Complete Auto Transit, Inc. v. Brady, 48590

Decision Date13 April 1976
Docket NumberNo. 48590,48590
Citation330 So.2d 268
PartiesCOMPLETE AUTO TRANSIT, INC. v. Charles R. BRADY, Jr., Chairman, Mississippi State Tax Commission.
CourtMississippi Supreme Court

Butler, Snow, O'Mara, Stevens & Cannada, Alan W. Perry, D. Carl Black, Jr., Jackson, for appellant.

Joe D. Gallaspy, William N. Lovelady, Jr., James H. Haddock, Jackson, for appellee.

Before GILLESPIE, C.J., and ROBERTSON, and LEE, JJ.

GILLESPIE, Chief Justice, for the Court:

This case involves an assessment for sales taxes imposed upon Complete Auto Transit, Inc., a Michigan corporation (hereinafter Taxpayer). Taxpayer paid the taxes and filed suit in the Chancery Court of Hinds County to recover the sum paid. From a decree upholding the validity of the assessment, Taxpayer appealed to this Court.

Taxpayer is engaged in the business of hauling motor vehicles for General Motors Corporation. It is a certificated contract carrier operating throughout the United States pursuant to authority of the Interstate Commerce Commission. The Mississippi activity of Taxpayer requires the maintenance of a yard adjacent to a railroad at Jackson where an office, together with facilities for servicing Taxpayer's trucks, is maintained. Taxpayer receives approximately 350 automobiles per day from General Motors Corporation with whom it has a contract which is renegotiated from time to time in order to assure Taxpayer a fair return.

The General Motors plant in Georgia assembles automobiles for delivery to dealers in Mississippi and surrounding areas in other states. A sticker is placed on each automobile when it leaves the assembly plant in Georgia showing the dealer to whom it is to be sold. The vehicles are then loaded on railroad cars with a bill of lading showing the consignee as General Motors, in care of Complete Auto Transit. The bill of lading also shows the name of the city to which each automobile is to be delivered but not the name of the dealer to whom it is to be sold. The automobiles are transported to Jackson, Mississippi, by railroad and are unloaded onto Taxpayer's yard adjacent to the railroad. The bill of lading is then stamped 'Received by General Motors Corporation, Chevrolet Motor Division, by Complete Auto Transit, Inc.' The vehicles are then inspected for damage, and Taxpayer prepares waybills showing the shipper as General Motors Corporation, the description of the automobiles, and the names of the consignees (General Motors dealers in cities other than Jackson). As soon as practical, usually within twenty-four to forty-eight hours, the vehicles are loaded on Taxpayer's trucks and delivered to dealers at various points in and out of the State of Mississippi.

Taxpayer is paid on a contract basis, and ordinarily no bill is rendered by Taxpayer to General Motors Corporation. The entire transportation charge is collected by General Motors from the dealer who ultimately receives the vehicle. The charges paid by General Motors to Taxpayer for transportation of vehicles from Jackson, Mississippi, to various General Motors dealers within the state are readily separable from charges for transporting vehicles from Jackson beyond the borders of Mississippi. Likewise, the transportation charges paid the railroad company are in no way connected to the charges paid by General Motors to Taxpayer.

The question is whether the gross income derived by Taxpayer from transporting automobiles from Jackson to other points in the State of Mississippi is taxable by the State.

The statute levying the tax is Mississippi Code Annotated section 27-65-13 (1972), which provides:

There is hereby levied and assessed, and shall be collected, privilege taxes for the privilege of engaging or continuing in business or doing business within this state to be determined by the application of rates against gross proceeds of sales or gross income or values, as the case may be, as provided in the following sections.

The following sections, referred to in the statute, supra, describe the businesses taxed as 'truck or any other transportation business for the transportation of property for compensation . . . between points within the state. . . .' The amount of the tax is five percent of the gross income.

The general rule is that a state may tax a local activity affecting or related to interstate commerce if the local activity is sufficiently separate from the out of state aspects of interstate commerce. Memphis Natural Gas Co. v. Stone, 335 U.S. 80, 68 S.Ct. 1475, 92 L.Ed. 1832 (1948). However, such a tax is invalid if there exists the danger that it can impose cumulative burdens on interstate commerce not borne by local commerce. General Motors Corp. v. Washington, 377 U.S. 436, 84 S.Ct. 1564, 12 L.Ed.2d 430 (1964). The local activity taxed must be one that does not lend itself to repeated exactions in other states. Memphis Natural Gas Co. v. Stone,supra.

The present case is controlled by cases arising in this State. Interstate Oil Pipe Line Co. v. Stone, 203 Miss. 715, 35 So.2d 73 (Miss.1948), aff'd, 337 U.S. 662, 69 S.Ct. 1264, 93 L.Ed. 1613 (1949), involved the first leg of an interstate shipment. The tax was levied on the gross receipts from the operation of the oil piplines wholly within the State. Interstate operated pipelines which were used to transport oil from various fields in Mississippi to loading racks adjacent to railroads elsewhere in the State. From the racks, the oil was pumped into railroad tank cars for shipment outside the State. If no tank cars were available, the oil was stored in tanks near the loading racks for short durations until cars were available. When the oil was delivered to Interstate, it was accompanied by...

To continue reading

Request your trial
3 cases
  • Complete Auto Transit, Inc v. Brady
    • United States
    • U.S. Supreme Court
    • 7 Marzo 1977
    ...the services provided by the State. Spector Motor Service v. O'Connor, 340 U.S. 602, 71 S.Ct. 508, 95 L.Ed. 573, overruled. Pp. 279-289. 330 So.2d 268, Miss., affirmed. Alan W. Perry, Jackson, Miss., for appellant. James H. Haddock, Jackson, Miss., for appellee. Mr. Justice BLACKMUN deliver......
  • Commissioner of Revenue v. JC PENNEY COMPANY, INC
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 9 Marzo 2000
    ...interstate commerce would thus be "smothered by cumulative taxes of several States." Id. at 552-553, quoting Complete Auto Transit, Inc. v. Brady, 330 So. 2d 268, 272 (Miss. 1976), aff'd, 430 U.S. 274 (1977). In rejecting this argument, this court reasoned, first, that, because title to the......
  • George S. Carrington Co. v. State Tax Commission
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 29 Junio 1978
    ...show any real "danger of interstate commerce being smothered by cumulative taxes of several states." Complete Auto Transit, Inc. v. Brady, 330 So.2d 268, 272 (Miss.1976), aff'd, 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326 (1977). Carrington concedes that no multiple taxation has occurred, a......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT