Untitled Texas Attorney General Opinion ( 1959 )

2917
Mr.ReaganHuffmsn ~&ion No. W- 598
Chairman Liquor Regulation
Coinmltlree Re: ConstitutionalityOf
House of Representatives .~ H.B. 57, 56 Leg., re-
Austin, Texas latlng to whether or
not the State may tax
beer sold to and oon-
sumed on MllltsrgRe-
servatlonswithin-the
Dear Mr. Huffman: State.
We quote from your opinion request as follows:
"Pursuantto'.amotion duly.made and.passed
by the Liquor RegulationCommittee, I am
herewith submittingto you the original
H.B. 57 for'an opinion as to its constltu-
tiona1ity.
"The specific question involved.is whether
or not the State of Texas may tax beer whloh
Is sold to and consumedon Military Reserva-
tlons within this State."
Section 1 of B.B.'57 amends Article 667-2&(d)
V.P.C. to omit the exemptionand refund provision pertaining
'to beer "shipped to any installationof the National Military
Establishment,wherein the State of Texas has ceded police
jurlsdlctlon,for consumptionby military personnel within
'said installation." Section 2 omits the exceptlon.of."mllltary
beer consigned to military installations"from the requirement
that all beer shipped into this State be consignedto.the holder
of a Manufacturer's,,General DIstrIbutorIs,Branch Distributor's
or Local Distributor'slicense, and adds the sentence2
"Nothingin this seotlon Bhall prohlbit'the"
holders of a Manufaoturerls,General Dlstrl-.
'butor.'s.
Branch Dlstrlbutor+s.or Looal Dls-
trlbutor's Lloense to sell beer, on whloh the
tax 'thereonlevied In Seotlon 2 F sio mlole
raf'the Te~q``l%``en rid,
EEdKlqrnmen Iiiiin~l~slnte. --
~.
: Sta~.phasls added)
2918
Mr. Reagan Huffman, page 2 (OpinionNo. w-598)
Article 667-23, V.P.C., provides:
"There is hereby levied and assessed a tax
at the rate of $1.37 per barrel on the first
zhof all beer manufactured&Texas and
lmwrW-A2n -- mall imported into
this Setate." (Emphks adm
Title 4, U.S.C.,A.,Section 105 grants to the States
the power to levy and collect sales and use taxes within
Federal.areas. S.ection107(a) states that this shall not
be deemed to authorize the levy or collectionoffw tax o-n
or from the United States or any Instrumentalitytherz.
or the,levy ar collectionof any tax with respect --
to &
or u of tangible personal.property sold
orany instrumentality.thereof to,any
authorlzed``purchaser.(Section 107(b) defines "authorized
purchaser.")
The foregoing provisionsare controlling. The state
may not tax importations~ofbeer by any Federal Government
Instrumentality;nor.may It tax "first sales" of beer to,.ang
Government instrumentality,or by such.Instrumentalityto
"authorizedpersons." See Attorney General's Opinion No.
w-582. The State has the authority to tax all other "importak~
tlons'.and'first sales," regardless of whether such "importa-,.~
tions" and "first sales" occurred within Federal areas. For
the reasons stated In the Attorney General's Opinion cited,
supra, no issue of constitutionalityis raised by repeal of the-
exemption and refund provisions regarding beer shipped to Mill?
tary Establishments.
.The specific question ig~your opinion request was
whether or not the State may tax beer which Is sold to and
consumed on Military Reservations. However, Section 2 of
H.B. 57 raises another issue so intimatelyrelated to this
problem ,thatIt must.,alsobe considered,i.e., the validity '
o-fthe amendment to.,Section29 of Article 667, V.P.C. The
amendment Is designed to aid collectionof the tax on beer
sold to Military Establishments. Omission of the exemption
of 'militarybeer cons~igned to military Installations"from
the requirementthat all beer imported into the State be con-
signed to the holder of one of the enumeratedpermits in effect.,,
requires a permit for the importationof beer into m?.litary
establlshmentst In cases where~the State of Texas has ceded
police jurlsdlctlonto the Unl,tedStates, the State is without,
power to Issue or require the.purchaseof permits or licenses':
sInbe .suchpermits norlicenses are imposed under the State's
Police Power to control~thetilcoholio beverage business. AttO*
General's Opinion No. WW-354, O-3216. See.also Collins v. Voz'
bh-.Reagan Ruffman,.page3 .. ,(OpinlonNo..WW-598)
mite Park & Curry Company, 304 U.S. 518 (1938). Since the
state cannot require the licensing of a consigneewithin a
Federal area In which police jurisdictionhas been ceded, It
cannot accomplishthe ssme result Indirectlyby ,requlrlngthat
all beer Imported Into the state be consigned to the holder of
a license. Further, such a requirementwould constitutean
undue Interferencewith Interstate commeroe. The case of
Murphy v. Dove, 249 Fed. 2d 783 (U.S. D.C. 1957, Cert.Den.
355 U.S. 9%) contains the following statementon point:
"Since Kansas does not have territorial
jurisdictionto regulate liquor In the Federal
enclave ,lthas no authorityto impose revenue
measures concerningliquor which are Inseparable
from such regulatory aspects of-the~Act. The
effect of what It seeks to do by the regulatory
provisions of Its 1aw.l.sto make Impossiblethe
purchase'or sale of llawr on the.Reservatlon.
or Importationof iiquor in Interstate0ommerEe
Into the Reservation. Such-a constructionwould
not only place a burden on irrterstate~cosunarce ,,.,,_
of liquor to the Reservation but would star,It
entirely. In Johnson v. Yellow CabTransl5 Com-
``;lO~Clr., 137 F; 26 274 279 we sa&d that
state has no pow& to'forbld the trans-
porta~l&'ln Interstate commerce of Intoxicating
liquor through Its territorialboundarles.~ and
that a State r... ..has no jurlsdlotionto require
or grant permits for the Importationof intoxicating
liquors into. . . ."a reservation." [Emphasis
added)
Therefore, the requirementthatall beer imported Into
Texas be consigned to the holder of a license Is Inoperativeas
respects
. beer consigned to military establishmentsin which pollc~
JU??iFKliCtiOn has been ceded.
The last sentence of the amended Seotlo,n29 implicitly
requires the payment of taxes on all beer sold to Federal C(overn-
ment lnstrument~ltles. .Such a requirement is in direct con-
provision Is void.
SUMMARY
The State my not.,ta$lmportations~of beer by
any Federal Qoverhment ~Ins:trumentallty~,nor
,,
. ,'
.;.
2920
Mr. Reagan Huffman, Page 4 (OpinionNo. W-598)
may It tax "first sales" of beer to any Govern-
ment Instrumentality,or by sudh Instrumentality
to any "authorizedpurchaser." The State has
the authority to $ax all other "importations"
and "first sales regardlessof whether such
"importations"0; "first sales" occurred within
Federal areas.
The State has no power to require the licensing
of consigneesof beer in Federal areas where
police jurisdictionhas been ceded, and cannot
Indirectlyaccomplish the same result by re-
quiring that all beer imported into the State
be consigned to the holder of a license; such
a requirement is further unconstitutionalas
constitutingan undue Interferencewith inter-
state commerce. Therefore, the requirement that
all beer imported into Texas be consigned to
'the holder of a license is inoperativeas respects
beer shipped to consigneeswithin military es-
tablishmentsin which police jurisdictionhas been
ceded. .~.
The implicit requirementof the iast sentence
of Section 2, H.B. 57, that taxes be paid on
all beer sold to Federal Government instru-
mentalities Is In direct contraventionof the
constitutionalprohibitionagainst taxation of
the Federal Governmentby the State Government
embodied In Title 26, U.S.C.A., Section 107,
and is void.
Yours very truly,
WILL WILSON
JNP:cm
APPROVED:
OPINION COMMITTEE:
Geo. P. Blackburn; Chairman
C. Dean Davis
C. K. Richards
Elmer McVey
Linward Shivers
REVIEWED FOR THE ATTORNEY GENERAL
By: W. V. CtEPPWT