Txm       Am-                        GENERAL
                                    OF     TEXAS
                                    Aus~         ii. TEXAS
  GERALD     C. MANN
  Y3xwx-
ATTORNEY     GLCNERAL




 Honorable   George H. Sheppard            Opinion    No. O-441 5
 Comptroller   of Public Accounts
                                           Re:      The exemption    of motor vehicles
                                                    purchased    by Defense Plant Corp-
                                                    oration   from the 1% retail sales
 Dear Sir:                                          tax.

               In your letter of February    10, 1942, you direct our attention to
 our Opinion No. O-3797, holding that motor vehicles          purchased and owned
 by instrumentalities     of the Federal Government      are not subject to the 1%
 tax levied on the retail sales of motor vehicles by Article VI, House Bill 8,
 47th Legislature,    and request our opinion as to whether or not the Defense
 Plant Corporation     is an instrumentality    of the Federal Government,     such
 that motor vehicles purchased by it will not be subject to said tax. You~also
 advise that in some cases the motor vehicles are registered           in the name of
 a contractor    who is building a defense or army plant and that the contractor
 claims that the vehicles are actually owned by the Federal Government,             and
 you ask us what evidence we think,should be submitted to the Tax Assessor-
 Collector    in order for .him to determine whether or not the tax should be paid.

            Defense Plant Corporation     apparently was organized   under Section
 606b, 15 U.S.C.A.,  and clearly is an agency of the Federal Government,      created
 “in order to aid the Government   of the United States in its national defense
 program.”   Section 610, 15 U.S.C.A.,   reads in part:

              “Any and all notes, debentures,    bonds, or other such obli-
        gations issued by the corporation     shall be exempt both as to
        principal and interest from all taxation (except surtaxes,        estate,
        inheritance,  and gifts taxes) now or hereafter      imposed by the
        United States, by any Territory,     dependency,    or possession
        thereof, or by any State, county, municipality,       or local taxing
        authority, except as provided in Section 742a (a) .of Title 31.
        The corporation,   including its franchise,    its capital, reserves,
        and surplus, and its income shall be exempt from all taxation
        now or hereafter   imposed by the United States, by any Territory,
        dependency,   or possession   thereof, or by any State, county,
     Honorable    George      H.,, Sheppard,   Page   2 (O-4415)




            municipality,  or local taxing authority; except that any
            real property of the corporation    shall be subject to State,
            Territorial,  county, municipal,   or local taxation to the
            same extent according    to its value as other real property
            la taxed. The exemptions provlded for in the preceding
            sentence with respect to taxation (which shall, for all pur-
            poaea, be deemed to include sales, use, storage, and purchase
            taxes) shall be construed to be applicable not only with respect
            to the Reconstruction    Finance Corporation     but also with respect
            to (1) The.Defense    Plant Corporation,  . . .*

                 From the above it is e.vident that Defense Pi&  Corporation   may
     not be required to pay the tax levied by Article VI of House Bill 8. 47th Legis-
     lature, on motor vehicles purchased by it.

                  We now direct our attention to your second question.,       Attached to
     your opinion   request is a letter fr,om an auditor of De~fensa Plant Corporation,
     Mr. M. R. Burson, in which he plainly states that ail automotive         equipment of
     the Defense Plant Corporation     is held and registered     in its own proper name..
     If such be true, it would follow as a matter of course that no vehicle standing
     in the personal   name of the contractor    is entitled to registration  witbout pay-
..   ment of this tax. At least until and unless advised by Defense Plant, Corpora-
     tion that it actually owns such automobiles      and asserts   the exemption.   we think
     tbat these claims for exemption     made by contractors      should be denied.   In case
     Defense Plant Corporation     hereafter   does assert such ownership and exemption
     you may so advise us and we will then be glad to render our opinion on the
     question as to whether exemption      from the tax may be allowed.

                                                                    Yours   very truly

     APPROVED       MAR 6. 1942                           ATTORNEY           GENERAL      OF TEXAS

     /s/~&rover     Sellers
                                                           BY
     FIRS.T ASSISTANT                                              /s/   Glenn R. Lewis
     ATTORNEY    GENERAL                                                 Assistant

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     APPROVED        OPINION COMMITTEE                BY BWB CHAD&AN

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