Untitled Texas Attorney General Opinion ( 1957 )

Hon. Robert S. Calvert OPINION RO. WW-309 Comptroller of Public Accounts Capitol Station Re: Conetruction of Section Austin 11, Texaa 2(b) of Article 7065b, V.A.C.S., a8 amended by the Regular Session of the 55th Leglalature a8 to the amount of tax to be allocated to the Comptroller for enborce- Dear Mr. Calvert: ment purposes. You request the opinion of this office upon the above captioned matter presented in your letter of November a, 1957,as f0n0ws: "We desire the opinion of your office regarding the conetructlon of Section 2(6) of Article 7065b, Vernon's Annotated Civil Statutes, as amended by Chapter 200, Regular Session of the 55th Legislature. "The said Section 2(b), as amended In the first paragraph, reads aa follows: "'Provided, that the tax on one and one-half per cent (13s) of the taxable gallons of motor' fuel sold OP distributed In this State shall be allocated to the persona selling, distributing, or handling eald motor fuel OP the taxes collected thereon, which aaid allocation or allowance shall be deducted In the payment of said tax to the State of Texas in the following manner: The tax on one and one-half per cent (1s) of said taxable gallonage shall be deducted by the distributor who refines, imports into, or produces motor fuel in Texas and makes the first taxable sale or distribution thereof; the tax on one and four-tenths per cent(1 k/10$) of said taxable gallonage shall be deducted by the distributor who purchases motor fuel Ron. Robert S. Calvert Page 2 (w-309) tax free from another licensed distributor under authority issued by the Comptroller and makes a taxable resale OP distribution thereof; and one-tenth of one per cent (l/10 of 1%) of the tax collected upon the resale or distribution of motor fuel pur- chased tax free by a distributor shall be set aside in the State Treasury for use by the Comptroller as hereinafter provided.' "After allocating 13% of the TAXABLE GALLONAGE to persons selling, distributing or handling motor fuel or the taxes collec&-' ted thereon in paragraph one, cited above, the nextparagraph,prornhdes:~that:.thecabove allocation OP allowance. . . shall be apportioned among all persons selling, distributing or handling motor fuel or the tax collected thereon In this State as follows: I. 11I l/2 of 1% to the distributor who refines, imports into or produces motor fuel in Texas and makes the first taxable sale or distribution of said motor fuel. II. )I'. l/2 of l$ to the wholesaler or jobbkr'who pays the tax to a distributor on motor fuel purchased for resale . . . III. "1. . . l/2 of 1% to the retailer . . , making a sale or distribution of such motor fuel . . . IV. "'Provided that the tax on . e . g/10 of 1% of said taxable gallonage shall be appor- tioned to a distributor who performs functions both as a distributor and as a wholesaler or jobber by paying over to the State ~of Texas taxes collected upon the resale OP distribution of motor fuel which has been purchased tax free . . . and thereafter resold or distributed at wholesale to retailers; . . . v. "1. l/10 of 1% of the tax collected and paid'oier to the State upon the resale or distribution of motor fuel purchased tax free by a distributor . . . shall be allo- cated to and set aside In the State Treasury Hon.i:Robert S. Calvert, page 3 (WW-309) for use by the Comptroller in the adminlstra- tion and enforcement of the provisions of this Article.' "The auestion concerns the wordinn of subdivision V above,.which provides that l/10 OP l$ of the taxes collected and paid over to the State upon the resale of motor fuel nurchaaed tax free shall be allocated to the Comptroller, instead of l/10 of 1s of the taxable gallonage sold, as was originally allocated for such purpose. "In other words a distributor reselling motor fuel purchased tax free deducts 1 b/10$ of the taxable gallonage and pays over to the State the tax on 98.6% thereof, and if the statutory provisions setting out how the allo- cation or allowance shall be apportioned con- trols over the statutory allocation Itself, then the Comptroller would only receive l/10 of 1% of 98.6 $ of the taxable gallonage. "Will you please advise us whether the Comptroller is entitled to receive l/10 of 1% of the 14% taxable gallonage originally allocated, or will he-be limited to l/10 of 1% of the tax paid over to the State on said taxable gallonage?" We are primarily concerned with the construction and application of Section V which appears on page 2 of your letter, which provides: v. "1. . l/10 of 1% of the tax collected and paid'over to the State upon the resale or distribution of motor fuel purchased tax free by a distributor . . . shall be allo- cated to and set aside in the State Treasury for use by the Comptroller in the adminis- tration and enforcement of the provisions of this Article.'" It is observed that l*$ of the taxable gallonage is the maximum that may be allocated to the distributor, the wholesaler or jobber, and to the retailer or other : person making a sale or disfribution of such motor fuel to the person using or consuming such motor fuel or to a distributor who functions both as a distributor and as a wholesaler or jobber. Hon. Robert S. Calvert, Page 4 (WW-309) A portion of Section 2(b) reads as follows: 1,. . . and one-tenth of one per cent (l/10 of 1%) of the tax collected upon the resale or distribution of motor fuel purchased tax free by a distributor shall be set aaide in the State Treasury for use by the Comptroller as hereinafter provided.(Fmphasis supplied.) It becomes important to observe what is Hherein- after provided". The allocations numbered I to V in- clusive are all, in the language of the Statute, "herein- after provided". When we apply simple mathematics to the allocations providedin 1;IIand III, we find that the maximum of l=# is absorbed, and IV provides that g/10 of 1% may be allo- cated to a distributor who likewise performs functions as a wholesaler or jobber. This would leave 6/10 of 1% which could be allocated to a retailer under III, If subdivision IV becomes operative. We must therefore construe Section V to mean what its literal language imports, that the l/10 of 1% allocated to the Comptroller for enforcement purposes is calculated upon the basis of l/10 of 1% of the taxes collected and paid over to the State after deducting the maximum total allocations of l&& In other words, It is l/10 of 1% of 98@, which is the amount of tax actually paid over and collected by the State. If there be a conflict between that portion of the Statute preceding the Dhrase "as hereinafter nrovided" and what follows this-phrase, the latter prohsion will control. cox, et al., V. Drainage District No. 2'i' of Craighead County, et a1 ., lo'/S .W .2d . 887 (Sup. Crt of Ark.) SUMMARY l/10 of 1% of the motor fuel tax collected and remitted to the State is the amount that should be allocated to the Comptroller for enforcement purposes. After authorized allocations are made, as provided in Section 2(b) of Hon. Robert S. Calvert, page 5 (W-309) Article 706513,V.A.C.S., 983% Is the amount of tax that is remitted to the State Treasurer, and is the amount upon which l/10 of 1s should be calculated. Very truly yours WILL WILSON Attorney General of Texas Assistant LPL/fb APPROVED: OPINION COMMITTEE George P. Blackburn, Chairman John Ii.MInton, Marietta McGregor Payne B. H. Timins, Jr. REVIEWED FOR THE ATTORNEY GENERAL By: James N. Ludlum