Untitled Texas Attorney General Opinion ( 1951 )

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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(repealed in 1941 but similar to that now levied under Article 7065b-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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