Court Opinion

ID: 7370856
Source: CourtListenerOpinion
Date Created: 2022-07-28 00:13:01.019154+00
Date Added: 2024-06-11T16:20:53.676100
License: Public Domain

LIVINGSTON, C. J., and STAKELY and MERRILL, JJ.
(dissenting).
Section 789(p) of Title 51, as reenacted, without change, in the Act of July 12, 1949, Acts 1949, page 300, pocket part Code, exempts from the use tax “machines used in * * * compounding, processing and manufacturing of tangible personal property; provided that the term 'machines/ as herein used, shall include machinery which is used for * * * compounding, processing or manufacturing tangible personal property, and the parts of such machines, attachments and replacements therefor, which are made or manufactured for use on or in the operation of such machines and which are necessary to the operation of such machines and are customarily so used”. That definition of a “machine” exempted from the tax should be used to determine whether the machine should be taxed. It defines the “machine” applicable to the use tax. If such a machine produces, etc., tangible personal property, it is not subject to the use tax (not now considering mining or quarrying), if it does not, it is subject to the use tax.
The tax is levied by section 788, Title 51, Code, on the storage, use or other consumption in this state of tangible personal property, unless it is exempt by section 789, supra. We applied the statute in State v. Wilputte Coke Oven Corp., 251 Ala. 271, 37 So.2d 197, so that when a machine is set up, intended for and capable of producing tangible personal property and therefore exempt from the use tax, the use of its fabricated parts purchased in another state is not their use, storage or consumption, so as to make them subject to the use tax. That was before it was reenacted. It *231means, therefore, that by its reenactment. So that if the compressor were exempt that would exempt its parts and attachments without regard to the status of those parts in relation to the tax.
The opposite must also be true. That if the compressor is taxable because not exempt, all its parts are likewise taxable. There can be no controversy as to those statements.
The ultimate result here sought, therefore, depends upon whether the generators are a part of or attachment to the compressor. That makes it necessary to determine what is meant by the compressor. The law is dealing with the operation of a machine in levying a use tax. The one machine which actually compresses the gas cannot operate to that end for the purpose for which it is designed without the use of electricity. Electricity is otherwise available under normal conditions, and is obtained from the Alabama Power Company. The generator is largely a stand-by. It is not used when Alabama Power electricity is available. But it is necessary to the conduct of the business that this source of “fire” also be available. The compressing outfit is incomplete without it. It is not used for any purpose except to constitute a part of the machine or “machinery” used in conducting the compressing operation. The statute uses the word “machinery” as having a broader meaning than simply a “machine”. The generator is a necessary feature of that operation. It is therefore a “part” of and an “attachment” to the machinery which serves the one purpose. As a stand-by it is distinct from its production of electricity as tangible personal property, and it is seldom so used.
This theory does not conflict with State v. Calumet & Hecla Consol. Copper Co., 259 Ala. 225, 66 So.2d 726, to the effect that the exemption by reason of producing tangible personal property is not controlled by the disposition of such property. Its standby service is the main purpose of its presence. Regardless of everything else, the exemption should not apply when its chief purpose is that of a stand-by, and not the actual production of property. It is therefore consistent with the Calumet case to hold that if the generators are used in producing tangible personal property, its use to that effect is so small that it should not he so classified. See page 730 of 66 So.2d, note 5 of Calumet case.