F. Strauss & Son v. Coverdale

• Decision Date: 22 May 1944
• Docket Number: 37143.
• Citation: 18 So.2d 496,205 La. 903
• Court: Louisiana Supreme Court
• Parties: F. STRAUSS & SON, Inc., v. COVERDALE, Assessor, et al.

18 So.2d 496

205 La. 903

F. STRAUSS & SON, Inc., v. COVERDALE, Assessor, et al.

No. 37143.

Supreme Court of Louisiana

May 22, 1944

Eugene Stanley, Atty. Gen., W. D. Goff, First Asst Atty. Gen., and S. L. Digby, City Atty. and Geo. W. Lester, Dist. Atty., both of Monroe, for defendants and appellants.

Hudson Potts, Bernstein & Snellings, of Monroe, for appellee.

HAMITER Justice.

F. Strauss & Son, Inc., a Louisiana corporation and the plaintiff herein, is and has been for sometime engaged in the wholesale produce and liquor business at its domicile in Monroe Ouachita Parish, Louisiana.

For the year 1942, its merchandise and stock in trade, based on an average inventory for 1941, was assessed for ad valorem taxation purposes by the tax assessor of Ouachita Parish at $76,860. But on a review of the assessment the Louisiana Tax Commission ordered an increase of $36,000, thus raising it to the total of $112,860, this added amount representing the cost of the federal and state revenue stamps borne by the containers of the liquor stock and paid for by the wholesaler, as required by the federal and state statutes. That agency, in this connection, concluded that the cancelled stamps formed a part of the value of the liquor on hand in view of the fact that payment of both state and federal taxes was necessary before the product could be sold to the retailer.

Following the issuance of the order the wholesaler brought this suit against the Louisiana Tax Commission, the Assessor and the Tax Collector of Ouachita Parish, and the Tax Collector of the City of Monroe, praying that the increase in its assessment for 1942 be decreed incorrect, illegal and void and that it be stricken and removed from the assessment roll.

There was judgment in accordance with plaintiff's prayer, and defendants are appealing.

The single question presented by the controversy is whether or not the mentioned state and federal revenue stamps are to be considered in valuing the liquor for assessment purposes.

An agreed statement of facts, on which the case was tried, discloses that 'prior to the year 1940, the Louisiana Tax Commission did not include in the assessed value of whiskey the amount of federal and state tax stamps attached thereto, but during the year 1941 the Tax Commission adopted the policy of including in the assessed value of alcoholic beverages the amount of federal and state taxes affixed to same. This was not put into effect completely, however, until the year 1942.'

It was also agreed by counsel as follows: For conducting its wholesale liquor business, plaintiff purchases both bulk and case liquors. Before it receives either, however, the federal tax thereon has been paid and stamps evidencing that payment have been affixed to the containers by the distiller. Reimbursement for the tax thus paid, pursuant to the distiller's billing of that obligation as a separte item, is made by plaintiff. Upon arrival, the liquor is stored by the wholesaler in one of its warehouses. There it remains until its sale is desired, at which time the liquor is withdrawn, state revenue stamps are attached to the containers and cancelled, and it is placed in another warehouse. The state stamps are purchased by the wholesaler from the Louisiana Department of Revenue and are non-transferable.

Article X, Section 1, of the Louisiana Constitution of 1921, as last amended by Act No. 81 of 1934, provides in part: 'The power of taxation shall be vested in the Legislature; * * *. No property shall be assessed for more than its actual cash value, ascertained as directed by law, * * *.' Somewhat similar provisions were contained in the Constitutions of 1898 and 1913.

According to the statutory law of this state, 'It is made the duty of the tax assessors throughout the state to place upon the assessment list all property subject to taxation, including merchandise or stock in trade within their respective districts or parishes; and in the assessment of merchandise, or, stock in trade on hand during the year preceding the calendar year in which the assessment is made, the inventory value of such merchandise, etc., shall be arrived at by computing the cost or purchase price of said shipment at the point of origin, plus the carrying charges to the point of destination, and the average value arrived at as above required shall be the basis for fixing the assessable value, * * *.' Acts 1898, No. 170, section 7, 1932, No. 78, section 1, Dart's, section 8328.

'All real estate and personal property subject to taxation * * * shall be estimated by the assessors * * * at its actual cash value * * *.' Acts 1898, No. 170, section 20, Dart's, section 8341.

'The words 'actual cash value,' or 'actual cash valuation', shall mean the valuation at which any real or personal property is assessed for the purpose of taxation, after the assessing authorities have considered every element of value in arriving at such valuation. And the price at which any piece of real estate or personal or movable property shall have been sold for cash in the ordinary course of business, free of all encumbrances, otherwise than at forced sale, shall be evidentiary only, and to be considered with other factors in determining the actual cash value for assessment purposes.' Acts 1898, No. 170, section 91, subd. 6, 1902, No. 130, section 5, 1934, No. 126, section 1, Dart's, section 8200.

Inasmuch as our Constitution states that the ascertainment of the property's actual cash value for assessment purposes is to be as directed by law, and as the statute law above quoted (Section 7 of Act No. 170 of 1898, as amended by Section 1 of Act No. 78 of 1932) provides that the inventory value (meaning obviously the actual cash value) of the stock in trade shall be arrived at by computing the cost or purchase price of the shipment at the point of origin plus the carrying charges, it is clear that the cost of the state revenue stamps affixed to the liquor containers by plaintiff is not to be included in the assessment. Those stamps were purchased, affixed and cancelled by the wholesaler after it had received the merchandise.

With that conclusion reached, there is left for consideration the matter of whether or not the cost of the federal revenue stamps, for which the wholesaler was required to make reimbursement to the distiller in obtaining the liquor, is a part of the purchase price of the shipment and is to be included in its actual cash value.

Counsel for defendant insist that it is a part of the purchase price and must be so included, they arguing that the actual cash value is the amount the merchandise would bring when sold on the regular market. To support this they cite Baker-Lawhorn & Ford, Inc., v. Louisiana Tax Commission, 15 La.App. 189, 130 So. 642, 644, in which it is said that 'the actual cash value (of the property) is the price at which it would sell for in cash in the ordinary course of business.' When that case was decided (1930) the existing and effective statutory definition of actual cash value was the 'price that any piece of real estate or personal property or movable property would sell for, for cash in the ordinary course of business, free of all encumbrances otherwise than by forced sale.' Section 91, Act No. 170 of 1898, as amended by Act No. 130 of 1902. But in 1934 the Legislature, by Section 1 of Act No. 126 of such year (above quoted), changed that provision, declaring that in arriving at the actual cash valuation of property the assessing authorities should consider every element of value, and that the price at which it shall have been sold...