Miniature Vehicle Leasing Corp. v. United States
Decision Date | 29 March 1967 |
Docket Number | Civ. 924-63. |
Citation | 266 F. Supp. 697 |
Parties | MINIATURE VEHICLE LEASING CORP., a corporation of New Jersey, Plaintiff, v. UNITED STATES of America, Defendant. |
Court | U.S. District Court — District of New Jersey |
COPYRIGHT MATERIAL OMITTED
David M. Satz, Jr., U. S. Atty., for the District of New Jersey, for defendant.
Henry G. Zapruder, Dept. of Justice, Tax Division, for defendant.
Plaintiff brings this action pursuant to 28 U.S.C. § 1346(a) (1) claiming the right to refund of excise tax alleged to have been erroneously or illegally assessed and collected. The assessment of tax was upon the sale by plaintiff of Volkswagen automobiles in the United States. The automobiles were imported by plaintiff from a distributor in England. 26 U.S.C. § 4061(a) (1) provides for the imposition of such tax at the rate of 10% of the price at which the importer sells the automobiles subject to exceptions defined by the provisions of 26 U.S.C. § 4216(a) (b).
The pertinent facts may be briefly summarized as follows:
During the taxation quarter ending June 30, 1960 plaintiff imported 30 Volkswagen automobiles which it procured from a distributor in England. Six of these automobiles were sold to Sun Motors in Alexandria, Virginia, at a price of $1575 per car. Twenty-four were shipped to E. M. Stafford, Inc. (Stafford) and sold by Stafford at auction. Title to each car as sold passed directly from plaintiff to the purchaser. Stafford retained a commission of $25 on each car sold. The average remission per car from Stafford to plaintiff on the 24 vehicles was $1631.42.
The automobiles were manufactured in Germany. A domestic corporation, Volkswagen of America, has an exclusive franchise with the manufacturer to purchase and import Volkswagens. It is by reason of this that plaintiff found it necessary, if it were to sell Volkswagens, to import from a distributor in England. Excise taxes assessed by defendant against Volkswagen of America and plaintiff were computed upon the price at which each, as an importer, sold the cars. Volkswagen of America was assessed a tax averaging $109.67 per car and plaintiff was assessed an average of $144.77 per car. The automobiles imported and sold by each are substantially identical. The minor differences which would be related to the value of each automobile are not relevant to the crucial issue presented. Plaintiff does not challenge as incorrect the arithmetical computation of tax.1 The inequity, alleged to be discriminatory, is predicated upon the theory that defendant should not be permitted in taxing plaintiff to use a sales price higher than that used in computing tax assessed against Volkswagen of America because the net result as between plaintiff and Volkswagen of America was discriminatory. Stated otherwise, plaintiff urges that the price at which Volkswagen of America sold its imported automobiles is the price upon which the assessment against plaintiff should have been computed. The argument challenges the alleged unconstitutional application of the taxing statute and is grounded upon the provisions of the Fifth Amendment and upon Article 1, Section 8 of the United States Constitution. The latter provides:
"The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises * * *. but all Duties, Imposts and Excises shall be uniform throughout the United States".
This provision of the Constitution was not intended to assure the equality of tax burden upon individual taxpayers of similar class. "Geographical uniformity, not uniformity of intrinsic equality and operation" is all that was intended. See Fernandez v. Wiener, 326 U.S. 340, 359, 66 S.Ct. 178, 188, 90 L.Ed. 116 (1945); Knowlton v. Moore, 178 U.S. 41, 104, 20 S.Ct. 747, 44 L.Ed. 969 (1900).
The tax imposed by 26 U.S.C. § 4061(a) (1) is uniformly imposed in all of the States at a rate of 10% of the selling price. Plaintiff's problem springs from a disparity in the tax base to which a uniform tax rate is applied. The disparity in tax base is evidently due to the fact that plaintiff, as an importer, cannot buy directly from the manufacturer and, as a consequence, incurs increased costs which are reflected in the sale price upon which the excise tax is computed. An analogous situation was presented in Fitch v. United States, 323 U.S. 582, 65 S.Ct. 409, 89 L.Ed. 472 (1945) where the court stated at page 586, 65 S.Ct. at page 412:
(Emphasis supplied)
The claim of plaintiff under the Fifth Amendment is likewise without merit. Congress may prescribe what shall be taxed and a uniform percentage to be applied to it in computation of the tax. What shall be taxed in this case is a selling price. The fact that a uniform percentage tax exacts more from plaintiff who sells at a higher price than a competitor may be painful; it is not unconstitutional. In Helvering v. Lerner Stores Co., 314 U.S. 463, 468, 62 S.Ct. 341, 86 L.Ed. 343 (1941) the Supreme Court stated that:
But plaintiff does not rest upon the foregoing contentions raised by the allegations of its initial complaint filed November 6, 1963. On September 30, 1965 it filed an amended complaint raising for the first time in this litigation the application of 26 U.S.C. § 4216 (b) (1) (B)2 to sales made through Stafford. By memorandum and at pretrial on January 12, 1966 plaintiff injected the further issue of whether the tax assessed against it violated a treaty of friendship between the United States and Germany.3
Defendant argues that there was no sale on consignment because Stafford was merely acting as a sales agent. Assuming that there is any merit to this argument on the facts as presented, it would follow that the price Stafford obtained for the automobiles would be plaintiff's price for the purposes of taxation. Hence, the Court perceives no difference here between a direct sale by plaintiff through an agent or a sale made by a consignee. For all practical purposes a consignee is an agent of the consignor and since the term "consignment" as used in the statute is not defined in the Internal Revenue Code or by regulations, the Court must look to the ordinary meaning of the word. Consignment was defined in In Re Taylor, 46 F.2d 326 (E.D.Mich. 1931) at page 328 as follows:
* * *"(Emphasis supplied)
Regardless, however, of the fact that the automobiles sold by Stafford were sold on consignment, plaintiff comes too late to claim refund on that basis. It was held in Nemours Corp. v. United States, 188 F.2d 745 (3rd Cir. 1951), cert. denied 342 U.S. 834, 72 S.Ct. 50, 96 L.Ed. 631 (1942) that:
* * *"
Under the applicable Treasury Regulation claim for refund must state all grounds on which it is based.4
Plaintiff's claim for refund dated May 16, 1963 recites:
To continue reading
Request your trial-
Hempt Bros., Inc. v. United States, Civ. No. 68-484.
...D.Del.1971, 325 F.Supp. 1227, 1229 n.3; Lehigh Inc. v. United States, E.D.Pa.1968, 290 F. Supp. 584; Miniature Vehicle Leasing Corp. v. United States, D.N.J.1967, 266 F.Supp. 697; Schuylkill Haven Trust Company v. United States, E.D.Pa.1966, 252 F.Supp. 557; Tompkins v. United States, Ct.Cl......
-
Williams v. United States, Civ. No. LV-2025.
...jurisdiction to order the refund he seeks. See United States v. Rochelle, 363 F.2d 225 (5th Cir. 1966); Miniature Vehicle Leasing Corp. v. United States, 266 F.Supp. 697 (D.C.N.J.1967). This opinion constitutes this Court's findings of fact, conclusions of law and preliminary ORDER It is th......
-
McMakin v. Pine Bush Equipment Co., Inc.
...of the property sold...." Harris v. Merlino, 137 N.J.L. 717, 718, 61 A.2d 276 (N.J.1948); cf. Miniature Vehicle Leasing Corp. v. United States, 266 F.Supp. 697, 701 (D.N.J.1967)(Shaw, J.)(defining a contract of consignment, where agent has the "duty to account to his principal for the proce......
-
Lemoge v. United States, C-71-1690-CBR.
...agreement are clearly presented in the 1971 refund claim. The instant case is unlike the situation in Miniature Vehicle Leasing Corp. v. United States, 266 F. Supp. 697 (D.N.J. 1967). There taxpayer's refund claim, asserting discriminatory taxation, did not apprise the Commissioner that tax......