Opinion
6 Div. 786.
January 4, 1923.
Appeal from Circuit Court, Tuscaloosa County; Henry B. Foster, Judge.
Harwell G. Davis, Atty. Gen., for the State.
Exemptions from taxation must be strictly construed. Cooley on Taxation (3d Ed.) 357. Counsel insist that the construction given subdivision (g) of section 2 by the trial court is erroneous.
Foster, Verner Rice, of Tuscaloosa, for appellee.
Counsel argue that the property was exempt, as being agricultural products grown during the year 1920 and bought by appellee during that year for prompt shipment, and that the statute does not confine the exemption to mere brokers, who sell the articles in the form in which they were purchased. The further insistence is made that cotton seed, after ginning, is a manufactured product, and exempt on this additional ground. 96 Ala. 295, 11 So. 381, 38 Am. St. Rep. 94; 91 Ala. 555, 8 So. 803; 188 Ky. 570, 222 S.W. 958, 10 A.L.R. 1269.
It is a general rule that exemptions from taxation must be strictly construed in favor of the taxing power. Cooley on Taxation (3d Ed.) p. 357. The articles in question were not acquired for prompt shipment, that is, by the appellees as a dealer or broker for immediate resale and shipment, but for the purpose of being manufactured into a compound or mixed commodity of merchandise, but had not been manufactured and were held for the purpose of being converted into manufactured articles. Subdivision (g) of section 2 of the Revenue Act of 1919, p. 283, exempts the articles there mentioned while in the hands of the producer or his landlord or of "purchaser purchasing the same for prompt shipment." This quoted provision applies to dealers and brokers who acquire the articles for exchange or resale and prompt shipment, and not to this appellee, who acquired the same for manufacturing purposes, notwithstanding it contemplated early sales and shipment of the compound into which they were to be manufactured.
Subdivision (i) exempts only manufactured articles for a certain period, not articles to be used for manufacturing purposes.
Nor do we think that the linting of the seed constituted the lint and seed manufactured articles within the meaning of the statute. This was but a more complete method of ginning or separating the seed from the lint, and it could not be said that ginning cotton or shucking and shelling corn converted the same into what is generally understood as manufactured articles. We therefore hold that all the articles in question were not exempt, and the trial court erred in holding that they were not subject to taxation, except, of course, the lint or other property belonging to the government or not owned by the appellee, and as to which the brief of counsel for the state does not insist upon a taxation.
The judgment of the circuit court is reversed, and the cause is remanded.
Reversed and remanded.
McCLELLAN, SOMERVILLE, and THOMAS, JJ., concur.