Nehi Bottling Co. v. Gallman
| Decision Date | 29 June 1972 |
| Citation | 333 N.Y.S.2d 824,39 A.D.2d 256 |
| Parties | In the Matter of NEHI BOTTLING CO., Inc., Petitioner, v. Norman F. GALLMAN et al., Constituting the New York State Tax Commission, Respondents. |
| Court | New York Supreme Court — Appellate Division |
Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo (Donald C. Lubick, Buffalo, of counsel), for petitioner.
Louis J. Lefkowitz, Atty. Gen. (Ruth Kessler Toch and Thomas P. Zolezzi, Albany, of counsel), for respondent.
Before HERLIHY, P.J., and GREENBLOTT, SIMONS, KANE and REYNOLDS, JJ.
OPINION FOR ANNULMENT
This is a proceeding pursuant to CPLR article 78 () to review so much of a determination of the State Tax Commission as held that New York State and Erie County sales and use taxes were owing on certain sales to petitioner of returnable soft drink bottles, carrying cases for the bottles, and fiber partitions for the cases.
The petitioner is a soft drink bottler and a distributor of soft drinks located in the Buffalo, New York area. In order to sell its product the petitioner purchases reusable and returnable bottles and carrying cases together with fiber partitions for the carrying cases to hold the bottles apart from each other.
It is the conclusion of the Commission that the petitioner purchased the bottles, carrying cases and partitions for a use other than resale so that the same are taxable pursuant to subdivision (b)(4) of section 1101 and section 1105 of the Tax Law.
In support of that conclusion the respondent found:
(4) Ownership of the bottles stayed with the vendor at all times. Retailers and distributors paid the vendor a deposit on each bottle. The payment was less than the cost of the bottle. The deposit amount was credited to the retailers and distributors when the bottles were returned to the plant.
There is no support in the record for the finding that Nehi retained ownership of the bottles or the other items when it transferred possession thereof to vendees. In People v. Cannon, 139 N.Y. 32, 49--50, 34 N.E. 759, 764, the court in regard to the transactions described in this record stated:
The taking of security for the return of the bottles, from the party to whom they were delivered, so long as there is no evidence of an agreement, and the party is under no legal obligation to return them, he having the right to retain them if he choose to leave the money deposited as a payment for the bottles, amounts in law to a sale of them, at the election of the party to whom they are delivered.
At most, the present record establishes the continuous offer by the petitioner to repurchase such bottles and carrying cases as its vendees might decide to offer to it for repurchase. Everyday experience demonstrates that the bottles involved are purchased by the ultimate consumer of the soft drink with the full intent and knowledge that he is free to do with such bottles as he pleases. There is no doubt that title and possession pass whenever the petitioner transfers the bottles and carrying cases together with the partitions to its vendees. Upon the...
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