| Tenn. | Jan 17, 1942
By the bill complainant questions the validity of Chapter 126, Public Acts of 1941, which amended the second paragraph of Section 6 of the Tobacco Tax Law, Pub. Acts 1937, ch. 133, to read as follows:
"The Commissioner is empowered to allow any wholesale dealer and jobber, as hereinafter defined, a discount of an amount not to exceed Seven and One-half (7 1/2%) Per Cent of the value of the stamps as compensation for selling and affixing the stamps to tobacco products. For the purpose of this paragraph, the term `wholesale dealer and jobber' is hereby defined to mean persons, firms or corporations who sell at wholesale only any one or more of the articles taxed herein to licensed retail dealers for the purpose of resale only."
Complainant is a corporation chartered under the laws *356 of Arizona, but qualified to do business in this State. It operates numerous chain stores and sells cigarettes and tobacco products at retail as well as at wholesale. Being a retail store, it does not come within the provision of the above quoted statute.
Complainant attacked the statute upon the ground that it is violative of Article 1, Section 8, and Article 11, Section 8, of the Constitution of Tennessee, and also the equality clause of the Fourteenth Amendment of the Constitution of the United States. It insists that the involved statute is class legislation creating a favored class of taxpayers, namely, wholesale dealers as distinguished from retail dealers.
By demurrer the defendants contended that the statute did not violate the Constitution, which view was accepted by the chancellor, who sustained the demurrer and dismissed the bill.
It has frequently been held by this court that all intendments are in favor of the constitutionality of an Act of the Legislature passed with the forms and ceremonies requisite to give it the force of law, and that every reasonable doubt must be resolved in favor of the legislative action. Condon v.Maloney, and State ex rel. v. Condon,
In 11 Am. Jur., Constitutional Law, section 91, it is said:
"The courts invariably give the most careful consideration to questions involving the interpretation and application of the Constitution and approach constitutional questions with great deliberation, exercising their power in this respect with the greatest possible caution and even reluctance; and they should never declare a statute void, unless its invalidity is, in their judgment, beyond reasonable doubt." *357
In the Condon case, referred to above, this court, after reviewing the decision of the Supreme Court of the United States in Magoun v. Illinois Trust Savings Bank,
"Nor did the court attempt to assign any reason for the difference. On the contrary, it said: `There is . . . no precise application of the rule of reasonableness of classification, and the rule of equity permits many practical inequalities. . . . It only requires that the law . . . shall operate on all alike under the same circumstances.'" [
Applying these principles of constitutional law to the facts of the cause under consideration, several reasons occur to us as to the object which the Legislature had in mind in the enactment of this statute. Prior to the enactment of this statute other plans had been tried out by the Legislature, which evidently had proven unsatisfactory. Apparently this latter plan could be executed more economically and more efficiently than the preceding one. In the next place, a wholesaler, as a rule, purchases in much larger quantities than a retailer, and that in and of itself is a well-established principle in our commercial life that entitles him to a discount. Finally, it appears from our taxing statutes that the Legislature in this State has uniformly placed retail and wholesale merchants in different classes. *358
The annotator of 62 A.L.R., 109, says:
"Classification of tobacco dealers based on the amount, quantity, or number of sales has been sustained in various cases, so as to sustain a graduated tax dependent on these various considerations. And for the same reasons the cases support the right to make a classification of tobacco dealers for taxation purposes, based on differences existing between wholesale and retail dealers."
Numerous decisions are cited in support of that statement.
This principle was given effect in the recent case of SpurDistributing Co. v. Lindsey,
A recent decision which is very much in point and which expresses our views in a clear and succinct manner is that ofHavens v. Attorney General et al.,
"Nor is the provision allowing the distributor a discount on the purchase of stamps discriminatory in any substantial sense. It is obviously designed to meet the objection raised in ReOpinion of the Justices,
This statute may work an inequality in so far as complainant is concerned, which, however, is insufficient to render it invalid.
The statute does not violate the constitutional provisions invoked, the result being that the decree of the chancellor will be affirmed. *360