Court Opinion

ID: 9560777
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:55:47.975724+00
Date Added: 2024-06-11T09:13:11.389778
License: Public Domain

PHELPS, Justice
(dissenting).
I regret that I cannot agree with the result reached by the majority members of this court. It is my view that they are repudiating the accepted theory of the court that the so-called sales tax act is not, in fact, a sales tax but is a tax imposed by the legislature for the privilege of conducting business in the state, or, as the case may be, by ordinance in the city in which the business is located; that the taxable incident ■or event under the act is “the engaging in business’’ and not the sale. We have so beld in a number of cases including State Tax Commission v. Quebedeaux Chevrolet, 71 Ariz. 280, 226 P.2d 549, and Arizona State Tax Commission v. Ensign, 75 Ariz. 220, 254 P.2d 1029; and we adhered to the rule in City of Phoenix v. Arizona Sash, Door & Glass Co., 80 Ariz. 100, 293 P.2d 438, 441, under an ordinance practically 'identical with the one under which the in■stant case is being decided. We said in tthe latter case;
“ * * * It is immaterial that both .the title and possession to a portion of the tangible property sold passes to the purchaser outside the corporate limits of the city.”
If the taxable incident is "the engaging in business in Phoenix” then it must follow that it makes no difference whether the sale is consummated and title passes to the purchaser within or without the corporate limits of the city. It appears that the majority is undertaking to say that the business of The Borden Company is the “processing of milk” and, as I interpret its opinion, it holds that the sale of the milk as processed in the city is a part of the business in which The Borden Company is engaged, but, if the milk is sold outside the city, that sale is not a part of the business in which The Borden Company is engaged. Upon no other ground, as I view it, can the majority reach the conclusion that a sale of milk without the city limits is not subject to the tax. The majority admits in its opinion that The Borden Company “is clearly engaged in business in the City of Phoenix.” If the sale of all of its milk is not an integral part of the business in which The Borden Company is engaged in the City of Phoenix, then the ordinance imposes no tax upon The Borden Company for sales of milk, either within or without the corporate limits of the city, because the ordinance makes the gross proceeds from the sales of milk processed by it the basis upon which the excise tax is computed. The ordinance doesn’t say the gross proceeds of sales *255made within the city, hut the gross sales of milk or gross income from its business activities. The latter term, “business activities”, is all-inclusive. It is not limited by any qualifying words or phrases.
The majority asserts that the gross income from the sale of milk within the City of Phoenix furnishes the basis for measuring the amount of the tax to be collected. As above stated nowhere does the ordinance limit the sales for taxing purposes to sales made within the corporate limits of the city. I believe the majority contends that the following portion of Ordinance No. G-93 (the ordinance here involved) furnishes the basis for its conclusion:
“Section 2. Imposition of the Tax. * * * [Tjhere is hereby levied * * the privilege taxes measured by the amount or volume of business done by the persons on account of their business activities and the amounts to be determined by the application of rates against values, gross proceeds of sale, or gross income, as the case may be, in accordance with the following schedule :
“(c) At an amount equal to one-half of one per cent of the gross proceeds of sales or gross income from the business upon every person engaging or continuing within the City of Phoenix in the following businesses:
“1. Selling any tangible personal property whatsoever at retail, except bonds and stocks.”
The majority relies specifically upon the following language to achieve the result reached by it: “gross income from the business upon every person engaging or continuing within the City of Phoenix in the following businesses.” If we eliminate from that phrase the words “or continuing” which are surplusage and immaterial, we have the simple phrase “gross income from the business upon every person engaging within the City of Phoenix in the following businesses” ; and following the phrase we have designated the business of “selling any tangible personal property whatsoever at retail,, except bonds and stocks.”
To me the meaning of this language is as clear as the noonday sun. It is simply saying that the persons must be engaged in business within the City of Phoenix, that is, the business must be located in the City of Phoenix, and if the business is that of "selling any tangible personal property whatsoever at retail, except bonds and' stocks”, it is subject to the imposition of the tax on the gross proceeds of its sales, within or without the city, or gross income from such business at the rate fixed therein. Nothing could be more clear than that it merely provides that the business must be located in Phoenix. How the above language can be construed to mean that the sale must be made within the corporate *256limits of Phoenix is beyond my comprehension. Although the opinion does not expressly overrule City of Phoenix v. Arizona Sash, Door & Glass Co., supra, it nevertheless constitutes an absolute contradiction to the conclusion reached in that case. We had the identical question raised there as raised here.
I am of the opinion that the case should be reversed for the reasons above stated.