Am. Mills Co v. Doyal

• Decision Date: 07 January 1933
• Docket Number: No. 22297.,22297.
• Citation: 167 S.E. 312,46 Ga.App. 236
• Parties: AMERICAN MILLS CO. v. DOYAL, State Tax Com'r.
• Court: Georgia Court of Appeals

46 Ga.App. 236

167 S.E. 312

AMERICAN MILLS CO.

v.DOYAL, State Tax Com'r.

No. 22297.

Court of Appeals of Georgia, Division No. 2.

Jan. 7, 1933.

Syllabus by Editorial Staff.

Error from Superior Court, Fulton County; E. D. Thomas, Judge.

Action by the American Mills Company against P. H. Doyal, State Tax Commissioner. Judgment was entered dismissing the petition, and plaintiff brings error.

Reversed.

Transferred from the Supreme Court, 174 Ga. 631, 163 S. E. 603.

Herbert J. Haas and Bertram S. Boley, both of Atlanta, for plaintiff in error.

J. A. Smith, of Atlanta, Geo. M. Napier, Atty. Gen., and W. K. Meadow, Asst. Atty. Gen., for defendant in error.

Syllabus Opinion by the Court.

SUTTON, J.

This case was transferred to this court by the Supreme Court. 174 Ga. 631, 163 S. E. 603. The American Mills Company, a Georgia corporation, engaged in business as wholesalers, jobbers, and brokers of certain articles of merchandise, brought suit against the state tax commissioner for a refund of taxes collected from it under the Sales Tax Act of August 29, 1929 (Ga. Laws 1929, p. 103). The petition, as amended, alleges that petitioner transacts both intrastate and interstate business; that a tax was paid on the business transacted within the slate and no claim for refund with respect to this has been filed; that petitioner paid taxes on business transacted outside the state from October, 1929, to December, 1930; that business transacted outside the state constitutes business done in interstate commerce; that all taxes levied on gross receipts derived from business transacted outside the state are a burden on interstate commerce; that petitioner is entitled to a refund of taxes paid on business transacted in interstate commerce, which refund defendant declined to make; and that an appeal to the state tax board was denied. The defendant demurred to the petition. In passing upon the demurrer the court considered an agreed statement of facts in which it appeared that the business transacted by the plaintiff outside this state was transacted through agents who solicited the business and mailed their orders to the plaintiff, who filled these orders from its warehouses located in this state. The court sustained the de murrer, and to this judgment the plaintiff excepted. Held:

1. Where the contract is for the sale of an article and for its delivery to the buyer in another state, the transaction is one of interstate commerce. Addyston, etc., Co. v. U. S., 175 U. S. 211, 246, 20 S. Ct. 96, 44 L. Ed. 136; Shafer v. Farmers' Grain Co., 268 U. S. 189, 45 S. Ct. 481, 69 L. Ed. 909; Heyman v. Hays, 236 U. S. 178, 35 S. Ct. 403, 59 L. Ed. 527; Crew Levick Co. v. Pennsylvania, 245 U. S. 292, 296, 38 S. Ct. 126, 62 L. Ed. 295; American Express Co. v. Iowa, 196 U. S. 133, 25 S. Ct. 182, 49 L. Ed. 417; Pennsylvania R. Co. v. Sonman, etc., Co., 242 U. S. 120, 37 S. Ct. 46, 61 L. Ed. 188; American Manufacturing Co. v. St. Louis, Mo. (C. C. A.) 296 F. 899, 900; Kehrer v. Stewart, 117 Ga. 969 (3), 44 S. E. 854. Interstate commerce consists of intercourse and traffic between the citizens or inhabitants of different states, and includes the purchase, sale, and exchange of commodities. Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 203, 5 S. Ct. 826, 29 L. Ed. 158; Kidd v. Pearson, 128 U. S. 1, 20, 9 S. Ct 6, 32 L. Ed. 346.

2. It is a burden on interstate commerce for a state to lay a tax on the proceeds of interstate commerce, and a tax by a state upon the gross receipts of goods sold in interstate commerce is a tax on interstate commerce, and is contrary to the Federal Constitution (Const. U. S. art. 1, § 8, cl. 3). Civil Code 1910, § 6644(3); State Freight Tax Case, 15 Wall. 232, 276, 277, 21 L. Ed. 146; Fargo v. Michigan, 121 U. S. 230, 244, 7 S. Ct. 857, 30 L. Ed. 888; McCall v. California, 136 U. S. 104, 109, 10 S. Ct. 881, 34 L. Ed. 392; Crew Levick Co. v. Pennsylvania, supra; New Jersey Bell Telephone Co. v. State Board of Taxes and Assessments of the State of New Jersey, 280 U. S. 338, 50 S. Ct. 111, 74 L. Ed. 463; Hope Natural Gas Co. v. Hall, 274 U. S. 284, 47 S. Ct. 639, 71 L. Ed. 1049; and see City of Atlanta v. York Manufacturing Co., 155 Ga. 33 (1), 116 S. E. 195.

3. In the instant case the Sales Tax Act under which this tax was collected from the plaintiff specifically provides that: "There shall be excepted from the receipts of all persons * * * taxed under this Act any amount that may be derived from the business or income of any such person or companies as the State of Georgia is prohibited from taxing under the constitution of the United States of America." Ga. Laws 1929, pp. 103, 107, § 7. While the tax laid on the gross sales of this company was proper so far as its intrastate business was concerned (Lehigh Valley R. Co. v. Pennsylvania, 145 U. S. 200, 12 S. Ct. 806,.36 L. Ed. 672; ...