Bemis Bro. Bag Co. v. Louisiana Tax Commission
| Decision Date | 02 March 1925 |
| Docket Number | 26286 |
| Citation | 103 So. 337,158 La. 1 |
| Court | Louisiana Supreme Court |
| Parties | BEMIS BRO. BAG CO. v. LOUISIANA TAX COMMISSION et al |
Appeal from Civil District Court, Parish of Orleans; Hugh C. Cage Judge.
Suit by the Bemis Bro. Bag Company against the Louisiana Tax Commission and others. From a judgment for the defendants plaintiff appeals.
Affirmed.
Carroll & Carroll, Henry G. McCall, and Azzo J. Plough, all of New Orleans, for appellant.
Catesby Jones, Asst. City Atty., of New Orleans, for appellees.
H. P Sneed, of New Orleans, for Louisiana Tax Commission and State Tax Collector.
Nat. D. Cooke, of New Orleans, for Board of Assessors.
The Bemis Bro. Bag Company is a foreign corporation, organized under the laws of the state of Missouri, with its legal domicile in the city of St. Louis, and with its financial headquarters in the city of Boston, Mass.
Said company is engaged in the business of importing burlap, and in the manufacture and sale of burlap and cotton bags, and owns and operates factories in New Orleans, St. Louis, Memphis, and other cities, and cotton mills in Indianapolis, St. Louis, and Jackson, Tenn. Said company seeks in the present suit to have canceled and annulled, on various grounds, and assessment of $ 425,500 made against it on credits for the year 1921, or, in the alternative, to have said assessment reduced by the sum of $ 291,600.
The item of $ 425,500 consists of $ 133,899.10, accounts receivable from debtors in the state of Louisiana, and of $ 291,600.90, accounts receivable from debtors outside of the state.
Plaintiff corporation is domiciled and doing business in the city of New Orleans, where it maintains a local office, and manufactures and sells its product for cash and on credit to customers within and without the state.
The New Orleans branch of plaintiff company manufactures its product, sells it, keeps the accounts of such sales, sends out the invoices, receives the remittances, and deposits these remittances in a New Orleans bank, without any distinction as to sales made to customers in and outside of the state.
Against this common fund the local manager draws daily checks for the amount of sales made to buyers in other states. These checks are forwarded to a New York bank, with instructions to place said checks to the credit of the financial office in Boston, to be handled through drafts from that office.
Under this state of facts, it is evident that all of the taxable credits in this case arise from sales made and completed in the city of New Orleans, or from business done in this state. Plaintiff company was allowed to offset its gross credits by the amount of debits, or bills and accounts payable, under the provisions of Act 24, Extra Session of 1918.
Plaintiff company has an authorized agent in the city of New Orleans on whom process can be served, and has complied with the laws of Louisiana permitting foreign corporations to do business in the state.
When plaintiff company established its domicile here and began to do business in the state of Louisiana, its person, its property, and its business became subject to the jurisdiction of this state and consequently subject to its taxing power. General Electric Co. v. Assessors, 121 La. 116, 46 So. 122; National Fire Insurance Co. v. Assessor, 121 La. 108, 46 So. 117, 126 Am. St. Rep. 313; L. & L. & G. Ins. Co. v. Assessors, 122 La. 98, 47 So. 415;L. & L. & G. Ins. Co. v. Assessor, 221 U.S. 346, 31 S.Ct. 550, 55 L.Ed. 762, L. R. A. 1915C, 903; Orient Insurance Co. v. Assessor, 221 U.S. 358, 31 S.Ct. 554, 55 L.Ed. 769.
The contention of plaintiff company that the credits arising from sales made in the state to customers outside of the state are not subject to taxation, because such credits are of a transitory character and without a permanent situs within the state, is not well founded in our opinion. Such contention is not sustained by the case of Bowman-Hicks Lumber Co. v. Cole, Assessor, 151 La. 303, 91 So. 744, in which the assessments were set aside for the sole reason that the credits there involved did not arise from business done in this state. While the shipments of lumber in that case were made from plaintiff's mills located in this state, the sales were made and completed in Kansas City at plaintiff's actual domicile. The case of General Electric Co. v. Board of Assessors, 121 La. 116, 46 So. 122, is expressly approved in the Bowman-Hicks Lumber Company Case.
The credits in the present case arose from business done in the state by said company, and the bills receivable were received in the state and deposited in bank here, in common with credits arising from sales to local buyers. The subsequent remittance by plaintiff company of the evidence of such credits to a bank in New York is immaterial.
Bertron, Griscom & Jenks v. City of New Orleans, 131 La. 73, 59 So. 19.
2. The credits in this case were subject to assessment under section 7 of Act 170 of 1898, Act 15, Extra Session of 1917, and under the provisions of Act 24, Extra Session of 1918.
Plaintiff company has attacked the constitutionality of Act 15, Extra Session of 1917, on the ground that said act has more than one object, in contravention of article 31 of the Constitutions of 1898 and of 1913, providing that no law shall embrace more than one object, and on the further ground that said act is in violation of article 225 of the Constitutions of 1898 and of 1913, requiring that all taxation shall be equal and uniform, because of the exemption of insurance companies from the provision of said act. The constitutionality of Act 24, Extra Session of 1918, is assailed on the last ground above mentioned, as banks and trust companies are exempted from its operation, as to assessment.
Section 7 of Act 170 of 1898 provides:
The first paragraph of said article expressly includes within the operation of the act, "Every insurance company doing business in this state."
In interpreting the scope of section 7 of Act 170 of 1898, the Supreme Court of this state held, in National Fire Insurance Co. v. Board of Assessors, 121 La. 108, 46 So. 117, 126 Am. St. Rep. 313, that its provisions applied to persons, firms, companies, associations and corporations, irrespective of what may be the character of their business, and especially to insurance companies.
Act 15, Extra Session of 1917, is an act to provide for the levying of an assessment on all of the property of nonresident persons, firms, corporations, partnerships, associations or companies doing business in the state of Louisiana. The class of property defined in said act is credits, and it is expressly provided in section 1 of said act that this class of property of nonresidents is subject to assessment and taxation in the same manner as all other property in the state of Louisiana. Section 2 of said act declares:
"That the notes, judgments, accounts and credits of such nonresident persons, firms, corporations, partnerships, associations, or companies doing business in the state of Louisiana, originating from the business done in this state, be and the same is hereby declared to be property with its situs within this state, and subject to taxation at the business domicile in this state of the said nonresident person, firm, corporation, partnership, association, or company, or their business agent or representative, under the same rules and in the same manner that property of a like nature is assessed and taxed within the state of Louisiana," i. e., in accordance with section 7 of Act 170 of 1898, the only law in force on the subject at the date of the adoption of said act.
Section 3 of Act 15, Extra Session of 1917, provides:
"That all laws and parts of laws in conflict herewith be and the same are hereby repealed, but nothing herein shall effect [affect] the law now in force with reference to the levying, assessing and collecting of taxes from fire, life or other insurance companies."
The law then in force as to insurance companies was section 7 of Act 170 of 1898. Therefore, Act 15, Extra Session of 1917, does not provide a different law for levying, assessing, and collecting taxes from nonresident insurance companies than from other nonresidents.
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