Pacific Tel. & Tel. Co. v. Henneford

• Citation: 81 P.2d 786,195 Wash. 553
• Decision Date: 29 July 1938
• Docket Number: 27164.
• Court: United States State Supreme Court of Washington
• Parties: PACIFIC TELEPHONE & TELEGRAPH CO. v. HENNEFORD et al., Tax Com'rs.

81 P.2d 786

195 Wash. 553

PACIFIC TELEPHONE & TELEGRAPH CO. v. HENNEFORD et al., Tax Com'rs.

No. 27164.

Supreme Court of Washington, En Banc.

July 29, 1938

Appeal from Superior Court, Thurston County; John M. Wilson, Judge.

Suit by the Pacific Telephone & Telegraph Company against H. H Henneford and others, Tax Commissioners of the State of Washington, to enjoin the collection of a tax from plaintiff for the privilege of using, within the State, personalty purchased without the State and brought into the State and used therein in plaintiff's intermingled intrastate and interstate business. From a decree granting a permanent injunction, defendants appeal.

Affirmed.

G. W Hamilton, Atty. Gen., and R. G. Sharpe, of Olympia, for appellants.

Post Russell, Davis & Paine, of Spokane, amici curiae.

McMicken, Rupp & Schweppe, of Seattle, for respondent.

MILLARD, Justice.

This appeal is from a decree of the Thurston County Superior Court permanently enjoining defendant Tax Commissioners from collecting from plaintiff a tax for the privilege of using within this state personal property purchased without this state and brought into this state and used herein indiscriminately and in common for the conduct of plaintiff's intermingled intrastate and interstate telephone and telegraph business, rendered upon defendants' refusal to plead further after a demurrer to the complaint had been overruled.

That portion of the Revenue Act pertinent to this appeal is Title 4, Chapter 180, Laws 1935, pp. 726-728, and Title 4, Chapter 180, Laws 1935, as amended by Chapter 191, Laws 1937, pp 943-946 reading as follows:

'Title IV. Compensating Tax.

'Sec. 31. There is hereby levied and there shall be collected from every person in this state a tax or excise for the privilege of using within this state any article of tangible personal property purchased subsequent to April 30, 1935. Such tax shall be levied and collected in an amount equal to the purchase price paid by the taxpayer nultiplied by the rate of 2%.

'Sec. 32. The provisions of this title shall not apply:

'(a) In respect to the use of any article of tangible personal property brought into the State of Washington by a non-resident thereof for his or her use or enjoyment while within the state;

'(b) In respect to the use of tangible personal property purchased other than at retail;

'(c) In respect to the use of any article of tangible personal property the sale or use of which has already been subjected to a tax equal to or in excess of that imposed by this title whether under the laws of this state or of some other state of the United States;

'(d) In respect to the use of tangible personal property purchased during any calendar month, the total purchase price of which is less than twenty ($20.00) dollars.

'Sec. 33. If any article of tangible personal property has already been subjected to a tax by this or any other state in respect to its sale or use in an amount less than the tax imposed by this title, the provisions of this title shall apply, but at a rate measured by the difference only between the rate herein fixed and the rate by which the previous tax upon the sale or use was computed.

'Sec. 34. Each taxpayer subject to the provisions of this title shall, on or Before the fifteenth day of every calendar month, file a return with the commission showing in detail the total quantity of tangible personal property used by him within the state during the preceding calendal month subject to the tax herein imposed, and such other information as the commission may deem pertinent. Each taxpayer shall remit to the commission with each such return the amount of tax shown thereon to be due.

'Sec. 35. For the purposes of this title:

'(a) The term 'purchase price' shall mean the consideration paid or given or contracted to be paid or given by any person to the seller of an article of tangible personal property for the article purchased. The term shall include, in addition to the consideration paid or given or contracted to be paid or given, the actual cost of transportation from the place where the article was purchased to the person using the same in this state.

'(b) The meaning ascribed to words and phrases in titles II and III and all the provisions of title XVIII of this act, insofar as applicable, shall have full force and effect with respect to taxes imposed under the provisions of this title: Provided, however, That in applying the provisions of section 202, the warrant shall direct the sheriff to levy upon and sell only the personal property the use of which is subject to tax under this title, and the lien therein provided for shall attach only to such property.' Chapter 180, pp. 726-728, Laws 1935.

'Section 1. Section 31 of chapter 180 of Session Laws of 1935 (8370-31, Remington's Revised Statutes), be and the same hereby is amended to read as follows:

'Section 31. From and after the first day of May, 1935, there is hereby levied and there shall be collected from every person in this state a tax or excise for the privilege of using within this state any article of tangible personal property purchased at retail or produced or manufactured for commercial use. This tax will not apply with respect to the use of any article of tangible personal property purchased, produced or manufactured outside this state until the transportation of such article has finally ended or until such article has become commingled with the general mass of property of this state. Such tax shall be levied and collected in any amount equal to the value of the article used by the taxpayer multiplied by the rate of two per cent.

'Sec. 2. Section 32 of chapter 180 of Session Laws of 1935 (8370-32, Remington's Revised Statutes) be and the same hereby is amended to read as follows:

'Section 32. The provisions of this title shall not apply:

'(a) In respect to the use of any article of tangible personal property brought into the State of Washington by a non-resident thereof for his or her use or enjoyment while temporarily within the state unless such property is used in conducting a non-transitory business activity within the state;

'(b) In respect to the use of any article of tangible personal property if the sale thereof has already been subjected to tax under title III of this act and such tax has been paid by the purchaser;

'(c) In respect to the use of any article of tangible personal property purchased at retail the sale of which would have been specifically exempt from the tax imposed under title III of this act had the sale thereof been made within the state; '(d) In respect to the use of tangible personal property put to use during any bimonthly period, the total value of which is less than fifty ($50.00) dollars;

'(e) In respect to the use of rolling stock or aircraft or floating equipment of a common carrier, the first use of which within the state is actual use in conducting interstate or foreign commerce.

'Sec. 3. Section 34 of chapter 180 of Session Laws of 1935 (8370-34, Remington's Revised Statutes) be and the same hereby is amended to read as follows:

'Section 34. Each taxpayer subject to the provisions of this title shall, on or Before the fifteenth day of the month succeeding the end of the bi-monthly period in which the tax accrued, file a return with the commission showing in detail the total quantity of tangible personal property used by him within the state during the preceding bi-monthly period subject to the tax herein imposed, and such other information as the commission may deem pertinent. Each taxpayer shall remit to the commission with each such return the amount of tax shown thereon to be due.

'Sec. 4. Section 35 of chapter 180 of Session Laws of 1935 (8370-35, Remington's Revised Statutes) be and the same hereby is amended to read as follows:

'Section 35. For the purposes of this title:

'(a) The term 'value of the articles used' shall mean the consideration paid or given or contracted to be paid or given by the purchaser to the seller for the article of tangible personal property, the use of which is taxable under this title. The term shall include, in addition to the consideration paid or given or contracted to be paid or given, the cost of transportation by a common carrier. In case the article used is produced or manufactured by the person using the same or is sold under conditions wherein the purchase price, including the cost of transportation, does not represent the true value thereof, the value of the article used shall be determined as nearly as possible according to the retail selling price at place of use of similar products of like quality and character under such rules and regulations as the tax commission may prescribe;

'(b) The terms 'use,' 'used,' 'using' or 'put to use' mean the first use of the article after delivery thereof is completed within this state, and shall include installation, and also storing and withdrawal from storage for subsequent actual use or consumption within this state;

'(c) The meaning ascribed to words and phrases in titles I, II and III and all the provisions of titles XVIII, XIX and XX of this act, in so far as applicable, shall have full force and effect with respect to taxes imposed under the provisions of this title.

'Sec. 5. Section 33 of Chapter 180 of Session Laws of 1935 (8370-33, Remington's Revised Statutes) hereby is repealed.' Chapter 191, pp. 943-946, Laws 1937.

The allegations of the complaint, admitted by the demurrer to be true, are summarized as follows:

Respondent a California corporation, has owned and operated a telephone and telegraph business in the states of Washington, California, Oregon, and a part of Idaho for many years....