Case Information

*1 The Attorney General of Texas

June 12, 1980

MARK WHITE

Attorney General

Honorable Bob Bullock Opinion No. NW-195 Comptroller of Public Accounts

LBJ State Office Build@ Re: Sales tax exemption for in- Austin, Texas 78744 dustrial development corporations or medical development corpora- Honorable Gerald R. Brown tions.

Executive Director

Texas Industrial Commission

Box 12728, Capitol Station

Austin, Texas 78711

Gentlemen:

You tive asked whether tangible personal property purchased by an industrial development corporation or medical development corporation is subject to sales and use tax if: the property is to be Incorporated into a project

1.

to be leased or sold to non-exempt persons or organizations, or the property is to be used in constructing a

2. project to be leased or sold to non-exempt persons or organizations?

If the answer to these questions is yes, Mr. Brown pases three additional questions. Authority to create and administer industrial and medical development corporations is found in the Development Corporation A& of 1979, article 5190.6, V.T.C.S. Section 32 of the Act provides in pertinent part that “. . .the corporation, all properties at any time owned by it, the income therefrom, and all bonds issued by it, their transfer, and the income therefrom shall be exempt from all taxation by the state.” (Emphasis added). -

You suggest that the answer may be affected by MW-94 (1979) which involved sales tax exemption for property leased by an exempt organization to a non-exempt commercial entity. That opinion, however, involved construction of article 20.04(Y), Taxation-General, which required that the property be improved for an exempt organization. There is no such - p. 631

Honorable Bob Bullock &

Honorable Gerald R. Brown - Page Two (MW-195) requirement in section 32 of article 5190.6, V.T.C.S., which simply exempts the corporation from all taxation. In light of the specific statutory exemption, we believe property purchased by an industrial development corporation is not stiject to the sales and use tax even though the property may be sold or leased to a non-exempt organization. You have not asked and we do not make any determination on exemptions under any other taxes.

Since the answer to both questions is in the negative, we need not address Mr.

Brown’s questions.

SUMMARY Tangible personal property purchased by an industrial development corporation or medical development corporation is exempt from the sales and use tax.

Very truly yours,

Attorney General of Texas JOHN IV. FAINTER, JR.

First Assistant Attorney General

TED L. HARTLEY

Executive Assistant Attorney General

Prepared by Bob Gammage &

C. Robert Heath

Assistant Attorneys General

APPROVED:

OPINION COMMITTEE

C. Robert Heath, Chairman

Jon Bible

Bob Gammage

Susan Garrison

Rick Gilpin

Myra McDaniel

p. 632