White v. State

Decision Date28 January 1957
Docket NumberNo. 33651,33651
Citation306 P.2d 230,49 Wn.2d 716
CourtWashington Supreme Court
PartiesDon W. WHITE et al., Appellants, v. The STATE of Washington, Respondent.

Weter, Roberts & Shefelman, Robert G. Moch, Seattle, for appellant.

Don Eastvold, Atty. Gen., G. Keith Grim, Asst. Atty. Gen., for respondent.

ROSELLINI, Justice.

Two issues are presented on this appeal: (1) Whether the provisions of the Washington retail sales tax law, chapter 180, Laws of 1935, as amended (RCW chapter 82.08), and regulations issued pursuant thereto, impose a tax on sales made by the appellants under the stipulated facts; and (2) if it be held that such statute and regulations do impose a tax on such sales, whether such statute and regulations are in violation of the equal protection and due process clauses of the federal and state constitutions--United States constitution, amendment 14 § 1, and Washington constitution, Art. I, §§ 3 and 12.

The stipulated facts on which the case was tried may be summarized as follows:

At all times pertinent to this action, the appellants (plaintiffs in the trial court) were engaged in the business of making sales at retail of tangible personal property within the state of Washington. Every sale made by the appellants was for an amount between 5 cents and 13 cents, inclusive, and all were made through automatic vending machines.

The appellants collected no sales tax on any of the sales made by them, pursuant to an administrative ruling of the tax commission, issued March 21, 1951, effective April 1, 1951, Vol. 7, AR No. 3, which provides as follows:

'Bracket System for the Collection of Retail Sales Tax

'Chapter 44 of the Laws of 1951, abolishing the use of tax tokens in the collection of the Retail Sales Tax, becomes effective on April 1, 1951.

'The Tax Commission under the authority of section 82.08.060, R.C.W., as amended by said chapter 44 of the Laws of 1951, has adopted the following schedule to govern the collection of the retail Sales Tax on all sales of tangible personal property made on and after April 1, 1951, to wit:

                "Amount of Sale         Tax Due
                ---------------------  --------
                  1 cents to 13 cents  No tax
                 14 cents to 49 cents   1 cent
                 50 cents to 84 cents   2 cents
                    85 cents to $1.14   3 cents
                  $1.15 to $1.49        4 cents
                  $1.50 to $1.84        5 cents
                  $1.85 to $2.14        6 cents
                 Et cetera."
                

The appellants paid to the state of Washington a retail sales tax of 3 percent of their gross sales during the period involved in this action. None of them made application to the tax commission for authority to pay the tax themselves on their sales made through vending machines, pursuant to the provisions of RCW 82.08.080, and no such authority was granted to any of them by the tax commission.

Throughout the state of Washington, retail sellers of tangible personal property generally collect the retail sales tax from the buyers of such property in accordance with the administrative ruling set out above.

Since the enactment of chapter 180, Laws of 1935, the tax commission, in its administration of that Act, has at all times required all retail sellers of tangible personal property to remit sales tax to the state in amounts computed by applying the applicable sales tax rate to such sellers' total gross proceeds from all of their retail sales not exempt under RCW 82.08.030, although the tax commission has never issued a formal ruling or regulation to that effect, except that since May 1, 1936, a formal rule of the tax commission has provided that for practical purposes persons owning and operating vending machines are authorized to waive collection of the tax from the customer and to absorb the amount of the tax on the individual sales and to pay directly to the tax commission 3 percent (2 percent originally) of the gross sales of or through such machines.

Within two years after the payment of the taxes involved in this suit, the appellants filed with the tax commission their petitions for refund thereof. The tax commission held a hearing on these petitions on January 18, 1954, and issued an order on January 29, 1954, denying the petitions. The appellants duly served and filed a notice of appeal from this order and filed an appeal bond on February 26, 1954, as required by law.

The trial court concluded that the Revenue Act of 1935, as amended, and regulations issued pursuant thereto, impose a retail sales tax upon every retail sale of tangible personal property within this state, including all sales for amounts less than 14 cents, and that the imposition of the tax on sales made by the appellants does not violate the equal protection and due process clauses of either the federal or state constitutions and dismissed the action.

The pertinent provisions of the statute which is the subject of controversy in this action are as follows:

RCW 82.08.020 'There is levied and there shall be collected a tax on each retail sale in this state equal to three percent of the selling price * * *.'

RCW 82.08.010 '(1) 'Selling price' means the consideration, whether money, credits, rights, or other property, * * * paid or delivered by a buyer to a seller, all without any deduction on account of the cost of tangible property sold, * * * taxes, or any other expenses whatsoever paid or accrued * * *.'

RCW 82.04.040 "Sale' means any transfer of the ownership of, title to, or possession of property for a valuable consideration * * *.'

RCW 82.04.050 "Sale at retail' or 'retail sale' means every sale of tangible personal property * * *.'

RCW 82.08.050 'The tax hereby imposed shall be paid by the buyer to the seller, and each seller shall collect from the buyer the full amount of the tax payable in respect to each taxable sale in accordance with the schedule of collections adopted by the tax commission pursuant to the provisions of RCW 82.08.060. The tax required by this chapter, to be collected by the seller, shall be deemed to be held in trust by the seller until paid to the commission * * *.

'In case any seller fails to collect the tax herein imposed or having collected the tax, fails to pay it to the commission in the manner prescribed by this chapter, whether such failure is the result of his own acts or the result of acts or conditions beyond his control, he shall, nevertheless, be personally liable to the state for the amount of the tax.

'The amount of tax, until paid by the buyer to the seller or to the commission, shall constitute a debt from the buyer to the seller and any seller who fails or refuses to collect the tax as required with intent to violate the provisions of this chapter or to gain some advantage or benefit, either direct or indirect, and any buyer who refuses to pay any tax due under this chapter shall be guilty of a misdemeanor.

'Where a buyer has failed to pay to the seller the tax imposed by this chapter and the seller has not paid the amount of the tax to the commission, the commission may, in its discretion, proceed directly against the buyer for collection of the tax, in which case a penalty of ten percent may be added to the amount of the tax * * *.'

RCW 82.08.060 'The tax commission shall have power to adopt rules and regulations prescribing methods and schedules for the collection of the tax required to be collected by the seller from the buyer under this chapter. The methods and schedules prescribed shall be adopted so as to eliminate the collection of fractions of one cent and so as to provide that the aggregate collections of all taxes by the seller shall, in so far as practicable, equal the amount of tax imposed by this chapter. Such schedules may provide that no tax need be collected from the buyer upon sales below a stated sum and may be amended from time to time to accomplish the purposes set forth herein.'

RCW 82.08.070 'Each seller, on or before the fifteenth day of the month succeeding the end of each bimonthly period, shall make out a return for the preceding bimonthly period, upon forms to be provided by the commission, setting forth the amount of all sales, nontaxable sales, taxable sales, the amount of tax thereon, and such other information as the commission may require, sign, and transmit the same to the commission. The commission may require annual returns from any taxpayer, setting forth such additional information as it may deem necessary to correctly determine tax liability. The tax accrued under the provisions of this chapter, whether or not collected from the buyer shall be paid by the seller to the commission in bimonthly installments at the time of transmitting the return above provided for.'

RCW 82.08.080 'The commission may authorize a seller to pay the tax levied under this chapter upon sales made through vending machines and similar devices or where sales are made under conditions of business such as to render impracticable the collection of the tax as a separate item and waive collection of the tax from the customer. No such authority shall be granted except upon application to the commission and unless the commission, after hearing, finds that the conditions of the applicant's business are such as to render impracticable the collection of the tax in the manner otherwise provided. The commission, by regulation, may provide that the applicant, under this section, furnish a proper bond sufficient to secure the payment of the tax.'

Sales to which the tax does not apply are listed in RCW 82.08.030. They do not include sales for amounts below 13 cents.

In support of their contention that the 1951 legislature, in amending Laws of 1935, chapter 180, § 22, so as to authorize the tax commission to issue schedules providing that no tax need be collected on sales under a certain amount, RCW 82.08.060, intended to exempt such sales from the tax, the appellants cite Mouledoux v. Maestri, 197 La. 525, 2 So.2d 11, and Winslow-Spacarb, Inc., v. Evatt, 144 Ohio St. 471, 59 N.E.2d...

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