261 Mass. 450 | Mass. | 1927
This petition is brought under G. L. c. 63, § 77, by a domestic corporation for the abatement of an excise tax assessed upon it. The agreed facts are that the principal place of business of the petitioner was at Springfield within this Commonwealth. There it maintained an office where its usual corporate functions were carried on and from which its dividends were distributed. It maintained no other office or place of business, permanent or temporary, in any State other than this Commonwealth. Its sole business was buying lumber and lumber products' in certain southern and western States of the Union and in the Dominion of Canada, and in selling and shipping the same to purchasers in certain other States of the Union. It also sold lumber for owners of lumber mills in a similar way for a commission. In most instances the petitioner did not buy lumber until it was ordered by a customer and then it was
The present controversy relates to the income for the year 1924. An excise tax was levied on the total net income of the petitioner without apportionment. The tax was assessed under that part of G. L. c. 63, §' 32, which provides that “. . . every domestic business corporation shall pay annually, with respect to the carrying on or doing of business by it, an excise equal to the sum of the following . . . : (1) An amount equal to five dollars per thousand upon the value of its corporate excess. (2) An amount equal to two and one half per cent of that part of its net income, as defined in this chapter, which is derived from business carried on within the commonwealth.” This part of the statute must be interpreted in connection with § 38 of the same chapter, which provides in effect that, if the corporation carries on no business outside this Commonwealth, the whole of the business income shall be allocated to this Commonwealth, a formula for allocation to this Commonwealth of a part of the net income being there established only for corporations conducting business both within and outside this Commonwealth based upon a comparison between the value of their tangible property situated within this Commonwealth and the value of all such property wherever situated.
The petitioner is incorporated under the laws of this Commonwealth. The tax here in issue is not a franchise tax on the right of the petitioner to exist as a corporation,
Seemingly that portion of the petitioner’s business which consisted of selling lumber on a commission is not interstate commerce within the principle declared in Ficklen v. Shelby County Taxing District, 145 U. S. 1. In that case it was held, touching a license tax on gross commissions of resident brokers engaged in negotiating, between residents and nonresidents, sales of goods situated in another State, that (page 24): “This tax is not on the goods, or on the proceeds of the goods, nor is it a tax oh nonresident merchants; and if it can be said to affect interstate commerce in any way it is incidentally, and so remotely as not to amount to a regulation of such commerce.” It is not necessary, however, to discuss this question or to consider whether the scope of this decision has been narrowed by later ones such as Stockard v. Morgan, 185 U. S. 27, 35-37, because it is plain that the petitioner was carrying on important parts of its business within this Commonwealth as intrastate business so as to be subject to an excise tax under the present statute by force of the decision in Cheney Brothers Co. v. Massachusetts, 246 U. S. 147, notwithstanding its other interstate business.
The petitioner is entitled to allocation of its excise tax. The pertinent statute on this point is G. L. c. 63, § 38, wherein, after referring to certain allocations of income not here material, it is provided that “the remainder of the net in
It follows that the petitioner was subject to an excise tax
Ordered accordingly.