Court Opinion

ID: 3243674
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:16:29.584162+00
Date Added: 2024-06-11T10:48:20.074705
License: Public Domain

Our attention is called to section I (i) of the Sales Tax, Gen.Acts 1936-37, Sp. Sess., p. 125, providing that "sales of tangible personal property * * * to * * compounders, which are consumed by them in compounding 'and do not become an ingredient or component part of the tangible personal property * * * are retail sales." It is insisted that our opinion is inconsistent with this provision. And it would be if the food served to the servants of the restaurateur had been purchased for that purpose. Such was the holding in the wrapping paper case. City Paper Co. v. Long, 235 Ala. 652, 180 So. 324. But the opinion in this case is predicated upon the admitted averment that the restaurateur permits her servants, etc., to eat all kinds of food available at the restaurant, such as is then on hand for sale to the public, but not thus sold. This means that the food they consume is not purchased for consumption by the employees, but is purchased for resale, and is compounded and prepared with that as its purpose. Out of the stock of food so prepared certain portions are awarded to the employees. This must usually be a very small proportion of the whole supply. It is purchased and compounded for resale, not for consumption, as the paper wrappings. The mere fact that some of the goods in the operation of the business are taken from the general stock designed for resale and consumed in the conduct of the business does not make them sales to that extent, and were not so when those articles were a part of a wholesale bulk sold to the proprietor for retail in a compounded form.
The distinction seems clear between this case and one where the article was purchased distinctly for consumption not as an ingredient of the compounded article.
Application for rehearing overruled.
ANDERSON, C. J., and BOULDIN and KNIGHT, JJ., concur.