Downs v. Dunn

• Decision Date: 29 November 1926
• Docket Number: 27770
• Citation: 162 La. 747,111 So. 82
• Court: Louisiana Supreme Court
• Parties: DOWNS, Tax Collector, v. DUNN

111 So. 82

162 La. 747

DOWNS, Tax Collector, v. DUNN

No. 27770

Supreme Court of Louisiana

November 29, 1926

Rehearing Denied January 3, 1927

Appeal from Ninth Judicial District Court, Parish of Rapides; R. C Culpepper, Judge.

Suit by U. T. Downs, Tax Collector, against John W. Dunn. Judgment for defendant, and plaintiff appeals.

Affirmed.

Isaac Wahlder, of Alexandria, for appellant.

T. A Carter, of Alexandria, for appellee. Harry P. Sneed, of New Orleans, for Louisiana Manufacturers' Ass'n, amicus curiae.

O'NIELL, C. J. OVERTON,J., ST. PAUL, J., dissents.

OPINION

O'NIELL, C. J.

This is a suit to collect a license tax of $ 50, being the minimum annual license tax levied on wholesale dealers in merchandise, by the Act 205 of 1924, § 7, p. 377. The defendant is engaged in the coffee business. He buys green coffee in large quantities, roasts and grinds it, mixes it with chicory, puts up the finished product in packages of convenient size for the trade, and sells it to retailers. It is admitted that his business is that of a manufacturer, selling only the product of his factory. It is admitted also that, if the defendant were not a manufacturer, he would be deemed a wholesale dealer according to the definition in the last paragraph of the seventh section of the statute (page 378), because he sells his merchandise only in the original or unbroken packages and only to dealers for resale. His defense is that his business, being that of a manufacturer, is exempt from a license tax by the terms of the exemption in the twenty-fifth section of the act (page 422), viz.:

"That any other business not provided for in this act, and not otherwise provided for by separate law, except manufacturing, shall be graded the same as above set forth, and shall pay a license as fixed in this section."

The district court ruled that manufacturers were exempt from license taxes, by the terms of the statute, and rejected the tax collector's demand. He has appealed from the decision.

By article 229 of the Constitution of 1898 and the corresponding article of the Constitution of 1913, the Legislature was forbidden to levy a license tax on "manufacturers other than those of distilled, alcoholic or malt liquors, tobacco, cigars, and cotton seed oil," viz.:

"Art. 229. The General Assembly may levy a license tax, and in such case shall graduate the amount of such tax to be collected from the persons pursuing the several trades, professions, vocations, and callings. All persons, associations of persons and corporations pursuing any trade, profession, business or calling, may be rendered liable to such tax, except clerks, laborers, clergymen, school teachers, those engaged in mechanical, agricultural, horticultural, and mining pursuits, and manufacturers other than those of distilled, alcoholic or malt liquors, tobacco, cigars, and cotton seed oil."

Therefore, in the first statute levying license taxes under the Constitution of 1898 (Act 171 of 1898), the Legislature, in the third section of the statute, levied a graduated license tax "on each business of manufacturing subject to license under article 229, of the Constitution," meaning, of course, on manufacturers of distilled alcoholic or malt liquors, and manufacturers of tobacco and cigars and of cotton seed oil. And, in the eleventh section of the statute, a graduated license tax was levied specifically on distillers of alcoholic or malt liquors, brewers of malt liquors, manufacturers of tobacco, cigars and cigarettes, and manufacturers of cotton seed oil. Other manufacturers were not, by the terms of the statute, declared exempt but the license tax on manufacturers was levied, specifically, only on those who were not exempted by article 229 of the Constitution.

By the Constitution of 1921, art. 10, § 8, p. 84, the prohibition against levying license taxes on manufacturers was abolished, thus:

"Sec. 8. License taxes may be levied on such classes of persons, associations of persons and corporations pursuing any trade, business, occupation, vocation or profession, as the Legislature may deem proper, except clerks, laborers, ministers of religion, school teachers, graduated trained nurses, those engaged in mechanical, agricultural, or horticultural pursuits or in operating sawmills."

Although the Legislature was thus permitted to levy license taxes on manufacturers, they were not mentioned at all in the new statute (Act 205 of 1924), levying license taxes pursuant to the new Constitution, except in the exempting clause in the twenty-fifth section, p. 422, which we have quoted. It is argued on behalf of the appellant that this exempting clause in the twenty-fifth section of the statute does not, in terms, declare that manufacturers are exempt from license taxes, but merely declares that license taxes on manufacturers shall not be graded as the other businesses are graded in the twenty-fifth section. On the contrary, the exempting clause declares that any other business, not provided for in that or any other statute except manufacturers, shall be graded the same as the license taxes levied by that section, and shall pay the same license taxes that are fixed in that section. That is the same as to say that the business of a manufacturer is not included among those other businesses, not provided for in the statute, which shall be graded as the license tax is graded in the twenty-fifth section and pay the license tax fixed in that section. The consequence is that no license tax has been levied on manufacturers. The definition of wholesale dealers and of retail dealers, in the last paragraph of the seventh section of the act (page 378) is given merely to distinguish the wholesale from the retail dealers, because the rate of license taxes levied on wholesale dealers, in the seventh section, is not the same as is levied on retail dealers, in the eighth section. If the Legislature had intended that manufacturers should be classed either as wholesale or retail dealers, depending upon whether they sold their merchandise only in the original unbroken packages and only to dealers for resale or sold in less quantities than the original unbroken packages, there would have been no reason whatever for inserting the clause in the twenty-fifth section, exempting manufacturers from license taxes. It is well settled that a manufacturer who sells only the articles which he manufacturers, if exempted from the payment of license taxes as a manufacturer, is not required to pay the license tax levied on wholesale or retail dealers, eo nomine. Ballard, Tax Collector, v. Hammond Coca-Cola Bottling Co., 147 La. 580, 85 So. 597; Ballard, Tax Collector, v. Kentwood Ice Manufacturing & Bottling Works, 147 La. 583, 85 So. 598; State v. Lanasa, 151 La. 706, 92 So. 306; State v. Transmission Machinery Co., 157 La. 827, 103 So. 180. The reason for that is that there would be no encouragement or advantage in the exemption of manufacturers from license taxation as manufacturers if they could not dispose of the products of their factories without paying the license taxes levied on dealers, either wholesale or retail. The judgment appealed from is correct.

The question has arisen in this case -- as it must arise and be determined in every case where the amount of the license tax in contest does not exceed $ 2,000 -- whether this court has jurisdiction ratione materiae. The fifth paragraph of the tenth section of article 7 of the Constitution, defining the jurisdiction of the Supreme Court, declares:

"It shall have appellate jurisdiction in all cases wherein the constitutionality or legality of any tax, local improvement assessment, toll or impost levied by the state, or by any parish, municipality, board, or subdivision of the state is contested, or where the legality, or constitutionality of any fine, forfeiture, or penalty imposed by a parish, municipal corporation, board, or subdivision of the state shall be in contest, whatever may be the amount thereof," etc.

It is plain, therefore, that this court has jurisdiction, not only over questions of constitutionality, but over all questions of legality, of a license tax levied or claimed as being levied by the state on any specified business, trade, profession, or calling, regardless of the amount of the tax in contest.

"Where judicial interpretation of a tax statute is necessary to determine whether or not the tax as demanded is imposed by law, the question of legality vel non of the tax is raised, and the appeal taken may be to this court only." State v. Rosenstream; Weiss & Co., 52 La.Ann. 2126, 28 So. 294, citing many such decisions; State v. Orfila, 116 La. 972, 41 So. 227; State v. Wenar, 118 La. 141, 42 So. 726.

This court has not appellate jurisdiction over a suit to collect a license tax that does not exceed $ 2,000 in amount if the defendant does not dispute that the tax claimed has been legally levied upon the specified business, trade profession, or calling, but defends on the ground merely that he is not engaged in the specified business, trade, profession or calling, or on the ground that he has not done the volume of business necessary to subject him to the tax, or that his business, trade, profession or calling is not within the grade or classification on which the tax is levied. In such case the only matter in dispute is whether the individual defendant owes the amount, either in whole or in part, of the license tax that has been levied on the specified business, trade, profession or calling; but, in such case, the legality of the tax, so far as it has been levied on the specified business, trade, profession or calling, is not in contest. But, when it is disputed, as in this case, that the tax has been legally levied, or levied at all, on the...