Untitled Texas Attorney General Opinion ( 1962 )

a. - WILL WI&SON AITOHNES GENERAL. February 12, 1962 HonorabU Vernon D. Adcock Opinion No. W-1259 County Attorney Dawson County Re: Liability of non-profit P. 0. Box 359 hospital auxiliary to Lamesa, Texas collect and report the sales tax on sale of cold &Inks etc., the proflte from such sales being used for charitable Dear Mr. Adcock: purpose. You have asked whether or not a non-profit hospital auxiliary Is required to collect and report the sales tax on the sale of cold drinks, candy, c&e and sandwlohes, sold from a concession counter in the county owned hospital, the profits from such sale being used to carry on their charitable work. Ye assume that no part of,the net earnings of this organization Inures to the benefit of any private shareholder or Individual. The Limited Sales, Excise and Use Tax Act was enacted by the 57th Legislature, First Called Session, as Article I, 4 .*- X: B: No:. 20,. Chapter 24; page 71, to be codified as Articles 20.01 to 20.17, Inclusive, Chapter 20, Title 122A, Taxatlon- Qeneral, V.C.S. Article 20.02 of the Act reads In part as follows: “There Is hereby Imposed upon each separate sale at retail of tangible personal property made within this State a limited sales 4zx at the rate of two per cent (2$) of the sale price of each Item or article of tangible personal prop- erty when sold at retail Ih .thIs State. “CA) Method of Collection and Rate of Limit&d Sales Tax. The tax hereby imposed shall be collected by the retailer from the consumer. II . . . . ’ &phasls addedJ A “Retailer” la defined In paragraph (J) (1) (a) of Article 20.01,; which read8 in part as follows: Honorable Vernon 0. Adoook, Page 2 Opinion No, WY-1259 “Every,seller engaged In the bushes6 .: of making sales of tangible personal p*operty for storage, use or other con- .sumption. . . . n “A “Sale” Is defined in paragraph (K) of Article 20.01, which rqads in part as follows: and Includes =w possession,. . . of tangible personal property for a con- “’ . sideration. ‘. “(2) ‘Sale’ Includes: i , ,I . . . ; “(c) The furnishing, preparing or serving of food, meals, or drinks. I If. . . . ” Paragraph (F) of Article 20.04 reads In part as follows: ..“There are exempted from the computation of the amount of the taxes imposed by this Chapter, the receipts from the sale. . . , .. .,~ . ?f +ny tangible ,p.ersonal property &. . .-./ .. n. . . "(5) Any -organization created for. , . charitable. . .purpoBes, provided no part of the earnings of any such organization Inures to the benefit of any private shareholder or Individual. ’ The purpose for which the profits from the sales are to be used Is not the factor under the act which detezmlnes’whether or not the tax must be collected. The tax Imposed by the Limited gales, Brclse and Use Tax Act Is Imposed on the purchaser. Uhlle your letter does not state who the purchasers are, we assume ~they would be classified as the “general public.” Since such a olassIflcatIon carries no exemption from the act, the purchaeers would be requlred to pay the tax. The organization, acting as the ‘Retailer’, would be required, to collect the tax, using the bracket system found ~ in Article 20.02, and to make the quarterly reports to the *. Comptroller provided for In Article 20.05. Honorable Vernon D. Adcock, Page 3 Opinion No. WW-1259 We do not have sufficient Information to determine whether or not the auxl~lary Is such a charitable organization, aa Is referred to in paragraph (P) (5)of Article 20.04. But even If we assume that .It Is, the exemption from the tti I8 for sales to the charitable organization, that I@, when the organl- eatlon’Ta the purchaser. We hold, therefore, that the hospital auxiliary, which operatee a concession stand In the county owned hospital, selling Oold drinks, candy, cake and sandwlohes to the general public, Is required to collect the sales tax from Its customers In accordance with Article 20.02 of the Limited Sales, Excise and Use Tax Act, and to make reports to the Comptroller In accordance with Article 20.05of said Act. SUMMARY A non-profit hospital auxiliary, which operates a oonceselon etand In a county owned hospital, selling cold drinks, candy, cake and sandwiches to the general public, Is required to collect the pales tax from Its customers, as provided by Article 20.02, and make reports .to the Comptroller au provided by Article 20.05, of the Limited Sales, Excise and Use Tax Act, (Articles 20 .Ol to 20:.17, Inclusive, Chapter 20, Title 122A, TaxatIon-Qeneral, V.C.S.). Yours very truly, WILL WILSON Attorney Qener&l of Texas Alley Eugene Fletcher REP/cm Assistant APPROVED: OPINION COWMITTBg: ‘W. V. Oeppert, Chairman Vernon Teof an : Tom McFarllng Harry P. Hewell Dudley HcCalla RBVIRUNDFOR THE ATTORNEY 0gNERA.L Bill Robleon 8~:~ Houghton Brownlee, Jr. .