Southern Grocery Stores v. South Carolina Tax Com.

• Decision Date: 02 February 1932
• Citation: 55 F.2d 931
• Court: U.S. District Court — District of South Carolina
• Parties: SOUTHERN GROCERY STORES, Inc., et al. v. SOUTH CAROLINA TAX COMMISSION et al.

55 F.2d 931 (1932)

SOUTHERN GROCERY STORES, Inc., et al. v. SOUTH CAROLINA TAX COMMISSION et al.

District Court, E. D. South Carolina.

February 2, 1932.

Gwinn & Pell and Davies, Auerback & Cornell, all of New York City, Harold Hirsch & Marion Smith and W. B. Cody, all of Atlanta, Ga., and Benet, Shand & McGowan, of Columbia, S. C., for complainants.

J. Fraser Lyon, of Columbia, S. C., for defendants.

Before PARKER and NORTHCOTT, Circuit Judges, and GLENN, District Judge.

PARKER, Circuit Judge.

This is a suit brought by the Southern Grocery Stores, a Delaware corporation, in behalf of itself and others similarly situated, against the members of the South Carolina tax commission, to enjoin the enforcement of the South Carolina chain store tax, being Act No. 829 of 1930 (36 St. at Large, p. 1384). A motion to dismiss has been made, based on a number of grounds; but defendants now make no point that there is an adequate remedy at law, withdrawing the contention to that effect, and consenting that equity take jurisdiction if the bill states any ground of relief. They contend, however, that the statute attacked is valid, and that the bill alleges no ground for the relief prayed.

The statute in question is as follows:

"Section 1. Every person, firm or corporation or association engaged in the business of operating or maintaining in this State under the same general management, supervision, or ownership one or more stores or mercantile establishments where goods, wares, and/or merchandise are offered for sale at retail, shall pay an annual license tax, in addition to all other license fees or charges, for each store or mercantile establishment situate in any incorporated city and/or town in this State, in accordance with the following schedule:

                  First store ..................   $  5.00
                  Second store .................     10.00
                  Third store ..................     15.00
                  Fourth store .................     20.00
                  Fifth store ..................     25.00
                  Sixth store ..................     30.00
                  Seventh store ................     35.00
                  Eighth store .................     40.00
                  Ninth store ..................     45.00
                  Tenth store ..................     50.00
                  Eleventh store ...............     55.00
                  Twelfth store ................     60.00
                  Thirteenth store .............     65.00
                  Fourteenth store .............     70.00
                  Fifteenth store ..............     75.00
                  Sixteenth store ..............     80.00
                  Seventeenth store ............     85.00
                  Eighteenth store .............     90.00
                  Nineteenth store .............     95.00
                  Twentieth store ..............    100.00
                  Twenty-first store ...........    105.00
                  Twenty-second store ..........    110.00
                  Twenty-third store ...........    115.00
                  Twenty-fourth store ..........    120.00
                  Twenty-fifth store ...........    125.00
                  Twenty-sixth store ...........    130.00
                  Twenty-seventh store .........    135.00
                  Twenty-eighth store ..........    140.00
                  Twenty-ninth store ...........    145.00
                  Thirtieth store ..............    150.00
                

"For each store in excess of thirty stores, an annual tax of One Hundred and Fifty ($150.00) Dollars for each store: Provided, That the tax herein imposed shall not apply to gasoline filling stations.

"§ 2. For the purpose of grading and determining the amount of the tax herein provided, it is hereby declared to be the purpose and intent of this Act to consider any person, firm, corporation or association herein taxed as being the person, firm, corporation or association which ultimately controls or directs the management or control of any stores or other mercantile establishments, or group or association of stores or mercantile establishments, whether the same be operated under separate charter or not.

"§ 3. That for the year 1930, the taxes herein provided for shall be paid to the South Carolina Tax Commission on or before the thirtieth day of June, and that for the years thereafter, the said license taxes shall be paid on or before the 1st day of April.

"§ 4. That the administration of this Act is vested in the South Carolina Tax Commission which shall prescribe rules and regulations pertinent to the enforcement of this Act. It shall have power to enter upon the premises of any taxpayer and examine, or cause to be examined by any agent or representative designated by it for that purpose, any books, papers, records, or memoranda and to secure any other information directly or indirectly concerned in the enforcement of this Act.

"That all the provisions of an Act entitled `An Act to Raise Revenue for the Support of the State Government, etc.' approved March 10, 1928, and being Act No. 574, are hereby adopted for the purpose of the enforcement and administration of this Act.

"§ 5. That any person, firm, corporation or association, liable for the tax herein provided for who shall fail to comply with any lawful regulation of the South Carolina Tax Commission, or who shall fail to pay the tax within the time herein provided, shall be liable to a penalty of Five Hundred ($500.00) Dollars: Provided, That the South Carolina Tax Commission may remit said penalties in whole or in part.

"§ 6. All Acts or parts of Acts inconsistent herewith are hereby repealed.

"§ 7. This Act shall take effect immediately upon its approval by the Governor."

In the light of recent decisions of the Supreme Court, we think there can be no question as to the constitutionality of this statute. State Board of Tax Commissioners of Indiana v. Jackson, 283 U. S. 527, 51 S. Ct. 540, 75 L. Ed. 1248, 73 A. L. R. 1464; Great Atlantic & Pacific Tea Co. v. Maxwell, 284 U. S. ___, 52 S. Ct. 26, 76 L. Ed. ___; Great Atlantic & Pacific Tea Co. v. Morissett, 284 U. S. ___, 52 S. Ct. 127, 76 L. Ed. ___.

Complainant contends that the...