Court Opinion

ID: 3996697
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:54:49.178775+00
Date Added: 2024-06-11T13:55:40.322981
License: Public Domain

Notwithstanding the eminent authority upon which the majority rests its decision, I am convinced that it has misconceived the situation, has failed to see what operation is sought to be taxed, and has misapplied the doctrine of Binderup v. PatheExchange, 263 U.S. 291, 44 S. Ct. 96.
For present purposes, we should disregard the fact that the films are produced outside of this state and are brought here through an interstate operation. All of that is wholly beside the present question.
When and after the films arrive in this state, they are exhibited in local theaters for the joint benefit of the local exhibitors and the film owner. The proceeds of those wholly local exhibitions, which are paid to and received by the film owner, are the sole basis for the tax. As I see it, such proceeds are wholly derived from the local exhibitions.
The process of exhibiting the films in all of the local theaters consumes wholly the commercial value of such films within this state. In other words, the films come to this state new, with their value intact, and are exhibited from place to place within the state until their value within the state is wholly consumed and no commercial value within the state remains in them. They are thus, for all practical purposes, as wholly consumed within the state as would be a sack of flour shipped into the state, made into bread, and the bread then eaten. Nothing would remain of the flour, and nothing remains of the commercial value of the films in this state, save as it has been converted into money *Page 386 
by the operation, and that money so earned within the state is wholly a local product and is the sole basis of the tax.
No such question involving earnings through local exhibitions was involved in the Binderup case, supra, and not even remotely did the court undertake to decide such an issue. On the contrary, the court clearly pointed out that no such question was involved, saying:
"The cases cited by defendants in error, upholding state taxation as not constituting an interference with interstate commerce, are of little value to the inquiry here. It does not follow that because a thing is subject to state taxation it is also immune from federal regulation under the Commerce Clause.Stafford v. Wallace, 258 U.S. 495, 525-527; Addyston Pipe Steel Co. v. United States, 175 U.S. 211, 245."
The case of State v. Paramount Publix Corp., 178 La. 818,152 So. 534, is the only case which supports the majority, and in that case the Louisiana court fell into the same error and, therefore, should not be followed.
In a case such as this, involving the purely local exhibition of films, the right of the sovereign state to tax is so clear that no authority need be cited.
The judgment appealed from should be reversed.
BEALS and BLAKE, JJ., concur with TOLMAN, J. *Page 387