Alabama Precast Products, Inc. v. Boswell
| Citation | 357 So.2d 985 |
| Parties | In re ALABAMA PRECAST PRODUCTS, INC. v. Charles A. BOSWELL, Commissioner of Revenue, State of Alabama. Ex parte Alabama Precast Products, Inc. SC 2527. |
| Decision Date | 07 April 1978 |
| Court | Supreme Court of Alabama |
Dewayne N. Morris, Birmingham, for petitioner.
William J. Baxley, Atty. Gen. and Herbert I. Burson, Jr., Chief Counsel, Dept. of Revenue and Asst. Atty. Gen., and John J. Breckenridge, Asst. Counsel, Dept. of Revenue, and Asst. Atty. Gen., for respondent.
Appellant, Alabama Precast Products, Inc., filed a petition for writ of mandamus in the Jefferson County Circuit Court seeking a refund of sales taxes paid by the corporation. The request for the writ was denied by the trial court and the Court of Civil Appeals affirmed, 357 So.2d 981. We granted certiorari to review this decision of the appeals court.
The case was submitted to the trial court on an agreed statement of facts and briefs of the parties. The facts as stipulated show that Alabama Precast Products manufactures and sells roof slabs at its plant in Birmingham, Alabama. Because of this retail business, Alabama Precast Products purchases building materials needed to manufacture the roof slabs at wholesale.
Alabama Precast Products is also engaged in the business of performing certain construction contracts. In 1974, the corporation entered into a contract with Daniel Construction Company to "furnish and install" precast channel roof slabs on a building being constructed in Graniteville, South Carolina. The roof slabs were manufactured according to contract specifications at the Alabama Precast Products plant in Birmingham from building materials withdrawn from its on-hand stock purchased at wholesale, and then taken to South Carolina and installed by employees of Alabama Precast Products.
The total cost of manufacturing the roof slabs was $138,554.00. A 4% sales tax of $5,541.38 was paid by Alabama Precast Products to the State of Alabama. Subsequently, South Carolina demanded and was paid the same amount in sales/use taxes. Alabama Precast Products then filed a request for a refund from the State of Alabama on the grounds that it should not have to pay sales tax on the roof slabs in both states. (Alabama and South Carolina do not currently have a reciprocity agreement whereby taxes paid in one state may be credited against the payment of sales tax on building materials in another state.)
Prior to trial, the State Revenue Department agreed to refund $4,003.37, stating that the amount of $1,538.39 was due as sales tax on the cost of the raw materials withdrawn from its inventory and used in the manufacture of the roof slabs. Alabama Precast Products thereupon commenced the present action to recover the entire amount of sales taxes paid.
This appeal involves construction of Title 51, section 786(2)(j), Code of Alabama 1940 (§ 40-23-1(a)(10), Code 1975), which reads in pertinent part as follows:
"The term 'sale at retail' or 'retail sale' shall also mean and include the withdrawal, use or consumption of any tangible personal property by anyone who purchases same at wholesale, . . . except property which enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale and not for the personal and private use or consumption of any person so withdrawing, using or consuming the same . . . "
(The parties to this appeal have agreed that section 786(2)(j) is the only statute applicable to the facts of this case.)
It is the position of Alabama Precast Products that the compounding of raw materials to form the roof slabs according to the subcontract specifications did not constitute a "withdrawal" within the above quoted definition of a "sale at retail" or "retail sale" under subsection (j) because the materials became an ingredient of tangible personal property or products manufactured for sale to another, i. e., the roof slabs were sold "installed" to Daniel Construction Company. In other words, Alabama Precast Products contends that its subcontract with Daniel Construction Company, requiring Alabama Precast Products to "furnish and install" roof slabs is, in effect, two contracts in one a contract to sell the roof slabs to the construction company and a contract to supply services for...
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Melof v. Hunt
...the Alabama courts would be more than willing to recognize constitutional challenges under this provision. Cf. Alabama Precast Products, Inc. v. Boswell, 357 So.2d 985 (Ala.1978) (on appeal of mandamus proceeding for refund of sales taxes paid, merits of taxpayers' claims, including commerc......
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..." 'The withdrawal provision was first applied to an objecting taxpayer who transferred the goods to another in Alabama Precast Products, Inc. v. Boswell, 357 So.2d 985 (Ala.1978). Alabama Precast manufactured roof slabs both for sale at retail and for use in "furnish and install" contracts.......
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...The withdrawal provision was first applied to an objecting taxpayer who transferred the goods to another in Alabama Precast Products, Inc. v. Boswell, 357 So.2d 985 (Ala.1978). Alabama Precast manufactured roof slabs both for sale at retail and for use in "furnish and install" contracts. Th......