33 So. 2d 841 | Miss. | 1948
The State Tax Commissioner on December 2, 1946, acting under Sections 10119, 10120 and 10135, Mississippi *256 Code 1942, assessed against appellant Lumber Company a tax of $371.74 upon the sale by appellant, during the months of July and August, 1946, of three lots located in Clarksdale, Mississippi. The Lumber Company paid the tax and sued in the Circuit Court for its recovery. The Commissioner demurred to the declaration. The trial court sustained the demurrer and rendered judgment for the Commissioner. From that judgment the Lumber Company appeals here.
The demurrer, of course, admits as true the allegations of fact properly set out in the declaration. Our investigation, therefore, is confined and limited to such allegations. We emphasize that statement in this case for the reason the briefs go far beyond the facts alleged in the declaration. We consider the case as made by the pleadings.
The tax is sought to be imposed under Section 10108, Code 1942, the part pertinent hereto being, "Upon every person engaging or continuing within this State in the business of selling any tangible property whatsoever, real or personal, (not including, however, bonds or other evidence of indebtedness, or stocks), there is likewise hereby levied, and shall be collected, a tax equivalent to two per cent of the gross proceeds of sales of the business . . .". This is a part of what is known as the Sales Tax Law. The declaration challenges the validity of this law, as applied to sales of real property, on a number of grounds, and then contends, and undertakes to set out facts sustaining the contention, that, even if the tax is valid, it does not apply to this corporation for the reason it is not engaged in the business of selling real property within the meaning of the quoted section. Since we have concluded that contention is well taken we do not decide the other questions involved.
The declaration avers that appellant is a corporation, with offices and warehouses in Clarksdale, Mississippi, "and that it is engaged in and doing a general lumber, material and supply business, selling at wholesale and retail lumber, sand and gravel, paint, hardware and other *257 building material and appliances . . ."; that "the said plaintiff is not engaged in the business of selling real estate, but is engaged in the wholesale and retail lumber and supply business, and as an incident thereof, and to accommodate the builders they acquired these respective properties and arranged for the financing thereof to veterans of World War II . . ."; that appellant did this in co-operation with the Federal Emergency Housing Program to construct homes for war veterans, under which program veterans had a priority on building materials, and the three houses were constructed and sold to said veterans pursuant to contracts previously made with them; that appellant furnished all the lumber and materials used in the building of the houses but they were constructed by another under contract with appellant, which contractor had paid all taxes required of him, including a sales tax on the labor in such construction; and that appellant realized no profit from the sale of the lots; that the corporation had paid all taxes owing by it, which necessarily included privilege tax, sales tax on all sales of lumber and supplies sold by it including that which went into the construction of the three houses here involved, corporation franchise tax, ad valorem and gross income tax.
Accepting these allegations as true, was appellant engaged in the business of selling real property within the meaning of said Section 10108? Neither party has cited us a case exactly in point, nor has our research disclosed one. In Warburton-Beacham Supply Co. v. City of Jackson,
In Craig, State Tax Collector v. Ballard,
In Stone, Chairman v. Martin Veneer Corporation,
The Federal Revenue Code imposes a tax on income realized from sales in "ordinary course of his trade or business". 26 U.S.C.A. Int. Rev. Code, Secs. 22, 117. The Federal Court in Fahs v. Crawford, 5 Cir.,
We are not required in this case to define exactly when one is ". . . engaging or continuing within this State in the business of selling . . ." real property under Section 10108, supra. We think it clear, under the allegations of the declaration and the Mississippi cases cited above, that the sale of the three lots here involved was merely incidental to the main business of appellant as a wholesale and retail dealer in lumber, building materials and supplies. It is familiar learning that doubts in tax statutes should be resolved in favor of the taxpayer. A development of all the facts may show appellant to be engaged in selling real property within the meaning of said Section 10108, but the allegations in this declaration show otherwise.
Reversed and remanded.