Rooney v. Horn, 38671
Decision Date | 07 March 1953 |
Docket Number | No. 38671,38671 |
Parties | ROONEY v. HORN et al. |
Court | Kansas Supreme Court |
Syllabus by the Court.
In a proceeding to determine whether the operator of a coin operated merchandise vending machine should pay a 2 percent tax on the gross receipts from these machines for the months from December, 1948, through May, 1949, the record is examined and it is held where a statute did not provide for the payment of such a tax until the session of 1951, the legislature did not intend to levy such a tax prior to that time and the owner of such machines is not obliged to pay it.
Charles Rooney, of Topeka, argued the cause and Charles Rooney, Jr., of Topeka, on the briefs, for appellant.
Paul H. Edgar, of Topeka, argued the cause and Wilbur G. Leonard, of Topeka, on the briefs, for appellee.
Payne H. Ratner, Ora D. McClellan, Louise Mattox, Payne H. Ratner, Jr., Keith Sanborn, Gerald L. Michaud, Russell Cranmer, Dale B. Stinson, Jr. and Starr Calvert, Jr., all of Wichita, on the briefs, as Amicus Curiae.
This was an action pursuant to G.S.1949, 79-3602, to determine whether the appellant is required to pay a 2 percent tax on the gross receipts from the sale of five-cent candy bars through vending machines. The director of revenue made an assessment for the months from December, 1948, through May, 1949. The appellant appealed to the commission, where the liability was fixed at $839.21. The appellant then appealed to the district court. That court upheld the findings of the commission--hence this appeal.
There was an agreed statement of facts as follows:
'This is an appeal from an order of the State Tax Commission assessing the above appellant sales tax on merchandise sold through the medium of five-cent Candy Vending Machines, the order being based under 79-3601 and following paragraphs pertinent thereto of the 1947 Supplement.
'The facts essential to the Court in determining this matter are hereinafter set out and agreed upon by the parties as the essential facts.
'1. The Appellant d/b/a The Rooney Confection Service is the owner of a large number of candy vending machines. These machines are placed by the appellant in factories, industrial plants, schools, hospitals and places where either employees or the public have access to insufficient numbers to make the operation successful and profitable.
'2. The machines are regularly serviced by the appellant's employees.
'3. The candy, gum and nuts vended through the machines are purchased wholesale by the appellant and come in packages which bear the price tag (5cents). The appellant is a registered retailer and each sale is a retail sale.
'4. The person desiring to make the purchase through the machine makes his selection of the candy, gum or nuts he desires, inserts a nickel in the slot, pulls the lever and receives the five-cent item of his selection.
'The machine vends no other article in price, other than five cents, nor will it make change.
'6. The machine accepts no coin other than a nickel.
'7. The customer, if he should desire more than one article, must repeat the procedure as above outlined. In other language, irrespective of how many five cent items he would purchase, each individual purchase is a separate and distinct transaction.
'It is further stipulated and agreed that the Court take judicial notice that since the 1939 Legislature abolished the mill token, there is no medium of exchange for sales tax in fractions of one cent.'
The trial court found:
'The Court further, and specifically, finds that the order of the State Commission of Revenue and Taxation, and the Director of Revenue, was not unreasonable, arbitrary, or capricious, and neither are the rules and regulations upon which the order is based unreasonable, arbitrary, or capricious; that the order of the State Commission of Revenue and Taxation, dated September 26, 1949, should be, and the same is hereby, sustained.'
Judgment was entered against appellant and in favor of the commission for $839.21.
The specifications of error are that the trial court erred in entering judgment against the appellant and in making findings that under G.S.1949, 79-3619, and the rules and regulations of the commission separate and individual five-cent candy bar sales are subject to the 2 percent sales tax.
The argument takes us to an examination of the sales tax from its inception. The act was enacted by the legislature in 1937. As enacted, provision was made for the payment of the tax on five-cent sales by the use of tokens. Section 19 of the Laws of 1937, Chapter 374, provided:
The legislature in 1939 repealed this section and enacted in lieu thereof G.S.1949, 79-3619. This section provides as follows:
Pursuant to the above statute the commission issued rules and regulations in part as follows:
'Retailer Liable for Tax. The retailer of tangible personal property, or the person selling or furnishing any of the other things or services taxable under the provisions of the act is liable and responsible to the state for the entire amount of the two per cent (2%) tax payable on his taxable gross receipts.
'Tax to be passed on. The retailer is required to pass on to the consumer or user the full amount of the tax imposed by this act, or an amount equal as nearly as possible or practicable to the average equivalent thereof.
'Unlawful advertising. The law provides that it shall be a misdemeanor, subject to a fine or imprisonment or both, 'To advertise or hold out, or state to the public, or to any consumer, directly or indirectly, that the tax, or any part thereof, imposed by this act will be assumed or absorbed by the retailer, or that it will not be considered as an element in the price to the consumer, or if added, that it, or any part thereof, will be refunded.'
'Bracket System for Adding and Collecting Sales Tax.
'In hearings had with various retailers and organizations and associations of retailers, it has been recommended that there be adopted and there is hereby ordered, approved, adopted, made...
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