Opinion ID: 1829624
Heading Depth: 2
Heading Rank: 3

Heading: Are Vicksburg and Delta Public Storage Warehouses?

Text: The chancellor found the existence of each one of the elements of a public storage warehouse and, thus concluded that Vicksburg and Delta were public in nature. This Court agrees inasmuch as they contract with whomever they choose to contract, whether an oil company or member of the public at large. As a practical matter, their public is the oil industry, all of whom have an implied invitation to contract with appellees for their services. The right to contract for services rendered by Vicksburg and Delta is open to all. Any customer that meets their prices can contract. Where, as here, any oil company or member of the public at large willing to pay the regular charges can store its product, the business is public as that term is commonly understood. In support of their argument on cross-appeal assailing the chancellor's finding of their public character, cross-appellants argue (1) they do not do business with a majority of oil companies in Mississippi which use public storage warehouses, (2) their contracts restrict their ability to be available to the public, and (3) they do not advertise and have not solicited any significant portion of the public storage warehousing public. First, it matters not that Vicksburg and Delta do not actually do business with a majority of oil companies which use public storage warehouses. It is enough they are open and available to do business with any number of them. They can and do store for as many customers as their capacity will allow. During the period of assessments, they contracted with as many customers as they could and sought to fill their tank capacity with the products of anyone willing to pay their price. This meets the definition of public warehouse. All public storage warehouses, of course, have a finite capacity which restricts the number of customers they may serve. Delta and Vicksburg are certainly no different. Second, Vicksburg's and Delta's contracts do not restrict the number of customers they may serve. Rather, it is the space available which limits the number of customers. Third, the fact that Vicksburg and Delta neither advertise nor solicit does not extinguish their public character. While it is true that Vicksburg and Delta operate highly specialized businesses which, as a practical matter, would not benefit the public at large, nothing in the record suggests the services of Vicksburg and Delta would not be available to any member of the general public who could meet their prices. The fact that their public, again as a practical matter, is restricted to a certain classification does not make Vicksburg and Delta any less public so long as their terminals are open to all. A business engaged in repairing automobile engines is open to the public at large even though, as a practical matter, its customers are limited largely to those persons owning automobiles. A grain elevator is taxed as a public storage warehouse although not everyone grows grain. In view of these considerations, the argument advanced in the cross-appeal filed by Vicksburg and Delta assailing the chancellor's finding of their public character is devoid of merit. Vicksburg and Delta also contend they are not public storage warehouses because storage is neither the primary service rendered by the companies nor is storage, in any part, the basis upon which the amount of compensation is determined. The chancellor found difficulty with the fact the statute taxes the gross income of the business of public storage warehousing even though Vicksburg's and Delta's businesses include various sub-activities in addition to storage. Some of the sub-activities the chancellor found to exist include (1) receiving the product, (2) docking the barges, (3) inspecting the cargo, (4) pumping into storage, (5) delivering to trucks, (6) record-keeping, (7) metering, (8) insurance, (9) quality control, (10) wharfing, (11) factoring, (12) agent for delivery, and (13) accounting. These sub-activities are incidental and secondary to Vicksburg and Delta's primary service of public storage warehousing. It goes without saying that in order for one to store, one must necessarily place into storage and eventually remove from storage. Receiving, docking, inspecting, pumping into and out of storage, accounting for the product by weight and volume, recordkeeping, quality control, and the like are incidental functions of nearly every warehouse. By virtue of a majority of their contracts, both Vicksburg and Delta are required to have available at all times during the terms of their agreements, storage facilities sufficient to store minimum quantities of product. Storage, it appears, is more than an incidental part of the business conducted by Vicksburg and Delta. It is an integral part of their business and the sine qua non of their existence. But for their storage capacity and their ability to store, the business could not viably exist. Mississippi's sales tax laws take into account the fact that businesses perform sub-activities. Miss. Code Ann. § 27-65-9 provides, in part, as follows: `Business' shall mean and include all activities or acts engaged in (personal or corporate), for benefit or advantage, either direct or indirect, and not exempting sub-activities in connection therewith. Each of such sub-activities shall be considered business engaged in, taxable in the class in which it falls.  [emphasis supplied]. See Brady v. Getty Oil Co., 376 So.2d 186 (Miss. 1979). The chancellor also found difficulty with the fact the fee collected is based upon quantities delivered to jobbers after storage, i.e., the amount of product withdrawn, and not upon quantities stored. This Court does not share this concern. One must, for billing purposes, measure the quantity of product stored in some active manner. The products here, to a great extent, are commingled. Consequently, an efficient and economical measure for monthly billing is either by input or outflow. Measuring or accounting for the fee by withdrawal, i.e., delivery, does not make or break the character of a public storage warehouse. The proverbial bottom line is that measurement of the fee by the amount of product withdrawn from the tanks is, in effect, measurement of the product stored. In other words, the quantity of the product taken out of storage is indicative of the quantity placed into storage and thus stored. Vicksburg and Delta have charge, care, custody, and control of the liquid petroleum products once it enters their manifolds and is piped into their tanks. They perform a service that is sold to their customers. Whether their activity is called terminaling or anything else, both Vicksburg and Delta are taxable entities as public storage warehouses within the meaning and purview of the statute and the rule.