Nesbitt v. Gill
| Decision Date | 05 March 1947 |
| Docket Number | No. 96.,96. |
| Citation | 227 N.C. 174,41 S.E.2d 646 |
| Parties | NESBITT . v. GILL. |
| Court | North Carolina Supreme Court |
[COPYRIGHT MATERIAL OMITTED]
Appeal from Superior Court, Buncombe County; Wm. H. Bobbitt, Judge.
Action to recover taxes paid under protest by P. M. Nesbitt against Edwin M. Gill, Commissioner of Revenue of North Carolina. From the judgment, the plaintiff appeals.
Affirmed.
This is an action to recover taxes paid under protest.
The plaintiff, a citizen and resident of Buncombe County, North Carolina, on or about 15 March, 1943, purchased seventy-eight horses from ranches located in the State of Montana, and had them shipped to him at Asheville, N. C, during the months of June and July, 1943. Thereafter, on or about 3 April, 1945, the plaintiff paid the defendant, under protest, the sum of $407.40, which represented the taxes due the State, by the plaintiff, including penalties for late filing, under the provisions of Section 115, C. 158, of the Public Laws of 1939, G.S. § 105-47. Demand for the refund of the tax and penalties was duly made. The defendant refused to make the refund, and this action was duly instituted.
Upon the pleadings and evidence offered in the trial below, the Court held: That the tax levied by the aforesaid statute is a valid license or privilege tax upon the business of purchasing horses and/or mules for resale within the State of North Carolina; that it applies alike to purchases of horses and/or mules raised within or without the State and is applicable only to horses and/or mules purchased for resale within the State of North Carolina, and entered judgment that plaintiff recover nothing by his action and that the same be dismissed. Plaintiff appeals to the Supreme Court, assigning error.
Lamar Gudger and Don C. Young, both of Asheville, for plaintiff.
Harry M. McMullan, Atty. Gen, and Frank P. Spruill and Ralph M. Moody, Asst. Attys. Gen, for defendant.
The plaintiff alleges and contends that Section 115 of chapter 158, of the Revenue Act of 1939, as amended, purporting to levy the tax involved herein, is unconstitutional, in that: (1) Purchasing horses and/or mules for resale, is not a trade or profession within the meaning of Article V, Section 3, of the Constitution of North Carolina; (2) the levy of a head tax of $3 upon horses and/or mules purchased for the purpose of resale exacted by subsection (a) of Section 115, of said Revenue Act, as amended, is a tax on property and as such is unconstitutional and void, being in violation of the aforesaid Section of our State Constitution; (3) the Act does not levy a head tax on horses and/or mules raised in North Carolina and is therefore in contravention of Article I, Section 8, clauses 1 and 3, of the Constitution of the United States; and (4) the head tax levied under the Act imposes an undue burden upon interstate commerce by subjecting interstate purchases of horses and/or mules to the risk of multiple taxation and by exempting "horses and/or mules which are acquired or received as a result of an allowance for credit for horses and/or mules taken in part payment on horses and/or mules subject to the tax imposed in this section" from said tax.
The pertinent parts of Section 115, of the Revenue Act of 1939, as amended, now G.S. § 105-47, read as follows:
Article V, Section 3, of our State Constitution, among other things, provides that "The power of taxation shall be exercised in a just and equitable manner
* * *. Taxes on property shall be uniform as to each class of property taxed.
* * * The General Assembly may also tax trades, professions, franchises, and incomes." The appellant contends that the business of purchasing horses and/or mules for the purpose of resale in North Carolina is not a trade within the meaning of the above section of our Constitution. This contention is not in accord with the uniform decisions of this Court. In de fining the meaning of the word "trades", as used in the above Section of our Constitution, in the case of State v. Worth, 116 N.C. 1007, 21 S.E. 204, 205, this Court said: This interpretation as to the meaning of the word "trades", as used in the above Section of our Constitution, has been approved in Wayne Mercantile Co. v. Commissioners of Mount Olive, 161 N.C. 121, 76 S.E. 690, 49 L.R.A..N.S., 954; Bickett v. State Tax Commission, 177 N. C. 433, 435, 99 S.E. 415; State v. Elkins, 187 N.C. 533, 122 S.E. 289; Hilton v. Harris, 207 N.C. 465, 177 S.E. 411 and State v. Dixon, 215 N.C. 161, 1 S.E.2d 521. Hence, we hold that when a person, firm or corporation, in North Carolina, engages in the business of purchasing for the purpose of resale, either at wholesale or retail, horses and/or mules, such person, firm or corporation is a dealer in said animals, and as such is pursuing a trade within the meaning of that term as used in Article V, Section 3, of our State Constitution.
The appellant challenges the validity of the per head tax on the ground that it is a property and not a privilege or license tax, and lacks that uniformity required for ad valorem taxes.
Prior to the enactment of Section 115, of the Revenue Act of 1939, as amended, any person, firm or corporation engaged in the business of purchasing and selling horses and/or mules in North Carolina, was required to pay a minimum license tax of $12.50 for the privilege of selling one carload of horses and/or mules, and $5 for each additional carload purchased. Pub. Laws 1935, C. 371, § 115 In computing the tax twenty-five horses and/or mules were considered a carload and whena car contained in excess of that number an additional tax of 25 cents per head in excess of twenty-five, was required to be paid. In addition thereto, a sales tax of 3% was levied for the privilege of carrying on said business. In 1939, the annual license and head tax was substituted, as set forth herein, and the sales of horses and/or mules were expressly exempted from the sales tax. G.S. § 105-169(n).
The General Assembly is not restricted to uniformity as between trades or professions in levying a privilege or license tax. However, the tax must apply equally to all persons belonging to the prescribed class upon which it is imposed. Gatlin v. Town of Tarboro, 78 N.C. 119, 122; Smith v. Wilkins, 164 N.C. 135, 80 S.E. 168; Southern Grain & Provision Co. v. Maxwell, Comr. of Rev, 199 N.C. 661, 155 S.E. 557; Leonard v. Maxwell, Comr. of Rev, 216 N.C. 89, 3 S.E.2d 316, 321. If a privilege or license tax is reasonable and just, and applies alike in its exactions and exemptions to all persons belonging to the prescribed class or business, it is not objectionable under the provisions of the Constitution of North Carolina for lack of uniformity. In Leonard v. Maxwell, Comr. of Rev, supra, Stacy, C. J, in speaking for the Court, said: ...
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