Act has been previously paid upon such motor
                             vehicle. It is thec urpose of this subsection to impose
                             a use tax upon motor vehicles brought into this State
                             by.new residents of this State.’

                        *The Automobile Dealers Association has questioned the in-
                        structions given by this Department to the Tax Assessor-
                        Collectors. in regard to the collection of the $15.00 use tax.
                  .     We have said it. must be paid on a motor vehicle purchased
                        by a person while a resident of another State who later brings
                        the car to Texas and sells it to a Texas Dealer who is pur-
                        chasing it for resale only and’not for use; that is, where the
                        car comes from a non-title State, and for that reason a title
I                       must be obtained by the owner before he sells it to the Deal-
!


                        “You will please advise if we have correctly construed the
                        law, in that the tax of $15.00 should be paid on a car pur-
I
I   -
            644.
                     Hon. Robert S. Calvert,   page 2 (V-1498)




    ,                     chased by a person in another State which does not
                          issue certificates of title, while he is a resident
                          thereof, and who later brings the car to Texas and                /
                          sells it to a Dealer who is purchasing it for resale
                          only. and not for use.*

                               In answering your question we must first determine
                     whether or not a car brought into thii State by a nonresident
                     for the purpose of sale to a dealer and not for useis required
                     to be registered and a certificate of title obtained as a prere-
                     quisite to making the sale to the ‘dealer. We have reached the
                     conclusion that, under the admitted facts presented in your let-
                     ter, one who brings a car into the State for the purpose of sale
                     to a.dealer and not for use is an importer and gpverned by the
                   . provisions.of Sections 10. 17, 23, 27, 29, and 30 of Article 1436-l.
                     Vernon’s Penal Code. These articles provide respectively as
                     follows:

                               ‘See. 10. The term ‘Used car’ means a motor
                          vehicle that has been the subject of a first sale whether
        .
                          witbin this State or elsewhere.”

                             : ‘Sec. 17. The term ‘Importer’ means any person,
                         except a manufactur,er. who brings any used motor
                         vehicle into this State for the purpose of sale within
                         this State. *

                               *Sec. 23. The term ‘Importer’s kertiiicate’ means
                          the certificate on form to be prescribed by the Depart-
                          ment for each used motor vehicles brought into this State
                          for the purpose of sale within this State, and such im-
                          porter’s certificate must be accompanied by such evi-
                          dence .of title to the motor vehicle as the Department
                          may, from time to time, require in order to show a
                          good title and the names and addresses of mortgagees.”

                               *&cc. 27. Before selling or disposfn~g of any motor
                          vehicle required to be registe’red or licensed in this
                          State on any highway or public place within this State,
                          except with dea1e.r.s metal or cardboard license num-
                          ber thereto attached as now provided by law, the own-
                          er shall make application to the designated agent in
                          the county of his domicile upon form to be prescribed
                          by the Department for a certificate of title for such
                          motor vehicle..”

                               ‘Sec. 29. No such d~esignated agent shall issue a
                          receipt for a certificate of title to any used motor ve-
                          hicle imported into this State for the purpose of sale
           Hon. Robert S. Calvert,   page 3 (V-1498)



                within this State without deliveryto him by the appli-
                cant of an importe~r’s certificate properly assigned
                by the importer upon form to be prescribed by the
                Department.”

                       %ec. 30. Before any motor vehicle brought into
                 this State by any person, other than a manufacturer or
                 importer, and which is required to be regfstered or
                 licensed within this State, can be bargained, sold,
                 transferred, or delivered with intent to pass any in-
                 terest therein or encumber by any lien, application
                 on form to be prescrfbed by the Department must be
                 made to the designated agent of the county wherein
                 the transaction is to take place for a certificate of
                ‘title, and no such designated agent shall issue a re-
                 ceipt ~unttland unless the applicant shall deliver to   *
                 him such evidence of title as shall satisfy the desig-
-.              ~nated agent that the applic~ant is the owner of such
                ‘motorvehicle,    and that the same is free of liens ex-
                 cept such as may be disclosed on an affidavit inform
     e           to be prescribed by the Department.’

                     Such a car has been subject to a first sale, and hence
           is a used car within the ~definition of, a used car contained in
           Section 10 of Article 1436-1. A person bringing such a car into
           the State is, under the definition of Section 17, an importer.   An
           importer is required as a prerequisite to making a sale in this
           State to comply with Section 23 of the Act by obtaining an im-
           porter’s certificate upon the form prescribed by the Highway
           Department.

                       Section 29 of tie Article forbids the tax assessor-
            colle’ctfon from issuing’s certificate of title upon tiny used
            motor vehicle imported into the State for the purpose of sale
           within the State without delivery by the ,applicant of an im-
            porter*s certificate properly assigned by the importer upon
            the form prescribed by the Highway Department.        Section 30
            of the Act exempts from the reqnirement of registration a used
         _~ car brought into the State by an importer for the purpose of
            sale and not for use by the importer upon the highways.

                     All that’is required of a person bringing a used car
           from without the State into the State for the purpose of sale to
           a dealer is that the importer secure an importer’s certificate
           with the necessary information prescribed by the Department
           to be furnished by the importer, which certificate is required
           to be assigned to the purchaser or dealer. In other words, an
           importer is not required to register the car as a necessary
           prerequisite to making the sale to the dealer, but is required
         Hon. Robert S. Calvert, page 4 (V-1498)


         to deliver and~assign to the dealer, the purchaser,    the proper
         importer’s certificate when he makes the~sale.

                     When the dealer makes a sale of such an imported
          car. it will of course then become subject to the sales tax
          prescribed by Section 1 (a) of Article 7047-k. V.C.S.. for the
         ‘same would then constitute a retail sale as provided for in
          this sec.tLon of the taxing act.

                     Our answer to your question is based upon the assump-
           tion that no use upon the highways of this State is made by the
           importer prior to sale to the dealer except such as necessary
           for delivery to the dealer by the importer.    If, however, the im-
           porter makes any use of the highways in the imported motor
          vehicle other than to deliver it to the’dealer, such use would
           subject the importer to liability for registration and the neces-
        : sfty of obtaining a certificate of title. ‘The owner of a used
           motor vehicle brought into this State and used upon the high-
    c     ‘ways by him would no longer be an importer within the purview
         : of the A& and would be governed by the othe~r provisions of the
         istatute requirfng registration and obtaining a certificate of title
          tand any sale made by him in the State would be a taxable sale and
h
          isubject to the tax imposed by Section 1 (a) of Article 7047-k, V.C.S.,
           which provides as follows:

                    ‘Section 1. (a) ,There is hereby levied a tax upon
              every retaii sale of every’motor vehicle sold in this
              State, s~uchtax to be equal tol.l%of the total considera-
              tion paid or to be paid to the seller by the buyer, which
              consideration shall include the amount paid or to be paid
              from said motor vehicle and all accessories     attached
             ‘thereto at the time of the sale, whether such considera-
              tion be in the nature of cash, credit, or exchange of other
             property, or a combination of these. In the event the con-
              sideration   received by the seller includes any tax im-
              posed by the Fede~ral Government, then such Federal tax
              shall be deducted from such consideration for the purpose
              of computing the amount of tax levied by this Article upon
              such retail sale.’ (Emphasis added.)

                     The problem will be more easily understood by the simple
         statement that a car imported into this State under an importer’s
         ce’rtificate and sold to a dealer for resale and not for use occupies
         the same status in so far as registration and taxes are concerned
         as a new car in the hands of the dealer. Upon sale by the dealer
         of’such an imported car it becomes subject to registration and
         totbe sales tax provided in Section 1 (a) of Article 7047-k, supra.
         The use tax prescribed in Sections 2 and 5a of Article 7047-k has
         no application to such transaction.
                                                                        -

        Hon. Robert S. Calvert,   page 5’(V-1498)



                                     SUMMARY
,

                   A car purchased outside the State and brought
              into the State for sale to a dealer and not for use is
              an imported car, and the owner must procure and
              assign.to the dealer an importer’s certificate as a
              necessary   prerequisite to making the sale. Such a
              car is not required to be registered nor the sales
              tax paid tbereon by the importer, but the car must
              be registered and the sales tax paid when it is sold
              by the dealer upon the same basis as a new car, as
              prescribed by Section 1 (a) of Article 7047-k. and is
             ‘not subject to the use tax prescribed by Sections 2
              and 5 (a) of Article 7047-k.   The use tax has no ap-
              plication to such sale.

                                                    Yours very truly,

        APPROVED:                                    PRICE DANIEL
    *                                                Attorney General
        .W. V. Genoert
         Taxation -Division

        E. Jacobson                                 BY   Xc2G-J
        Reviewing Assistant                          - L. % Lollar
                                                       Assistant,
        Charles D. Mathews
        First Assistant

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