Decided November 17, 1943.
Appeal — From Tax Commissioner to Board of Tax Appeals — Sections 5611 and 12223-1 to 12223-5, General Code — Statutes in pari materia and reconciled — Notice of appeal not jurisdictionally defective and may be amended, when — Sales tax — Merchandise for delivery outside state where sold, not taxable, when — Sale to nonresident purchaser, with delivery in taxing state, taxable, when — Interstate commerce.
1. General appeal statutes, Sections 12223-1 to 12223-5, inclusive, General Code, making provisions for appeals from the findings and orders of administrative officers or commissions, when provided by law, and Section 5611, General Code (118 Ohio Laws, 353), providing for an appeal from a finding of the Tax Commissioner, are in pari materia and, if possible, their provisions should be reconciled.
2. A notice of appeal to the Board of Tax Appeals, seasonably filed, which does not "set out" a complete copy of the tax assessment made by the Tax Commissioner, from which the appeal is taken, which does not contain a specification of the errors complained of, but which does describe the assessment as made on a certain date, and which states that the appeal is on questions of law and fact, is not jurisdictionally defective and. may, on motion, be corrected by amendment.
3. Generally, where a sale involves the delivery of merchandise to a destination outside the state where sold, a sales tax by such state on such transaction may not be applied; however, such a tax may be applied to sales of merchandise made on orders accepted within but received from purchasers residing without the taxing state by a seller maintaining a place of business within the taxing state, provided delivery is made, not to an interstate carrier for transportation beyond the state, but to the purchaser who comes within the state to close the transaction and to accept delivery.
APPEAL from the Board of Tax Appeals.
The appellant, Trotwood Trailers, Inc., is an Ohio corporation engaged in the construction and sale of automobile trailers at Trotwood, Montgomery county, Ohio.
On October 8, 1940, the Tax Commissioner of Ohio levied an assessment against the appellant in the sum of $736.73 and penalty, representing the Ohio sales tax on 62 automobile trailers sold to purchasers residing outside of the state of Ohio, the validity of which assessment is the subject of controversy in this action.
The purchasers of these trailers became interested in them through advertisements in various magazines and catalogues circulated through the mails. Each purchaser placed his order for his trailer through correspondence with the appellant, or, in some instances, by a visit to the factory for that purpose. The type of trailer was selected and a deposit made on the purchase price, after which the trailer was constructed in accordance with the specifications agreed upon by the parties.
In each instance, when the trailer was ready for delivery, the appellant so notified the purchaser and sent him a bill of sale apparently to enable him to procure a license plate of his own state for the movement of the trailer. The purchaser then came to the appellant's factory with his own automobile to which the trailer equipment was attached by means of a coupling or hookup meeting the requirements of the particular automobile, and the license plate was placed on the trailer. After the automobile and trailer were hooked together, the purchaser paid the balance of the contract price or its equivalent and drove away his automobile and trailer thus attached.
There is some dispute as to whether the evidence shows that the purchaser immediately moved the trailer to his residence outside of Ohio, but for the purpose of the decision of this case, it may be assumed that the trailer was so moved by the purchaser.
This.cause is an appeal under the provisions of Section 5611-2, General Code, from a decision of the Board of Tax Appeals affirming the finding of the Tax Commissioner confirming the sales tax assessment levied against the appellant on account of the sale of the trailers as above recited. There is also a cross-appeal by the Tax Commissioner in which he claims that the Board of Tax Appeals had no jurisdiction to hear appellant's appeal because of an alleged defect in the notice of appeal required by the provisions of Section 5611, General Code (118 Ohio Laws, 353). He claims that appellant failed to "set forth the tax assessment, valuation, determination, finding, computation or order, or the correction or redetermination thereof, complained of, and the errors therein complained of," in his notice of appeal as required by the statute, which defect was challenged by a motion to dismiss appellant's appeal. The notice simply gave notice of appeal to the Board of Tax Appeals from the assessment in a named amount made on a certain date, "said appeal to be on questions of fact and law." The Board of Tax Appeals did not expressly rule upon the commissioner's motion to dismiss, but considered appellant's appeal on the merits, and affirmed the order of assessment.
Mr. Chester A. Garber and Messrs. Hyers, Leyland Patterson, for appellant.
Mr. Thomas J. Herbert, attorney general, Mr. Aubrey A. Wendt and Mr. A.A. Cartwright, for appellees.
The first question to be determined is the jurisdictional sufficiency of appellant's notice of appeal. The Tax Commissioner claims that under Section 5611, General Code (118 Ohio Laws, 353), the notice of appeal must "set out" a complete copy of the tax assessment and a specification of the errors complained of. On the other hand, the appellant claims that the appeal statute in question is in pari materia with the general appellate sections of our code found in Chapter 1 of Title V, Part Third, of the General Code of Ohio, and especially Sections 12223-1 to 12223-5, General Code, which are remedial and, therefore, to be liberally construed.
These general appeal statutes make specific provisions for notice of appeal whereby a "court reviews or retries a cause determined by another court, an administrative officer, tribunal, or commission." (Section 12223-1, General Code.) They further provide that "Every final order, judgment or decree of a court and, when provided by law, the final order of any administrative officer, tribunal, or commission may be reviewed as hereinafter provided, unless otherwise provided by law * * *" (Section 12223-3, General Code); and finally, Section 12223-5, General Code, provides that "The notice of appeal shall designate the order, judgment, or decree appealed from and whether the appeal shall be on questions of law or questions of law and fact. * * * The failure to designate the type of hearing upon appeal shall not be jurisdictional and the notice of appeal may be amended by the appellate court in the furtherance of justice for good cause shown." (Italics ours.)
In the opinion of this court, the amendment (118 Ohio Laws, 353) of Section 5611, General Code, after the general appeal statutes above referred to were enacted, does not repeal by implication the latter, but Section 5611, General Code, provides by law an appeal from the finding of the Tax Commissioner and supplements the provisions of the general appeal statutes relating to an appeal from the final order of any administrative officer, tribunal, or commission. These appeal statutes are in pari materia and, if possible, their provisions should be reconciled. The notice of appeal, while defective, could have been amended on motion without prejudice to the Tax Commissioner. In the opinion of the court, the defect complained of did not divest the Board of Tax Appeals of appellate jurisdiction. The Board of Tax Appeals, in failing to pass upon the motion to dismiss the appeal, in effect, overruled such motion. In thereafter proceeding to consider the merits of the case, the board committed no error. The principles laid down by this court in the cases of Capital Loan Savings Co. v. Biery, 134 Ohio St. 333, 16 N.E.2d 450, and Couk v. Ocean Accident Guarantee Corp., Ltd., 138 Ohio St. 110, 33 N.E.2d 9, apply. The right of a taxpayer to challenge, by appeal, the validity of a tax levied against him should not be limited or defeated by failure to comply with nonjurisdictional statutory provisions relating to procedure. Defects or omissions because of such failure may be corrected by amendment without prejudice to the taxing authority.
The tax on the sale of the trailers in question was levied pursuant to Section 5546-2, General Code, paragraph 8 of which exempts "sales which are not within the taxing power of this state under the Constitution of the United States." Appellant claims that the sales in question were made in interstate commerce, and that the imposition of the tax will burden interstate commerce, contrary to Section 8, Article I of the Constitution of the United States.
It is conceded by all parties that if these sales involve intrastate transactions the tax is properly assessable, but if they involve interstate transactions the tax is not assessable. The sole question then to be determined is the character of the transaction as affecting interstate commerce.
On this subject 47 American Jurisprudence, 209, Section 10, says:
"One of the most baffling problems in connection with the validity of sales tax legislation is the effect thereupon of the commerce clause of the federal Constitution, which provides that 'the Congress shall have power * * * to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.' With respect to the application of this constitutional provision upon state taxation generally, the broad rule is that while a state may not impose taxes directly upon interstate or foreign commerce, it may under certain circumstances impose taxes which may have some incidental effect upon such commerce, but * * * it appears to be impossible to reconcile completely the many cases which have considered the application of this principle to particular state sales tax statutes."
The taxation of property shipped interstate, before its movement begins or after it ends, is not forbidden. McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 84 L.Ed., 565, 60 S.Ct., 388, 128 A. L. R., 876; Bacon v. Illinois, 227 U.S. 504, 57 L.Ed., 615, 33 S.Ct., 299; Minnesota v. Blasius. 290 U.S. 1, 78 L.Ed., 131, 54 S.Ct., 34; Hope Natural Gas Co. v. Hall, Commr., 274 U.S. 284, 71 L.Ed., 1049, 47 S.Ct., 639; Memphis Natural Gas Co. v. Beeler, Atty. Genl., 315 U.S. 649, 86 L.Ed., 1690, 62 S. Ct., 857.
The case of Coe v. Errol, 116 U.S. 517, 29 L.Ed., 715, 6 S.Ct., 475, is a leading case on what constitutes interstate commerce and well illustrates the rule applicable here. The question in issue was whether the state of New Hampshire had the power to tax certain logs which were within its jurisdiction on tax day. Some of the logs had been cut in the state of Maine and were being floated down the Androscoggin river to Lewiston, Maine, to be milled but were detained in the river at the town of Errol in the state of New Hampshire by low water. Other logs had been cut in New Hampshire and hauled to the river bank at Errol with intent to place them in the same river and float them down to the same destination in the state of Maine as soon as there was sufficient water.
As to the logs cut in Maine, the movement of which was interrupted at Errol by low water, the Supreme Court of New Hampshire held that they had already entered interstate commerce and that because of that fact, the state had no power to tax them so long as they retained that character. On the other hand, the court held that the logs cut in New Hampshire and brought down to the river bank ready to be put into the river were not yet in interstate commerce, even though it was intended likewise to float them down the river to the same destination as the other logs from the state of Maine, and that the former were subject to the taxing power of the state of New Hampshire. The court specifically held that until these logs were put in the river and their movement to another state actually commenced, they had not entered interstate commerce and were, therefore, subject to the taxing power of the state. The judgment of the Supreme Court of New Hampshire approving the tax was affirmed by the Supreme Court of the United States.
Generally, when a sale involves the delivery of merchandise to a destination outside the state where sold, the validity of a sales tax levied by such state on such transaction, is denied. Crew Levick Co. v. Pennsylvania, 245 U.S. 292, 62 L.Ed. 295, 38 S. Ct., 126; J. D. Adams Mfg. Co. v. Storen, 304 U.S. 307, 82 L.Ed., 1365, 58 S.Ct., 913, 117 A.L.R., 429. See, also, United States v. Tucker, 188 F., 741.
On the other hand, it is generally held that a sales tax may be applied to sales of merchandise, made on orders accepted within but received from purchasers residing without the taxing state, by a seller maintaining a place of business within the taxing state, provided delivery is made, not to an interstate carrier for transportation beyond the state, but to the purchaser who comes within the state to close the transaction and to accept delivery. See In re Conecuh Pine Lumber Mfg. Co., 180 F., 249; Coe v. Errol, supra; Bacon v. Illinois, supra; Federal Compress Warehouse Co. v. McLean, Sheriff, 291 U.S. 17, 78 L.Ed., 622, 54 S.Ct., 267.
"Sales completed entirely within a state are not transactions in interstate commerce; and this rule has been applied to a completed contract of sale between residents of a state and a contract between citizens of different states, when the contract is made and delivery accepted in the state where the property is situated, although the buyer intends to ship the property outside the state." 15 Corpus Juris Secundum, 300, Section 26, citing In re Conecuh Pine Lumber Mfg. Co., supra; Brunner v. Mobile-Gulfport Lumber Co., 188 Ala. 248, 66 So. 438; Department of Treasury of Indiana v. Wood Preserving Corp., 313 U.S. 62, 67, 85 L.Ed., 1188, 1193, 61 S.Ct., 885, 888.
Thus, interstate commerce is not unconstitutionally burdened by the application of a sales tax upon the retail sale of tangible personal property made within the state when such tax is applied to sales of coal at a mine in the taxing state to purchasers from another state who took delivery in their own trucks and immediately thereafter, in accordance with their original intent, drove the trucks to the other state. State Board of Equalization v. Blind Bull Coal Co., 55 Wyo. 438, 101 P.2d 70.
In McGoldrick, Comp., v. Compagnie Generale Transatlantique, 309 U.S. 430, 84 L.Ed., 849, 60 S. Ct., 670, New York City imposed a sales tax on the sale of fuel oil to a French corporation which owned and operated vessels between New York City, France and other foreign countries, but maintained a business office in New York City, where the French corporation purchased fuel oil for consumption in the operation of its vessels, from a New Jersey corporation which also maintained an office and did business in New York City. The contract was negotiated and signed in New York City for the sale to the French corporation of its requirements of fuel oil, deliverable alongside the purchaser's vessels in New York harbor by barges bringing the oil from storage tanks in New Jersey. New York City claimed that the sale and delivery of the oil took place in the city before transportation in foreign commerce began, and that the transaction was subject to its sales tax. The appellate division of the New York Supreme Court held that the taxing statute under these circumstances infringed upon interstate commerce ( 254 App. Div. 237, 4 N. Y. Supp. [2d], 661.). The Court of Appeals affirmed ( 279 N.Y. 192, 18 N.E.2d 828), on the single ground that the tax was unconstitutional by reason of its effect on interstate commerce. The Supreme Court of the United States held that "so far as the validity of the tax with respect to the interstate commerce is concerned, our decision sustaining it in the Berwind-White Coal Mining Company case is controlling, and the judgment must be reversed * * *."
The late case of Department of Treasury of Indiana v. Wood Preserving Corp., supra (April, 1941), has close parallels, both in facts and in legal implications, to the case at bar. In that case, the validity of the Indiana gross income tax law was challenged. The Wood Preserving Corporation, respondent, brought suit to recover taxes, collected from it by the state of Indiana, on the ground that they were invalid under the Federal Constitution as laid upon income received outside the state, and as constituting an unlawful burden upon interstate commerce. The corporation, having its principal place of business at Pittsburgh, Pennsylvania, but with an office at Marietta, Ohio, was engaged in the business of treating railroad ties by creosoting them, and also in the business of purchasing ties and selling them to railroads with whom it had contracts for tie treatment. The taxes in question were laid upon the corporation's gross receipts from the sale of ties to the Baltimore Ohio Railroad Company in the state of Indiana in accordance with certain contracts. One contract provided for the sale of raw ties by the corporation to the Baltimore Ohio Railroad Company, delivered f. o. b. cars on the railroad tracks, while a supplemental contract required that all such ties delivered to the railroad in Indiana should be shipped to the plant of the corporation at Finney, Ohio, for treatment.
The further course of business was as follows: Requisitions for ties were issued from the railroad company's office at Baltimore and were accepted by the corporation at its office in Marietta by telephone or mail. The corporation then procured the ties from local producers in Indiana through communications by telephone or mail from its Marietta office. The Indiana vendors delivered the ties at loading points on the railroad in Indiana. When the ties were ready, an inspector for the railroad company and the corporation's agent met at the loading point in Indiana, the ties were examined and those accepted by the inspector were loaded on freight cars furnished by the railroad at the loading point. The inspection and loading were simultaneous operations. The corporation paid the Indiana producers only for such ties as were accepted. The corporation's agent made out bills of lading with the corporation named as consignor and the railroad's chief engineer of maintenance at Finney, Ohio, as consignee, and the ties were carried from the Indiana loading points to Finney for treatment. The corporation paid no freight to the railroad company for the transportation. The corporation's office at Marietta mailed weekly invoices to the railroad company's office at Baltimore for the ties sold and delivered to the railroad company, and monthly reports of such invoices were made to the corporation's home office at Pittsburgh. The payments for ties so sold from points in Indiana were made by the railroad company to the corporation's main office at Pittsburgh.
The taxes in question were laid by the Indiana taxing authorities on the gross receipts which the corporation derived from the sale of the untreated ties pursuant to an Indiana statute providing for a tax upon gross income "derived from sources within the state of Indiana" of all nonresident persons and corporations. The sales receipts did not include charges for the creosoting treatment, these being separately billed to the railroad company when the treatment was completed.
The Supreme Court, speaking through Chief Justice Hughes in a unanimous opinion, said:
"Further, as the sole subject of the challenged tax is the income derived from respondent's sales to the railroad company there is no occasion for apportionment. The creosoting operations in Ohio, and the income derived from them, were not involved. And the fact that the ties which were sold to the railroad company were purchased by respondent through orders given to the Indiana producers from respondent's Marietta office cannot affect the authority of Indiana to tax the receipts from intrastate activities of respondent in its dealings with the railroad company. * * * [Citations omitted.]
"As to these dealings, it appears that respondent received in Indiana the ties it purchased from the local producers and that respondent sold and delivered these ties in Indiana to the railroad company. The fact that the delivery by the producers to respondent and respondent's delivery to the railroad company took place at the same time is not important. Respondent was in Indiana acting through its agent at the designated points on the railroad line. The railroad company was at the same points represented by its inspector. The ties brought there by the producers were then examined and those found by the inspector to be in accordance with specifications were accepted. In these transactions, respondent through its agent at once accepted from its vendors the ties which the railroad company found satisfactory and then and there sold and delivered these ties to the railroad company. These were local transactions, — sales and deliveries of particular ties by respondent to the railroad company in Indiana. The transactions were none the less intrastate activities because the ties thus sold and delivered were forthwith loaded on the railroad cars to go to Ohio for treatment. The contract providing for that treatment called for the treatment of ties to be delivered by the railroad company at the Ohio plant, and the ties bought by the railroad company in Indiana, as above stated, were transported and delivered by the railroad company to that treatment plant. Respondent did not pay the freight for that transportation and the circumstance that the billing was in its name as consignor is not of consequence in the light of the facts showing the completed delivery to the railroad company in Indiana. See Superior Oil Co. v. Mississippi, 280 U.S. 390 [ 74 L.Ed., 504, 50 S.Ct., 169].
"We find no ground for saying that in taxing the receipts from these local transactions Indiana has exceeded its constitutional authority by taxing interstate commerce or discriminating against it."
"* * * when the commerce begins is determined, not by the character of the commodity, nor by the intention of the owner to transfer it to another state for sale, nor by his preparation of it for transportation, but by its actual delivery to a common carrier for transportation, or the actual commencement of its transfer to another state." 7 Ohio Jurisprudence, 726, Section 24; In re Greene, 52 F., 104; Hammer v. Dagenhart, 247 U.S. 251, 272, 62 L.Ed., 1101, 1105 and 1106, 38 S.Ct., 529, Ann. Cas. 1918E., 724, 3 A. L. R., 649; 10 Cincinnati Law Review, 351, 353, 357; 2 Ohio State Law Journal, 260.
The change of possession from seller to purchaser is the taxable event regardless of the time and place of passing title to the merchandise in question. McGoldrick, Comp., v. Berwind-White Coal Mining Co., supra.
Here the orders for the trailers were accepted and the contract of sale completed in Ohio. The sale itself was completed upon payment of the balance of the purchase price or its equivalent by the purchaser and the delivery of the trailer to him. The transaction was wholly completed before there was any transportation or any movement of the trailer in interstate commerce. The mere fact that both seller and purchaser contemplated that after the completion of the transaction the later would move it out of Ohio to his residence in another state does not make the sale an interstate transaction. Minnesota v. Blasius, supra; McGoldrick, Comp., v. Berwind-White Coal Mining Co., supra; Graybar Electric Co. v. Curry, Commr., 238 Ala. 116, 189 So. 186, affirmed 308 U.S. 513, 84 L.Ed., 437, 60 S.Ct., 139.
There is no adequate basis for distinguishing the present tax laid on the sale and delivery of goods before they enter an interstate movement, from the general property tax which may be levied by this state against owners of property found in the state on taxing date, even though there be an intention to transport such property the next day into a foreign jurisdiction, the validity of which latter form of taxation, under the authorities, must be conceded. The situs of the property in this state fixes its status for taxation in either event. Brown v. Houston, Collector, 114 U.S. 622, 29 L.Ed., 257, 5 S.Ct., 1091; Coe v. Errol, supra; Pittsburgh S. Coal Co. v. Bates, 156 U.S. 577, 39 L.Ed., 538, 15 S.Ct., 415; American Steel Wire Co. v. Speed, 192 U.S. 500, 520, 48 L.Ed., 538, 546, 24 S.Ct., 365; General Oil Co. v. Crain, Insp., 209 U.S. 211, 52 L.Ed., 754, 28 S.Ct., 475; Bacon v. Illinois, supra.
If trailers situated as those in the present case became, before their removal from Ohio, subject to a state property tax as against the purchasers and owners, transfer of possession of the trailers to them upon sale before being placed in transit to another state, makes such trailers equally subject to a sales tax.
While the Ohio sales tax must be collected by the vendor, it is charged against the purchaser who, in fact, pays the tax. To hold the transaction in this case free from a sales tax would, under similar circumstances, operate discriminatingly against a purchaser of trailers residing in this state. Such a result should not obtain, and the commerce clause of the Constitution does not require it.
The decision of the Board of Tax Appeals is affirmed.
WEYGANDT, C.J., MATTHIAS, ZIMMERMAN, BELL and WILLIAMS, JJ., concur.
In response to appellant's advertisements in nationally distributed publications, appellant received orders by mail from sixty-two residents of various other states throughout the United States. The name and address of each purchaser appears in the record.
Through a mass of interruptions and objections, the record discloses that appellant's general manager and secretary was permitted to outline appellant's method of doing business and to give the details of some typical cases. The witness testified that appellant's business was obtained by the use of advertising in national publications. When inquiries were received, literature was sent out. Correspondence developed into mail orders accompanied with deposits.
Taking the case of Mr. Richard Mathews of Ogdenberg, New York: Mr. Mathews wrote appellant for literature which was sent; correspondence followed, resulting in a mail order. When the trailer was finished appellant notified and billed Mr. Mathews, giving him also the serial number of the trailer and a bill of sale. Mr. Mathews came to Trotwood, Ohio, with a New York state trailer license which was placed upon the trailer. Mr. Mathews paid appellant the balance due and the trailer left the factory behind an automobile which also carried a New York license.
In the case of Mr. P.L. Hamlet of Middlesboro, Kentucky, the procedure was the same as in Mr. Mathews' case save that Mr. Hamlet did not pay cash in full when he took his trailer but entered into a conditional sales contract or chattel mortgage which was financed through the Finance Securities Corporation of Toledo, Ohio. The seller obtained the full cash price through the transaction.
In the case of Mrs. C. Rotgans: This lady came to appellant's factory without previous correspondence. She was driving a car with a Florida license. As soon as the trailer was finished she took it to Florida.
The evidence discloses: "Were each and every one of these trailers under question attached to an out-of-state car when they left your factory? A. Yes."
Had these trailers been delivered to a carrier f. o. b. Trotwood, Ohio, the majority would readily concede as disclosed by their opinion that the sales were made in interstate commerce. That delivery to a carrier f. o. b. point of origin is a delivery to the purchaser or consignee is so elementary as to need no citation of authorities. It is elementary also that qui facit per alium facit per se. I am unable to understand wherein the delivery of merchandise to a nonresident purchaser in person is any different in principle from the delivery at point of origin to such purchaser's agent.
We are not here discussing the case of a traveler walking into a retail store and making a purchase of tobacco or a necktie and walking out, but we are discussing here an order which was secured through interstate advertising and which came by mail from the resident of another state, who in the course of interstate commerce came into the state to accept delivery of merchandise which in the course of interstate commerce he removed from the state.
The Ohio sales tax is levied on retail sales made in this state of tangible property. (Section 5546-2, General Code.)
The tax is to be paid by the purchaser. (Section 5546-3, General Code.)
The alleged liability of appellant arises from his failure to collect the tax from the purchaser with and at the same time as the price. (Section 5546-3, General Code.)
The majority opinion cites a number of cases decided by the Supreme Court of the United States involving taxes on property at rest in the state where taxed and not at the time in interstate commerce. It is respectfully submitted that such authorities are not apposite. Likewise, cases involving "sales completed entirely within the state" are not involved here.
In the case of McGoldrick, Comp., v. Berwind-White Coal Mining Co., 309 U.S. 33, 84 L. Ed., 565, 60 S.Ct., 388, 128 A.L.R., 876, relied upon in the majority opinion, there was involved a sales tax upon the purchase for consumption of tangible personal property where the transaction was consummated within the limits of the municipality and if effected either by a transfer of the title or possession within the municipality or by an agreement therefor. The purchase was consummated within the limits of the municipality and was for the purpose of consumption within the municipality although the property (coal) was to be transported from another state and delivered to the purchaser at points within the municipality. Mr. Justice Stone, at page 55 (L.Ed., 576), stated in substance that in that case there was an analogy in principle to the cases levying property taxes.
A very material difference between the Berwind-White case and the instant case is to be noted in the fact that in the former case, the ordinance under consideration specifically provided: "This Act shall not authorize the imposition of a tax on any transaction originating and/or consummated outside of the territorial limits of * * * [the] city," whereas in the instant case the transactions did originate outside of the territorial limits of Ohio.
As pointed out by Mr. Justice Stone, at page 49, L. Ed., 572, the tax in the Berwind-White case was "laid upon every purchaser, within the state, of goods for consumption, regardless of whether they have been transported in interstate commerce. Its only relation to the commerce arises from the fact that immediately preceding transfer of possession to the purchaser within the state, which is the taxable event regardless of the time and place of passing title, the merchandise has been transported in interstate commerce and brought to its journey's end." (Italics ours.)
In the instant case a tax is being imposed upon a nonresident purchaser who ordered the merchandise through the United States mails and who personally transported his purchase to his own state. The evidence in this case is clear that the purchaser came into the state in the course of interstate commerce, took delivery of the article which he had bought through interstate commerce and removed it from the state in the course of interstate commerce. That this tax is a burden upon interstate commerce is illustrated by the fact that the nonresident must pay a use tax in his own state on the same article for which the majority opinion holds he must pay a sales tax in this state.
I am of the opinion that the principle announced in the case of Gwin, White Prince, Inc., v. Henneford, 305 U.S. 434, 83 L.Ed., 272, 59 S. Ct., 325, is controlling here. The sales tax is analogous to a gross receipts tax. As therein stated by Mr. Justice Stone (page 439):
"The present tax [on gross receipts], though nominally local, thus in its practical operation discriminates against interstate commerce, since it imposes upon it, merely because interstate commerce is being done, the risk of a multiple burden to which local commerce is not exposed."
The case of Dept. of Treasury of Indiana v. Wood Preserving Corp., 313 U.S. 62, 85 L.Ed., 1188, 61 S. Ct., 885, discussed in the majority opinion did not attempt to modify the holding in the case of Gwin, White Prince, Inc., supra. Instead the court distinguished its decision in J. D. Adams Mfg. Co. v. Storen, 304 U.S. 307, 82 L.Ed., 1365, 58 S.Ct., 913, 117 A. L. R., 429, which involved the same Indiana gross income act, from the facts then under consideration. The instant case falls within the doctrine of the J. D. Adams Mfg. Co. case which was relied upon in the Gwin, White Prince, Inc. case.
Appellant attempted to prove that it was required to furnish out-of-state purchasers with data upon which to compute the use tax in purchaser's home state.
However, this court is required by the provisions of Section 12102-31, General Code, to "take judicial notice of the statutes of every state, territory and other jurisdiction of the United States."
Ohio, like other states, levies a use tax on the consumer of property used in this state on which no Ohio sales tax has been paid. (Section 5546-26, General Code.)
The question here is one of unconstitutional application for the reason that Section 5546-2 (8), General Code, specifically provides that the Ohio sales tax does not apply to sales which are not within the taxing power of the state under the Constitution of the United States.
It.is a safe assumption that the General Assembly did not intend by what it said to handicap an Ohio manufacturer by requiring him to collect a sales tax from a purchaser who would have to pay a use tax in his home state. Certainly, such procedure would discourage the purchasing of Ohio products.
As to the procedural question, I concur in the conclusion reached by the majority but for a different reason. It is a well-recognized rule of construction that when the legislative body has enacted a statute dealing specifically with a particular subject such statute controls and excludes the provisions of a general statute. Section 5611, General Code (118 Ohio Laws, 353), provides the method by which appeals may be taken to the Board of Tax Appeals from a final determination of the Tax Commissioner. This statute pertains only to appeals to the Board of Tax Appeals from decisions by the Tax Commissioner. I am of the opinion that the provision in respect of the contents of such notice is directory and if such notice is not made definite upon motion, the defect may be considered as waived, at least in the absence of a showing of prejudice to the Tax Commissioner. In the instant case there is no such showing of prejudice.