88 P.2d 481 | Wyo. | 1939
The appeal is from a judgment in favor of the State of Wyoming in an action by it to recover from defendants sales taxes under the Emergency Sales Tax Act of 1935 (Sess. Laws, 1935, ch. 74) on amounts paid by one defendant, Capital Coal Company, to the other defendant, Union Pacific Railroad Company, for intrastate transportation of coal from the mines to Cheyenne, Wyoming, during five months in 1936 and three months in 1937 before the act of 1935 was superseded by the Selective Sales Tax Act of 1937 (Sess. Laws, 1937, ch. 102).
The coal company refused to pay the tax to the railroad company, and both defendants now challenge the judgment, on the ground that the purchases of the transportation services should be deemed wholesale sales as defined by section 2 (f) of the applicable act.
The coal company was engaged in the business of selling coal at wholesale and retail at Cheyenne. It bought the coal at the mines in carload lots f.o.b. cars at nearby shipping points which, as to coal produced in Wyoming, were Hanna, Rock Springs and Kemmerer. The coal was all graded and screened at the mines, was ready for resale by the coal company on its arrival at Cheyenne, and was all resold. About 90 per *180 cent of it was delivered directly from the cars by the coal company to its customers.
As explained in State Board of Equalization v. Stanolind Oil
Gas Co.,
"Each purchase of service as defined by Section 4(b) of this act, by a person engaged in compounding and selling a service of a like kind, which is subject to tax under Section 4(b) of this act and actually used in compounding such taxable service shall be deemed a wholesale sale and shall be exempt from taxation under this act."
This part of section 2(f) was not amended by the legislature and appears as copied above in the act as passed. The coal company in contending that this provision is applicable argues that the transportation of coal from the mines to Cheyenne was actually used by the coal company in compounding a like taxable service which the coal company was rendering in delivering coal to its customers by trucks after the coal had been transported to Cheyenne by rail. A short and sufficient answer to this is that the coal company in delivering coal to its customers by truck was not compounding and selling a service which was subject to tax under section 4(b).
Section 2(f) of the bill as introduced contained, also, this provision:
"Each purchase of tangible personal property or product made by a person engaged in the business of manufacturing, compounding for sale, profit or use, *181 any article, substance or commodity which enters into and becomes an ingredient or component part of the tangible personal property or product which he manufactures or compounds or the container, label, or the shipping case thereof shall be deemed a wholesale sale and shall be exempt from taxation under this act."
This provision of the bill was materially changed by amendment. In the act as passed it reads, still as part of section 2(f), as follows (the added words being italicized):
"Each purchase of tangible personal property or service, made by a person engaged in the business of producing,furnishing, manufacturing, or compounding for sale, profit or use, any article, substance, service or commodity, which isactually used in the production of, or enters into the processingof, or becomes an ingredient or component part of the article, substance, service, or commodity which he manufactures or compounds, produces, or furnishes, or the container, label, or the shipping case thereof, shall be deemed a wholesale sale and shall be exempt from taxation under this act."
These amendments, as noted in our decisions in State Board of Equalization v. Oil Wells Supply Co.,
The provision in question, as applied in this case, may be read as follows:
Each purchase of * * * service (transportation) made by a person engaged in the business of * * * furnishing * * * for sale, profit or use any * * * commodity (coal) which * * * enters into the processing of, or becomes an ingredient or component part of the * * * commodity which he * * * furnishes, * * * shall be deemed a wholesale sale and shall be exempt from taxation under this act.
We hold that this must be construed as a declaration that purchases of transportation like those here involved were wholesale sales. The coal company was "furnishing a commodity for sale, profit and use," and the transportation may be considered a part of the "process" of furnishing. It may be thought that, to bring the purchases within the letter of the statute, we must give some of its words a rather broad meaning, but we think we are justified in so doing. In Equitable etc. Society v. Thulemeyer,
Most of the early cases that formulated the last mentioned rule treated of exemptions which were mere gratuities and unjustifiable except upon the ground that they were intended to further some public purpose. See Gillette v. Hartford,
There are other reasons that seem to justify our construction of the statute. The transactions here in question, though perhaps not clearly within the letter of the statutory definition of a wholesale sale, are not on principle distinguishable from transactions not taxable under our holding in State Board of Equalization v. Oil Wells Supply Co. and State Board of Equalization v. Stanolind Oil Gas Co., supra. Legislative policy may carry a statute beyond the strict letter. See Johnson v. United States, 163 F. 30, 89 C.C.A., 508, 18 L.R.A. (N.S.) 1194; Van Beeck v. Sabine Towing Co.,
The judgment will be reversed.
RINER, Ch. J., and BLUME, J., concur.