Universal Battery Co v. United States
| Decision Date | 26 May 1930 |
| Docket Number | 350-352,275,Nos. 127,s. 127 |
| Citation | 74 L.Ed. 1051,50 S.Ct. 422,281 U.S. 580 |
| Parties | UNIVERSAL BATTERY CO. v. UNITED STATES and four other cases |
| Court | U.S. Supreme Court |
Mr. George Maurice Morris, of Washington, D. C., for petitioners in cases Nos. 127 and 275.
Mr. George M. Wilmeth, of Washington, D. C., for petitioners in cases Nos. 350, 351, and 352.
The Attorney General and Mr. Claude R. Branch, of Providence, R. I., for the United States.
These are cases brought against the United States to recover taxes paid under section 900 of the Revenue Acts of 1918 and 1921, chapter 18, 40 Stat. 1122, and chapter 136, 42 Stat. 291, upon sales of articles which the revenue officers regarded as 'parts or accessories for' motor vehicles the sale of which is subjected to a tax by subdivisions 1 and 2 of that section. In each case the facts were found specially and judgment was given for the defendant. In all this court granted certiorari.
We pass the details relating to protests, claim to a refund, and administrative denial of those claims, and come directly to the terms of the section under which the taxes were exacted. It provides:
'Sec. 900. That there shall be levied, assessed, collected, and paid upon the following articles sold or leased by the manufacturer, producer, or importer, a tax equivalent to the following percentages of the price for which so sold or leased— '(1) Automobile trucks and automobile wagons, (including tires, inner tubes, parts, and accessories therefor, sold on or in connection therewith or with the sale thereof), 3 per centum;
'(2) Other automobiles and motorcycles, (including tires, inner tubes, parts, and accessories therefor, sold on or in connection therewith or with the sale thereof), except tractors, 5 per centum;
'(3) Tires, inner tubes, parts, or accessories, for any of the articles enumerated in subdivision (1) or (2), sold to any person other than a manufacturer or producer of any of the articles enumerated in subdivision (1) or (2), 5 per centum.'
The claimants do not manufacture or sell any of the vehicles enumerated in subdivisions 1 and 2, but each does manufacture and sell the article on sales of which the challenged tax was assessed and collected. These sales were all to persons other than a manufacturer or producer of any of the enumerated vehicles. In each case the question presented is whether the article sold is a 'part or accessory for' such a vehicle within the meaning of subdivision 3.
Taking the three subdivisions together, it is apparent that the words 'parts' and 'accessories' have the same meaning in all; that they comprehend articles having some relation to the enumerated motor vehicles; and that it is because of that relation that the tax is laid on their sale.
Subdivisions 1 and 2, with the introductory provision, contemplate that parts and accessories may be sold along with the vehicle by the manufacturer of the latter, and show that, where this is done, the tax is to be paid by the manufacturer of the vehicle. Subdivision 3, with the introductory provision, contemplates that parts and accessories may be sold separately from the vehicle by the manufacturer of the former to others than a manufacturer of the latter, as where the sale is for replacement purposes, and show that the tax on such a sale is to be paid by the manufacturer of the parts and accessories. And it is implicit in the three subdivisions, with the introductory provision, that, where parts and accessories are sold by their manufacturer to a vehicle manufacturer to be resold along with the vehicle by the latter, the sale by the former is to be tax free, while the resale by the latter, when incidental to the sale of the vehicle, is to be taxed against the latter as already indicated.
Thus the scheme of taxation embodied in these provisions centers around the motor vehicles enumerated therein. Their sale is the principal thing that is taxed, and the sale of parts and accessories 'for' such vehicles is taxed because the parts and accessories are within the same field with the vehicles and used to the same ends.
The administrative regulations issued under section 900 uniformly have construed the term 'part' in that section as meaning any article designed or manufactured for the special purpose of being used as, or to replace, a component part of such vehicle, and which by reason of some characteristic is not such a commercial article as ordinarily would be sold for general use, but is primarily adapted for use as a component part of such vehicle. The regulations also have construed the term 'accessory' as meaning any article designed to be used in connection with such vehicle to...
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