State Tax Comm'n v. Gen. Trading Co., No. 46273.

CourtUnited States State Supreme Court of Iowa
Writing for the CourtMILLER
Citation233 Iowa 877,10 N.W.2d 659
Docket NumberNo. 46273.
Decision Date27 July 1943
PartiesSTATE TAX COMMISSION v. GENERAL TRADING CO., Doing Business as Minneapolis Iron Store.

233 Iowa 877
10 N.W.2d 659

STATE TAX COMMISSION
v.
GENERAL TRADING CO., Doing Business as Minneapolis Iron Store.

No. 46273.

Supreme Court of Iowa.

July 27, 1943.


Appeal from District Court, Polk County; Loy Ladd, Judge.

Action to recover use taxes. Defense was that, because of defendant's method of doing business, no tax is due and, if the letter of the statute imposes a tax, the statute is unconstitutional. The tax commission filed a demurrer to the answer; the demurrer was sustained; defendant stood on the ruling, suffered judgment to be entered thereon, and appeals.

Affirmed.

[10 N.W.2d 660]

O'Brien, Horn, Stringer & Seymour, of St. Paul, Minn., and Gamble, Read, Howland & Rosenfield, of Des Moines, for appellant.

John M. Rankin, Atty. Gen., and Jens Grothe, Asst. Atty. Gen., for appellee.


MILLER, Justice.

Plaintiff's petition asserts that defendant is a Minnesota corporation, selling merchandise under the trade name of Minneapolis Iron Store at Minneapolis, Minn.; from April 16, 1937, through September 30, 1941, defendant sold merchandise to Iowa purchasers who used and consumed same; defendant sent solicitors into Iowa who took orders from Iowa purchasers, subject to acceptance at defendant's store in Minnesota; the property was subsequently delivered upon said orders in interstate commerce to the purchasers in Iowa; defendant thereby became a “retailer maintaining a place of business in this state” as defined by the Iowa Use Tax Law (Chapter 329.4, Code 1939), and was required to collect and pay to the state a use tax of 2% on the merchandise so sold; defendant failed to collect and pay such tax; plaintiff determined the tax to be $360 and made an assessment accordingly; defendant was notified of such assessment and took no appeal therefrom; time for appeal has expired. The prayer demanded judgment for the use tax of $360 with statutory penalty and interest.

Defendant voluntarily appeared and filed answer which admitted certain allegations and denied others. Defendant admitted its corporate capacity, its place of business, the assessment of the tax, the failure to appeal therefrom, and that 2% of the purchase price of merchandise sold by defendant to residents of Iowa from April 16, 1937, through September 30, 1941, amounted to $360. The answer further asserted that defendant is not qualified to do business in Iowa as a foreign corporation, does purely interstate business, has not maintained any office, distribution house, sales house, warehouse or other place of business, or any agent located in Iowa, through which it has sold tangible personal property to persons in Iowa; from time to time during the period aforesaid, defendant sent traveling salesmen from Minnesota into Iowa, none of whom lived in Iowa or had headquarters in Iowa; such traveling salesmen solicited orders for merchandise in Iowa, which orders were subject to acceptance or rejection at defendant's office in Minnesota; the salesmen were not authorized to make and did not make any contracts in Iowa; in filling such orders as were accepted at its office in Minnesota, merchandise was shipped from Minnesota to Iowa by delivery to common carriers, truck or rail, or by delivery to U. S. Postal Dept.; the purchasers paid all costs of transportation by carrier or parcel post.

Based on the statement of facts aforesaid, the answer asserted that defendant's business was purely interstate, not dependent on any law or privilege extended by the State of Iowa and not subject to regulation by the State of Iowa; defendant's right to do business was granted by the Constitution of the United States and the laws of Minnesota; plaintiff and the State of Iowa have no jurisdiction to charge defendant for the privilege of carrying on its interstate business; if the Iowa Use Tax Act be construed to give plaintiff power to make the assessment herein, the act is void because it violates the due process clause of the 14th Amendment to the U. S. Constitution, violates Section 8, Article I of said Constitution and violates Section 9, Article I, Constitution of Iowa; defendant is not a retailer maintaining a place of business in Iowa and there is no liability to plaintiff under the terms of the act; enforcement of the assessment made by plaintiff would result in regulation of defendant's business without the boundaries of Iowa, contrary to the due process clauses aforesaid, would result in regulation of and imposition of a direct tax upon sales in interstate commerce, and the exercise of sovereign power by the State of Iowa beyond its boundaries, all in violation of the aforesaid constitutional provisions. The prayer of the answer was that the action be dismissed at plaintiff's costs.

Simultaneously with the filing of the answer, the tax commission filed a demurrer thereto, which asserted that (1) the answer shows on its face that defendant is a “retailer” and a “retailer maintaining a place of business in this state” as defined by paragraphs 5 and

[10 N.W.2d 661]

6, Section 6943.102, Code 1939; (2) the answer shows on its face that defendant, as a “retailer” and a “retailer maintaining a place of business in this state” made sales to Iowa purchasers and is liable for said use tax assessment under the provisions of the Iowa Use Tax Law.

The demurrer was duly argued and submitted; the court ordered that it be sustained; defendant refused to plead further, elected to stand on the ruling, and judgment was entered for the assessment of the use tax in the sum of $360 and costs. Defendant has appealed to this court.

In sustaining the demurrer, the court determined that, under the allegations of the answer, defendant is a “retailer maintaining a place of business in this state” within the meaning of the use tax law. The defendant challenges such finding on four grounds, which may be classified into two, (1) that the court was wrong in interpreting the act so that it applies to defendant and (2) making the act applicable to defendant renders it unconstitutional. We find no merit in either contention.

I. The statutory provisions, interpreted by the trial court, are paragraphs 5 and 6 of Section 6943.102, Code 1939. We think that said paragraph 5 defines a “retailer” to include anyone engaged in the business of selling at retail tangible personal property for use in Iowa. Defendant was selling tangible personal property for use in Iowa and the sales were retail sales. Defendant was a “retailer” within the meaning of the act and does not contend otherwise. The contention is that defendant is not a “retailer maintaining a place of business in this state”, as defined by paragraph 6 of said Section 6943.102.1 The answer asserts facts from which it appears that, if the phrase were to be given its ordinary meaning, defendant is not such a retailer. But we are dealing with a statutory definition. The tax commission points out that the statute provides that a “retailer maintaining a place of business in this state” shall include “any retailer having *** within this state *** any agent operating within this state under the...

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13 practice notes
  • State ex rel. Transport Mfg. Co. v. Bates, No. 41456.
    • United States
    • United States State Supreme Court of Missouri
    • November 14, 1949
    ...Amendments to the Constitution of the United States. Powell v. Maxwell, 210 N.C. 211, 186 S.E. 326; State Tax Comm. v. General Trade Co., 233 Iowa 877, 10 N.W. (2d) 659; Banner Laundering Co. v. State Bd. of Tax Adms., 297 Mich. 419, 298 N.W. CONKLING, J. This original action in mandamus pr......
  • Peoples' Gas & Elec. Co. v. State Tax Comm'n, No. 46987.
    • United States
    • United States State Supreme Court of Iowa
    • September 16, 1947
    ...to a two per cent. sales tax. Dain Mfg. Co. v. Iowa State Tax Commission, Iowa, 22 N.W.2d 786;State Tax Commission v. General Trading Co., 233 Iowa 877, 10 N.W.2d 659, 153 A.L.R. 602. In the language of Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 363, 61 S.Ct. 586, 588, 85 L.Ed. 888, 132 ......
  • Sperry & Hutchinson Co. v. Hoegh, No. 48475
    • United States
    • United States State Supreme Court of Iowa
    • July 26, 1954
    ...supreme court on matters relating to the federal constitution are binding on state courts. See State Tax Comm. v. General Trading Co., 233 Iowa 877, 886, 10 N.W.2d 659, 664, 153 A.L.R. 602; Elk River Coal & Lbr. Co. v. Funk, 222 Iowa 1222, 1232, 271 N.W. 204, 110 A.L.R. 1415; Tolerton & War......
  • Creamery Package Manufacturing Co. v. State Board of Equalization of State, 2327
    • United States
    • United States State Supreme Court of Wyoming
    • March 5, 1946
    ...West Publishing Company case, heretofore cited, is not, accordingly in point herein. In State Tax Commission vs. General Trading Company, 233 Iowa 877, 10 N.W.2d 659, an assessment of a use tax was upheld. In that case it appears that the defendant, General Trading Company, not qualified to......
  • Request a trial to view additional results
13 cases
  • State ex rel. Transport Mfg. Co. v. Bates, No. 41456.
    • United States
    • United States State Supreme Court of Missouri
    • November 14, 1949
    ...Amendments to the Constitution of the United States. Powell v. Maxwell, 210 N.C. 211, 186 S.E. 326; State Tax Comm. v. General Trade Co., 233 Iowa 877, 10 N.W. (2d) 659; Banner Laundering Co. v. State Bd. of Tax Adms., 297 Mich. 419, 298 N.W. CONKLING, J. This original action in mandamus pr......
  • Peoples' Gas & Elec. Co. v. State Tax Comm'n, No. 46987.
    • United States
    • United States State Supreme Court of Iowa
    • September 16, 1947
    ...to a two per cent. sales tax. Dain Mfg. Co. v. Iowa State Tax Commission, Iowa, 22 N.W.2d 786;State Tax Commission v. General Trading Co., 233 Iowa 877, 10 N.W.2d 659, 153 A.L.R. 602. In the language of Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 363, 61 S.Ct. 586, 588, 85 L.Ed. 888, 132 ......
  • Sperry & Hutchinson Co. v. Hoegh, No. 48475
    • United States
    • United States State Supreme Court of Iowa
    • July 26, 1954
    ...supreme court on matters relating to the federal constitution are binding on state courts. See State Tax Comm. v. General Trading Co., 233 Iowa 877, 886, 10 N.W.2d 659, 664, 153 A.L.R. 602; Elk River Coal & Lbr. Co. v. Funk, 222 Iowa 1222, 1232, 271 N.W. 204, 110 A.L.R. 1415; Tolerton & War......
  • Creamery Package Manufacturing Co. v. State Board of Equalization of State, 2327
    • United States
    • United States State Supreme Court of Wyoming
    • March 5, 1946
    ...West Publishing Company case, heretofore cited, is not, accordingly in point herein. In State Tax Commission vs. General Trading Company, 233 Iowa 877, 10 N.W.2d 659, an assessment of a use tax was upheld. In that case it appears that the defendant, General Trading Company, not qualified to......
  • Request a trial to view additional results

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