American Sign & Indicator Corp. v. City of Lake Charles

• Court: Court of Appeal of Louisiana
• Writing for the Court: HALL
• Citation: American Sign & Indicator Corp. v. City of Lake Charles, 320 So.2d 234 (La. App. 1975)
• Decision Date: 08 October 1975
• Docket Number: No. 5140,5140
• Parties: AMERICAN SIGN AND INDICATOR CORPORATION, Plaintiff-Appellant, v. CITY OF LAKE CHARLES, Louisiana, Defendant-Appellee.

Page 234

320 So.2d 234

AMERICAN SIGN AND INDICATOR CORPORATION, Plaintiff-Appellant, v. CITY OF LAKE CHARLES, Louisiana, Defendant-Appellee.

No. 5140.

Court of Appeal of Louisiana, Third Circuit.

Oct. 8, 1975.

John Sheldon Toomer, Lake Charles, for plaintiff-appellant.

Peter A. Ciambotti, Lake Charles, for defendant-appellee.

Before HOOD, DOMENGEAUX and HALL, JJ.

HALL, Judge.

Plaintiff, American Sign & Indicator Corporation, sued defendant, City of Lake Charles, seeking recovery of the sum of $3,849.61 allegedly owed by defendant for State, School Board and City sales taxes arising out of the performance of a contract for the construction by plaintiff of a large sign on defendant's Civic Center property. The City answered denying liability for payment of any sales taxes and reconvened against plaintiff for recovery of $769.92 in sales tax allegedly owed the City by plaintiff arising out of the same construction project.

After trial the district court, pursuant to well-reasoned written reasons for judgment, rendered judgment rejecting plaintiff's demands against the City and granting the City judgment for $379.82 against plaintiff. We affirm the decision of the district court.

The facts are disclosed by documents offered into evidence and by a stipulation between the parties.

On July 10, 1972, pursuant to public bids, plaintiff entered into a building or construction contract with the City whereby plaintiff agreed to provide and furnish all materials, equipment and labor to perform all work required to build, construct and complete a large, illuminated sign on the Civic Center property owned by the City in accordance with certain plans and specifications for a contract price of $76.992.16. The contract contains no provisions concerning sales taxes.

Construction was completed and the contract price was paid on June 7, 1973.

It is stipulated that of the contract price of $76,992.16, the sum of $39,010.25 is allocated to labor cost and to items on which all sales or use taxes have been paid, leaving a taxable amount of $37,981.91 on which sales taxes, if any are owed, should be computed. The amounts of taxes due, if any, are $1,139.46 state, $379.82 school board and $379.82 city.

It is further stipulated, and copies of the ordinances filed in evidence reflect, that the pertinent provisions of the local ordinances are the same as those of the state statute, LSA-R.S. 47:301 et seq., except as to the tax rate, the state being 3% And the local rates each being 1%.

It is further stipulated, and it is clear under the law, that the Civic Center sign constructed pursuant to the contract is immovable property and is not movable property. Industrial Outdoor Displays v. Reuter, 162 So.2d 160 (La.App.4th Cir. 1964), writ refused, 246 La. 348, 164 So.2d 352; LSA-C.C. Arts. 464, 467, 468.

LSA-R.S. 47:302, and the two local ordinances, levy a tax 'upon the sale at retail, the use, the consumption, the distribution, and the storage for use or consumption . . . of each item of or article of tangible personal property, as defined herein . . ..'

LSA-R.S. 47:301(16), and the two local ordinances, define 'tangible personal property' as follows:

"Tangible personal property' means and includes personal property which may be seen, weighed, measured, felt or touched, or is in any other manner perceptible to the senses. The term 'tangible personal property' shall not include stocks, bonds, notes, or other obligations or securities.'

The district court correctly held that the City, as owner under a contract for the construction of immovable property, is not liable for taxes imposed on the sale or use of tangible personal property, but that plaintiff, as contractor, is liable for taxes imposed on the materials used and consumed by it and incorporated in the immovable structure, to the extent that taxes have not previously been paid. The district court cited St. John the...