Fontenot v. S. E. W. Oil Corp.
| Decision Date | 06 May 1957 |
| Docket Number | No. 42913,42913 |
| Citation | 95 So.2d 638,232 La. 1011 |
| Parties | Rufus W. FONTENOT, Collector of Revenue, State of Louisiana, v. S.E.W. OIL CORPORATION. |
| Court | Louisiana Supreme Court |
Robert L. Roland, Levi A. Himes and Chapman L. Sanford, Baton Rouge, for appellant.
Wilkinson, Lewis, Wilkinson & Madison, Shreveport, for appellee.
On this appeal the Collector of Revenue for the State of Louisiana seeks to have set aside the ruling of the State Board of Tax Appeals, as well as the judgment of the district court affirming it, which disapproved an assessment of a 'use' tax levied (under LRS 47:301 et seq., entitled Sales Tax) against the defendant corporation on an oil drilling rig brought into this state from Texas.
The controversy was tried on a stipulation of facts reflecting that in 1953 the S.E.W. Oil Corporation was the owner of the drilling rig which it had been using for sometime in the State of Texas. In May of that year it moved the used rig into Louisiana for the purpose of drilling on a lease that it owned; and on June 22, 1954 the Collector caused the mentioned assessment of $6,422.85 to issue against the corporation, this being composed of a 'use' tax of $4,902.95, penalty of $1,225.73, and interest of June 20, 1954 of $294.17. The amount of the tax was computed at 2% Of $245,147.50, the purchase or cost price of the drilling rig when new. The corporation denied owing that amount, but it offered to pay a 2% Tax based on the original cost less depreciation, stipulated to be $164,413.85.
Subsequent negotiations between the parties failed to produce an agreement, and the corporation filed a petition with the State Board of Tax Appeals wherein the above recited facts were set out. It prayed that 'the total amount of the assessment should be reduced to two (2%) percent of the value of the property at the time it was moved into Louisiana, being $164,413.85, or $3288.28.'
The Board ruled in favor of the corporation, holding that the 2% Tax was payable only on the value of the property when it was brought into Louisiana, not on its original cost or purchase price. As indicated above, the district court (in a proceeding instituted there) affirmed that ruling; and from the judgment the Collector is prosecuting this appeal.
The defendant corporation does not dispute the applicability here of the provisions of LRS 47:301 et seq. (entitled Sales Tax). It concedes that a 'use' tax is due on the drilling rig, and it questions only the base employed by the Collector for computing the tax. Therefore, the sole issue presented for our determination is whether (assuming the applicability of the statute) the tax should be computed on the original purchase or cost price of the property or on its value at the time it was brought into Louisiana.
In support of his contention that the 2% 'use' tax is to be computed on the original purchase or cost price of the drilling rig, regardless of the value of that article when imported into Louisiana, the Collector invokes the following provisions of the statute in question:
'(2) At the rate of two per centum (2%) of the cost price of each item or article of tangible personal property when the same is not sold but is used, consumed, distributed, or stored for use or consumption in this state; provided there shall be no duplication of the tax.
'As used in this Chapter, the following words, terms and phrases have the meaning ascribed to them in this Section, except when the context clearly indicates a different meaning:
'(3) 'Cost price' means the actual cost of the articles of tangible personal property without any deductions therefrom on account of the cost of materials used, labor or service cost, transportation charges or any other expenses whatsoever.'
The Collector insists that the Board of Tax Appeals and the district court erred when interpreting these provisions (in the interpretation they were aided by other language of the statute) to mean that '* * * upon importation into Louisiana for use, the cost to be considered for purposes of assessment would be the cost less depreciation, i.e., the value of the tangible personal property computed as of the time of entry thereof into Louisiana, * * *.' He argues that such provisions are plain and unambiguous and that, therefore, no interpretation of them...
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