Ga. Paper Stock Co v. State Tax Bd. Of Ga.

• Decision Date: 13 May 1932
• Docket Number: No. 8551.,8551.
• Citation: 164 S.E. 197,174 Ga. 816
• Parties: GEORGIA PAPER STOCK CO. v. STATE TAX BOARD OF GEORGIA et al.
• Court: Georgia Supreme Court

174 Ga. 816

164 S.E. 197

GEORGIA PAPER STOCK CO.

v.STATE TAX BOARD OF GEORGIA et al.

No. 8551.

Supreme Court of Georgia.

May 13, 1932.

Syllabus by the Court.

1. The act of 1929 (Ga. Laws 1929, p. 103) provides for the raising of public revenue by a tax upon the privilege of engaging in certain occupations and by a tax upon certain business and commercial transactions and enterprises; and for the ascertainment and assessment and collection of such taxes, etc. By section 3 of that act is imposed on "every person engaging or continuing within this State in the business of manufacturing, compounding, or preparing for sale, profit, or use any article, substance or substances, commodity or commodities, the amount of such tax to be equal to the value of the articles manufactured, compounded, or prepared for sale, * * * a tax of one half of one mill on the dollar thereof." Section 7 provides: "Upon every person engaged or continuing within this State in any and every business not included in the preceding sections there is levied and shall be collected a tax equal to two mills on the dollar of the gross receipts of any such business." The plaintiff was engaged in purchasing raw material known as "waste paper, assorting, classifying, cleaning and baling, and putting the same in condition for sale as 'paper stock' and known to the trade as such." The state tax commissioner and the state tax board classified the business as falling under section 7 of the sales tax act, supra. The superior court upheld this classification. Held, that this was error. The classification should have been under section 3.

2. The court erred in upholding the classification of the state tax commissioner and the state tax board.

ATKINSON, J., dissenting.

Error from Superior Court, Pulton County; John D. Humphries, Judge.

Petition for injunction by the Georgia Paper Stock Company against the State Tax Board of Georgia and another. Judgment for defendants, and plaintiff brings error.

Reversed.

The plaintiff brought a petition for injunction against the members of the state tax board and the tax commissioner of Georgia. The judge heard the case on an agreed statement of facts, as follows: "Petitioner is a corporation organized under the laws of Georgia, with its place of business in Atlanta, Ga. Within the time provided by law, petitioner filed its gross-receipts (general sales) tax-return for the period beginning October 1, and ending December 31, 1929, and paid the taxes under the classification of 'manufacturing or preparing for sale' to wit, $21.34. * * * Subsequently the State tax-commissioner proposed a reassessment against petitioner, said reassessment being for the amount of $61.65, leaving an additional tax claimed to be due by said petitioner of $40.31. The petitioner held a conference with the State tax-commissioner, and the said tax-commissioner overruled the contention of the petitioner that said petitioner was entitled to pay the tax under the classification of 'manufacturing or preparing for sale.' Petitioner then, within thirty days after said notice, filed an appeal to the State Tax Board, on which appeal a hearing was held before said board, and said board decided adversely to the petitioner. The petitioner's business consists of purchasing raw material known to the trade as 'waste paper, ' assorting, classifying, cleaning and baling, and putting the same in condition for sale as 'paper stock, ' and being known to the trade as such. The processes used by the petitioner include the use both of hand labor and machinery in an organized and ordered routine through regular processes. The machinery used consists primarily of the conveyers used for shaking and cleaning, and presses used for baling. The assorting is done by chemical processes and hand labor. The average cost of the waste paper purchased by the petitioner is approximately $6 • per ton, and the average cost of the processes used by the petitioner in conditioning the stock for sale as paper stock amounts to approximately $6 per ton. After the paper has been thus assorted, cleaned, and baled, it is sold to the paper manufacturers as paper stock to be used in manufacturing paper for the retail and jobbing trade; and in so far as the paper manufacturer is concerned, this stock is its (the paper manufacturer's) raw material. The company employs a traveling salesman, buys its goods in small quantities, and sells in large quantities to paper mills."

Injunction was denied, and the plaintiff excepted.

Jones, Puller, Russell & Clapp, of Atlanta, for plaintiff in error.

John A. Smith, of Talbatton, C. N. Davie, J. F. Kemp, L. S. Camp, P. H. Doyal, and

R. O. Norman, all of Atlanta, Geo. M. Napier, Atty. Gen., and T. R. Gress, Asst. Atty. Gen., for defendants in error.

HILL, J. (after stating the foregoing facts).

The Legislature of this state in 1929 (Ga. Laws 1929, p. 103) passed an act providing for the raising of public revenue by a tax upon the privilege of engaging in certain occupations, and by a tax upon certain business and commercial transactions and enterprises, etc. By section 3 of the act is imposed "upon every person engaging or continuing within...