Paramount-Richards Theatres v. State
| Decision Date | 17 March 1949 |
| Docket Number | 3 Div. 504. |
| Citation | 39 So.2d 380,252 Ala. 54 |
| Parties | PARAMOUNT-RICHARDS THEATRES Inc., v. STATE. |
| Court | Alabama Supreme Court |
Richard T. Rives, of Montgomery, and John W. Lapsley, of Selma, for appellants.
A. A. Carmichael, Atty. Gen., and Hugh F Culverhouse, Asst. Atty. Gen., for appellee.
Lawrence K. Andrews, of Union Springs, for Alabama Theatre Owners Association, amicus curiae.
This appeal is from a decree of the circuit court, in equity sustaining the state's demurrer to the bill filed by the appellant in pursuance of an appeal from the assessment of use taxes by the state department of revenue against the appellant on July 9, 1947, which with interest aggregated $11,625.08.
The question presented is not whether it was within legislative competence to levy a use tax for the activity in which appellant is engaged, but whether or not the activities, as disclosed by the allegations of the bill, fall within the provisions of the statute, Code of 1940, Title 51, § 788. Said section provides:
'An excise tax is hereby imposed on the storage, use or other consumption in this state of tangible personal property purchased at retail on or after the first of March 1939, for storage, use or other consumption in this state at the rate of two percent of the sales price of such property, except as provided in subsection (b) of this section.' (Subsection (b) which immediately follows is not pertinent to the case at hand.) [Italics supplied.]
The facts alleged in the bill, upon which appellant bases its attack on the assessment, are: 'In the determination of computation of said assessment the State Depart of Revenue erroneously and illegally included therein the amount of rentals paid by taxpayers for moving picture films, and trailer films in connection therewith, leased by taxpayer in interstate commerce from lessors situated outside the State of Alabama, under which lease such films and trailers were shipped in interstate commerce by said lessors to taxpayer, as lessee at Mobile, Alabama, and pursuant to which lease said films and trailers were exhibited or used by lessee in the conduct of said moving picture theatre; after which, said films and trailers were returned by taxpayer to said lessors, by shipments thereof made in interstate commerce from said Mobile, Alabama, to the point or points outside of the State of Alabama from which the same were shipped, as required under the terms of the lease or leases relating thereto; the amount of such rentals in the year 1944 being $170,050.43, the amount of such rentals in the year 1945 being $161,210.70 and the amount of such rentals for the year 1946 being $170,710.50, total $501,971.63, resulting in an erroneous, illegal and excessive assessment of use tax for said years in the total amount of $10,139.43, and interest thereon.
'(b) Said films and trailers hereinabove mentioned were leased or rented under bona fide leases or rental agreements under which the taxpayer as lessee was given no right or option to purchase said films or trailers, the title to which was retained by lessors; and said leases or rental agreements were not used for the purpose of affecting any sale of said films or trailers to taxpayers; nor were said films or trailers sold or agreed to be sold by lessors to said taxpayer; that said transactions did not involve in fact or in law a sale or agreement to sell said films or trailers to taxpayers; that neither said films or trailers were in fact or in law sold to taxpayer or purchased by taxpayer; that there was no purchase of said films or trailers within the meaning of the Alabama Use Tax Act; that there was no sale or sales price of said films or trailers within the meaning of the Alabama Use Tax Act; and therefore said assessment is erroneous, illegal and excessive in the amount and to the extent of $10,039.43, and interest thereon. * * *.'
The contention of appellant is that the renting or leasing of said films and trailers shipped in interstate commerce to taxpayer under the facts alleged in the bill does not constitute a purchase or retail of tangible personal property for use or storage or other consumption in this state and to apply the levy to said activities would burden interstate commerce in violation of the Constitution of the United States.
The contention of the state, on the other hand, is that the term 'retail sale' embodied in § 787, Title 51, Code of 1940, in connection with the definition of the word 'purchase' brings the case presented by the bill within the influence of § 788, supra.
Subsection (e) of said § 787 defines the term as, "sale at retail' or 'retail sale' shall mean all sales of tangible personal property except those above defined as wholesale sales. * * *' Subsection (i) of said section defines the word 'purchase' as meaning, 'acquired for a consideration, whether such acquisition was effected by a transfer of title, or of possession, or of both, or a license to use or consume; whether such transfer shall have been absolute or conditional, and by whatsoever means the same shall have been effected; and whether such consideration be a price or rental in money, or by way of exchange or barter.'
As shedding light on the language of the levying section (§ 788), towit, 'An excise tax is hereby imposed on the storage, use or other consumption in this state of tangible personal property purchased at retail,' we are authorized to look to the definition of the term 'wholesale' embodied in § 787, supra, that: 'The term 'wholesale sale' or 'sale at wholesale' means the sale of tangible personal property by wholesalers to licensed retail merchants, jobbers, dealers, or other wholesalers for resale and does not include a sale by wholesalers to users or consumers not for resale. * * *' [Italics supplied.]
Subsection (j) defines the term 'sale price' as follows: 'The term 'sale price' means the total amount for which tangible personal property is sold, including any services (including transportation) that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest charged, losses or any other expenses whatsoever; provided, that cash discounts allowed and taken on sales shall not be included and sales price shall not include the amount charged for property returned by customers when the entire amount charged therefor is refunded either in cash or by credit.'
It was stated by counsel at the bar in argument against the validity of the levy on submission of the case, 'that appellant's only stock in trade is the pictures photographed on the films which appellant uses in the operation of its business and these pictures are sold to the individuals who purchase and pay for tickets of admission and attend the show.'
The films are leased by...
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