Belk Brothers Co. v. . Maxwell, Comr. of Revenue
200 S.E. 915
N.C.
1939
Check Treatment
*13 Stacy, 0, J.

The intention of the lawmaking body is not difficult of discernment, albeit the language used to express it is awkward enough. Indeed, our principal concern is to ascertain whether the tax-levying provision of the statute covers every “chain store” as subsequently defined in the act. Harwood v. Maxwell, Comr. of Revenue, 213 N. C., 55, 195 S. E., 54. That the plaintiff comes within the statutory definition of a chain store seems clear, but whether the act is so drawn as to levy a chain-store license tax on the 46 “Belk” Stores having similarity of name and benefit in whole or in part of group-purchase of merchandise and perhaps common management is the question for decision. However, if the statute be read with the definition of the term “chain store” interpolated above the tax-levying provision, where it really belongs and was intended to be inserted, which is permissible in our quest for the legislative intent, most of the difficulty would seem to be somewhat minimized. It is true, this rearrangement presents some awkwardness of expression, nevertheless it gives significance and meaning to the obvious purpose and intention of the General Assembly, which, after all, is the real heart of the statute. Trust Co. v. Hood, Comr., 206 N. C., 268, 173 S. E., 601. Moreover, in dealing with a fiscal system, and more particularly in interpreting a revenue act, “some play must be allowed for the joints of the machine.” M. T. & K. Ry. Co. v. May, 194 U. S., 267. It is peculiarly the function of the lawmaking body to levy assessments and to devise a scheme of taxation. Bank v. Doughton, 189 N. C., 50, 126 S. E., 176.

The constitutionality of section 162, as it appeared in the Revenue Act of 1929, was upheld in Tea Co. v. Maxwell, 199 N. C., 433, 154 S. E., 838, and this ruling was affirmed by the Supreme Court of the United States in a memorandum opinion, 284 U. S., 575, on authority of State Board of Tax Comrs. v. Jackson, 283 U. S., 527, 73 A. L. R., 1464.

The only change made in the section in 1933--was the- addition of the definition of the term “chain store,” following the schedule of rates. This enlargement or expansion was clearly made for the purpose of bringing the “Belk” Stores, and others similarly situated, within the purview of the chain-store license tax.

The question then arises whether this application of the statute operates unreasonably or arbitrarily against the plaintiff. Hans Rees’ Sons v. North Carolina, 283 U. S., 123. We cannot say that it does.

All the advantages and perhaps others accruing -from the operation of chain stores as pointed out in the Jackson case, supra, and there held to be sufficient to warrant the imposition of a chain-store license tax, would seem to be present here, where there is: singularity of president; similarity of name; standardization of form and method of advertising; commonalty of brand or label; group purchase of merchandise in whole *14 or in part; uniformity of accounting; common knowledge; general integration, and action by plaintiff as bead of the chain in advancing expenses, etc. See Great A. & P. Tea Co. v. Grosjean, 301 U. S., 412, 81 L. Ed., 1193; Fox v. Standard Oil Co., 294 U. S., 87; Liggett Co. v. Lee, 288 U. S., 517; Maxwell v. Shell, 90 F. (2d), 39, certiorari denied, 82 L. Ed., 552.

The power of the General Assembly to impose license taxes of the character here in question is undoubted, and the right of classification is referred largely to the legislative will, with the limitation that it must be reasonable and not arbitrary. S. v. Elkins, 187 N. C., 533, 122 S. E., 289; Smith v. Wilkins, 164 N. C., 135, 80 S. E., 168; Clark v. Maxwell, 197 N. C., 604, 150 S. E., 190, affirmed 282 U. S., 811.

The rule is authoritatively stated by Hoke, J., in Land Co. v. Smith, 151 N. C., 70, 65 S. E., 641, as follows: “The power of the Legislature in this matter of classification is very broad and comprehensive, subject only to the limitation that it must appear to have been made upon some ‘reasonable ground — something that bears a just and proper relation to the attempted classification, and not a mere arbitrary selection.’ ”

The observations made in Brown-Forman Co. v. Kentucky, 217 U. S., 563, would seem to be pertinent: “A very wide discretion must be conceded to the legislative power of the State in the classification of trades, callings, businesses or occupations which may be subjected to special forms of regulation or taxation through an excise or license tax. If the selection or classification is neither capricious nor arbitrary, and rests upon some reasonable consideration of difference or policy, there is no denial of the equal protection of the law.”

In Liggett Co. v. Lee, supra, it was pointed out that “there is a clear distinction between one owner operating many stores and many owners each operating his own store with a greater or less measure of cooperation voluntarily undertaken,” and it was said the Legislature may make this distinction the occasion of classification for purposes of taxation, but it was not there held that the taxation of the voluntary as well as the integrated chain would be in excess of the legislative power. See Fox v. Standard Oil Co., supra.

The whole matter is summed up by Mr. Justice Stone in the pithy statement that “the equal protection clause does not forbid discrimination with respect to things that are different.” Puget Sound P. & L. Co. v. Seattle, 291 U. S., 619. For full discussion of the subject and analysis of the authorities, see Hurt v. Cooper, 130 Tex., 433, 110 S. W., (2d), 896; S. c., 113 S. W. (2d) (Tex. Civ. App.), 929; Smith Co. v. Fitzgerald, 270 Mich., 659, 259 S. W., 352.

It is stipulated in the concluding paragraph of the facts agreed that should liability be found in any respect, the action shall fail. Plaintiff *15 admits liability to tbe tax in question for four of tbe 46 “Belk” Stores, not bere in controversy. We tbink tbe record supports tbe judgment imposing liability for tbe remaining 42. In tbe circumstances, tbe judgment of dismissal will be upheld.

Affirmed.

Sea well, J., took no part in tbe consideration or decision of tbis case.