State v. Maddox Tractor & Equipment Co.

• Decision Date: 17 December 1953
• Docket Number: 6 Div. 527
• Parties: STATE v. MADDOX TRACTOR & EQUIPMENT CO.
• Court: Alabama Supreme Court

Page 426

69 So.2d 426

260 Ala. 136

STATE v. MADDOX TRACTOR & EQUIPMENT CO.

6 Div. 527.

Supreme Court of Alabama.

Dec. 17, 1953.

Si Garrett, Atty. Gen., and H. Grady Tiller and Willard W. Livingston, Asst. Attys. Gen., for appellant.

Curtis, Maddox & Johnson, Jasper, for appellee.

STAKELY, Justice.

This is an appeal from a decree of the equity court overruling the demurrer of the State of Alabama (appellant) to the bill of complaint filed by Maddox Tractor and Equipment Company, a partnership composed of Walter Maddox and James H. Maddox and Walter Maddox and James H. Maddox, individually. The case involves the construction of certain phases of the Alabama Sales Tax statutes.

On November 2, 1951, the State Department of Revenue made a final assessment against Maddox Tractor and Equipment Company, a partnership composed of Walter- Maddox and James H. Maddox and Walter Maddox and James H. Maddox, individually, for additional sales tax during the period from December 1, 1949 through and including June 30, 1951, with penalty and interest thereon in the total amount of $375.12. An appeal was taken from the foregoing assessment to the Circuit Court of Lamar County, in Equity, in accordance with § 140, Title 51, Code of 1940. There a bill was filed by Maddox Tractor and Equipment Company as a partnership and the individuals composing the partnership to which the State of Alabama demurred. The court overruled the demurrer and hence this appeal.

During the period covered by the assessment Maddox Tractor and Equipment Company sold new and used farm tractors and tractor-drawn farm equipment, such as harrows, cultivators, planters, plows, rakes, post-hole diggers, etc. The assessment was based upon an examination of records of the partnership by representatives of the State Department of Revenue. Throught the period the partnership collected a sales tax of 1/2 of 1% each time equipment was sold with a new tractor but when equipment was sold with an old tractor, the partnership did not collect any tax on the equipment. The State Department of Revenue claims that all equipment should be taxed at the regular two percent rate whether it was sold with a tractor as a unit or not.

In December 1949 the books of the partnership were audited by the State Department of Revenue. That audit showed that the partnership collected on business transacted prior to July 1951 1/2 of 1% on tractor-drawn equipment sold as a unit with the tractor, which was approved. At the conclusion of that audit the agents of the State, who were auditors of the State Department of Revenue, advised the partnership that they were not supposed to collect but 1/2 of 1% on tractor-drawn equipment when sold as a unit with a tractor. The partnership was further informed that when equipment was sold separate to the tractor, the sales tax was 2%.

On July 27, 1951 the same auditors of the State Department of Revenue advised that they had been sent by the department to make an audit on tractor-drawn equipment sold as a unit with tractors from the time of the last audit in 1949 and that the State Department of Revenue had made a new ruling known as rule and regulation A28-031, subjecting the aforesaid tractor-drawn equipment to a 2% sales tax instead of 1/2 of 1%. At that time they advised the partnership that 'they had previously instructed differently and that on the previous audit told them to collect only 1/2 of 1%.' The partnership did not collect but 1/2 of 1% under and by virtue of instructions through the State Department of Revenue and by its present action the State Department is attempting to make them pay taxes which were not collected from the customer and which they were advised not to collect from the customer, and a letter sent out by the State Department of Revenue to another company in the same business as the partnership here involved is alleged as showing the policy of the State Department of Revenue prior to July 25, 1951. The letter to which reference is made shows that the sales of tractors with tractor-drawn equipment when sold as a unit are subject to a sales tax of 1/2 of 1%, but tractor-drawn equipment when not sold as a unit with a tractor is subject to a sales tax of 2%.

It is alleged that the foregoing was the policy of the State Department of Revenue up until some time in 1951 when it placed a different interpretation on the sales tax act and that the aforesaid taxpayer was lulled into security in collecting only 1/2 of 1% on tractor and tractor-drawn equipment when sold as a unit during the audit period by the representation made by the auditors of the State Department of Revenue, that the partnership did not collect the 2% which is now claimed and that it should not be penalized by charging an additional 1 and 1/2% sales tax.

The action of the court in overruling the demurrer of the State of Alabama presents two questions. (1) Does tractor-drawn equipment, when sold as a unit with a tractor, come under the statute providing for a sales tax of 1/2 of 1% of the gross proceeds of the sale? (2) Is the State of Alabama under the facts in the case at bar estopped from collecting the sales tax in question if the equipment does not come within the statute?

I. During the period covered by the assessment in this case, the statute involved, Title 51, § 753(c), Code of Alabama 1949 Pocket Part, provided as follows:

'Tax levied on gross receipts.--There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as herein provided, a privilege or license tax against the person on account of the business activities and in the amount to be determined by the application of rates against gross sales, or gross receipts, as the case may be, as follows: * * * (c) Upon every person, firm or corporation engaged or continuing within this state in the business of selling any automotive vehicle or truck trailer and semi-trailer, an amount equal to one-half of one percent of the gross proceeds of the sale of said automotive vehicle or truck trailer and semi-trailer.'

The final assessment in this case is based on the rates as specified in the above quoted section. This section was amended by the Legislature in 1951, Act No. 121, p. 348, by changing the rate from 1/2 of 1% to 1% of the gross proceeds of sale of the automotive vehicles or truck trailers and semi-trailers. However, it is to be noted that the new rate has no application to the period covered by the final assessment in this cause.

It is a well known rule of statutory construction that where there is nothing in the statute to indicate to the contrary, words in a statute will be given the meaning which is generally accepted in popular, everyday usage. Pullman-Standard Car Mfg. Co. v. State, 253 Ala. 638, 46 So.2d 500; Carter Oil Co. v. Blair, 256 Ala. 650, 57 So.2d 64. The terms 'automotive vehicles or truck trailers and semitrailers' are not defined in the statute which we have set forth. Accordingly, taking the words as accepted in popular, everyday usage, we do not consider that tractor-drawn equipment and implements are 'automotive vehicles or truck trailers and semi-trailers' within the meaning of § 753(c), Title 51, Code of 1940, P.P. We note the definition of 'trailer and semi-trailer' as set forth in 60 C.J.S., Motor Vehicles, § 10, at page 118, as follows:

'Trailer; semitrailer. A trailer is a separate vehicle, which is not driven or propelled by its own power, but which is drawn by some independent power; a vehicle without motive power, designed to carry property or passengers wholly on its own structure, and to be drawn by a motor vehicle. A trailer may be attached to a truck by means of a coupling arm, and a load may be carried in the trailer that is not related to the load carried in the truck, and the truck may be disconnected from the trailer and proceed with its load without disturbing the load on the trailer.

'A 'semitrailer,' in motor vehicle law, has been defined as a vehicle of the trailer type so designed or used in conjunction with a motor vehicle that some part of its own weight and that of its load rest upon, or is carried by, the motor vehicle. It is a separate vehicle which is not driven or propelled by its own power, but which, in order to be useful, must be attached to, and become a part of, another vehicle. It has been described as a vehicle with a box thereon to contain the load or things carried, and having two wheels at the rear, the front, when in use, resting upon the tractor truck, which thus carries part of the weight of the semitrailer. A semitrailer, of the two-wheel type, may be attached to the body of the truck, and both the truck and the semitrailer participate in carrying the same load.'- It is our view that tractor-drawn farm equipment such as harrows, cultivators, planters,...