Buffelen Lumber & Mfg. Co. v. State
Decision Date | 07 December 1948 |
Docket Number | 30632. |
Court | Washington Supreme Court |
Parties | BUFFELEN LUMBER & MFG. CO. v. STATE. |
Department 2
Action by the Buffelen Lumber & Manufacturing Company against the State of Washington to recover back the amount of manufacturer's and occupation taxes collected by the defendant. Judgment for plaintiff, and defendant appeals.
Affirmed.
Appeal from Superior Court, Thurston County; D. F Wright, Judge.
Smith Troy, Max Kaminoff and William C. Klein, all of Olympia, for appellant.
McMicken Rupp & Schweppe and A. Vernon Stoneman, all of Seattle, for respondent.
W. E Heidinger and Oliver Malm, both of Tacoma, amici curiae.
The state of Washington appeals from a judgment of the superior court of Thurston county rendered in favor of the plaintiff.
For cause of action plaintiff alleged in its complaint that a substance known as 'hog fuel' is a waste product resulting from plaintiff's operations in producing plywood, doors, and other lumber products, and that plaintiff is not a manufacturer of 'hog fuel'; that the state tax commission has claimed that plaintiff has consumed this fuel to the value of $37,500, and has collected a tax known as a manufacturer's or business and occupation tax of one-quarter of one per cent, and a compensating tax of three per cent; further, that the collection of these taxes is without warrant in law.
The answer of the state denies that 'hog fuel' produced by plaintiff is a waste product, but asserts that plaintiff is a manufacturer thereof.
The appellant's assignments of error challenge the findings of fact that, respondent was not a manufacturer of hog fuel, and that as to the hog fuel respondent was not using an article produced for commercial use.
The respondent is primarily engaged in the business of manufacturing plywood and doors. As a natural result of processing at each stage from the log to finished product, various scraps are produced. These scraps are removed from the production line by means of conveyor belts and are then ground into small fragments in machines known as 'hogs.' There are several of these machines at various places in the plant. As the result of the grinding operations, the scraps are more easily handled, particularly at points where the conveyor system makes right angle turns. The belts lead to a collection point outside the main buildings where the various fragments are deposited. A portion of this material known as 'hog fuel' or 'hogged fuel,' is burned under the plant boilers, and the remainder is piled up outside where it is sold or hauled away by truck to a disposal area and never used. Only that part of the fuel that is consumed by respondent under its boilers is in issue here. There is no dispute between the parties as to the facts or the amount involved.
As indicated in the pleadings, there are two taxes in issue here--a manufacturer's tax and a compensating tax. In this case we are called upon to interpret the two taxing statutes. In interpreting those statutes, we are confronted at once by the general canon of construing legislative acts, which requires an ascertainment of the legislative intent.
Judicial power is never exercised for the purpose of giving effect to the will of the courts, but always for the purpose of giving effect to the will and intent of the legislature; or, in other words, to the will of the law. The intent of the legislature in enacting a law must be gleaned from the wording of the statute itself. State ex rel. Port of Seattle v. Department of Public Service, 1 Wash.2d 102, 95 P.2d 1007.
It must be borne in mind that if there is any doubt as to the meaning of a taxing statute, it must be construed most strongly against the taxing power in favor of the citizen. Weyerhaeuser Co. v. Henneford, 185 Wash. 46, 53 P.2d 308.
Of course, if the statute is plain and unambiguous, then there is no room for construction, and the rule will not apply. Ernst v. Kootros, 196 Wash. 138, 82 P.2d 126.
The pertinent portions of the law imposing a tax on manufacturers are:
'( l) The term 'commercial use' means the following uses of products by the extractor or manufacturer thereof:
'(1) Manufacturing of articles, substances or commodities from extracted products;
'(2) Leasing or renting of extracted or manufactured products;
'(3) Consigning, shipping or transferring extracted or manufactured products to another either without consideration or in the performance of contracts;
'(4) Any other use of products extracted or manufactured on a commercial scale under such rules and regulations as the Tax Commission shall prescribe'. Rem.Supp.1945, § 8370-5.
Before respondent may be taxed as here attempted, it must appear that it was engaged in the manufacture of hog fuel.
Seeberger v. Castro, 153 U.S. 32, 14 S.Ct. 766, 38 L.Ed. 624, indicates the path to be followed in this case. That case is so much in point that we deem it necessary to state the facts upon which it was based, and set out a liberal quotation from the opinion. The facts were:
'The Rayner & Baxter Cigar Company imported the tobacco in question, which consisted of 'clippings from the ends of cigars, and pieces broken from the tobacco of which cigars are manufactured, in the process of such manufacture, the said clippings and pieces not being fit for any use in the condition in which the same are imported, and their only use being to be manufactured into cigarettes and smoking tobacco.' The collector assessed upon the tobacco a duty of 40 cents per pound, under [Rev.Stat.] § 2502 [ ], which took effect on March 3, 1883, including it within the terms of the fifth paragraph of Schedule F of that act, which reads as follows: 'Tobacco, manufactured, of all descriptions, and stem tobacco, not specially enumerated or provided for in this act, forty cents per pound.''
After calling attention to an opinion of the attorney general and two Federal court cases, the supreme court stated:
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