Dow Jones & Company v. United States

Decision Date08 February 1955
Docket NumberNo. 273-54.,273-54.
Citation128 F. Supp. 748,130 Ct. Cl. 696
PartiesDOW JONES & COMPANY, Inc. v. The UNITED STATES.
CourtU.S. Claims Court

George W. Martin, New York City, Emmet, Marvin & Martin, New York City, on the briefs, for plaintiff.

Allen A. Bowden, Washington, D. C., H. Brian Holland, Asst. Atty. Gen., Andrew D. Sharpe and Ellis N. Slack, Washington, D. C., on the briefs, for defendant.

Before JONES, Chief Judge, and LITTLETON, WHITAKER, MADDEN and LARAMORE, Judges.

MADDEN, Judge.

The plaintiff's petition alleges that it bought from the Addressograph-Multigraph Corporation one Model 4400 Automatic Speedaumat, or Speedaumailer, in 1948, and two in 1949. It paid $36,000 for each machine, plus a $3,600 Federal excise tax imposed by Section 3406(a) (6) of the Internal Revenue Code of 1939, as amended, 26 U.S.C.A. § 3406(a), on each machine. The taxes were paid to the vendor, which paid them to the Government. The taxes on the three machines thus amounted to $10,800.

The vendor, Addressograph-Multigraph Corporation, filed a claim for refund of the taxes which it had collected from the plaintiff. The Commissioner of Internal Revenue ruled that the tax should not have been calculated on the basis of 100 percent of the retail price, as it was calculated, but on the basis of 60 percent of the retail price. The tax was thus reduced by 40 percent, and $4,320 was refunded to Addressograph-Multigraph and by it to the plaintiff. The plaintiff, however, contends that the machines were not taxable at all, and that the entire $10,800 should have been refunded. It says that the machines were not business-and-store machines, which were taxable under Section 3406(a) (6), but were production machines and therefore not subject to the tax. It therefore sues to recover the $6,480 not already refunded to it.

The Government moves to dismiss the plaintiff's petition on the ground that the plaintiff was not the taxpayer, and therefore has no right to sue for a refund. The tax imposed by Section 3406 (a) is imposed upon the manufacturer, producer, or importer. He will, if possible, add the amount of the tax to the selling price, and thus pass on the economic burden of the tax to the purchaser. But the purchaser is not liable for the tax, and is not the taxpayer. In Lash's Products Co. v. United States, 278 U.S. 175, 49 S.Ct. 100, 73 L.Ed. 251, affirming 64 Ct.Cl. 252, the Court said:

"The phrase `passed the tax on' is inaccurate, as obviously the tax is laid and remains on the manufacturer and on him alone. * * * The purchaser does not pay the tax. He pays or may pay the seller more for the goods because of the seller's obligation, but that is all."

See also Twentieth Century Sporting Club, Inc., v. United States, 34 F.Supp. 1021, 92 Ct.Cl. 93. In Indian Motocycle Co. v. United States, 283 U.S. 570, 51 S.Ct. 601, 75 L.Ed. 1277, the Court held that because the purchaser that bore the economic burden of the federal tax was a municipal corporation, the imposition of the tax was an infringement upon the immunity of a state from federal taxation. The court did not, of course, decide that the purchaser was the taxpayer. It only made a liberal application of the doctrine of state immunity from federal taxation. And in State of Alabama v. King & Boozer, 314 U.S. 1, 62 S.Ct. 43, 86 L.Ed. 3, the Supreme Court overruled Panhandle Oil Co. v. State of Mississippi...

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8 cases
  • International Business Machines Corp. v. United States
    • United States
    • U.S. Claims Court
    • 16 Abril 1965
    ...on the other hand, was imposed on the manufacturer (the plaintiff) which alone can sue for refund (Dow Jones & Co. v. United States, 130 Ct.Cl. 696, 698, 128 F.Supp. 748, 750 (1955)). As the taxpayer, plaintiff has the direct personal interest lacking in Sharp & Dohme, Inc. Moreover, that d......
  • Agron v. Illinois Bell Telephone Company
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • 22 Septiembre 1971
    ...occupation taxes. 15 Cf. James v. Dravo Contracting Co., 302 U.S. 134, 160, 58 S.Ct. 208, 82 S.Ct. 155 (1937); Dow Jones & Co. v. United States, 128 F.Supp. 748 (Ct.Cl.1955); Sun Oil Co. v. Gross Income Tax Div., 238 Ind. 111, 149 N.E.2d 115 (1958); Fischman & Sons, Inc. v. Department of Re......
  • Stumes v. Bloomberg
    • United States
    • South Dakota Supreme Court
    • 25 Abril 1996
    ...statutory tax scheme is identical to SDCL 10-45-2 and -22. See M.S.A. §§ 7.521 and 7.522. ¶11 In Dow Jones & Company v. United States, 130 Ct.Cl. 696, 128 F.Supp. 748, 749 (1955), the United States Court of Claims held that, although excise taxes paid by the manufacturer on the sale of mach......
  • Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. USIRS
    • United States
    • U.S. District Court — Western District of Wisconsin
    • 28 Abril 1987
    ...(9th Cir.1960). See also Ace-Chicago Great Dane Corp. v. United States, 726 F.2d 321 (7th Cir.1984); Dow Jones & Company v. United States, 130 Ct.Cl. 696, 128 F.Supp. 748, 749-50 (1955). In this case, the tribe does not appear to contest that the motor vehicle excise tax is imposed on the m......
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