Mccanless Motor Co v. Maxwell

• Decision Date: 25 November 1936
• Docket Number: No. 455.,455.
• Citation: 188 S.E. 389,210 N.C. 725
• Court: North Carolina Supreme Court
• Parties: McCANLESS MOTOR CO. v. MAXWELL, Commissioner of Revenue.

210 N.C. 725

188 S.E. 389

McCANLESS MOTOR CO.

v.MAXWELL, Commissioner of Revenue.

No. 455.

Supreme Court of North Carolina.

Nov. 25, 1936.

Appeal from Superior Court, Wake County; W. L. Small, Judge.

Action by the McCanless Motor Company against A. J. Maxwell, Commissioner of Revenue. From a judgment for plaintiff, defendant appeals.

Reversed.

A. A. F. Seawell, Atty. Gen., and Harry McMullan and T. W. Bruton, Asst. Attys. Gen., for appellant.

I. M. Bailey, of Raleigh, and Hayden Clement, of Salisbury, for appellee.

SCHENCK, Justice.

This was an action instituted by the plaintiff, a corporation engaged in the retail sale of automobiles in the City of Salisbury, against the defendant, Commis sioner of Revenue, for the refund of $1,-454.75 paid by the plaintiff to the defendant under protest, being taxes levied and collected by the defendant from May 25, 1934, to July 1, 1935, on the resale of secondhand or used automobiles taken in exchange for other secondhand or used automobiles which had been taken in part payment of new automobiles sold by the plaintiff and upon the sales of which new-automobiles the maximum tax of $10 on the sale of any single article had been paid. The case was heard upon an agreed statement of facts and presents the question as to whether under the Emergency Revenue Act of 1933, chapter 445, Public Laws 1933, § 400 et seq., sales of secondhand or used automobiles, other than the sales of those secondhand or used automobiles taken in part payment in the sales of new automobiles, are exempt from sales tax. The answer to the question involves an interpretation of section 404, subsec. 11, of said act, which reads:

"When in the sale of a new article a second-hand or used article is taken in part payment, the sale of the new article shall be reported at the full gross sales price. The resale of second-hand or used articles, taken in part payment in the sale of new articles, or the resale of articles repossessed by the vendor, may be excluded from gross sales taxable under this act if separate record is kept of all such transactions in such manner as may be prescribed or approved by the Commissioner of Revenue."

The trial judge was of the opinion, and entered judgment accordant therewith, that the resales of secondhand or used automobiles taken in exchange and part payment of other secondhand or used automobiles which had been taken in part payment in the sales of new automobiles, upon the sales of which new automobiles the maximum tax of $10 on the sale of any single article had been paid, were exempt from sales tax. The defendant appealed to the Supreme Court, assigning as error the judgment of the superior court. We think, and so hold, that such assignment of error is well founded.

Section 406 of the Emergency Act of 1933 provides for the payment to the Commissioner of Revenue by retail merchants of $1 for a license to engage in and conduct business, and for additional tax as follows: "Upon every retail merchant as defined in this article a tax of three percent (3%) of total gross sales by every such person." Section 404, subsec. 12, provides that the maximum tax on...