Trico Elec. Co-op. v. State Tax Commission
| Decision Date | 18 October 1955 |
| Docket Number | No. 5957,5957 |
| Parties | TRICO ELECTRIC COOPERATIVE, Inc, a corporation, Appellant, v. STATE TAX COMMISSION of the State of Arizona; Thad M. Moore, Warren Peterson and William E. Stanford, Members of and constituting said State Tex Commission, Appellees. |
| Court | Arizona Supreme Court |
Hall, Catlin & Molloy, Tucson, for appellant.
Robert Morrison, Atty. Gen., for appellees.
The State Tax Commission of Arizona levied an assessment against Trico Electric Cooperative, Inc., under the provisions of the Excise Revenue Act of 1935, as amended, for selling tangible personal property at retail during the period from June 1, 1949, to March 31, 1952. The tax was paid under protest and suit brought to recover the same. The trial court sustained the validity of the tax and rendered judgment for the defendant tax commission. Plaintiff Trico Electric Cooperative, Inc., appeals. The parties will be referred to as they appeared in the trial court.
The facts are stipulated to be substantially as follows: Plaintiff is an electrical co-operative selling electricity to its members only and constructs most of and maintains all of its distribution lines and to that end purchases quantities of materials. In making these purchases the plaintiff's engineers drew up specifications and estimates of plaintiff's needs and the plaintiff then ordered from two to ten percent in excess of the estimates. Normally this excess was nearer ten than two percent of such estimates and was to prevent the possibility of experiencing a shortage of needed material. All purchases were with the intention of using the same but with the knowledge that a surplus might and probably would occur and that in all probability it would be necessary in good business practice to dispose of such surplus in order to recover capital. Plaintiff endeavored when feasible to order in carload lots and thereby obtained lower unit prices.
During the three-year period involved, a surplus of various materials over and above plaintiff's needs did occur and were sold to various companies and individuals for their respective consumption and not for resale. These sales were made to the respective consumers without profit at actual book cost except in one instance when ten percent was added to cover handling charges. In this manner plaintiff recovered its investment in these surplus articles. Had they been returned to the original suppliers plaintiff would have been compelled to pay a ten percent handling charge plus freight and in many instances such return would have been refused. Plaintiff never advertised surplus for sale and never sold articles for which it had immediate need.
The date of each respective sale is not reflected in plaintiff's books. The sales for a month are recorded at the end thereof and as near as can be gained from the stipulated facts show an aggregate for the three-year period of 145 sales for a total of $48,508.40. These sales occurred during various months of the year.
We have held this type of tax is a levy on the business of selling tangible personal property at retail rather than on the sales. State Tex Commission v. Quebedeaux Chevrolet, 71 Ariz. 280, 226 P.2d 549. A retail sale is one for any purpose other than for resale and business 'includes all activities or acts * * * engaged in with the object of gain, benefit or advantage either direct or indirect, but not casual activities or sales.' Section 73-1302, A.C.A.1939. The legal problem for solution is, therefore, whether plaintiff's activities place it in the category of doing business as a retailer and thereby subject it on the obligation of paying two percent on the gross proceeds of the aforementioned sales as required by the provisions of section 73-1303, 1952 Cum.Supp., A.C.A.1939. Its solution depends upon whether the sales were casual and therefore exempt or, if not exempt, whether the sales were made 'with the object of gain, benefit or advantage either direct or indirect'. Section 73-1302, supra.
We do not believe plaintiff's activities in disposing of this property can be classified as casual sales as that term is used in the Act. We have no particular difficulty in determining what the legislature meant to...
To continue reading
Request your trial
-
Arizona State Tax Commission v. Garrett Corp.
...that the tax imposed is a tax on the privilege or right to engage in business and is not a sales tax: 'Trico Electric Cooperative v. State Tax Commission, 79 Ariz. 293, 288 P.2d 782; Arizona State Tax Commission v. Ensign, 75 Ariz. 220, 254 P.2d 1029, on rehearing 75 Ariz. 376, 257 P.2d 392......
-
State ex rel. Arizona Dept. of Revenue v. Phoenix Lodge No. 708, Loyal Order of Moose, Inc.
...of gross proceeds that are not subject to the transaction privilege tax to begin with. We do not agree. Trico Elec. Co-op. v. State Tax Comm'n, 79 Ariz. 293, 288 P.2d 782, defines "casual" as Casual means "a happening without design and without being expected; coming without regularity; occ......
-
Maher Terminals, Inc. v. Director, Div. of Taxation
...coming without regularity; occasional ... [i]t carries the idea of lack of continuity." Trico Electric Cooperative Inc. v. State Tax Com., 79 Ariz. 293, 296, 288 P.2d 782, 784 (Sup.Ct.1955). If, however, the characteristic of systematic recurrence and continuity develops, the sale no longer......
-
Standard Oil Co. of Cal. v. State, 35304
... ... It was the theory of the tax commission,[355 P.2d 351] in levying the taxes in question, that to the extent that ... State Board of Equalization, 137 Cal.App.2d 87, 290 P.2d 20, and Trico Electric Cooperative, Inc. v. State Tax Comm., 79 Ariz. 293, 288 P.2d 782 ... ...