Iden v. Bureau of Revenue, 4398.

• Decision Date: 27 January 1939
• Docket Number: No. 4398.,4398.
• Citation: 89 P.2d 519,43 N.M. 205
• Parties: IDENv.BUREAU OF REVENUE et al.
• Court: New Mexico Supreme Court

43 N.M. 205

89 P.2d 519

IDEN

v.BUREAU OF REVENUE et al.

No. 4398.

Supreme Court of New Mexico.

Jan. 27, 1939.Rehearing Denied April 24, 1939.

Appeal from District Court, Valencia County; Eugene D. Lujan, Judge.

Proceedings between Clarence Iden, as receiver of the Big Chief Lumber Company, an insolvent corporation, and the Bureau of Revenue of New Mexico and another. From an adverse judgment, the former appeals.

Judgment affirmed.

One who claims exemption from a tax must bring himself clearly within exemption provision.

W. A. Keleher and Theo. E. Jones, both of Albuquerque, for appellant.

Richard E. Manson, Asst. Atty. Gen., and J. O. Walton, of Santa Fe, Atty. for Bureau of Revenue, for appellees.

BRICE, Justice.

[1] On June 19, 1937, the appellant was appointed, by the district court of Valencia County, receiver for the creditors and stockholders of the Big Chief Lumber Company, a domestic corporation, as authorized by Sec. 32-175, N.M.Sts. 1929; and thereupon became possessed of the legal title to its property.

The Big Chief Lumber Co. (hereafter called the Lumber Company) was, from prior to 1934 and until it was placed in receivership, engaged in the business of “felling, skidding, bucking and sawing of standing timber into lumber and other products for sale and distribution.” Among other products produced by the Lumber Company and by the receiver were railroad ties, which in the rough were sold and delivered to the Santa Fe Railroad Company at its “tie plant” near Albuquerque, New Mexico. The railroad company put such ties through a process of drying in the sun and open air for eight months; cut them to the proper length; grooved them for tie plates and bored holes through each tie for spikes to hold the plate, rail and tie together; after which they were soaked for several hours in creosote for preservation. The railroad company purchased the ties for replacements in its own lines and not for resale.

In 1934 there was enacted Ch. 7 by the Special Session of the Legislature of that year, imposing an excise tax for engaging or continuing in businesses, professions, trades and callings for profit; providing for the levy, assessment, and collection of the tax. Among the provisions of the act are the following, material to a decision in this case:

“The term ‘business' when used in this Act shall include all activities or acts engaged in (personal, professional, and corporate) or caused to be engaged in with the object of gain, benefit or advantage either direct or indirect.” Subsec. (f), Sec. 3, Ch. 7, L. 1934, Sp.Sess.

“The term ‘retail’, except as herein otherwise provided, means the sale of tangible personal property for consumption and not for resale in the form of tangible personal property, and ‘retailer’ means every person engaged in the business of making sales at retail.” Subsec. (h), Sec. 3, Ch. 7, L. 1934, Sp.Sess.

“The term ‘wholesaler’ or ‘jobber’ means any person who sells tangible personal property for resale and not for consumption by the purchaser, except as herein otherwise provided.” Subsec. (i), Sec. 3, Ch. 7, L. 1934, Sp.Sess.

“There is hereby levied, and shall be collected by the Tax Commission, privilege taxes, measured by the amount or volume of business done, against the persons, on account of their business activities, engaging, or continuing, within the State of New Mexico, in any business as herein defined, and in the amounts determined by the application of rates against gross receipts ***.” Sec. 201, Art. 2, Ch. 7, L. 1934, Sp.Sess.

“At an amount equal to one-fourth of one per cent of the gross receipts of the business of every person engaging or continuing in the business of manufacturing, smelting, refining, reducing, processing, compounding, fabricating, packing, preserving, distilling, preparing for sale or commercial use, or the making of wares, commodities or material products by hand or machinery; ***.” Subsec. B, Sec. 201, Art. 2, Ch. 7, L. 1934, Sp.Sess.

“At an amount equal to two per cent of the gross receipts of the business of every person engaging or continuing in the business of selling at retail of goods, wares, materials and commodities, for consumption and not for resale; ***.” Subsec. D, Sec. 201, Art. 2, Ch. 7, L. 1934, Sp. Sess.

The Act of 1934 was reenacted as Ch. 73 of N.M.L. 1935; with amendments and changes that do not affect the issues presented.

The question is whether Sec. 209 of the Acts of 1934 and 1935 exempts the Lumber Company from paying the two per cent tax levied under Sec. 201, subsec. D of the acts. Sec. 209 of 1934 act is as follows: “Any person exercising any privilege taxable under Paragraphs A, B or C of Section 201 of this Act and engaging in the business of selling his products at retail in this state shall be required to make returns of the gross proceeds of such retail sales, and shall pay upon such gross proceeds the tax imposed by Paragraph D of Section 201 of this Act, in addition to the tax imposed upon him by Paragraphs A, B or C of Section 201 of this act; but any such person engaging in the business of selling his products produced or manufactured in this state to wholesalers, jobbers, retailers, or manufacturers, or at wholesale sales as defined in this act, shall not be required to pay any tax in addition to that imposed upon him by said Paragraphs A or B of Section 201 of this Act.”

The same section of the 1935 act is amended so that the exemption applies to “manufacturers, or at wholesale sales.”

[2][3][4] It is agreed that the business of the corporation comes under classification B; and is therefore liable to a tax of one-fourth of one per cent of the gross receipts of the business. As the ties were sold to the railroad company for consumption, they are sold at “retail” as that word is defined by the act. Albuquerque...