Jackson Fertilizer Co. v. Stone, Chairman, State Tax Commission

• Decision Date: 03 June 1935
• Docket Number: 31781
• Citation: 173 Miss. 183,162 So. 170
• Court: Mississippi Supreme Court
• Parties: JACKSON FERTILIZER CO. v. STONE, CHAIRMAN, STATE TAX COMMISSION

162 So. 170

173 Miss. 183

JACKSON FERTILIZER CO. v. STONE, CHAIRMAN, STATE TAX COMMISSION

No. 31781

Supreme Court of Mississippi

June 3, 1935

Division B

1 LICENSES.

Manufacturer of fertilizer held subject to privilege tax on business of manufacturing, measured by percentage of gross proceeds of manufacturer's sales, and not within exemption provision relating to sales of fertilizer, where statute imposed separate tax on business of selling property at higher rate than that imposed on manufacturing (Laws 1934 chapter 119, sections 2, 2-b, 2-c, 4 (m), 10).

2 TAXATION.

Exemptions from taxation are strictly construed, and never presumed, and person claiming exemption had burden to establish his right thereto.

3. LICENSES.

Repeal of 1932 act imposing privilege taxes measured by gross income or gross sales, did not, in view of saving clause in 1934 act, relieve taxpayer of liability for taxes paid under repealed act (Laws 1932, chapter 90, section 11; Laws 1934, chapter 119, sections 11, 20, 22).

HON. J. P. ALEXANDER, Judge.

APPEAL from the circuit court of Hinds county HON. J. P. ALEXANDER, Judge.

Suit by the Jackson Fertilizer Company against A. H. Stone, Chairman of the State Tax Commission. From a judgment dismissing the suit, plaintiff appeals. Affirmed.

Affirmed.

Green, Green & Jackson, of Jackson, for appellant.

Appellant operates a fertilizer factory, whereat it manufactures from raw material a complete commercial fertilizer, which it sells, and so doing, claims exemption from the sales tax.

Mississippi is almost exclusively an agricultural state. Its chief product for market has always been, and probably always will be, cotton.

Brown v. Cooperative Association, 96 So. 856, 132 Miss. 859.

The court judicially notices the present depression and the causes thereof, which, insofar as Mississippi is concerned, is the impaired purchasing power of its farmers.

Dayton Power & Light Co. v. Commission, 292 U.S. 290, 78 L.Ed. 1267.

Properly construed, this act is a tax on the farmer, who consumes the fertilizer.

Gregg Dyeing Co. v. Query, 286 U.S. 472, 76 L.Ed. 1236; Stewart Dry Goods Co. v. Lewis, 79 L.Ed. 542; Panhandle Oil Co. v. Mississippi, 277 U.S. 218, 72 L.Ed. 857.

A tax is not imposed by inference; the language must be clear and unequivocal.

Pan American Petroleum Corp. v. Miller, 154 Miss. 565, 122 So. 393; Gully v. Alexander, 158 So. 201; Middleton v. Lincoln County, 84 So. 908, 122 Miss. 673; Gully v. Jackson International Co., 145 So. 905, 165 Miss. 103; Furniture Co. v. Tax Commission, 133 So. 652, 160 Miss. 185; Town of Utica v. State, 148 So. 635, 166 Miss. 565; State v. Grenada Compress Co., 123 Miss. 191, 55 So. 139; State v. Union Tank-Car Co., 119 So. 312, 151 Miss. 797; Middleton v. Lincoln County, 84 So. 908, 122 Miss. 673; Gully v. Goyer Co., 147 So. 327, 165 Miss. 279; McKenzie v. Adams Banks Lbr. Co., 128 So. 335; Pan American Petroleum Corp. v. Miller, 154 Miss. 565, 122 So. 393; Board of Levee Comrs. v. Howie, 149 Miss. 843, 116 So. 92; Sperry & Hutchison Co. v. Harbison, 123 Miss. 682, 86 So. 455.

We admit that exemptions from taxation are to be strictly construed.

Hollandale Ice Co. v. Washington County, 157 So. 689.

But strict construction does not mean emasculation.

Being an emergency measure, to relieve agriculture, the reason of the act required that the farmer be free from the tax of both 2-b and 2-c, each equally burdensome, and to construe the act as was done by the circuit judge, is but to remedy half the evil.

Stewart Dry Goods Co. v. Lewis, 79 L.Ed. 542.

The exemption is of "sales of all fertilizers." "All" is all-inclusive, embracing fertilizers within both 2-b and 2-c, for fertilizers would not be subject to taxation as produced by appellant under 2-c, as they are therefrom expressly exempted. Appellant is taxable solely as a manufacturer, not as a seller.

28 C. J. 989; In re Reimstrom, 207 F. 136.

It is well settled that a manufacturer who sells only the articles which he manufactures, 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.

Nash v. State, 110 So. 797; Downs v. Dunn, 111 So. 84; People ex rel. v. Campbell, 144 N.Y. 166, 38 N.E. 990.

So the sale "of all fertilizers," being an adjunct inseparable of manufacturing, is exempted and excepted, because, being a necessary adjunct of manufacture, without which manufacture could not exist, this exception covered sales "of all fertilizer," sales by a dealer, sales by a manufacturer, sales by anyone else.

Chapter 90, Laws of 1932, is repealed as at April 1, 1934.

The present sales tax act took effect on March 1, 1934, according to the terms of this act; it expired on the 30th day of June, 1934, and having expired and been repealed by its own terms, no taxes thereunder may be collected.

Musgrove v. Railroad Co., 50 Miss. 677; French v. State, 53 Miss. 653; Anding v. Levy, 57 Miss. 58; Bradstreet v. Jackson, 81 Miss. 233, 32 So. 999; Crow v. Cartledge, 54 So. 947, 99 Miss. 277; Durant v. Attala County, 101 Miss. 290, 57 So. 916; Johnson v. Rives, 72 So. 928, 112 Miss. 248; City of Bay St. Louis v. Hancock County, 83 So. 277, 120 Miss. 873; Supervisors v. Meridian, 114 So. 803, 149 Miss. 139.

J. A. Lauderdale, Assistant Attorney-General, for appellee.

Chapters 90 and 91, Laws of 1932, and chapter 119, Laws of 1934, are involved in this case.

Appellant was not exempt from the privilege tax levied by section 2-b by the provisions of section 4 (m) of said acts.

An exemption from taxation will never be presumed and the burden is on the claimant to establish clearly his right to an exemption.

Barnes v. Jones, 103 So. 773, 139 Miss. 675.

The rule is universal that he who claims exemption must show affirmatively an exemption expressly declared and that he is clearly within its terms.

Morris Ice Co. v. Adams, 75 Miss. 410, 22 So. 944; Building & Loan Association v. City of Gulfport, 155 Miss. 498.

The appellant concedes that the tax levied by section 2-b is applicable to his business but contends that he is exempt from said tax under the provisions of section 4 (m), which exempts the "sale of fertilizers."

My contention is that said exemption applies to the tax levied by section 2-c but does not apply to the tax levied by section 2-b.

Section 2-b levies the privilege tax on the manufacturer, and this tax is measured by the "gross proceeds derived from the sale" of the manufactured product. It is not a tax for the privilege of selling the manufactured products.

Section 2-c then levies a privilege tax on the privilege of selling tangible property.

The exemption, therefore, applies to a dealer who is engaged in the business of selling fertilizer but it does not apply to the manufacturer.

Crew Levick Co. v. Pennsylvania, 245 U.S. 292, 62 L.Ed. 295.

A statute which repeals a former statute and reenacts it in practically the same language, does not abrogate the former statute.

Anding v. Levy, 57 Miss. 51, 59; Abbay v. Levee Commissioners, 83 Miss. 102, 107; Hodges v. Inman, 149 Miss. 785; McDonald v. Tax Commission, 158 Miss. 331; State Tax Commission v. Mississippi Power Co., 172 Miss. 659.

Argued orally by Garner Green, for appellant, and by J. A. Lauderdale, for appellee.

OPINION

Ethridge, P. J.

The Jackson Fertilizer Company filed suit in the circuit court of Hinds county, where it is domiciled, for the recovery of certain taxes levied upon it by virtue of chapter 90, Laws 1932, as amended by chapter 91, Laws 1932, and by virtue of chapter 119, Laws 1934. It was alleged in the bill that a tax was levied by the tax commission upon the appellant as a manufacturer of fertilizers for sale, and that this tax was improper and unlawful because appellant was exempt from taxes by clauses (c) and (m) of said Laws 1934 (chapter 119, section 4 (c, m).

The amount sued for was one thousand ninety-two dollars and seventy-one cents, with interest from August 24, 1934. The suit was filed on September 5, 1934.

The declaration was demurred to on the grounds that it did not state a cause of action, and because it affirmatively appeared therefrom that the taxes were legally due to the state at the time same were collected.

This demurrer was sustained, and the suit was dismissed, from which this appeal is prosecuted.

Chapter 119, Laws 1934, section 2, which is the same as section 2, chapter 90, Laws 1932, provides that: "There is hereby levied and shall be collected annual privilege taxes, measured by the amount or volume of business done, against the persons, on account of the business activities, and in the amounts to be determined by the application of rates against values, or gross income, or gross proceeds of sales, as the case may be, as follows."

Section 2-b (same as 2-b, chapter 90, Laws 1932), provides that: "Upon every person engaging or continuing within this state in the business of manufacturing, compounding, or preparing for sale, profit or commercial use, either directly or through the activity of others, in whole or in part, any article or articles, substance or substances, commodity or commodities, the amount of such tax to be equal to the value of the articles, substances, or commodities, manufactured, compounded, or prepared for sale, as shown by the gross proceeds derived from the sale thereof by the manufacturer or person compounding or preparing the same (except as hereinafter provided), multiplied by the respective rates as follows:

"Manufacturers of brick, drain tile, building tile, sewer pipe, Portland cement and Portland cement products and clay products, one per cent; manufacturers of bottled soft drinks, one per cent ice...