Court Opinion

ID: 9568482
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:04:12.852751+00
Date Added: 2024-06-11T10:43:18.212293
License: Public Domain

Eberhardt, Judge,
concurring specially. Determinative of this appeal is whether the transportation charges are considered to be one of the component factors of cost considered by the seller in arriving at the total cost price charged taxpayer, or whether the transportation charges are deemed to be a surcharge added to the cost price.
“ 'Cost Price’ means the actual cost of articles of tangible personal property without any deductions thereform on account of the cost of materials used, labor, or service costs, transportation charges, or any expenses whatsoever.” Code Ann." 92-3403a (F). “Sales price,” which is the tax base of the sales tax complementary to the “cost price” of the use tax, is defined as “the total amount for which tangible personal property or services are sold, including any services that are a part of the sale . . . without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, losses or any other expenses whatsoever. . .” Under either definition, for sales and use tax purposes the price of the tangible personal property is deter*63mined and fixed on the basis of the transaction between the purchaser and seller, and the tax base is the total amount paid by the buyer to the seller without deduction for any of the component factors of cost considered by the seller in arriving at the total figure charged the purchaser. In the context of this case the taxpayer’s liability depends upon the price at which the steel companies agreed to sell and the taxpayer agreed to purchase the pipe.
It is stipulated that under the terms of the purchase agreement taxpayer “agreed to pay the various steel companies for said pipe on a delivered price basis.” (Emphasis supplied). The Commissioner and taxpayer agree that “the delivered price charged by the various steel companies was equal to the mill value of the pipe at the respective mills from which the pipe was shipped, plus an additional amount over and above such mill value.” (Emphasis supplied.) The majority equates “mill value” with “cost price” or “undelivered purchase price” and states that the “additional amount” over and above the mill value “obviously was added to defray the cost of transportation and other services involved in delivering the property from the mills to construction sites in Georgia.” I am unable to so construe the stipulation, however, and I would give it effect as it is written—taxpayer “agreed to pay the various steel companies for said pipe on a delivered price basis,” and it is this price which is the “cost price” constituting the tax base. The information contained in the stipulation in regard to mill value plus “an additional amount” is merely an agreement between the Commissioner and taxpayer as to how the “delivered price” is made up. Moreover, it is not stipulated that the “additional amount” represents transportation or other service costs; on the contrary, it is stipulated that the transportation charges amounted to $882,484.40, whereas the “additional amount” was stipulated to be only $395,039.98.
Taxpayer relies upon the stipulation that under the terms of the purchase agreement title to pipe passed to taxpayer when it was loaded aboard the carriers. The concept of passing of title may be a relevant factor to be considered along with other *64factors when it is not clear on what basis the property was sold. Here, however, it is stipulated that the pipe was sold on a “delivered price basis,” and the point at which title to the pipe passed is not relevant.
Taxpayer also relies on Code Ann. § 92-3403a (C) (2) (j), which provides that the terms “sale at retail,” “use,” “storage,” and “consumption” shall not include charges made for the transportation of tangible personal property made in connection with interstate and intrastate transportation of such property. This section is not applicable to a situation such as that presented here but refers only to the tax which the carrier must collect and remit on the sale of the service of transportation. The Sales and Use Tax Act has provided since its adoption in 1951 that the terms “retail sale” or “sale at retail” (the event upon which the sales tax is based) include the sale of transportation. (Ga. L. 1951, pp. 360, 364; Code Ann. § 92-3403a (C) (1) (a)). Before the amendment of 1953 (Ga. L. 1953, Jan. Sess., pp. 182, 183; Code Ann. § 92-3403a (C) (2) (j)) the sale of transportation of persons and property were both taxable; since this amendment only the sale of transportation of persons is taxable. The effect of the amendment is that carriers are no longer required to collect and remit a tax on the sale of transportation of tangible personal property. The Commissioner, however, is not seeking to recover a tax on the sale of transportation services by the carriers to the steel companies, but seeks merely to prevent taxpayer from reducing its tax base by an amount equivalent to one of the cost factors considered by the sellers in arriving at the “delivered price” which, under the Act, must be taken as the “cost price.”