Untitled Texas Attorney General Opinion ( 1959 )

c . ``EA``ORNEYGENEPLAL OFTEXAS AUSTXN 11. TEXAS November 18, 1959 Honorable Robert S. Calvert Opinion No. WW-73G Comptroller of Public Accounts Capitol Station Re: #ether parts for an air Austin 11, Texas conditioner, when bought arid used for repair pur- pose8, are taxable under A&2;+01 of X.B. 11, Dear Mr a Calvert : . e, 56th Leg. By letter dated October 14, 1959, you advised: “This Department requests the opinion of your office on the following q.1eart1or.s: “IS an autarwbils ir aold with an aIf COW- tioner fn I: (and the tax Imposed by Art. 6.01 . of X.B. ll,, 3rd C.S,, 56th Leg. on such sale is duly paid) or IS an ai? oondltioner is sold and installed in an automobile ,(and ths tax imposed bye Art. 20.04 of W¶.d Aot on auoh sale 16 duly paid) and then such air oond%tioner bscomer in need of repair, which repair necessitates the replacemant of some c;e-Dectlve part, is the re- placement of such dcfscttve part In connection with and as a necessary element of tha rffeotub-, Alon of such repair aervics a ‘retail sale’ 86 &fined in Art. 20.01 of said Aot? “If it 1-s your opinion that such replacement under such clrc-~mstsn~crs is a ‘ret&l sale’ within %d.ch dcfinltlon, thsn your opinion is also requested whether, under such clrccmstances, such rej)~,aJ~i”``.~>,‘ iill,ng segregates ohargee far services and parts or includ~es Ghem in one total) arei the subject of a “sale.” However, because of the view taken of the second c,uestlon which you propound, this point ir rendered moot. Hon. Robert.. S. Calvert, Page 2 (Opinion No. WW-734) . . .. .’ The pertinent portions of the titie to House Bill 3.1. state that it Is “an act. . .levylng certain new and addi-+:. :: tional taxes for support of the State Government including excise taxes on. . .air conditioners. . .” Article 20.04 of House Bill 11 states; “There is hereby levied and shall be imposed upon the sale, distribution or use of air condi- tioners in this State an excise tax equivalent to three per cent (3%) of the retail price for which such air conditioners ..-- - are sold,” (Emphasis added) Although Chapter 20 of House Bill 11, in which the excise tax on air conditioners is set forth, specifically taxes component parts of radios, television, sets or phono-’ graphs, there is no comparable tax levied upon component parts of air conditioners. In view of this, It olearly appears that it was not the legislative lnten t to levy the excise tax upon component parts of air co,ndit.loners sold for the purpose of repair. This conclusion 1,s fortified by, the canon of statu- tory construction that all questions ooncerning, whether a rev- enue measure extends to narticular objects are to t’e. strictlv ‘construed against imposition of the tax a.nd Ian favor of .the - taxpayer. State V: San Patricia, Cannrn.g Co., 17 S.W,2d 160’ (Tex.Civ.App. 1929 t hl’atory); ,Western Pu.bl’i,c Servic,e Co, v. Meharg, 116’T%w$3, ‘~292 &WI lb6 (lYZ( )” Southerland ” Statutory Construction (2nd BtL), page 293, Ch. $7, Sec.. b701- and see Attommy General’s Opirdon No, W-fi34 (September 2, ’ 1959): A minute examination eb the .definition of .“a%rcondi- tioner” contaIned In Article’ 20.01 ,of Chapter 20 of House Bill 11, 3rd Co&, 56th Leg., verifies the foregoing conclusion. Th,e first portion of such definition state,8 that “air’ c’ondi- tionars” shall mean any self-contained unit, apparatus, device, commonly knowni sold and used as an airy conditioner. This, language merely Is declarafory~ of the intent to levy the tax upon, div;lces,.~known, sold or used as air conditioner& The’::. definition then proceeds to state ‘&at the term air conditi&er “shall include’ any Instrument, ,apparatus, or mechanical con’t;ri- ‘Vance -desIgned, constructed, or assembled as part of .any s&h self-oontained unit, apparatus, or -device to cool or ,assist in the cooling of air In any manner.” This Language does hot extend, f&e. ioope of the tax to inG.ude gar’t%t@dtslJ.e@ .%n air condltlbnetis during the course of repair. Iii vlew,.bf the leg- islativk intent ‘and the canon, of statutory: construct$on dfs- cusse~dabore, this language c,an only be ;construed to, include all instruinents,, ‘apparatus or contrivazxes which are designed for use ln,,~dr’ constructed,@ assembled as part ofj an original tqxablk :unif:, Hon. Robert S. Calvert,’ Page 3 (Opinio:? No. W&T?&) The second sentence of the definition of the term air conditioner states: II . . The term ‘air conditioner’ shall also irklude all sub-assembl.les, devices or instru- ments commonly used In conjunction with any such other apparatus, device, sub-assembly or Instrument, which when combin,ed or connected as a functioning self-contained unit, apparatus or deyice will constitute an air conditioner. . . . This language does not enlarge the scope of the tax so as to tax other than air conditioners as that term Is defined. Though the language used is broad, specifying sub-assemblies, devices, etc., It is limited by the phrase “which when com- bined or connected as a functioning self-contained unit.” The tax is still levied only upon %he air conditioner. ObVl- ously the language in the second sentence was included for one purpose, i.e. to avoid fraud and evasion of the tax by sales of separate pa.--ts of air COl?ditiOr.erS with a subsequent assembly thereof e.s an orlginnl taxable aiz conditioning unit. Parts sold for s;lch purpose are taxable, but the definition of “air conditlo?er” Ij affords no basis upon which to tax re- placement parts or par~ts Installed in a!.r conditioners during the course of repair.1 In summary you are advIsed that a3.1 de-~ioes, assem- blltis, sub-assemblies, etc., designed or sold for orlgklal installation or assem3ly’ as a3 air co;:diti?::er are taxable, but that parts sold or installed fo? the purpose or during the course of repair are not taxable. language is not in conflici: with i-:5& oplr.ior, expressed aDove. It wa7 inci2ded ir? Opilslion No, WW-53G only to iiI23- trate the proposition that a11 devlczs, sub-assemblies, etc., sold or designed for origkal i>stal?afion or assembly’ as an air cord.itioner would be taxable. Hon. Robert S., Calvert, Page 4 (Opinion No. ww-734j’ SUMMARY Parts for a~r:.~coaditio~etis when ,~.. bought and used for repair purposes are not taxable under Article 20.01 of H.B. 11, 3rd C.S., 56th Leg. , Yours very truly, WILL WILSON Attorney General, JNP:b