Southern Package Corporation v. State Tax Commission

• Decision Date: 11 November 1935
• Docket Number: 31888
• Citation: 164 So. 45,174 Miss. 212
• Court: Mississippi Supreme Court
• Parties: SOUTHERN PACKAGE CORPORATION v. STATE TAX COMMISSION

164 So. 45

174 Miss. 212

SOUTHERN PACKAGE CORPORATION v. STATE TAX COMMISSION

No. 31888

Supreme Court of Mississippi

November 11, 1935

Division B

1 LICENSES.

Statute exempting from taxation sales of boxes and crates used in preparing agricultural products for market held not to exempt manufacturer of such boxes and crates from payment of manufacturer's tax, since it was not tax on sales (Laws 1932, chapter 90, section 4, as amended by Laws 1932, chapter 91, section 2).

2 LICENSES.

Statute imposing manufacturer's tax under which tax rate was not same for manufacturers of all products covered by tax held not unconstitutional on ground that it was not uniform, since constitutional provision requiring uniformity applied only to ad valorem taxes and not to privilege or excise taxes (Laws 1932, chapters 90, 91; Laws 1934, chapter 119; Const. Miss 1890, section 112).

3. LICENSES.

Taxes levied under statute imposing tax on persons engaging or continuing in certain businesses held privilege or excise taxes and not property taxes (Laws 1932, chapters 90, 91; Laws 1934, chapter 119).

4. TAXATION. States have wide discretion in making classification for purpose of taxation.

"Classification" is grouping of things in speculation or practice because they agree with one another in certain particulars and differ from other things in the same particulars.

5. CONSTITUTIONAL LAW.

Classification, for purposes of taxation, to be obnoxious to constitutional guaranty of equal protection of laws must be manifestly arbitrary and unreasonable and not possibly so (Const. U.S. Amend. 14).

6. CONSTITUTIONAL LAW.

Statute imposing manufacturer's tax under which tax rate imposed against manufacturers of some products was different from that imposed against manufacturers of other products held not invalid as denial of equal protection (Laws 1932, chapters 90, 91; Laws 1934, chapter 119; Const. U.S. Amend. 14).

HON. E. J. SIMMONS, Judge.

APPEAL from the circuit court of Copiah county HON. E. J. SIMMONS, Judge.

Action by the Southern Package Corporation against the State Tax Commission. Judgment for defendant, and plaintiff appeals. Affirmed.

Affirmed.

W. S. Henley, of Hazlehurst, for appellant.

The statute involved in this controversy is chapter 90, Laws of 1932, approved April 28, 1932, as amended by chapter 91, Laws of 1932, approved May 18, 1932.

Chapter 90, Laws of 1932, violates section 112 of the Constitution of the state of Mississippi.

It is assumed that there can be no question about this statute violating section 112 of the Constitution providing the tax levy is a property tax and not a privilege tax.

This tax certainly is a revenue measure, and is not levied under the police power of the state, for the purpose of regulating the businesses in which the various parties, who have been taxed, are engaged.

Hamilton v. Collins, 154 So. 201.

Unless the Supreme Court should overrule the case of Thompson v. McLeod, 112 Miss. 383, 73 So. 193, the tax in question should certainly be held to be a property tax.

Barnes v. Jones, 139 Miss. 675, 103 So. 773; South Carolina. Power Co. v. South Carolina Tax Commission, 52 F.2d 527.

Crates manufactured for sale as containers for agricultural products exempt from provisions of act.

64 L.R.A. 55; People ex rel. Standard Wood Co. v. Roberts, 20 A.D. 514, 47 N.Y.S. 122; Southern Electric Light & Power Co. v. City of Philadelphia, 43 A. 123; In re Consolidated Electric Storage Co., 26 A. 983, 63 L.Ed. 1086; American Mfg. Co. v. City of St. Louis, 142 S.W. 297; International Shoe Co. v. Chapman, License Collector, 276 S.W. 32; Simmons Hardware Co. v. City of St. Louis, 192 S.W. 394.

Just as the Supreme Court of the United States said, in the American Mfg. Co. case, that the manufacturer's tax imposed by the ordinance of the city of St. Louis, did not apply to certain sales, the Legislature of the state of Mississippi has said, that the manufacturer's tax levied by it, shall not apply to sales of certain commodities.

J. A. Lauderdale, Assistant Attorney-General, for appellee.

Whether under the facts of this case the appellant, a manufacturer of boxes and crates for sale to be used in preparing agricultural products for market, is exempt from the tax levied by chapter 90, Laws of 1932.

The question raised here is exactly the same as the question raised in the case of Jackson Fertilizer Co. v. Stone, State Tax Commissioner, 162 So. 170. The decision of the court in that case is conclusive against the contention of appellant made here.

Section 112 of the State Constitution has no application to a privilege or excise tax.

Postal Tel. Co. v. Robertson, 116 Miss. 204; State v. G. M. & N. Ry. Co., 138 Miss. 70; State v. Lawrence, 108 Miss. 291; Barataria Canning Co. v. State, 101 Miss. 890; Coca Cola Co. v. Skillman, 91 Miss. 677; Clarksdale Ins. Agency v. Cole, 87 Miss. 637; Holbert v. Macon, 55 Miss. 112.

The tax levied by chapter 119, Laws of 1934, is a privilege tax or excise tax and not a property tax.

American Mfg. Co. v. St. Louis, 63 L.Ed. 1084; State v. G. M. & N. Ry. Co., 138 Miss. 70; Knisely v. Cotterel, 196 Pa. 614; Banker Bros. v. Commonwealth, 38 Pa. S.Ct. 101, 56 L.Ed. 168; Commonwealth v. Bailey, 20 Pa. S.Ct. 210; State v. Yelle, 25 P.2d 91; Winter v. Barrett, 186 N.E. 113; Reif et al. v. Barrett, 188 N.E. 889; State ex rel. v. Welch, 251 N.W. 189; Grocery Co. v. Robertson, 126 Miss. 34, 88 So. 4; Coca Cola Co. v. Skillman, 91 Miss. 677; Canning Co. v. State ex rel., 101 Miss. 890, 58 So. 769; American Sugar Refining Co. v. Louisiana, 45 L.Ed. 102; Oliver Iron & Mining Co. v. Lord, 67 L.Ed. 930; Hope Natural Gas Co. v. Hall, 71 L.Ed. 1049, 102 W.Va. 272; Article IX, sec. 1, Constitution of Pennsylvania; Article X, sec. 1, Constitution of West Virginia; Section 2 (a), chap. 1, Acts of Legislature of West Virginia, Extra Session of 1925; Article IX, secs 1 and 5, Constitution of Florida; Section 1, Chap. 15658, Acts of 1931, Extra Session, State of Florida; City of Lakeland v. Amos, 143 So. 744; Article IX, secs. 1 and 2, Constitution of Illinois; Smith-Hurd Rev. St. 1933, chap. 120, sec. 440; Article XI, sec. 2, Constitution of South Dakota; Chapter 184, Laws of 1933, State of South Dakota; Article VII, secs. 1, 2 and 3, Constitution of Washington, Amendment XIV; Chapter 199, Laws of 1933, State of Washington, Article X, secs. 1 to 5, Constitution of Missouri; Article X, sec. 1, Constitution of Indiana; Chapter 50, Acts of 1933, State of Indiana; Miles v. Department of Treasury, 193 N.E. 855; Article XVI, sec. 5, Constitution of Arkansas; Act No. 233, General Assembly of Arkansas, 1935; Wiseman v. Phillips, 84 S.W.2d 91; Article X, sec. 8, Constitution of Louisiana, 1921; Act No. 17, Laws of 1932 of Louisiana; State v. Wilson & Co., 154 So. 636; Article VII, sec. 2, par. 1, Constitution of Georgia; Standard Oil Co. of Kentucky v. State Revenue Commission, 176 S.E. 1; General Assembly of Georgia, Laws of 1929, pages 103 to 117.

OPINION

Anderson, J.

Appellant brought this action in the circuit court of Copiah county against appellee to recover a manufacturer's tax assessed under chapters 90 and 91, Laws of 1932, and paid to appellee under protest. There was a demurrer to the declaration which was sustained, and, appellant declining to plead further, judgment was entered dismissing the action, from which judgment appellant prosecutes this appeal.

Appellant avers in its declaration that it was engaged in the business of manufacturing boxes and crates for sale in this state and elsewhere used in preparing and crating for shipment agricultural products for the market, and was so engaged from May 1, 1932, to July 1, 1932, during which time it manufactured boxes and crates for the purposes named of the value of eighty-eight thousand five hundred one dollars and fifty cents, against which appellee assessed taxes at the rate of one-fourth of one per cent under the statute, totaling two hundred twenty-one dollars and twenty-five cents; that from August 1, 1932, to July 1, 1933, it manufactured boxes and crates for the purposes named of the value of three hundred twenty thousand one hundred forty-two dollars and seventy cents, against which appellee assessed, under the statute, one-fourth of one per cent, totaling eight hundred dollars and thirty-five cents. The aggregate of these two amounts, with interest, appellee sought to recover.

By the demurrer, these questions are raised: (1) Whether by section 4 of chapter 90, Laws 1932, as amended by section 2 of chapter 91, Laws 1932, appellant is exempt from the tax? (2) If not exempt, whether or not the statute imposing the tax violates section 112 of the Constitution of the state? (3) Whether it violates the equal protection clause of the Fourteenth Amendment of the Federal Constitution? We will consider these propositions in the order stated.

Section 4 of chapter 90, Laws 1932, as amended by section 2 of chapter 91, Laws 1932, exempts from taxation sales of boxes and crates used in preparing agricultural products for market. This identical question was involved in Jackson Fertilizer Co. v. Stone, 173 Miss. 183, 162 So. 170, and decided contrary to appellant's contention. It was held in that case that the tax involved was a manufacturer's tax and not a tax on sales; that the volume of sales was used only to fix the value of the manufactured product for the purposes of taxation. We think that decision is sound and ought to stand. In fact, we do not understand that appellant asks that it be overruled.

Section 112 of the Constitution provides that taxation shall be uniform and equal throughout the state, and that property shall be taxed in proportion to its value. Appellant contends that the...