*1 at enforceable contract the time he exhibited the no to the who it at a eventually sub- property persons bought stantial reduction price. remanded, reversed. Cause
By Judgment Court.— directions enter judgment dismissing complaint, with costs to the defendants. Department Appellant,
Greenebaum, Taxation, Respondent. May 9 June CM co *2 Michael, For the there were briefs appellant by Spohn, Friedrich, Best & and Ronald M. Anton of coun- attorneys, sel, Milwaukee, all of and оral Mr. John S. Best argument by and Mr. Anton.
For the there was a brief respondent by Attorney Persons, General and Harold H. assistant attorney general, and oral Persons. Mr. argument by concerns the controversy
Brown, interpretаtion J. sec. Stats. and sec. 71.05 Stats. identical, 1947. The material two statutes are parts so we will refer 1947 enactment. Incidentally, that has now been repealed. persons “Sec. 71.05. Deductions from incomes corporations. Persons other than corpora- than other
tions, in taxation, incomes for shall reporting purposes allowed the deductions: . . . following Dividends, those
“(5) except provided sections 71.03 and 71.03 rеceived from (2) (1) (e) (d) any corporation all of the of this requirements subsection. conforming Such must have filed income-tax returns as corporation required the income of such law and must be corporation subject to the income-tax law of this state. The the must be attributable to Wisconsin
corporation and for of this subsection any shall be con- business attributable to sidered Wis- having if 50 cent or more of the entire nеt income or loss consin after for tax adjustment of such corporation purposes (for of such was used the year preceding payment dividends) the taxable income provided chapter The facts are states them thus: undisputed. Appellant “At all times here material was an individual appellant in Milwaukee ITe his county, Wisconsin. filed residing income-tax returns for the calendar years 1947, and 1948 with the assessor of inсomes for Milwaukee 1946 and 1948 received county. During years appellant dividends from Greenebaum Tanning Company (herein- J. $29,970 after called the sum of ‘Tanning Company’) $89,910, which were and as included respectively, by aрpellant *3 tax income in his Wisconsin returns for said year. gross deducted the dividends so received from his Appellant gross deductible section income under stat- (4) utes of 1945 and section 71.05 statutes of 1947. These (5) deductions wеre disallowed the assessor of incomes. Ap- for abatement of the taxes pellant’s application resulting denied; was and such denial affirmed the Wisconsin the board of tax and circuit court for Milwaukee appeals county.
“The was an Illinois li- Tanning Company Wisconsin; in censed to do business with offices in Illinois in and Wisconsin and was leather at the manufacture of engaged in in Illinois. Wisconsin and Its Wisconsin plants were in than its Illinois plants larger productive capacity and each of its four fiscal within the years plant; period falling 30, which July commenced and ended June 1948, cent 65 or more of the sales were per corрoration’s Wisconsin, cent the attributable to of 66 or more of costs per sales were attributable its to manufactured in goods Wisconsin, cent more 66 or of its and per shipping, selling, Wisconsin, were incurred within sub- exрenses and general stantially more than half one of its fixed properties were inventories located in this state. over Substantially half the income for such four-year period income to subject was Wisconsin taxation under chapter 30, statutes, fiscal ended but for each of its years June 1948, 30, income subject its Wisconsin and June than 50 cent of taxation under 71 was less per chapter total income. re- income-tax
“The filed Wisconsin Tanning Company fiscal ended and each of for its year turns June it fiscal and in each of said years succeeding years, three to taxation 71.” income under subject chapter had filed Thеre is no Tanning Company dispute in each it income-tax returns and that year Wisconsin issue, then, taxation. subject income Wisconsin attributabil- centers around third statutory requirement, and, business to more narrowly, of its ity is attributable whether business determining Wisconsin, factors be considered other than its may any more, cent, the net income of the of 50 or corpora- use etc., tion, its taxable after income? adjustments, tax stated in its deсision board of appeals Although established in the facts have been record . . sufficient that “. conclusion that its the factual to warrant Wisconsin, is, the words using was attributable sense,” nevertheless it held in the business’ ‘prinсipal com- legislative a clear unambiguous the statute is exclusive test for test was the mand that year business in given location of principal determining court The circuit conclusive. test is result of that agreed. *4 below. reached conclusion reach the are unable
We under- commonly their to be are given statutes “Words 235 v. Clark (1940), ex rel. Green State stood meaning.” necessary 25. “It is hardly N. 294 W. Wis. this court said by often been has so what again repeat common, or ordinary, ap- statutes construction of in the in- to be is regarded of words meaning proved manifest legislative inconsistent unless tended 238 Wadhams v. 448, Oil Co. State
purpose.” (1933), Wis. 456, 646, 245 N. W. 246 N. W. and cases there cited. is the
What manifest legislative of sec. 71.05 purpose ? certain Stats. To from exempt taxation. What dividends ? Those whose paid corporations principal business is attributable to Wisconsin. Is the busi- principal ness this attributable to corporation Wiscоnsin? “Using sense,” the words business’ in the ‘principal ordinary then, tax board of found that it was. appeals did not Why, board Be- uphold dividends? deductibility “ cause of . . . for the statutory provision of this subsection any shall be considered as hav- business attributable to if ing cent or more of the entire net income . . . was per used in the taxable . .” income. . board and the court this as a definition regarded not of when the attributable,- business is is what the statute —-which а clearly also definition of when the expressly says,—but Wisconsin, business is not attributable —which the statute does not at all. say Under interpretation statute means if 50 cent simply net income is attributable to Wisconsin the shareholder dividends; deduct its if may less than 50 is attributable, so he not. The may location of principal busi ness, sense, then, in the ordinary is quite immaterial and no sense, otherwise, or is attached to the words of the statute which mаke business” one of “principal the three factors to be considered the taxation authorities. Produc tion of net income it. “It is an supersedes rule elementary for the construction of statutes that effect must be if given, word, clause, possible, every sentence thereof.” State v. Columbian Nat. Ins. Co. Wis. Life 502; Worachek v. Stephenson Town School *5 Dist. 270 Wis. When (2d) Stats., reads sec. one sees immediately that, business is of con- attributability primary cern. Under the it is of no department’s interpretation, concern If whatever. been the intention of the chose a body most cumbersome legislature and unper- suasive manner of itself. think error We lies expressing rather in a interpretation by than respondent legisla- inclusion tive of much meaningless language.
What, then, ? does statute direct In our view statute are if the says deductible business is attributable to Wiscоnsin. To determine that fact the tax authorities shall look at the returns of the If they find that 50 corporation. of its net income was used its Wisconsin taxable income they need look no farther. The statute is But satisfied. if they cannot so then find must farther they look and determine the still-vital fact of business by other any appropriate as the board did here when it tests, just found that in the — sense the Tanning Company’s principal attributable to Wisсonsin. was seems to us clear
This meaning unambiguous. the virtue words their It has giving ordinary meaning, statute, effect all and of parts avoiding of giving condition, therein, into the statute of a not reading expressed which much of what was deprives meaning expressed. reversed, By and cause -Judgment remanded Court.-— further not inconsistent with this for proceedings opinion. (dissenting). provision interpreted Fairchild, J. was intended double taxa- in the avoid majоrity opinion In the In- corporate profits. original tion and until this provision Tax Law was worded so come with exact object nicety. as to Where accomplish *6 in a net income was taxed of corрoration’s percentage could that same of its dividends only percentage Wisconsin them. a Wisconsin who received by taxpayer be deducted v. Milwaukee 159 Wis. Van Dyke See into the form In law was changed substantially this case. Laws 1927. It Ch. of permitted controlling from of dividends some and corporations deduction complete of from others. The denied deduction dividends completely can have been of аdministrative change purpose the exact Instead of of convenience. applying percentage net income taxed Wisconsin to corporate in order to determine the amount а its dividends taxpayer deduct, an line was drawn and the arbitrary could of on one side the line be could de- falling of corporations toto, not at those of others all. ducted that the which was legislature, I conclude relieving from a burden of arithmetical commission computation, it of not intend to saddle burden did determining of fact whether a question complex corpora- frequently business was attributable to Wisconsin. Mоre- tion’s principal over, instance an where an this happens arbitrary more test is far relevant to the purpose percentage than is some other of concept statute business. every for twenty-four years Finally, taxpayer instructions, as well as was informed official the terms return, that the 50 test his was THE test on printed of dividends. Thousands deductibility taxpayers their figured deductions presumably throughout period taxes in reliance upon their position and paid that the 50 cent test and the department commission controlled. effect to all the used in words
The rule favor giving not be followed so far as to obstruct the should the lаw and at most raise an law should general which can be ambiguity resolved by long-continued adminis- trative construction. The of the circuit judgment court ought to be affirmed.
I am authorized to state that Mr. joins Broadfoot Justiсe in this dissent. Plaintiff another, Respondent,
Jewell, Schmidt Defendants and Respondents: Farmers Mutual Au Company another, tomobile Defend Insurance ants and Appellants. *7 another, Plaintiffs,
Mellen Defendants and Same, Respondents: Defendants and Appellants. Same,
May 9 June