Stapling Machines Co. v. Monaghan

• Decision Date: 13 January 1958
• Docket Number: No. 40698,40698
• Citation: 99 So.2d 649,232 Miss. 484
• Parties: STAPLING MACHINES COMPANY v. Noel MONAGHAN, Chairman, State Tax Commission.
• Court: Mississippi Supreme Court

Page 649

99 So.2d 649

232 Miss. 484

STAPLING MACHINES COMPANY v. Noel MONAGHAN, Chairman, State Tax Commission.

No. 40698.

Supreme Court of Mississippi.

Jan. 13, 1958.

Opinion Corrected March 24, 1958.

See 101 So.2d 359.

Tighe & Tighe, Jackson, for appellant.

John E. Stone, Henry A. Fly, Jackson, for appellee.

HALL, Justice.

This case is a suit for recovery of income taxes paid by the appellant to the State Tax Commission for the years 1951, 1952 and 1953, which was decided by the lower court adversely to the appellant.

The appellant attacks the constitutionality of the assessment against it and we do not use much time in saying that the identical questions as to constitutionality were passed upon by this Court in the case of Stone v. Stapling Machines Company, 220 Miss. 470, 71 So.2d 205, appeal dismissed by the Supreme Court of the United States on October 14, 1954, 348 U.S. 802, 75 S.Ct. 31, 99 L.Ed. 633, and in Stone v. Stapling Machines Company, 221 Miss. 555, 73 So.2d 123, the appeal having been dismissed by the Supreme Court of the United States January 10, 1955, 348 U.S. 907, 75 S.Ct. 296, 99 L.Ed. 711. The case first mentioned involved the liability of appellant for sales tax, and the case second mentioned involved the liability of appellant for 1950 income tax. The facts involved in the present case, except as to amount, are identical with those involved in 221 Miss. 555, 73 So.2d 123, with the additional feature that since that decision the appellant has entered the State of Mississippi and now employs in this State Regularly men who are engaged in the repair of its machines and the replacement of parts needed in connection therewith.

The appellant complains that it was not permitted to deduct from its gross income the federal taxes paid by it. Our income tax law makes no provision for such a deduction by anyone. All individuals and corporations in this State are subject to the same law.

The appellant also complains that the State Tax Commission did not use the formula which it desired in determining the amount of its income tax. Appellant works out an apportionment ratio which it says should be used since it is engaged in business and has income from many other states and keeps only a unitary system of books. It contends that there should be taken the ratio of the Mississippi receipts to the total unitary receipts, together with the ratio of the Mississippi tangible property to the total unitary tangible property and that there should be taken the ratio of the salaries and wages paid in Mississippi to the total salaries and wages paid everywhere. The appellant works out these three items to be a total of 27.64016% and then contends that the apportionment ratio for Mississippi is one-third of this amount or 9.21339%, and in connection with its contention the appellant has introduced into the record the state income tax law pamphlet including regulations No. 9 published in 1949, and the state income tax law pamphlet including regulations No. 10 published in 1952. Article 247 of the regulations divides foreign corporations into three different classes, and the third class is divided into three identifications, (A) manufacturing, (B) trading, and (C) personal service and special cases. The 1949 regulations and the 1952 regulations are substantially the same in this regard and appellant seeks to come under the ratio prescribed for manufacturing corporations. However, it will be noted from the statement of facts that the appellant does not qualify as a manufacturing corporation. The appellant earned all of its profits from the leasing of machines,--not from the manufacture thereof. It appears that the appellant does not sell and will not sell a single one of its machines. Any person using its machines is...