129 S.W.2d 611 | Ark. | 1939
This suit was filed in the Pulaski chancery court by the Director of State Highways and the State Highway Commission against Z. M. McCarroll, as the Commissioner of Revenues for the State of Arkansas. The substantial and pertinent parts of the complaint are to the effect that plaintiffs are engaged in the exercise of the powers and discharge of duties bestowed upon them by law in the maintenance, repair and construction of public highways and bridges of the state. For use in the performance of their duties they had purchased a railway tank car of motor fuel. The plaintiffs plead that it is the duty of the Commissioner of Revenues to collect the so-called gasoline tax of 6 1/2 cents per gallon and that he has asked of the plaintiffs, the Director of Highways, and the Highway Commission, that they pay the 6 1/2 cents per gallon tax and that upon their refusal, has assessed, or that he will assess a penalty of 20 per cent. and that the Commissioner of Revenues will follow up the remedies provided by law to collect the tax and impose the penalties fixed thereunder. *437
Plaintiffs plead that they are lawfully in possession of the said tank car of gasoline; that it is not to be sold or otherwise used than in the repair, maintenance and construction of highways and bridges in the state highway system; that it is not subject to the alleged tax of 6 1/2 cents a gallon. They pray that the defendant be enjoined from the collection of the gasoline tax or taking any steps threatening or seeking to collect the same.
The Commissioner of Revenues filed a demurrer to this complaint which the court overruled, and, defendant refusing to plead further, decree was entered enjoining the appellant as Commissioner of Revenues from proceeding to collect any tax upon the railway tank car of gasoline.
The appeal challenges the correctness of the trial court's decree.
The appellees, aside from the statute imposing the tax, rely upon one Arkansas authority, the case of Board of Improvement v. School District,
We speak of this tax in this opinion as we do in ordinary or every-day language, but we think it must be understood generally, both by the lawmakers and the legal profession, that the tax had its origin, not as a sales tax upon the commodity, but as a tax upon the privilege and use of the highways, which privilege and use was measured by the amount of gasoline used in the exercise of that privilege and use so taxed. Such has been the holding of this court in some of its previous decisions. Standard Oil Co. v. Brodie,
In the cited case, the tax by act 606, 1 and 3 of Acts of 1921 was a tax of 1 cent a gallon for fuel sold or used.
Section 25 of act 11 of the Acts of the Extraordinary Session of 1934 amends 2, of act 63, of the General Assembly, approved February 25, 1931, and as to this act expressly states: "The purpose of this act is to provide for the payment and collection of an excise or privilege tax on the first sale of motor vehicle fuels when sold, or the use, when used in this state; double taxation is not intended."
A certain provision of the same section is: "The tax herein levied is to be collected at the source in this state of the manufacturer or wholesaler when sales of any motor vehicle fuels are made, and when not sold in this state, then when first brought into this state for use therein."
Section 27 of the said act is cited by the appellees as an indication or implication that it was not intended by *439 the legislature to impose a tax upon gasoline bought and used by the Highway Department. This section reads as follows: "Nothing in this act or in any similar law on the subject shall be construed as intending to levy any tax on motor vehicle fuel that the state has no power to tax."
Answering the suggestion as to the last-quoted section, we must say that we do not understand that this section provides the exemption claimed. Rather it looks to transportation in interstate commerce of gasoline or motor fuels shipped through the state which is not brought into the state to be sold here, nor for use in this state. Directly, there is no indication under this provision that gasoline used in this state may be exempted from the tax.
Section 25, just mentioned above, not only imposes the tax upon gasoline sold in the state, but the tax is there fixed upon gasoline used in the state. We cited Standard Oil Co. v. Brodie,
This case does not call for any special analysis of those several authorities. They are sound in principle and the deductions are conclusive upon us.
We proceed, however, to discuss the application of some of these announcements of the law. In the case of Blackwood v. Sibeck,
A similar analysis was made in the case of Ft. Smith v. Watson
The court said there that the city must be regarded as a wholesaler of the gasoline in its purchase and use of it and that it was liable for the tax.
Again we had this suggestion made, almost identical with the proposition we now have for consideration in the case of Wiseman v. Madison Cadillac Co.,
There was, also, quoted from 61 C.J. 391, the announcement that in cases of doubt as to legislative intention, or as to inclusion of particular property, within the terms of the statute, the presumption is in favor of the taxing power, and the burden is on the claimant to establish clearly his right to exemption, bringing himself clearly within the terms of such conditions as the statute may impose.
There was, also, quoted from vol. 2, (4th Ed.), of Cooley on Taxation, 1403, 672, an announcement to the same effect as above stated, except that this celebrated law-writer made more emphatic the principle announced, for he says: "Exemptions are never presumed, the burden is on a claimant to establish clearly his right to exemption, and an alleged grant of exemption will be strictly construed, and cannot be made out by inference or implication, but must be beyond reasonable doubt."
We think the case under consideration had been decided in principle by an announcement of this court in the case of Arkansas State Highway Commission v. Wiseman, Commissioner,
It is unnecessary to extend unduly this discussion, but we desire to close it by announcing that the argument made that a tax upon the Highway Department is the taking of money from one pocket and putting it in another is not conclusive. However absurd the statement may appear, we do not feel at liberty to announce a principle whereby less revenue will be collected or distribution provided for under the provisions of act 11 of the Extraordinary Session of 1934 and in that manner impair the effectiveness of that legislation. While it is true that if the Highway Department pay over this tax it will have that much less money to pay out on highways, the argument is just as forceful that if it should not pay over this tax, there will be exactly that much less money in the aggregate paid to the treasury for the redemption of bonds and payment of interest and other debt service obligations.
It is suggested, but not seriously argued, that the Highway Department cannot be required to pay this tax because there is no special appropriation therefor. If the Highway Department is able to buy gasoline it will find, unless it seeks to evade the law, that the tax imposed upon the gasoline is a mere incidental part of the purchase price. We do not mean by "incidental" that it is small or insignificant, but that it is an inseparable part of the purchase price. *443
The other questions suggested and presented in this case, as to the right of the Commissioner of Revenues to sue the Highway Department, we deem of no particular significance as this action was instituted by the Highway Department and its director. The officers in control of the various departments of this state desire merely to know and understand their duties and obligations in order that complete and entire performance may be insured.
It follows that the trial court was in error. The decree is, therefore, reversed, and the cause remanded with directions to sustain appellant's demurrer.
GRIFFIN SMITH, C.J., and HOLT, J., dissent.