Untitled Texas Attorney General Opinion ( 1957 )

Hon. Robert S. Calvert opinion No. ww-338 Comptroller of Public Accounts Capitol Station Re: Whether the Hotor Vehicle Austin, Texas Sales Tax levied by Article 7047K, V.C.S., applies where an auto- mobile dealer secures a motor vehicle from a manufacturerto be used by a salesman for demon- stration purposes when no considerationIs Dear Mr. Calvert: involved? In your letter request you submit to us the following question: "Where an automobile dealer has secured a vehicle from the manufacturerand has the manufacturer'scertificateand wishes to let a salesman have the vehicle to use for demon- stration purposes, and no considerationwas Involved,would the tax be due?" Section 3 (b) of Article 7047K, V.C.S., provides: "The term 'retail sale' or 'retail sales' as herein used shall Include all sales of motor vehicles except those whereby the purchaser acquires a motor vehicle for the exclusive purpose of resale and not for use." Article 7OJ+7Konly levies the tax upon a "sale" of a motor vehicle. If the transfer of the motor vehicle to the automobile dealer constitutesa "sale" the tax will apply as ,you state the motor vehicle Is to be used for "demonstration purposes." The dealer did not acquire same for the exclusive purpose of resale, but acquired It-for use, that Is for use as a demonstrator. Attorney General's Opinion O-3742. How- ever, you state that "no considerationwas involved." This being true there was not a "sale" involved. Even if the transactioncould be ,termeda sale, no tax would be due for Hon. Robert S. Calvert,, page 2 (``-338) the simple reason that 1.1s of the sale price--whichIs nothing--amountsto a tax of .OOOO. SUMMARY The motor vehicle sales tax levied by Artlole 7047K, V.C.S., does not apply to transactionswhere an automobile dealer, without a consideration,acquires a motor vehicle from a manufacturer to be used as a demonstrator. Yours very truly, WILL WILSON Attorney Qeneral of Texas W. V. GCeppert Assistant wvff:gs APPROVED: OPINION COMMITTEE Qeo. P. Blackburn, Chairman J. C. Davis, Jr. Milton Richardson Leonard Passmore REVIEWEDBOR THE ATTORNEYGENF3AL BY James N. Ludlum