National Linen Service Corp. v. State Tax Commission, 3 Div. 267.

CourtAlabama Supreme Court
Writing for the CourtBOULDIN, Justice. PER CURIAM.
Citation186 So. 478,237 Ala. 360
PartiesNATIONAL LINEN SERVICE CORPORATION v STATE TAX COMMISSION.
Docket Number3 Div. 267.
Decision Date31 January 1939

186 So. 478

237 Ala. 360

NATIONAL LINEN SERVICE CORPORATION v STATE TAX COMMISSION.

3 Div. 267.

Supreme Court of Alabama

January 31, 1939


Rehearing Denied Feb. 21, 1939.

Appeal from Circuit Court, Montgomery County; Walter B. Jones, Judge.

Bill for a declaratory judgment by the National Linen Service Corporation against the State Tax Commission, to determine the constitutionality of a provision of the Sales Tax Act, Gen.Acts Sp.Sess. 1936-37, pp. 125, 126, § 2(d). From an adverse decree, complainant appeals.

Affirmed.

THOMAS and GARDNER, JJ., dissenting on rehearing.

The tax imposed by statute levying a tax of 2 per cent. on fair market value of goods brought into state by any consumer on which tax levied by statute has not been paid is not a "property tax," and statute does not violate constitutional provision limiting rate of ad valorem taxes. Gen.Acts 1936-37, Sp.Sess., p. 126, § 2(d); Const.1901, §§ 211, 214, 217. [186 So. 479]

The bill is in substance as follows:

Complainant is a Delaware Corporation, qualified to do business in Alabama. Complainant is engaged in the linen supply business, that is, the rental of towels, barber coats gowns, caps, napkins, tablecloths and like articles, to its customers at a stipulated price, not selling or passing title to any of said articles. Complainant maintains laundry equipment at designated points in Alabama, which it employs to launder the articles rented to its customers Through its main office in Atlanta, Georgia, complainant purchases a considerable portion of the linens and supplies employed in its Alabama offices, and these supplies are shipped directly from the manufacturer to said Alabama offices. In some instances the main office purchases unfinished materials and processes same in its plant in Atlanta, and the finished products are shipped to its Alabama offices. Practically all of the supplies imported or brought by complainant into the State of Alabama are actually turned over to its customers, in the usual course of its business, within and prior to twenty-four hours after said goods have reached the confines of the state

Prior to the filing of this bill the State Tax Commission advised the complainant that it was required to pay the two per cent. sales tax upon the fair market value of said materials and supplies imported or brought into the State, by virtue of subdivision d, Section 2 of the Sales Tax Act.

Complainant alleges that said subdivision is not applicable to it and that complainant is not subject to said tax, and further that the same is invalid, void and unconstitutional [186 So. 480] for that it constitutes a tax upon interstate commerce and a burden thereon; and that it violates Section 214 of the Constitution of Alabama, being an ad valorem tax or property tax in excess of the rate or amount allowed.

The prayer is for a declaratory decree or judgment stating whether or not complainant is subject to the tax and whether or not said tax is illegal, void and unconstitutional. Respondent answered, joining in the prayer for declaratory judgment.

The trial court rendered a decree holding complainant subject to the tax and that tax was constitutional.

A. Berkowitz, Jas. L. Permutt, Benners, Burr, McKamy & Forman, and Frontis H. Moore, all of Birmingham, for appellant.

A. A. Carmichael, Atty. Gen., Jas. L. Screws and Wm. H. Loeb, Asst. Attys. Gen., and Jack Crenshaw, of Montgomery, for appellee.

BOULDIN, Justice.

This cause raises the question of the constitutionality of Section 2(d) of the Sales Tax Law of Alabama, Gen.Acts Special Session, 1936-37, p. 125, 126.

Subdivision (d) reads: "A situs is hereby declared to exist for the purpose of this Act and there is hereby levied a tax of two per cent on the fair market value of goods, wares and merchandise, motor vehicles, radio receiving sets, phonograph mechanisms, and all articles of trade imported or brought into this State by any consumer on which the tax herein levied has not been paid; provided, said goods, wares and merchandise have terminated their movement into the State of Alabama and the original package in which they were imported has been broken and they have been within the confines of the State of Alabama for a period of more than twenty-four hours prior to their consumption by the importer thereof."

Appellant challenges this provision as in violation of the Commerce Clause of the Constitution of the United States; and upon the further ground this is a tax on property, and in violation of Section 214 of the State Constitution limiting the rate of ad valorem taxes in Alabama.

This statute enacted under the title "An Act To further provide for the general revenue of the State of Alabama," etc., by Section 2, levies, or purports to levy, privilege or license taxes on specified business activities on a basis of a per centum on gross sales, or gross receipts as the case may be. Such business activities are listed in subdivision (a) to (e) inclusive. We summarize here as follows:

(a) On persons engaged in the business of selling tangible personal property at retail.

(b) On persons in the business of selling any automotive vehicle. A special reduced per centum is prescribed for this tax.

(c) On persons in the business of conducting places of amusement or entertainment.

(d) Copied above.

(e) On salesmen and solicitors for the sale of merchandise located without this State directly to consumers in this State.

Taxing statutes are to be construed strictly against the State and in favor of the taxpayer. But this does not impinge upon the all prevailing rule that a statute is to be construed in accordance with its real intent and meaning, and. not so strictly as to defeat the legislative purpose. 61 C.J. 168; Pappanastos v. State Tax Commission, 235 Ala. 50, 177 So. 158.

Another well known rule intervenes in dealing with the constitutionality of a statute. It should be construed, if reasonably capable of such construction, so as to uphold the statute, to give it a field of operation within constitutional bounds, not to strike down as an abortive attempt to legislate. Henry v. McCormack Bros. Motor Car Co., 232 Ala. 196, 167 So. 256; State v. Alabama Fuel & Iron Co., 188 Ala. 487, 66 So. 169, L.R.A.1915A, 185, Ann.Cas.1916E, 752.

Whether the tax imposed by Section 2 (d) above, is violative of the Commerce Clause of the Federal Constitution, U.S.C.A.Const. art. 1, § 8, cl. 3, is as of course, a Federal question, upon which the decisions of the United States Supreme Court are controlling.

As early as Hinson v. Lott, 8 Wall. 148, 19 L.Ed. 387, a case originating in Alabama, it was declared in general terms that if the State Taxing Act "institutes no legislation which discriminates against the products of sister States, but merely subjects them to the same rate of taxation which similar articles pay that are manufactured within the State, we do not see in it an attempt to regulate commerce, but an appropriate and legitimate exercise of [186 So. 481] the taxing power of the States." [Page 153.]

In Henneford v. Silas Mason Co., 300 U.S. 577, 57 S.Ct. 524, 81 L.Ed. 814, the court considered a tax upon the use of machinery brought into a State where the tax system also levied a tax of equal burden on retail sales, as under our statute. Whether the tax in question was deemed a property tax or an excise tax was deemed...

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26 practice notes
  • County Board of Ed. of Jefferson County v. State ex rel. Carmichael., 6 Div. 408
    • United States
    • Supreme Court of Alabama
    • January 31, 1939
    ...[82 L.Ed. 823, 115 A.L.R. 944], and cases cited." See, also, our recent cases National Linen Service Corp. v. State Tax Commission, 186 So. 478; Henry S. Long, et al., Members etc., v. Sherrill Terminal Co., etc., 187 So. 412. So much for the nature and character of the excise or privi......
  • Dixie Coaches, Inc. v. Ramsden, 6 Div. 529.
    • United States
    • Supreme Court of Alabama
    • June 15, 1939
    ...Curry, as Com'r of Revenue et als. v. Feld et al., Ala.Sup., 190 So. 88; National Linen Service Corp. v. State Tax Commission, Ala.Sup., 186 So. 478; Graybar Electric Co. v. Curry, Ala.Sup., 189 So. 186. That is to say, that taxes are construed liberally in favor of the citizen, but not so ......
  • Banner Laundering Co. v. Gundry, Nos. 5-7
    • United States
    • Supreme Court of Michigan
    • May 21, 1941
    ...Tax Commission v. Sisters of the Sorrowful Mother, 186 Okl. 339, 97 P.2d 888;National Linen Service Corp. v. State Tax Commission, 237 Ala. 360, 186 So. 478. While it is true, as appellants urge, that the mere fact the legislature has designated the use tax as ‘a specific excise tax’ is not......
  • King & Boozer v. State, 3 Div. 351.
    • United States
    • Supreme Court of Alabama
    • July 29, 1941
    ...234 Ala. 465, 175 So. 399; Long v. Roberts & Son, 234 Ala. 570, 176 So. 213; National Linen Service Corp. v. State Tax Commission, 237 Ala. 360, 186 So. 478; McPhillips Mfg. Co. v. Curry, Ala. Sup., 2 So.2d 600. See, also, Macallen Co. v. Massachusetts, 279 U.S. 620, 49 S.Ct. 432, 73 L.......
  • Request a trial to view additional results
26 cases
  • County Board of Ed. of Jefferson County v. State ex rel. Carmichael., 6 Div. 408
    • United States
    • Supreme Court of Alabama
    • January 31, 1939
    ...548 [82 L.Ed. 823, 115 A.L.R. 944], and cases cited." See, also, our recent cases National Linen Service Corp. v. State Tax Commission, 186 So. 478; Henry S. Long, et al., Members etc., v. Sherrill Terminal Co., etc., 187 So. 412. So much for the nature and character of the excise or privil......
  • Dixie Coaches, Inc. v. Ramsden, 6 Div. 529.
    • United States
    • Supreme Court of Alabama
    • June 15, 1939
    ...Curry, as Com'r of Revenue et als. v. Feld et al., Ala.Sup., 190 So. 88; National Linen Service Corp. v. State Tax Commission, Ala.Sup., 186 So. 478; Graybar Electric Co. v. Curry, Ala.Sup., 189 So. 186. That is to say, that taxes are construed liberally in favor of the citizen, but not so ......
  • Banner Laundering Co. v. Gundry, Nos. 5-7
    • United States
    • Supreme Court of Michigan
    • May 21, 1941
    ...Tax Commission v. Sisters of the Sorrowful Mother, 186 Okl. 339, 97 P.2d 888;National Linen Service Corp. v. State Tax Commission, 237 Ala. 360, 186 So. 478. While it is true, as appellants urge, that the mere fact the legislature has designated the use tax as ‘a specific excise tax’ is not......
  • King & Boozer v. State, 3 Div. 351.
    • United States
    • Supreme Court of Alabama
    • July 29, 1941
    ...234 Ala. 465, 175 So. 399; Long v. Roberts & Son, 234 Ala. 570, 176 So. 213; National Linen Service Corp. v. State Tax Commission, 237 Ala. 360, 186 So. 478; McPhillips Mfg. Co. v. Curry, Ala. Sup., 2 So.2d 600. See, also, Macallen Co. v. Massachusetts, 279 U.S. 620, 49 S.Ct. 432, 73 L.Ed. ......
  • Request a trial to view additional results

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