Untitled Texas Attorney General Opinion ( 1977 )

EC-ATTORNEY GENERAL
OF TEXAS
AURTIN. TRXAS 78711
March 16, 1977
The Honorable John C. White Opinion No. H-957
Commissioner
Texas Department of Agriculture Re: License and inspection
P. 0. Box 12847 fees under the Texas Egg Law.
Austin, Texas 78711
Dear Mr. White:
You ask two questions about the Texas Egg Law, article
165-8, V.T.C.S., which you administer. This statute provides
for the inspection, grading, and marketing of eggs and the
licensing of persons who sell or process eggs'. Your questions
concern the application of section 16-A, which imposes a three
cent inspection fee on each case of eggs at the first sale or
first use. Section 16-A reads as follows:
In addition to the license fees
hereunder the li-densee which first
establishes the grade, size a-ass-
ification of eggs sold or offered for sale
in this state shall collect on their first
sale of such eggs in this State an
inspection fee of three ($.03) cents per
case (thirty (30) dozen eggs) and all
licensed processors in this state shall
pay an inspection fee of three ($.03)
cents per case (thirty (301 dozen eggs)
upon their first use or change in form in
eggs processed by them, such fees shall be
remitted by all such licensees monthly in
accordance with rules and regulations as
promulgated by the commissioner, and all
sums so collected shall be placed by him
in the general revenue fund of the State of
Texas. (Emphasis added).
P. 3992
The Honorable John C. White - page 2 (H-957)
You ask whether persons required to obtain a license by
sections 14 and 15 must also pay the inspection fee imposed
by section 16-A. With some exceptions, section 14 requires
persons who buy or sell eggs for subsequent resale to first
obtain a license from the Commissioner.
Section 15 requires each licensee to pay a license fee,
except for retailers, defined as persons selling eggs to
consumers. Section 16 establishes a scale of license fees.
We believe that the persons who are licensed under section
14 and pay license fees under section 15 must also pay the
inspection fees required by 16-A. Section 16-A plainly
states that the inspection fees are exacted in addition to
license fees and that licensees must remit inspection fees.
The Department of Agriculture reads section 16-A as being
based on sections 14 and 15, and thus agrees that licensees
must pay both license fees and inspection fees.
In exercise of its police power authority, the State
may exact license fees reasonable in amount. See Berry v.
McDonald, 123 S.W.Zd 388 (Tex. Civ. App. -- Sanntonio s38,
no writ); Parrish v. Wright, 293 S.W. 659 (Tex. Civ. App. --
Amarillo 1927, writrm A Texas court has approved the
imposition of both a license fee and an "additional registration
fee" on the taxpayer's vehicles, where the fees were
authorized by two different statutes. Lowery v. English,
299 S.W. 478 (Tex. Civ. App. -- Eastland 1927, writ ref'd).
We do not believe the fact that the inspection fee is additional
to the license fee and imposed under a different section of
the statute impairs its validity. We reiterate our conclusion
that persons licensed under sections 14 and 15 must pay the
section 16-A inspection fees.
You also ask whether a licensee who first establishes
the grade, size, and classification is required to pay the
section 16-A inspection fee on eggs sold to the military.
In a long line of cases beginning with McCulloch v. Maryland,
4 Wheat 316, 4 L. Ed. 579 (1819), the Supreme Courthas held
that the federal government and its instrumentalities are
constitutionally immune from state taxes. United States v.
State Tax Commission of Mississippi, 421 U.S. 599 (1975).-
Militaryinstallations, post exchanges, and officer's clubs
are instrumentalities of the federal government. Id.
-
P. 3993
The Honorable John C. White - page 3 (H-957)
The federal government is also immune from inspection
fees imposed upon it without its consent. w v. United
States, 319 U.S. 441 (1943); Attorney General Opiiiion
O-4617 (1942). --
See also City --
of Los Angeles v. United
States, 355 F. Supp. 461 (C.D. Cal. 1972). ITfact, the
inspection fee, as an "enforced contribution to provide
for the support of government," fits the definition of
tax recently adopted by the Supreme Court in a federal tax
immunity case. United States v. State -Tax Commission of
-
Mississippi, supra at 606. -
The federal immunity from state taxation extends to a
state tax whose legal incidence falls upon the federal
government. United States v. State Tax Commission of
Mississippi, supra. Annot.,State Sales or Use Taxys
Violating Immunity of United States -- Supreme Court Cases,
44 L.Fd. 2d 719. The fact that the economic burden of the
tax may be passed on to the United States does not by itself
invalidate the tax. See Alabama v. King & Boozer, 314 U.S.
1 (1941). When, however, state law requires that the sales
tax be passed on to the purchaser and collected from him,
the legal incidence is on the purchaser as a matter of law.
United States v. State Tax Commission of Mississippi, supra;
see Attorney GGerJ(1pxon
_ H-380 (1974).
Section 16-A of article 165-8 states that "[iln addition
to
-- the license fees hereunder the licensee . . . shall
collect on theirfirst sale of such eggs . . . an-ection
fee. . . .- (Emphasis added). The legislative intent with
respect to the incidence of the inspection fee is somewhat
unclear. The statute states that the licensee shall collect
it on the first sale, but also classes it with the license
fee, which the licensee pays. Rules promulgated under the
Texas Egg Law seem to place the incidence of the inspection
fee on the licensee who first establishes the grade of eggs.
See Rules and Regulations -- Texas Egg Law VII (A)(b),(c).
However, the United States Supreme Court may itself determine
the meaning of a state statute upon which the resolution of
a federal constitutional issue rests. United States v 2
State -Tax Commission of
- &w, supra.
p. 3994
The Honorable John C. White - page 4 (R-957)
We believe that if the Supreme Court were to consider
section 16-A, it would probably focus on the words "shall
collect" and conclude that the incidence of the tax falls on
the purchaser. See Gurley v- Rhoden, 421 U.S. 200, 205
(1975) and Kern-merlck Inc. -
- v. Scurlock, 347 U.S. 110
(1954).The fee therefore cannot constitutionally be applied
to federal purchasers, and licensees need not remit the
inspection fee on sales to military purchasers. See Attorney
General Opinion H-380 (1974).
SUMMARY
Persons licensed under the Texas Egg Law
who first establish the grade, size and
classification of eggs sold in Texas must
pay an inspection fee on their sales of
such eggs. Licensees need not pay the
inspection fee on eggs sold to the military
in Texas.
Very truly yours,
of Texas
APPROVED:
\
&)zstant
Opinion Committee
p. 3995