Summary
In Woodson v. State, 1941, 57 Wyo. 305, 116 P.2d 852, decided subsequent to the amendment, Woodson, doing business as Capital Coal Company, resisted payment of the sales tax to Union Pacific incurred subsequent to the amendment.
Summary of this case from State Bd. of Equalization v. Cheyenne NewspapersOpinion
No. 2202
September. 19, 1941
SALES TAX — TRANSPORTATION CHARGES TAXABLE — PAYMENT UNDER PROTEST.
1. Under the Selective Sales Tax Act of 1937 imposing tax equivalent to two per cent. of amount paid to carriers for all transportation, all sales of transportation of freight and passengers must be regarded as retail sales and in consequence taxable and shipper was not entitled to recover money paid under protest to railroad as sales taxes on transportation of coal (Laws 1937, c. 102).
APPEAL from the District Court, Laramie County, SAM M. THOMPSON, Judge.
For the appellant, there was a brief and oral argument by Richard J. Jackson of Cheyenne.
The action involves the taxability of transportation charges paid by a coal dealer in Cheyenne, under the provisions of Chapter 102, Laws 1937. A similar question arose under the Emergency Sales Act of 1935 and was decided by this court in State v. Capital Coal Company, 54 Wyo. 176. In the present case, the dealer paid the tax under protest and thereafter brought this action for reimbursement. It is our contention that the amendment made by the 1937 Act does not justify the imposition of a sales tax upon charges made for transportation of coal, nor do we find anything in the regulations adopted by defendant Board which justifies such a tax. Freight charges are a part of the wholesale cost of commodities, and we believe are exempt from tax under Article 10, page 12, of the Rules and Regulations of the Board. The title of the Act of 1937 declares it to be an excise tax upon retail sales. The result which the legislature intended to accomplish by amending the 1935 Emergency Sales Tax is not clear. Section 2 (f) of the amendatory act indicates what shall be considered component parts of sales at wholesale, which are to be exempt. All of the coal purchased by appellant at wholesale should be exempt, because only retail sales are taxable. It was so held in the case of State v. Capitol Coal Company, supra. Appellant contends that there was no legislative attempt to change any Supreme Court ruling by amending the Act of 1935, because the first case, Board of Equalization v. Stanolind Company, 51 Wyo. 237, was not decided until after the 1937 legislature had adjourned. It is shown by the agreed statement of facts that appellant has not charged his coal customers with the tax on the transportation exacted from him.
For the respondents, there was a brief by Ewing T. Kerr, Attorney General; Harold I. Bacheller, Deputy Attorney General; and Arthur Kline, Assistant Attorney General, and oral argument by Arthur Kline.
The facts in this case are substantially the same as the facts in the case of State of Wyoming v. Capital Coal Company, 54 Wyo. 176. The issues involved are almost identical with those in the case of State of Wyoming v. Holly Sugar Corporation, docketed as case No. 2185. The Act of 1937 removed the word "service" and substituted the word "product" in the first paragraph of Section 2 (f) of the 1937 Act, and made some other changes by limiting wholesale exemption to purchases made by manufacturers in compounding for sale, profit or use any article, substance or commodity, and likewise abolished the exemption granted to persons in the 1935 Act, who were engaged in the business of producing or furnishing articles or commodities, for sale, profit or use. Appellant does not contend that he is engaged in the business of manufacturing or compounding. The case of Board of Equalization v. Stanolind Oil and Gas Company, 51 Wyo. 237 was decided after the amendment made in 1937, but it did not arise under that act. Under the definitions appearing in the Act of 1937, it is clear that the legislature intended sales of transportation to be considered as retail sales. Chapter 98 of the 1941 Session Laws exempts transportation of property from the sales tax. We direct attention to this, for the reason that it was clearly understood by the legislature that the Act of 1937 imposed a tax on transportation that should be removed. The legislature in amending the law clearly intended to make some change therein.
This case is a direct appeal from a judgment of the district court of Laramie County disallowing a recovery by the plaintiff and appellant, Woodson, doing business as The Capital Coal Company, of certain sums of money paid under protest as sales taxes upon the transportation of coal and collected by the defendant and respondent, Union Pacific Railroad Company under the Selective Sales Tax Act of 1937, for the State Board of Equalization of the State of Wyoming. This judgment was entered on January 16, 1941, after a trial on the 8th of that month upon an agreed statement of facts. Counsel for all parties concede that the facts in this case are "practically identical" with those involved in our Case No. 2095, State v. Capital Coal Company et al., 54 Wyo. 176, 88 P.2d 481, the only difference being that the latter arose under the Emergency Sales Tax Act of 1935, while the instant case is to be ruled by the effect to be given to the Selective Sales Tax Act of 1937. It is a companion case with No. 2185, The State of Wyoming v. Holly Sugar Corporation, a corporation, and The Union Pacific Railroad Company, a corporation, this day decided. Both cases were heard and considered together, though as noted above, the present case was heard and decided in the district court on a much later date than the Holly Sugar Company case, supra.
Since the facts in the case at bar are so closely allied with those already examined and passed upon by this court in our case No. 2095, supra, we shall not lengthen this opinion by again citing them here. Our views as expressed in the opinion filed in Case No. 2185 must rule the instant case. We may add to what was said in that cause that in the brief of the appellants in Case No. 2095, supra, it was stated in the sub-division thereof No. II that:
"The purchase of transportation from the Union Pacific Railroad Company is the purchase of service. This purchase of service is that service mentioned in Section 2 (f) of the Act."
And this statement was followed in sub-division III of that brief by the admisison that:
"The Sales Tax Act of 1935 was, by its express terms, self-repealing and expired on March 31, 1937. In the meantime, the Legislature passed the 1937 Sales Tax Act (Chapter 102, S.L. Wyo. 1937) and eliminated the word `service' from Section 2 (f) of the Act, so that in all probability the argument advanced under II above could not be advanced successfully under a like situation under the 1937 Act."
We agreed then with that statement, and we agree with it now as confined to the Emergency Sales Tax Act of 1935. We also agree, for the reasons indicated (among others given in Case No. 2185, supra,) that this argument cannot be used under the Selective Sales Tax Act of 1937. We think that under the 1937 Selective Sales Tax Act all sales of transportation of freight and passengers must be regarded as retail sales, and in consequence taxable.
We must conclude therefore that the judgment of the district court of Laramie County drawn in question by this appeal was correct, and it will accordingly be affirmed.
Affirmed.
KIMBALL and BLUME, JJ., concur.