Straus Beverage Corp. v. Com.
| Decision Date | 13 January 1947 |
| Docket Number | Record No. 3122. |
| Citation | 185 Va. 1055 |
| Parties | S. & L. STRAUS BEVERAGE CORPORATION v. COMMONWEALTH OF VIRGINIA. |
| Court | Virginia Supreme Court |
Present, Holt, C.J., and Hudgins, Gregory, Eggleston, Spratley and Buchanan, JJ.
1. LICENSES — Wholesale Merchants — Tax Code Section 188 — Meaning of "Amount of Purchases". — Under section 188 of the Tax Code, requiring every wholesale merchant to pay a license tax to be measured by the amount of purchases made during the preceding year, "amount of purchases" carries the meaning of being the amount one pays for what he buys, the sum total surrendered in exchange for the thing purchased. It is the total sum of money the buyer parts with to get the article, regardless of what proportion of that amount is taxes and what proportion is labor or material or other cost.
2. LICENSES — Beer Manufactured, Bottled or Sold — Obligation of Wholesaler and Retailer Secondary. — Under sections 4675(27) and 4675(28) of the Code of 1942 (Michie), providing for an excise tax on beer manufactured, bottled or sold in the State, the obligation of the wholesaler and retailer is secondary and attaches only in case the manufacturer has failed to discharge his obligation.
3. LICENSES — Beer Manufactured, Bottled or Sold — Obligation to Pay Is Manufacturer's. — Under sections 4675(27) and 4675(28) of the Code of 1942 (Michie), providing for an excise tax on beer manufactured, bottled or sold in the State, all manufacturers are required to affix the tax-paid stamps or crowns, and those out of the State must do so before offering the beer for sale in the State. Whether the tax is on the manufacture or on the sale, the obligation to pay it is the obligation of the manufacturer.
4. LICENSES — Wholesale Merchants — Tax Code Section 188 — Inclusion of Excise Tax Paid by Manufacturer and Included in Wholesaler's Invoice — Case at Bar. — In the instant case, an action to recover for a deficiency in a wholesale merchant's license, required by section 188 of the Tax Code to be measured by the amount of purchases made during the preceding year, defendant, a wholesaler of beer, in reporting the amount of its purchases did not include the amount of the State excise tax on the beer, which had been previously paid by the manufacturers from whom the beer had been purchased and was included as a separate item in the invoice to defendant. Defendant contended that the State excise tax was not a part of the "amount of purchases" made by defendant but admitted that it was proper to include the federal excise tax because, it said, the federal tax attached before a sale, was "buried in the purchase price" and not separately billed.
Held: That whether the manufacturer invoiced the amount of the excise tax to the wholesaler separately or buried it in the price the result to the wholesaler was the same and the amount of his purchase was the total amount he paid to get the beer.
5. LICENSES — Wholesale Merchants — Tax Code Section 188 — Inclusion of Excise Tax Paid by Manufacturer — Not Double Taxation — Case at Bar. — In the instant case, an action to recover for a deficiency in a wholesale merchant's license, required by section 188 of the Tax Code to be measured by the amount of purchases made during the preceding year, defendant, a wholesaler of beer, in reporting the amount of its purchases did not include the amount of the State excise tax on the beer, which had been previously paid by the manufacturers from whom the beer had been purchased and was included as a separate item in the invoice to defendant.
Held: That to include the excise tax as a part of the amount of purchases made by defendant did not result in double taxation, since the license tax assessed against defendant was based on the total charge made by the manufacturer for his product and no double taxation was involved in that procedure.
6. LICENSES — Wholesale Merchants — Tax Code Section 188 — Inclusion of Excise Tax Paid by Manufacturer — Allowing Manufacturer to Obtain License Based on Cost of Manufacture Not Illegal Discrimination — Case at Bar. — In the instant case, an action to recover for a deficiency in a wholesale merchant's license, required by section 188 of the Tax Code to be measured by the amount of purchases made during the preceding year, defendant, a wholesaler of beer, in reporting the amount of its purchases did not include the amount of the State excise tax on the beer, which had been previously paid by the manufacturers from whom the beer had been purchased and was included as a separate item in the invoice to defendant. Defendant contended that the provision of section 188 that a manufacturer may sell the product he manufactures at a separate place of business as a wholesaler, by paying a wholesaler's license based on the cost of manufacture, resulted in illegal discrimination, since the "cost of manufacture" would not include the excise tax and, therefore, the manufacturer would pay less for the wholesale license than his competitor who was not a manufacturer.
Held: That there was no illegal discrimination. Whatever the reason for the distinction, it was one the legislature had the right to make.
7. STATUTES — General Application Not Destroyed by Special Instances of Avoidance. — The general application of a statute is not destroyed by discovering special instances in which it may be avoided.
8. LICENSES — Wholesale Merchants — Tax Code Section 188 — Inclusion of Excise Tax Paid by Manufacturer — Not Affected by Exclusion of Tax Paid for Crowns Furnished Manufacturer — Case at Bar. — In the instant case, an action to recover for a deficiency in a wholesale merchant's license, required by section 188 of the Tax Code to be measured by amount of purchases made during the preceding year, defendant, a wholesaler of beer, in reporting the amount of its purchases did not include the amount of the State excise tax on the beer, which had been previously paid by the manufacturers from whom the beer had been purchased and was included as a separate item in the invoice to defendant. Defendant made a small per cent of its purchases from a manufacturer outside of the State, to whom it furnished tax-paid crowns paid for by it, and the amount so paid was not included in the invoice for the beer and not taken into account in computing the license tax. It was argued that since this might be done it was not intended that the excise tax should be included when the manufacturer paid it and invoiced it to the wholesaler.
Held: That there was no merit in this contention. If the way to avoid a tax is not followed, the tax applies. The taxpayer must take the privilege as it is offered.
9. LICENSES — Wholesale Merchants — Tax Code Section 188 — Inclusion of Excise Tax Paid by Manufacturer and Included in Wholesaler's Invoice — Case at Bar. — In the instant case, an action to recover for a deficiency in a wholesale merchant's license, required by section 188 of the Tax Code to be measured by the amount of purchases made during the preceding year, defendant, a wholesaler of beer, in reporting the amount of its purchases did not include the amount of the State excise tax on the beer, which had been previously paid by the manufacturers from whom the beer had been purchased and was included as a separate item in the invoice to defendant. Defendant contended that the State excise tax was not a part of the "amount of purchases" made by defendant.
Held: That when defendant bought the beer on the purchase of which the assessment for the license was made, it paid to the manufacturer therefor a sum that included the excise tax which the manufacturer was required to pay, and had paid, and the amount of the purchase was the sum so paid.
Error to a judgment of the Circuit Court of the city of Richmond. Hon. Julien Gunn, judge presiding.
The opinion states the case.
Christian, Barton, Parker & Body and J. Vaughan Gary, for the plaintiff in error.
Abram P. Staples, Attorney General, and W. W. Martin, Assistant Attorney General, for the Commonwealth.
The Commonwealth recovered a judgment against S. & L. Straus Beverage Corporation, defendant, for $697.04 deficiency in wholesale merchant's license for 1942 and 1943, which we are asked to reverse because contrary to the law and evidence. The facts were stipulated and are these, so far as they need be stated:
The defendant, a Virginia corporation, is a wholesale merchant of wine and beer in Richmond. It buys the beer it sells only from manufacturers (brewers), located in Virginia and elsewhere. In reporting the amount of its purchases of beer in order to secure wholesale merchant's license for 1942 and 1943, it did not include in the amount of such purchases the amount of the Virginia State excise tax on the beer, which amount had been previously paid by the manufacturers from whom the beer had been purchased and was included in the invoices to the defendant.
The invoice of the manufacturer shows the amount charged for the beer as one item and the Virginia State excise tax as another item, and in paying the invoice the defendant included both items in one check. In other words, the manufacturer paid the excise tax and the defendant paid the manufacturer in paying for the beer. When it was discovered that the defendant had omitted this excise tax from the amount of its purchases in paying its license tax the Commonwealth brought suit against it which resulted in the judgment to which this writ of error was awarded.
According to the stipulation, ...
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