Could Texas use revenue from a sales tax on gasoline for purposes other than roads and the uses listed in the constitution?
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This page answers the general question as of 1986. Ezel answers yours: what it means for your facts, under current Texas law, with citations.
Texas AG Opinion JM-593: Gasoline Sales Tax Dedication
Plain-English summary
JM-593 asked whether Texas could spend the proceeds of a sales tax on gasoline for purposes outside article VIII, section 7-a of the Texas Constitution. The AG answered no. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
The constitutional provision covered "all taxes," other than gross-production and ad valorem taxes, on motor fuels and lubricants used to propel vehicles over public roads. The opinion concluded that a sales tax on gasoline was neither excluded type and fell squarely within the phrase "tax on motor fuel." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
Article VIII, section 7-a allowed the legislature to control appropriation, allocation, and direction within the constitutional dedication. JM-593 said that language did not permit the legislature to redirect the revenue to purposes outside those the provision listed. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
Currency note
This opinion was issued in 1986. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Common questions
Did article VIII, section 7-a apply only to the motor-fuel taxes in Tax Code chapter 153?
No. JM-593 read the constitution's phrase "all taxes" on motor fuels to include a sales tax imposed through chapter 151 as well. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
Could a gasoline sales tax be treated as an ad valorem or gross-production tax?
No. The opinion said a sales tax on gasoline could not be characterized as either excluded type. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
Could the legislature decide how to allocate the revenue?
Yes, but only among the purposes the constitutional provision permitted. JM-593 read the legislature's appropriation and allocation authority as control within the dedication, not authority to choose unrelated uses. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
What general rule did the AG apply to constitutionally dedicated revenue?
The opinion stated that when the constitution earmarks money for specific purposes, the money can be dedicated to no other purpose. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
Background and statutory framework
Article VIII, section 7-a dedicated qualifying motor-fuel tax revenue primarily to acquiring rights-of-way, constructing, maintaining, and policing public roads, traffic and safety administration, and certain older county and road-district debt. It also allocated one-fourth of net motor-fuel tax revenue to the Available School Fund. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
The highway department accepted that the dedication applied to chapter 153 motor-fuel taxes and asked whether it would also reach a sales tax added through chapter 151. JM-593 focused on the substance of the tax and fuel, not the Tax Code chapter in which the legislature placed it. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
Citations and references
The opinion cited the following authorities. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
Constitutional and statutory provisions:
- Tex. Const. art. VIII, § 7-a
- Tax Code ch. 153
- Tax Code ch. 151
Cases:
- Gulf Insurance Company v. James, 185 S.W.2d 966 (Tex. 1945)
- Brazos River Conservation and Reclamation District v. McCraw, 91 S.W.2d 665 (Tex. 1936)
- Lawson v. Baker, 220 S.W. 260 (Tex. Civ. App. - Austin 1920, writ ref'd)
Source
- Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0593
- Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0593.pdf
- Date reference: https://www.casemine.com/judgement/us/59148cfbadd7b0493453b74c
Original opinion text
Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.
December 24, 1986
Mr. Robert C. Lanier
Chairman
State Department of Highways and Public Transportation
Dewitt C. Greer State Highway Bldg.
11th and Brazos Streets
Austin, Texas 78701
Opinion No. JM-593
Re: Whether a sales tax on motor fuels must be used exclusively for public roads by virtue of article VIII, section 7-a, of the Texas Constitution
Dear Mr. Lanier:
You have asked for an interpretation of article VIII, section 7-a, of the Texas Constitution, which provides:
Subject to legislative appropriation, allocation and direction, all net revenues remaining after payment of all refunds allowed by law and expenses of collection derived from motor vehicle registration fees, and all taxes, except gross production and ad valorem taxes, on motor fuels and lubricants used to propel motor vehicles over public roadways, shall be used for the sole purpose of acquiring rights-of-way, constructing, maintaining, and policing such public roadways, and for the administration of such laws as may be prescribed by the Legislature pertaining to the supervision of traffic and safety on such roads; and for the payment of the principal and interest on county and road district bonds or warrants voted or issued prior to January 2, 1939, and declared eligible prior to January 2, 1945, for payment out of the County and Road District Highway Fund under existing law; provided, however, that one-fourth (1/4) of such net revenue from the motor fuel tax shall be allocated to the Available School Fund; and, provided, however, that the net revenue derived by counties from motor vehicle registration fees shall never be less than the maximum amounts allowed to be retained by each County and the percentage allowed to be retained by each County under the laws in effect on January 1, 1945. Nothing contained herein shall be construed as authorizing the pledging of the State's credit for any purpose.
In your request letter, you stated:
It is of course well established that this constitutional dedication is applicable to motor fuel taxes imposed under chapter 153 of the Texas Tax Code. While we are confident that the dedication would equally apply to any taxes which might be imposed on motor fuels through appropriate amendments to provisions of the Limited Sales, Excise, and Use Tax Act, chapter 151 of the code, we seek your official legal confirmation.
Simply stated, your question is whether, if the Texas Legislature were to impose a sales tax on gasoline, the proceeds of that tax could be used for any purpose other than those stated in article VIII, section 7-a. We answer in the negative.
If the constitution earmarks money for specific purposes, that money can be dedicated to no other purpose. See, e.g., Gulf Insurance Company v. James, 185 S.W.2d 966 (Tex. 1945); Brazos River Conservation and Reclamation District v. McCraw, 91 S.W.2d 665 (Tex. 1936); Lawson v. Baker, 220 S.W. 260 (Tex. Civ. App. - Austin 1920, writ ref'd). Article VIII, section 7-a provides in relevant part that
[s]ubject to legislative appropriation, allocation and direction . . . all taxes, except gross production and ad valorem taxes, on motor fuels . . . used to propel motor vehicles over public roadways, shall be used for the sole purpose of [accomplishing specific objectives].
It is beyond cavil that this language earmarks the revenue generated by any tax on motor fuel, other than a gross production or ad valorem tax, for the purposes named in the article. It can hardly be argued that a sales tax on gasoline could be characterized as either a gross production or an ad valorem tax, nor could it be contended that such tax is not a "tax on motor fuel" within the meaning of the constitutional provision. The proceeds of a sales tax on gasoline, therefore, fall squarely within the terms of article VIII, section 7-a.
The prefatory language in article VIII, section 7-a gives the legislature the right to control the "appropriation, allocation and direction" of the proceeds of a sales tax on gasoline. Neither this nor any other portion of this constitutional provision, however, permits the legislature to dedicate those proceeds to any purpose other than those enumerated therein.
SUMMARY
The proceeds of a sales tax on gasoline could be used only for the purposes expressed in article VIII, section 7-a, of the Texas Constitution.
Very truly yours,
JIM MATTOX
Attorney General of Texas
JACK HIGHTOWER
First Assistant Attorney General
MARY KELLER
Executive Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jon Bible
Assistant Attorney General
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