Texas Attorney General Opinion: V-439 Page: 4 of 6
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Hon. Geo. H. Sheppard, Page 4 (No. V439)
"Se. 5a. At the time the tax herein
levied is paid to said Tax Collector the
purchaser shall file with said Tax Collector
the affidavit of such purchaser (or if a
corporation the affidavit ofthe President,
Vice President, Secretary, or Manager) set-
ting forth the then value in dollars of the
tota l c onsidera tibz- received or to be re-
ceived by such seller or his nominee vether
in money or other thing of valtze. (Emphas.is
It will be noted that the situations referred to
in your three questions all involve the exchange of motor
vehicles; and if these exchanges had taken place within the
State of Texas, the tax vould be based upon Section 1 of
the Act, being a "sales" tax. However, the tax imposed by
Section 2 is a "use" tax as is disclosed by the specific
verbiage above emphasized and which is based upon the "total
consideration paid or to be paid for said vehicle at such
No provision is contained in Section 2 similar to
Section 1(b), although the term "retail sale" is used without
any qualification throughout the act except as qualified in
Section 1. Since Section 1 imposes a "sales" tax and Section
2 imposes a "use" tax, each must be viewed in the light of
the intention of the'Legislature at the time the law was en-
Both the sales tax and the use tax are revenue
measures. However, it is a well-known principle of layw that
the essential bases for. these two taxes are entirely different.
The sales tax is based upon the sale of the property within
the state, the tax liability accruing at the time of the actual
sale of the property. The use tax is based upon the use within
the state of the property, which is purchased outside of the
state, and the tax liability accrues upon the first use of the
property within the state. These principles of law are too
yell known to necessitate the citation of authorities.
If the Legislature had intended to apply the methods
of ascertaining the basis of taxes due upon the retail sales
involved in the exchange of property, as was done by the en-
actment of Section 1(b), to the use tax levied by Section 2,
it could have easily enacted Section 2(b) in similar terms aor
if the Legislature had desired to apply the same basis where
the exchange of property is involved as to both the sales and
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Texas. Attorney-General's Office. Texas Attorney General Opinion: V-439, text, November 24, 1947; (texashistory.unt.edu/ark:/67531/metapth265258/m1/4/: accessed March 18, 2018), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting UNT Libraries Government Documents Department.