Court Opinion

ID: 3887736
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:17:03.628762+00
Date Added: 2024-06-11T09:28:23.363518
License: Public Domain

This action was instituted by the plaintiff for the recovery of $868.32 assessed against the plaintiff by the South Carolina Tax Commission and paid under protest. The tax was assessed under Section 11-A of Act No. 11, Acts of 1923, levying a tax on manufacturing. Section 11-A of this Act was repealed by the Appropriation Act of 1926, to take effect July 1, 1926. The taxes in controversy were levied according to the allegations of the complaint, upon goods which were in process of manufacture at the time the repealing statute took effect. The defendants demurred to the complaint and contended that the goods were manufactured in part within the State and therefore taxable under subdivision (a) of Section 11-A of the Act above referred to. The matter was heard by his Honor, Judge Whaley, in the County Court of Richland County, who overruled the demurrer and ordered the amount of the taxes refunded. Notice of intention to appeal was duly served on the attorneys for plaintiff.
Questions involved:
(1) Does Section 11-A of "An Act to Raise Revenue for the Support of the State Government," at page 21, Statutes of 1923, apply to fertilizer in process of manufacture on July 1, 1926?
(2) Does the repeal, without a saving clause, of the statute above providing for the levy of a license tax, destroy the right to collect taxes under said statute? *Page 390 
Section 11-A of an Act entitled "An Act to Raise Revenue for the Support of the State Government," approved March 26, 1923, provides for a license tax on all persons engaged in the business of manufacturing "which shall be measured by and graduated in accordance with: (a) In the case of manufacturing the entire receipts, including all sums earned or charged, whether actually received or not, and in the case of any article manufactured in whole or in part within this State, and not sold or disposed of in this State, the value thereof shall be included."
Thus, first, it clearly appears that, in order for the tax to be levied, the goods must have been sold either in this State or in another State, as until the goods were sold there was no method of admeasurement. In other words, the tax was collectible on the gross output of the manufacturer as distinguished from gross receipts. The latter part is applicable to articles partially manufactured in this State and not sold or disposed of in this State, and the value thereof could have been arrived at by the price for which they were sold; but in the case at bar the goods had not been completely manufactured, had not been sold, not shipped out of the State, and there was no method of arriving at the value thereof at the time the statute was repealed.
The clause undoubtedly was inserted to prevent a manufacturer, operating a factory in this State, shipping goods from the State before the same were in final marketable condition, and thereby evading the tax. The statute specifically provides that the tax shall be measured by the entire receipts.
Further, the repealing Act has no saving clause, and therefore the Tax Commission has lost the right to collect any taxes thereunder. "The repeal, without a saving clause or provision, of a Statute imposing a license tax or fee, takes away the right to collect an unpaid tax which is due, even *Page 391 
though a suit to collect the tax is pending." 25 R.C.L., 940; Columbia Railway, Gas  Electric Co. v. Carter,127 SC., 473, 121 S.E., 377. "The general rule is that powers derived wholly from a statute are extinguished by its repeal."Columbia Railway, Gas  Electric Co. v. Carter, supra.
And further: "Under the established rule that, where substantial doubt exists as to the construction and interpretation of legislative action with respect to the enactment and enforcement of tax statutes, the doubt must be resolved against the government." Language used by Mr. Justice Marion in Columbia Railway, Gas  Electric Co. v. Carter,supra.
To allow this tax to be collected would in effect result in double taxation, because undoubtedly the respondent was forced to pay the license tax on all goods completed after the same took effect, and in all probability the manufacture of the goods first returned for taxation had been largely completed before the tax was admeasured by the total value of said goods and not by the amount that the value was enhanced after the statute took effect.
The exceptions should be overruled, and judgment affirmed.