General Refining & Producing Co. v. Davidson County

• Decision Date: 20 March 1918
• Citation: 201 S.W. 737
• Court: Tennessee Supreme Court
• Parties: GENERAL REFINING & PRODUCING CO. v. DAVIDSON COUNTY et al.

Page 737

201 S.W. 737

GENERAL REFINING & PRODUCING CO. v. DAVIDSON COUNTY et al.

Supreme Court of Tennessee.

March 20, 1918.

Appeal from Chancery Court, Davidson County; Jas. B. Newman, Chancellor.

Bill for injunction by the General Refining & Producing Company against Davidson County and others. From a decree of dismissal, complainant appeals. Reversed, and injunction granted.

Douglas & Norvel, of Nashville, for General Refining & Producing Co. M. P. O'Connor and Norman Farrell, Jr., both of Nashville, for Davidson County and others.

LANSDEN, J.

The bill in this case was filed to enjoin Davidson county from proceeding to collect a privilege tax from the complainant and to recover back a privilege tax of like amount which it had paid to the state under protest. The Chancellor held that complainant was liable for the tax under consideration and dismissed its bill. It appealed to this court and has assigned errors.

We take the following statement of the facts of the case, together with the reasons assigned in support of the claim against complainant, from the brief of defendant's learned counsel:

"The appellant is engaged in manufacturing and refining petroleum and its by-products in Nashville. It maintains storage tanks in which the manufactured product is stored until sold. It sells its product at the refiner's price, not at the retailer's price.

"The only question presented in the record is: Is appellant liable for the privilege tax imposed by the Revenue Act of 1915?

"That act, so far as it is applicable to this controversy, reads as follows:

"`Coal Oil, Illuminating Oil, or Lubricating Oil, or Petroleum Products.

"`Each and every person, firm, partnership, corporation, or local agent having oil depots, storage tanks, or warehouses for the purpose of selling, delivering or distributing oil of any description, * * * shall pay a privilege tax as follows:

"`In cities, towns or taxing districts of 30,000 inhabitants or over, or in territories within five miles of the limit of such town, or taxing district, each per annum $500.'

"It is the insistence of the appellees that the keeping of storage tanks for the purpose of selling, delivering, or distributing oil is a privilege to be taxed within the meaning of the act, no matter whether the storage and sale be by a manufacturer, who gets only a manufacturer's profit, or by a wholesaler or retailer who gets only a selling profit.

"The appellant in this case makes or refines the oil, keeps tanks in which it stores the oil, and sells the oil at the manufacturer's price. The wholesaler buys the oil, stores it in tanks, and sells it at the wholesale price for a wholesaler's profit only. The retail dealer buys the oil, stores it in tanks, and sells at the retail price for a retail profit only.

"Each of the three maintain storage tanks from which they sell oil, for only one profit each. The wholesaler and retailer pay the tax. Why should the manufacturer escape the tax merely because he refines the oil and puts it in tanks, while the others buy the oil...