Atlas Supply Co v. Maxwell
Decision Date | 15 December 1937 |
Docket Number | No. 459.,459. |
Citation | 212 N.C. 624,194 S.E. 117 |
Court | North Carolina Supreme Court |
Parties | ATLAS SUPPLY CO. et al. v. MAXWELL, Commissioner. |
Appeal from Superior Court, Wake County; N. A. Sinclair, Judge.
Proceeding under the Declaratory Judgment Act by the Atlas Supply Company and others against A. J. Maxwell, Commissioner. From the judgment, plaintiffs appeal.
Affirmed.
Proceeding under Declaratory Judgment Act, chapter 102, Public Laws 1931, to determine validity of regulation promulgated by Commissioner of Revenue under sales tax provisions of Emergency Revenue Act of 1937 (Pub.Laws 1937, c. 127, § 400 et seq.), effective July 1, 1937, as applied to certain transactions or types of business carried on by the plaintiffs.
The plaintiffs are local dealers in heating and plumbing equipment, materials, and supplies, and, as such, are engaged in selling their wares and merchandise (1) to merchants for resale, and (2) to plumbing and heating contractors to be used by them locally in erecting, constructing, improving, altering, or repairing, plumbing and heating systems in buildings and structures of various kinds under lump-sum contracts.
The precise question submitted to the court for decision is whether the second class of sales made by plaintiffs to plumbing and heating contractors to be used by them in fulfilling lump-sum contracts is subject to the 3 per cent. sales tax.
The trial court held that, upon the facts agreed and appearing of record, the sales in question were subject to the 3 per cent. tax, and from this ruling, plaintiffs appeal, assigning errors.
Ehringhaus, Royall, Gosney & Smith, of Raleigh, for appellants.
A. A. F. Seawell, Atty. Gen., and Harry McMullan and T. W. Bruton, Asst. Attys. Gen., for appellee.
Under the Emergency Revenue Act of 1937, article 5, Schedule E, of chapter 127, section 400 et seq., Public Laws 1937, "wholesale" and "retail" merchants are required to pay a sales tax, as a license or privilege tax, upon the sale within this state of tangible personal property; the rate upon sales at wholesale being one-twentieth of 1 per cent。 and the rate upon sales at retail being 3 per cent. of the value of the merchandise sold.
It is further provided in the act that "the sale of any article of merchandise by any 'wholesale merchant' to any one other than a merchant for resale" shall be taxable at the retail rate, and the Commissioner of Revenue is authorized to promulgate appropriate regulations defining transactions carrying the different rates. Section 405.
Pursuant to this statutory authority, the Commissioner of Revenue has issued a regulation classifying the transactions here in question as subject to the retail rate. The correctness of this regulation is challenged by the plaintiffs. They contend that the transactions should be denominated sales at wholesale, and, therefore, entitled to the lesser rate.
The act contains its own glossary or definition of terms. Section 404. The pertinent ones follow:
(1) The words "wholesale merchant" shall mean every person who engages in the business of buying any articles of commerce and selling same to merchants for resale.
(2) The words "retail merchant" shall mean every person who engages in the business of buying or acquiring, by consignment or otherwise, any article of commerce and selling same at retail.
(3) The word "merchant" shall include any individual, firm or corporation, domestic or foreign, estate or trust, subject to the tax herein imposed.
(4) The word "retail" shall mean the sale of any article of commerce in any quantity or quantities for any use or purpose on the part of the purchaser other than for resale.
(5) The word "sale" shall mean any transfer of the ownership or title of tangible personal property for any kind of consideration, regardless of the name that may be given to such transaction.
It may be conceded that plaintiffs are "wholesale merchants" within the meaning of the act in question, and that sales made by them to merchants for resale are properly taxable at the wholesale rate. And there is no denial that, ordinarily, heating and plumbing contractors are not regarded as merchants. It is the contention of the plaintiffs, however, that under the definition of the word "sale, " as "any transfer of the ownership or title of tangible personal property, " such...
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