Court Opinion

ID: 9568431
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:03:38.257124+00
Date Added: 2024-06-11T10:42:04.338849
License: Public Domain

Duckworth, Chief Justice,
dissenting. The controlling question here is whether or not the delivery of stamps to a purchaser of goods is a “sale” or a “gift.” This is true because it determines whether the exchange of the premium merchandise for stamps is a sale or gift. If the delivery of the stamps was a sale of the stamps then the premium merchandise is thereby purchased because the stamps are symbolic of the premium goods. On the other hand if the delivery of the stamps to the purchaser of merchandise at the identical price with or without stamps is a gift of the stamps then the premium merchandise which the stamps symbolize is thereby given, hence not resold, and consequently the sales tax is collectible on the original purchase of the premium goods.
The majority of necessity have ruled that the delivery of the stamps in the first place is a sale. Yet they have not and cannot identify the price thereof. They have wandered blindly into the area of operating private enterprise without having the remotest experience or knowledge of what is necessary to make it succeed, or what the operator legitimately considers necessary and freely chooses to employ for that purpose. Of course sound business requires that sale prices cover all costs, including advertisement and building good will, but it indisputably includes a profit, which belongs exclusively to the operator. Then being free to expend this profit which is his, he can spend it for advertisements, premiums, stamps, or anything else that he freely chooses to advance, enlarge and improve his business. Despite the fact that his customers contributed such funds as a part of the price they paid, such funds thereupon ceased to belong to the customer and became the property of the dealer. *111He has an untrammelled right to expend such funds of his for stamps to be given to customers free, and for which the customer can obtain premium merchandise. This last transaction is indisputably not a sale subject to sales tax.
The motion for a rehearing posed a hypothetical question that cannot be answered consistently with the majority opinion. And the majority do not even attempt to do so. It is — if with a sale of fertilizer that is exempt from the sales tax, 100 stamps are delivered, as in this case, then how can the sales tax for the stamps that are not exempt be collected? What was paid for them? If their delivery is a sale as the majority holds, then the tax officials have a duty to collect the sales tax. The answer of the majority is that it is an administrative problem. But if this court cannot answer, then what can the administrator do? If a declaratory judgment proceeding is brought praying for a declaration of how such sales tax can be ascertained, this court would thereby be confronted with the duty to answer a question for which there is no answer because the premise “sale” is completely absent. It is absent because there was no sale, and if properly faced now, that inescapable fact would be admitted and an affirmance declared.
For these reasons I dissent, and I feel that the public interest has not been served by this decision which thus confuses the tax law. I can only extend my sympathy to the tax officials who are charged with a public duty to collect sales tax who are by this decision forced to face an insoluble dilemma. They would be justified in tossing it back in a proper case to this court which created it and thereby force an answer, if that is possible, or an admission that there is no answer.