Nashville union and dispatch. [volume] (Nashville, Tenn.) 1866-1868, 1867-04-23
Important Decision.

Thomas G. Smith, Judge Of the Law
Court of Memphis, decided few days ago
that the two per cent tax imposed by the
Legislature upon the invoice cost of goods
sold by merchants, did not apply to COM
mission merchants. The Post says:
The question came before the court upon
an agreed case. Messrs Davis q Norton,
commission merchants, acting for them
selves and some thirty other houses in the
city, refused to pay the two per cent. tax, as
required by the County Clerk, but rendered
the amount of tax due exclusive of the two
per cent, and made an application to the
! court for a writ of mdnddmHs against the
County Clerk, commanding him to renew
their license on the terms prescribed by
law.
In the answer of the counsel for John
League, ESQ.,, County Clerk, the facts set
forth in the petition we're admitted, but it
was contended that, nevertheless, commits
sion merchants are liable to pay to the
State upon the gross amount of their sales,
public and private, two per cent. TO the
State and one-fourth of one per cent. TO the
county Of Shelby, in addition to the thirty
five dollars to the State when the gross
amount does not exceed $4,000, and the
same amount to the county on the same
amount of sales as commission merchants.
The facts were agreed upon between the
parties in order TO have a construction of
the law so as TO determine whether COM
mission merchants are liable to the tax OF
two per cent. as merchants are on the in
voice price of goods when purchased.
Tho oorrrf baIH fba Of
merchant" and commission merchant"
were totally different callings. The one
not only buys but sells for himself and on
his own account, and not otherwise. The
other buys nothing, but only sells, and then
not for himself, but as agent for his princi-
pal. The two occupations are of a different
nature and character. The Legislature,
both under the Code and the revenue act of
May oath, 1865, adopted different method
or standard Of taxation for each of them.
" In the case of the merchant the method
adopted by the Legislature is an assessment
Of two per cent. on the sales of merchan-
disc, but by the express terms of the act,
such two per cent. is to be ascertained,
not on the amount for which the merchan-
disc gudS sold, but on The inrOice cost price for
which it was purchased. Whereas in the
case Of the commission merchant, uhO bltgS
nothing, and receives only commission on
what he sells, this method of taxation as to
him would be utterly impracticable and
simply absurd"
The court sustained the County Clerk in
regard to the tax of one-quarter of one per
cent, assessed by the county on commission
merchants, but decided against the two per
cent. tax. Judge Smith, in rendering the
decision, concludes as follows:
The conclusion, therefore, arrived at is,
that the defendant, Clerk of the County
Court of Shelby, and as Collector of Taxes
on Privileges, put himself in the wrong by
requiring of petitioners TO pay the addi-
tional two per cent. tax, and in refusing to
receive the amount by them rendered, and
to issue 10 them license TO exercise the
privilege Cf commission merchants. A
mGnddmus peremptory is therefore awarded.
This decision, Of course, only bears upon
business done previous TO the passage Of
the amended revenue law at the last session
Of the Legislature. Under the law as it
now stands, merchants and commission
merchants are both required to pay State
tax Of one per cent. upon the cost of mer-
chandise sold by them.