Untitled Texas Attorney General Opinion ( 1952 )

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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
LPL mm