Untitled Texas Attorney General Opinion ( 1970 )

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TRIE ATTQIZNEY GENERAL
QFTEXA~
March 18 , 1970
Honorable 0. N. Humphreys, Jr.
Administrator
Texas Liquor Control Board
Sam Houston State Office Building
Captiol Station
Austin, Texas 78711
Opinion No.M-598
Re: Airline-Beverage Permits
under Article,I, Section
15 (21) Texas Liquor Con-
Dear Mr. Humphreys: trol Act.
The 61st Legislature amended the Texas Liquor Control
Act by providing for a new "Airline-Beverage Permit."
[Article 666-15(21), V.P.C., Acts 1969, 61st Leg., 2d C.S.,
ch. 1, Art. 6, sec. 3, p.5, 37-381. you have inquired
as to the implications of this amendment as follows:
"Question No. 1. Does an Airline-Bev-
erage Permit authorize the holder to pur-
chase alcoholic beverages outside of Texas,
transport same into Texas, and store same
at airports in Texas?
"Question No. 2. If the answer to
Question No. 1 is 'yes)' does an Airline-
Beverage Permit further authorize the
holder to supply its passenger aircraft
departing from Texas airports to be served
to the passengers aboard the flight, with
the alcoholic beverages previously pur-
chased outside of Texas and stored at an
airport in Texas?
"Question No. 3. Do alcoholic beverages
purchased outside of Texas become taxable
under Article I, Section 21, T.L.C.A.;
Article I, Section 21 l/8, T.L.C.A.; or
Article II, Section 23, T.L.C.A., upon
the occurrence of any of the events or trans-
actions described in Questions No. 1 and
2 above?”
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Honorable 0. N. Humphreya, Jr., Page 2, (M-588 )
Our answer to your questions are 88'follows: Question
No. 1 "Yea"; Question No. 2, 'Yes": Question No. 3;"Alcoho-
lit beverages purchased, transported, stored and sold in
accordance with the procedures in question become taxable
upon the first actual sale or consumption within TBxas."
The relevant provisions of Article 666-15(21), Vernon's
Penal Code, as amended, may be paraphrased as follows:
(1) The Legislature declares that
nothing in the Texas Liquor Control Act
prohibits selling or serving of alcoholic
beverages in any size containers on com-
mercial passenger airplanes even though
"dry" areas may be traversed during the
course of flight; provided a special
$1000 airline beverage permit is obtain-
ed annually from the Alcoholic Beverage
Commission.
(2) Permittees are exempted from
Article I, Sections 15(a) 7 and 18
of the Act which relate respectively
to the taxing power of county commis-
sioner's courts, and residence-owner-
ship requirements for other permittees.
(3) Permittees are authorized to store
alcoholic beverages at airports in any
size sealed containers subject to rules
and regulations.
(4) Taxes imposed on alcoholic beverages
on board aircraft departing this state are to
be paid pursuant to rules and regulations.
(5) Permittees are exempt from the
Limited Sales, Excise and Use Tax Act, and
in lieu thereof, a five cents per drink
service fee is assessed for each serving
of an alcoholic beverage within this state
which fee permittees may absorb and remit
monthly pursuant to rules and regulations.
(6) Retail package store permittees are
granted exclusive rights to sell alcoholic
beverages in any size containers to Airline-
Beverage Permit holders. Such containers
are allowed through the ordinary manufactur-
er-importer-wholesaler-retailer channels for
such sales.
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Honorable 0. N. Humphreys, Jr., Page 3, (W- 598 )
Although the amendment does not deal expressly with
out-of-state purchase, importation and storage of liquor,
yet we think the Legislature enacted definite provisions
which have no meaning unless it presumed such activity'
would occur. We therefore conclude that the Airline
Beverage Permit impliedly authorizes the procedures out-
lined in question number one.
We do not think that subsection (f) of the amendment1
prohibits out-of-state purchasing, importation an'stor-
age in this state. This subsection simply requires that,
among the various permittees authorized to sell liquor &I
Texas, only retailers are allowed to sell to Airline Bev-
erage Permittees.‘
The question thus becomes whether the subsection
impliedly prohibits transportation into the state of such
liquor. To so conclude, one would have to reason that
subsection (f) requires that all beverages on airliners
in Texas be purchased from a Texas retailer. To comply,
airliners entering this,state would either'have to jettison
all out-of-state liquor or consider it subject to for-
feiture as an illicit beverage. [cf. Art. 666~SS3a(4);
42(a) ; 17 (13) V.P.C.] Nothing in the amendment indicates
legislative intent for such requirements.
On the other hand, there are affirmative indictions
that the Legislature contemplated that permittees would
import liquor purchased out-of-state. Subsection (d) of
the amendment reads as follows:
"As to all alcoholic beverages on board
any commercial passenger aircraft departing
from any airport in this state, the taxes
'"Only the holder of a Package Store Permit shall
be authorized to sell liquor to the holder of an Airline-
Beverage Permit: and for the purposes of this Act, any
sale of liquor to the holder of an Airline-Beverage Permit
shall be considered a sale at retail to a consumer."
[Art. 666-15(21f), V.P.C.1
%y requiring all sales in Texas to be made at retail,
payment of the retail sales tax is also assured.
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Honorable 0. N. Humphreys, Jr., Page 4, (M-598 )
imposed by the Texas Liquor Control Act
shall be paid as prescribed by rul~esand
regulations of the Board." (Emphasis added).
If any beverages on departing aircraft were purchased at
retail, the taxes would already have been paid atthe time
of delivery from the wholesaler to the retailer. [cf. Art.
666-9921, 21 l/EA(l)b quoted infral. Thus, the qu6tCd
provision would be unnecessaryand meaningless in that
there would be no occasion for a reporting system, rules
and regulations for payment of taxes already p&id.' The
Legislature is not presumed to have passed a meaningless
statute. cf. 53 Tex.Jur.2d 272, Statutes, Sec. 182.
Further, we conclude that the Legislature envisioned
beverages on departing aircraft for which the appropriate
taxes might not have been paid, viz. out-of-state imported
liquor. The legislature therefore directed the Commission
to prescribe rules and regulations for reporting and paying
taxes on such liquor.
Another 61st Legislature amendment,3 while not part
of the Airline Beverage Permit provisions, is pertinent;
it provides as follows:
ion number three1 shall
obtaining exemption from or credit for such
taxes and shall provide by,rule and regu-
lation for equitable and final.disposition
of any tax credit brought about by such
payment of any such unintended or excess."
There is heavy traffic from Texas terminals to out-
of-state airports. To conclude that aircraft must be sup-
plied only with liquor purchased at retail in Texas would
inevitably require an inundating refund claim procedure
on liquor consumed out-of-state. Moreover, a complex
adjudicative system for the "equitable and final dis-
position" of excess taxes would have to be devised.
3
Acts 1969, 61st Leg., R.S., ch. 38, p. 80, 96-98,
Sec. 17, codified as Art. 666-21 1/8A, V.P.C.
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Honorable 0. N. Humphreys, Jr., Page 5, (M- 598 )
The Alcoholic Beverage Commission is at present totally
ungeared for such procedures , and nothing in the'~recent
amendments indicates legislative intent that the Com-
mission's procedures be'so extensively revised.
To the contrary, the Legislature declared~that taxes
on Liquor shipped out-of-state for consumption not be
collected in the first place, thereby necessithting only
nominal and incidental refund procedures. The only dis-
cernible conclusion again appears to be that the Legis-
lature foresaw the possibility of'beveragason board de-
parting aircraft for which the tax had been unpaid, and
specifically declared its policy only to tax such liquor
as might be consumed within this State.
The act allows storage at airports pursuant to the.
rules and regulations of the Commission. We"deem.it
evident that all liquor lawfully purchased'and transported
pursuant to the Airline Beverage Permit, whether from
within or without Texas, may be stored at Texas terminals.
Our answer to your question number one is "yes."
You further ask whether beverages so puchased and
transported may be used to supply aircraft departing
from Texas. We see nothing in the recent amendments to
suggest that Airline Beverage Permittees cannot supply
departing aircraft with liquor which they have lawfully
purchased and stored pursuant to an airline beverage
permit. Accordingly, we answer your second question
affirmatively.
Assuming liquor has been purchased out-of-state,
transported to a Texas terminal, stored, and supplied
to an aircraft departing this state, your third question
inquires which activity, if any, makes the alcoholic
beverages taxable under the following provisions of the
Texas Liquor Control Act: Article I, Section 21,4
Article I, Section 21 1/8,5 or Article II, Section 23.6
4Art. 666-21, V.P.C.
5Art. 666-21 l/8, V.P.C.
6Art. 667-23, V.P.C.
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Honorable 0. N. Humphreys, Jr., Page 6, (M- 598 1
These sections respectively imposed.gallonage and
barrel excise taxes on the "first sdle"'bfSli~tib~or
beer within this state. "Piret-sBli""is'~dBfidCBbroadly
to include possession, distribution;'or lise'of'alLliquor
refined, blended, manufactured;'~imported'iiito,'or'~in~
any
other manner produced; 'acqufred;~possessed,or brought~
into this state. However, under the ~general'scheme, the
tax is not due and payable until the first actual sale
within this state. Section 2L"l/EA, ,1(b) p-s:
following~the 'fi
kie'for the purpose'of"this'sectmha11--
mean the first actual sale by the holder"
of any wholesaler's permit to.the~holder
of any other permit authorizing the retail
sale of the beverage to be taxed."
(Emphasis added).
The special Airline Beverage Permit does not precisely
fit within the general scheme since "first sale" is de-
fined as the first actual sale by a wholesaler to a re-
tailer. However, Section 21 l/8 AZ, supra, seems to-
evince a legislative intent that the reporting system
be synchronized for those who transport liquor through
this State for out-of-state consumption. Since that
section declares the legislative policy to tax only bev-
erages sold or consumed within Texas, any system other
than a reporting of taxes due on liquor actually sold or
consumed in Texas would seem unreasonabeiy cumbersome.
Because we are unable to see any appreciable distinction
as to the provisions pertaining to the barrel tax on
beer in Article 2, Section 23, we conclude that the same
standards would apply.
Excise taxes on beverages purchased out-of-state and
transported through this state only for service out-of-
state might further run afoul of the commerce clause of
the United States Constitution. [United States Constitu-
tion, Article SE, ~13.1 This office has rendered an
opinion discussing the interrelation of the Commerce
Clause and the 2lst Amendment to the United States Con-
stitution7 as to state regulation of interstate commerce
7
The 2lst amendment (ratified December 5, 1933)
repealed the prohibition amendment and left regulation
of alcoholic beverages to the individual States within
their boundaries.
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Honorable 0. N. Humphreys, Jr., Page 7, 04-598 1
where liquor is concerned. of. Attorney General Opinion
No. M-227. The most exhaustive judicial discusaiohs'of'
this matter are Hostetter vs. Idlewild Ban Voyage'Liquor
~~~~at~~~,~7:,y~;,'324~ '(1964~eM,"~~t"W~~~~ic
P Y , I&. vs. P
Beyrage Control Fdr’tik State of.Calffo~hih;"224"'F;Supp.
4 (1963). Thesecases held that'no state ~can'completely
prohibit interstate commerce where liquor iscohaerned; -
although reasonable regulations will-be~constitutianally
tolerated. Roth courts/however, used language strongly
indicating that such regulations would be those aimed
at preventing unlawful diversion or use of alcoholic
beverages within the state. We doubt seriously that a
gallonage or barrel tax upon liquor or beer only trans-
ported through this state could reasonabely begcalculated
as measures preventing unlawful diversion into Texas. We
therefore conclude that the gallonage and barrel taxes
cannot lawfully be collected on liquor and beer simply
transported through Texas for consumption out-of-state
because such taxee would be an unwarranted regulation of
interstate commerce a field pre-empted from State regula-
tion. 8
Our answer to question number 3 is that beverages
purchased, transported, stored and sold, pursuant to the
procedures discussed in this opinion become taxable upon
the first actual sale or consumption within Texas.
SUWWARY
Article 666-15(21) V.P.C. authorizes holders
of Airline Beverage Permits to purchase alcoholic
beverages outside Texas, transport them into
Texas, store same at Texas airports and supply
departing aircraft with such beverages. Assuming
the foregoing activity, the taxable event, for
purposes of Article I, T.L.C.A. SS 21, 21 l/8
and Article II, 623, (Art. 666-21, 666-21 l/8 and
667-23, V.P.C., respectively), is the first
actual sale of alcoholic beverages within Texas
airspace.
8
It is probable, however, that beverages imparted into
the state and transported through this state for consumption
and service without this state would have to be transported
in conjunction with a Carrier's permit as defined in Article I,
Section 15 tSl2).
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Honorable 0. N. Rumphreys, Jr., Page 8, (M- 598 )
General of Texas
Prepared by Earl S. Hines
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chaixmm
W. E. Allen, Acting Co-Chairmaa
Jay Floyd
Barold Kennedy
W.O. Shultz
B&Owen
Gordon Cam
!4EXDEP. GRIFFIN
Staff Legal Assistant
ALFRED itRtKER
Executive Assistant
NOLA WHITE
First Assistant
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