State v. Chapman

Decision Date10 October 1927
Docket NumberNo. 27786.,27786.
Citation300 S.W. 1076
PartiesSTATE ex rel. INTERNATIONAL SHOE CO. v. CHAPMAN, License Collector of City of St. Louis.
CourtMissouri Supreme Court

Jourdan & English, of St. Louis, for American Tobacco Co., amici curiæ.

BLAIR, J.

This is an original proceeding in certiorari, whereby relator seeks to quash the record of the board of merchants' and manufacturers' tax equalization of the city of St. Louis, made on July 27, 1926, in the matter of the assessment of merchants' license taxes against relator for year ending July 1, 1926. Said board having adjourned soon after its entry, the record here challenged is now in the custody and under the control of respondent in his official capacity as license collector.

The facts, together with applicable provisions of the city charter and ordinances, have been fully stipulated. Respondent is license collector of the city of St. Louis. The board of merchants' and manufacturers' tax equalization, to which we will refer as "board," meets on the third Tuesday of June each year and continues in existence for a six weeks' session, if so required, but not longer. Among other duties, the board "shall determine all matters of appeal, equalization, revision, or correction of assessment or of any other matter properly coming before said board." Rev. Code, 1914, § 335.

By section 407 of said Revised Code, the word "merchant" is thus defined:

"Whoever shall deal in the selling of any goods, wares or merchandise at any store, stand or place occupied for that purpose within the city, or at the merchants' exchange, is hereby declared to be a merchant, except as is or may be otherwise provided by ordinance."

By section 408, every person defined to be a merchant by section 407 is required to take out a license. Section 410 provides for a statement of the largest amount of merchandise the merchant had on hand between the first Monday in March and the first Monday in June of each year, and, "second, a statement of the aggregate amount of all sales made by him during the year next preceding the first Monday of June, which statement shall be made in writing," etc.

Section 411, after providing for the levy and collection of an ad valorem tax for municipal purposes on the goods, wares, and merchandise of said merchant "situated within the limits of the city," provides for a license fee "which shall be paid every year by the merchant, mercantile firm, or corporation (in addition to the per centum hereinbefore stated) of $1 on each $1,000 or fractional part thereof, of sales made by such merchant, mercantile firm, or corporation," etc.

That the fee for such license is based on all sales of the merchant, and not merely those made in Missouri, is further shown by section 415 of the Revised Code, which requires the merchants "to keep a proper book and enter in ink an account of all sales made by him or them, which account shall always be open to the inspection of the license collector to verify the returns made by him."

Relator is a manufacturer of shoes and a merchant of the product of its factories. It paid the manufacturers' license tax required by section 397 and the ad valorem tax due the city on its merchandise, etc., required by section 411. In July, 1926, relator made application to respondent for a merchant's license and filed therewith its verified return, showing, among other things not now important, that the entire value of all shoes made by relator in the city of St. Louis for the preceding year was the sum of $11,228,193.88, regardless of where such shoes were sold. It was also stated in said return that the entire value of all shoes sold by relator to customers in Missouri, regardless of where such shoes were made, was $6,210,315.23.

On July 12, 1926, the board examined said return and found it to be insufficient and made an order increasing the sales item from $6,210,315.23 to $86,139,744.54. The latter figure represents the total sales of relator within and without the state of Missouri. On July 22, 1926, relator filed a written protest with the board and the same was overruled on July 27, 1926. In entering its order disallowing said protest and after referring to relator's contention that the tax should not be imposed upon sales made outside of Missouri, the board said:

"But the board is advised that the license tax exacted of merchants by law and ordinance of the city of St. Louis of $1 per thousand upon the aggregate amount of all sales made by the merchant during the prior year is not a tax upon such sales specifically as such, but is a tax upon the privilege of pursuing the business of merchant in the city of St. Louis, under the protection of the laws of the state and the ordinances of the city, and that reference is had to such sales only for the purpose of graduating the license tax to the value of this privilege and to the extent of its exercise. It is accordingly, in the judgment of the board, immaterial to inquire whether any part of such sales constituted interstate commerce."

Relator contends that it is entitled to a license as a merchant upon paying the sum of $6,210.32, which amount it has tendered and which respondent refused to accept. Respondent contends that relator is not entitled to such merchant's license until it has paid the sum of $86,139.75, or $79,929.43 more than relator has tendered. Otherwise stated, relator contends that it is entitled to a merchant's license upon paying $1 per thousand upon sales made in Missouri. Respondent contends relator is not entitled to such license until it tenders and pays $1 per thousand upon its total sales, regardless of where such sales were made. If relator is correct in its contention, the order of the board, in so far as it fixed the amount of relator's sales in excess of $6,210,315.23, as a basis for relator's license tax as a merchant, is and was illegal and unauthorized, and its record to that extent should be quashed. If respondent is correct in his contention, our writ of certiorari was improvidently issued and should be quashed.

Relator is a corporation organized under the laws of the state of Delaware. Its offices and principal place of business are in St. Louis. It owns and usually operates 43 factories for the manufacture of shoes. Twenty-four of these factories are located in St. Louis and other cities of Missouri. Nineteen of such factories are located in Illinois, Iowa, Kentucky, and New Hampshire. The total daily capacity of its factories is approximately 150,000 pairs of shoes.

Relator contends that the imposition of a merchant's license tax, based upon all of its sales, is a burden upon interstate commerce, in so far as such tax is based upon sales made in other states and foreign countries, and to that extent is illegal. On the other hand, respondent contends, as the board wrote into its order overruling relator's protest, that the imposition of a merchant's license tax of $1 per thousand, based upon all sales intrastate and interstate, is not a tax upon such sales as such, but is a tax upon the privilege of pursuing the business of a merchant in the city of St. Louis and that the reference to sales is only made to graduate and determine the value of such privilege in view of the extent of its exercise.

In State ex rel. International Shoe Co. v. Chapman, air Mo. 1, 276 S. W. 32, Division 1 of this court had before it the question of the power of the city of St. Louis to base the license tax of relator as a manufacturer upon shoes manufactured outside of Missouri and brought to St. Louis for storage, sale, and distribution. It was there said that:

"For the purpose of levying a tax on the relator's privilege as a manufacturer, the ordinance did not authorize a computation of the tax upon the value of shoes manufactured beyond the jurisdiction of the city. The protest of relator, however, and its action here, goes only to the tax computed upon shoes made out of the city and sold out of the state, and as to that tax, levied against relator in its character as manufacturer, we hold it was unauthorized."

The question a whether or not the imposition of the manufacturer's license tax, based upon the value of shoes which were afterward the subject of interstate commerce, constituted an interference with or a burden upon interstate commerce was not regarded in that case as having any bearing upon the question there under consideration. It was said:

"But, we do not think the interstate character of those sales entered into or forms any necessary factor in the issue here to be determined. If those shoes were manufactured in St. Louis within the authorized meaning of the ordinance of the city, the fact that they were sold in other states offers no obstacle to their consideration in computing the manufacturer's tax."

This was in harmony with what we ruled in the American Manufacturing Co. v. St. Louis, 270 Mo. 40, 192 S. W. 402.

In the case at bar we have squarely presented the question of whether or not the imposition upon relator of a license tax as a merchant is an improper interference with or undue burden upon interstate and foreign commerce, in violation of the commerce clause of the Federal Constitution (article 1, § 8, par. 3), in so far as the said tax is based upon sales made in interstate and foreign commerce. We are convinced that a tax so imposed is illegal and void.

That the sales of shoes by relator outside of Missouri constitute...

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