Court Opinion

ID: 9568993
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:09:25.129428+00
Date Added: 2024-06-11T11:18:17.393437
License: Public Domain

Miller, Justice,

concurring:

Although I concur in the result reached by the majority that the making of sausage constitutes the dressing and processing of food, I believe the Court has formulated an overly broad test. A narrower test is warranted under the statutory language, but even under the narrower test sausage making would be the processing of food.
The problem can best be illustrated by starting with the majority's criticism of the State Tax Commissioner’s interpretation of the applicable statutory language:
“The Commissioner’s error has been that he has considered ‘dressing and processing’ and ‘manufacturing’ mutually exclusive.” [W. Va. at, S.E.2d at, Majority Opinion at 3-4]
The majority then proceeds to commit error in the opposite direction by concluding that the terms “dressing and processing” and “manufacturing” are virtually synonymous, with the result that the third syllabus states:
“If a taxpayer begins with what is usually considered a food substance and ends with a food product, he is dressing and processing food for the purposes of W. Va. Code, 11-13-2b [1974].”
Interpreting statutory law involves a careful analysis of the language utilizing fundamental legal principles of statutory construction. It is not merely a matter of substituting one’s own judgment of economic or social theory to determine sua sponte what the statute means.
This Court summarized and applied some of the traditional rules for interpreting a statute in Wooddell v. Dailey, W. Va., 230 S.E.2d 466 (1976). There, the issue was whether an interior decorator was exempt from paying consumer sales and service taxes under the pro*17fessional exemption set out in W.Va. Code, 11-15-8. The Court concluded the taxpayer was not entitled to the exemption.
Several rules set out in Wooddell have direct applicability to the present case:
“Effect should be given to the spirit, purpose and intent of the lawmakers without limiting the interpretation in such a manner as to defeat the underlying purpose of the statute; ... Each word of a statute should be given some effect and a statute must be construed in accordance with the import of its language; ... Undefined words and terms used in a legislative enactment will be given their common, ordinary and accepted meaning; ...” [W. Va. at, 230 S.E.2d at 469]
Wooddell also recognized that tax statutes are strictly construed against the taxing authority and in favor of the taxpayer, but noted that where an exemption is provided in a tax statute such “exemption is strictly construed against the person claiming the exemption.” [W. Va. at, 230 S.E.2d at 469]
W.Va. Code, 11-13-2b, establishes a broad category for the imposition of a business and occupation tax on the “business of manufacturing, compounding or preparing for sale” any article, substance or commodity. The proviso on which this case centers permits “the dressing and processing of food” to be taxed at the reduced wholesale tax rate in lieu of the manufacturing rate.
It is apparent that if the Legislature had intended to confer the reduced rate on all businesses engaged in “manufacturing, compounding or preparing” food, as now suggested by the majority opinion, it would have placed this broader language in the proviso. Instead, it chose to use the term “dressing and processing of food” in the proviso. One can only conclude that the choice of this language in the proviso was deliberate and manifested the Legislature’s intention not to except all food manufacturers from the manufacturing business and occupation tax rate.
*18I do not believe that differentiating between the term “manufacturing” and the concept of “dressing and processing” is impossible, as suggested by the majority. The term “dressing” is a technical term as applied to a food product and essentially relates to the freeing of the animal carcass from matter not suitable for human consumption. Fleming v. Swift & Co., 41 F. Supp. 825 (D.C. Ill. 1941), aff'd, 131 F.2d 249 (7th Cir. 1942); Shain v. Armour & Co., 50 F. Supp. 907 (D.C. Ky. 1943).
“Processing” of food is an ambiguous term. It is sometimes used conjunctively with the term “manufacturing” in the statutes, and in such case the courts will construe it as being synonymous with the term “manufacturing.” Gressel Produce Co., Inc. v. Kosydar, 34 Ohio St.2d 206, 297 N.E.2d 532 (1973); Pellerin Laundry Machinery Sales Co. v. Cheney, 237 Ark. 59, 371 S.W.2d 524 (1963).
Here, however, the term “processing” is not used con-juctively with “manufacturing,” but separately to establish an independent category in the proviso clause. Under the rule that an exemption clause in a tax statute is construed narrowly against the one claiming the exemption, we are warranted in adopting a narrow construction of the term “processing.” This also accords with the Legislature’s intent, as previously noted, since the broad term “manufacturing” was not used in the exemption clause, but instead the word “processing” was chosen.
The term “processing” has been recognized as a subcategory of the larger term “manufacturing” in East Texas Motor Freight Lines v. Frozen Food Express, 351 U.S. 49, 100 L. Ed. 917, 76 S.Ct. 574 (1956), where the issue was whether poultry which had been dressed and frozen was a manufactured product of an agricultural commodity. The Court, in concluding it was not a manufactured product, stated:
“At some point processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage we cannot say that it has been *19‘manufactured’ ..[351 U.S. at 54, 100 L. Ed. at 924]
It also relied on its earlier definition of the term “manufacturing” where it stated:
“The Court in Anheuser-Busch Brewing Asso. v. United States, 207 US 556, 562, 52 L ed 336, 338, 28 S Ct 204, in a case arising under the tariff laws, said,
“ ‘... Manufacture implies a change, but every change is not manufacture, and yet every change in an article is the result of treatment, labor and manipulation. But something more is necessary, as set forth and illustrated in Hartranft v Wieg-mann, 121 US 609. There must be transformation; a new and different article must emerge, “having a distinctive name, character or use.” ’ ” [351 U.S. at 53, 100 L. Ed. at 923]
The Virginia Court, in Prentice v. City of Richmond, 197 Va. 724, 90 S.E.2d 839 (1956), considered at some length the question of what constitutes manufacturing in regard to food products. It approved of the following general test:
“In general the more comprehensive definitions recognize three essential elements involved in manufacturing: (1) original material referred to as raw material; (2) a process whereby the raw material is changed; and (3) a resulting product which, by reason of being subjected to the processing, is different from the original raw material. The conflict in the authorities results largely in the different viewpoints as to the degree of change necessary to satisfy the third requirement. It may be said, however, that mere manipulation or rearrangement of the raw materials is not sufficient; there must be a substantial, well-signalized transformation in form, quality and adaptability ...” [90 S.E.2d at 843]
There can be no doubt that processing involves some transformation of the original product. Where the transformation is substantial in the form, quality and ingredi*20ents of the end product, it is deemed manufactured. A less substantial change marks the processing category.
Here, the original raw material, pork, has been changed by reducing its size and adding certain condiments. I do not believe there has been that substantial an alteration of form, quality and ingredient which would elevate the work done on the product to the manufacturing level.
While there is no bright line between what is a manufactured as distinguished from a processed food product, this does not mean that the two categories cannot be generally separated. The fact that a given food product may present characteristics of both categories does not mean that we should abandon any attempt to define the terms and treat them as synonymous when they are not.
I cannot help but feel that the loose language in the third syllabus was unintended and that this Court does recognize the difference in the terms. The majority opinion should not be read as an open invitation to all those who are engaged in the manufacturing of food products to claim the processing exemption.