375 Mass. 549 | Mass. | 1978
This action was commenced by a petition under formal procedure filed with the Appellate Tax Board (board) protesting the refusal of the State Tax Commission (commission) to abate sales taxes totaling $50,401.04, plus interest. The board ruled that the sales in question were not exempt from taxation, and we affirm that decision.
Appellant George S. Carrington Company (Carrington) manufactures greeting cards.
1. Carrington first argues that the transactions in question were exempt from taxation as “[sjales which the commonwealth is prohibited from taxing under the constitution ... of the United States.” G. L. c. 64H, §6 (a), inserted by St. 1967, c. 757, § 1. This contention is without merit. See Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, rehearing denied, 430 U.S. 976 (1977).
Carrington maintains that it is unconstitutional for the Commonwealth to impose a sales tax under the circumstances, because the taxable event — namely, delivery to the post office, see G. L. c. 64H, § 1 (12) (a), (e) — is not local activity of a sort that may be readily separated from interstate commerce. See Dunbar-Stanley Studios, Inc. v. Alabama, 393 U.S. 537, 540 (1969); Michigan-Wis. Pipe Line Co. v. Calvert, 347 U.S. 157, 166 (1954); Western Live Stock v. Bureau of Revenue, 303 U.S. 250 (1938). Carrington argues that these sales are so inextricably linked with interstate commerce that to subject them to the sales tax would offend the commerce clause of the United States Constitution. U.S. Const, art. 1, § 8, cl. 3. According to Carrington, we need only determine whether the tax was imposed while the goods were “in” or “out” of the stream of interstate commerce. Clearly, these goods were “in” interstate commerce once they were delivered to the post office.
Carrington’s argument assumes that interstate commerce enjoys a sort of “free trade” immunity from State taxation, but this view has been abandoned by the United States Supreme Court in favor of an approach that considers instead the practical effect of the tax on interstate commerce. See
Clearly a sales tax may be fairly imposed by Massachusetts in this case without creating an undue burden on the ability of business to deal in interstate channels. The manufacturing, printing, and packaging of the fund raising packets all occurred within Massachusetts, and Carrington’s entire performance of the contract occurred within the State. Thus, the requirement of a nexus between the sale and the taxing State is amply satisfied here. See Western Live Stock v. Bureau of Revenue, 303 U.S. 250 (1938); American Mfg. Co. v. St. Louis, 250 U.S. 459 (1919).
Nor can Carrington show any real “danger of interstate commerce being smothered by cumulative taxes of several
The risk that the transaction might be subject to a State use tax likewise is insubstantial. Most States have eliminated this risk by adopting statutory provisions that credit taxpayers for sales taxes paid in other jurisdictions. See, e.g., G. L. c. 641, § 7 (c). Carrington points to one jurisdiction that does not have such an exemption, see W. Va. Code § 11-15A-3 (1974), but contrary to Carrington’s suggestion, something more than a theoretical possibility of cumulative taxation must exist to invalidate an otherwise appropriate tax. See Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 288-289 n.15 (1977). See also Department of Revenue v. Association of Wash. Stevedoring Cos., 435 U.S. 734, 750-751 (1978).
The sales tax here is at the rate applicable to all sales within the State, thus no discrimination against interstate businesses is worked by this tax. See generally Boston Tow Boat Co. v. State Tax Comm’n, 366 Mass. 474 (1974). Nor is there any problem of apportionment here, since only Massachusetts-based sales are subject to the tax. G. L. c. 64H, § 1 (12) (a), (e). Cf. Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434 (1939). Carrington clearly benefits from services provided to it by Massachusetts. Its manufacturing and sales activities enjoy the same police protection enjoyed by
2. Carrington also argues that its sales were exempt from taxation under certain provisions of G. L. c. 64H, § 6 (b).
3. Finally, Carrington argues that since these were sales to charitable organizations, the exemption in G. L. c. 64H, § 6 (e), applies. That section exempts sales to any organization exempt under certain provisions of the Internal Revenue Code, provided that the organization “shall have first obtained a certification from the commissioner stating that it is entitled to such exemption.” G. L. c. 64H, § 6 (e) (2). The charities that dealt with Carrington had not requested such certification at the time of the sales in question, and, although they qualified for the exemption in all other respects, the board ruled that the § 6 (e) exemption was unavailable. There was no error. Carrington would have this court disregard the unambiguous language of a statute, but it is the court’s duty to give full force and meaning to the entire statute. See, e.g., Massachusetts Comm’n Against
So ordered.
Carrington is a division of Fox Valley Corporation (Fox Valley). Although Fox Valley is a Wisconsin corporation, Carrington’s usual place of business is Leominster, Massachusetts, and Carrington concedes that it is the proper party to pay any sales taxes resulting from the transactions in question.
See also Department of Revenue v. Association of Wash. Stevedoring Cos., 435 U.S. 734, 749-750 (1978).
Carrington further argues that the analysis in Complete Auto Transit does not apply to sales tax cases, but only to situations in which a State imposes a tax on the privilege of carrying on within the State certain activities relating to a corporation’s operation of an interstate business. We do not believe the Court’s opinion can be read so narrowly. Indeed, the Court characterized the Mississippi tax there in issue as a “sales tax.” Complete Auto Transit, Inc. v. Brady, supra at 275. The label by which a tax is known should not control the constitutional principles by which it is judged. That is a dominant theme in the Complete Auto Transit opinion. See id. at 284.
The provision of G. L. c. 64H, § 6 (b), on which Carrington relies exempts from taxation the gross receipts from sales of taxable personal property in “which the vendor is obligated under the terms of any agreement to deliver to a purchaser outside the commonwealth or to an interstate carrier for delivery to a purchaser outside the commonwealth ” (emphasis supplied).