195 P.2d 962 | Colo. | 1948
THIS action was brought to review a decision of the Director of Revenue making a deficiency assessment against plaintiff in error under the Emergency Retail Sales Tax Act of 1935 (S.L. '35, c. 189). It involves the construction of section 2 (n) of the act as applied to camelback, cushion gum, rubber cement and cord used in retreading motor vehicle tires. It was contended by plaintiff that sales of such commodities to persons engaged in the business of recapping and retreading tires were not taxable in that they were commodities of tangible personal property which became an ingredient of a manufactured product, and were exempt under section 2 (n), supra which provides as follows: "Sales to and purchases of tangible personal property by a person engaged in a business of manufacturing, compounding for sale, profit or use, any article, substance or commodity, which tangible personal property enters into the processing of or becomes an ingredient or component part of the product or service which is manufactured, *466 compounded or furnished and the container, label, or the furnished shipping case thereof, shall be deemed to be wholesale sales and shall be exempt from taxation under this act."
[1] There is no factual issue involved, and the case presents solely a question of law which is here subject to review to wit: Is a person engaged in tire recapping engaged in the business of manufacturing any article, substance or commodity within the meaning of the act.
The word "manufacture" has varying meanings dependent on the circumstances of its use. As employed in the Federal Bankruptcy Act it has been held to be used in its broadest sense, and in taxation statutes to have a narrower meaning. Armature Exchange, Inc. v.United States,
In the Rheinstrom case the court said that, for one to be a manufacturer he must produce a new article: that, "In order that one may be a maker, it is essential that he be the efficient cause of the coming into existence of something that did not before exist." In Anheuser-BuschBrewing Ass'n v. United States,
Turning to the legislative intent for assistance in interpreting the statute, we said in Bedford v. ColoradoF. I. Corp.,
If further assurance were necessary, it would be found in the similar construction by the federal courts in *468 Skinner v. United States,
The judgment of dismissal is affirmed.