Court Opinion

ID: 9849982
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:50:23.135659+00
Date Added: 2024-06-11T09:20:29.934697
License: Public Domain

Candler, Justice,
dissenting. For the privilege or license to engage in the business of selling tangible personal property at retail in this State, our Sales Tax Act of 1951 (Ga. L. 1951, p. 360) imposes on every such dealer the duty to collect from the purchaser or. consumer a tax equal to three, percent (3%) of the sales *625price or charge for each such article at the time of sale and to remit such tax monthly to the State Revenue Commissioner. If he fails, neglects, or refuses to collect the tax from the purchaser or consumer, he is personally liable for it and also commits a misdemeanor and is subject to the punishment prescribed by the act on his conviction of that offense. However, section 3 of the act expressly exempts from its operation several enumerated items of tangible personal property, on which a retail dealer is not required or authorized to collect a tax on their sale at retail, and this section of the act further provides that the terms “retail sale” and “Sale at retail” shall also1 not include the following: “. . . (d) Sales which a State would be without power to tax under the limitations of the Constitution of the State or the United States, together with sales to the State of Georgia, any county or municipality of said State.” It is conceded in the brief for the Revenue Commissioner and well settled by numerous decisions of the Supreme Court of the United States, beginning with McCulloch v. Maryland, 4 Wheat. 316, 376, which was delivered for the court by Chief Justice Marshall in 1819, that the State of Georgia is without power to tax the United States, and it is very clear to me that the tax-exempting words in section 3 (d) of our Sales Tax Act, namely, “Sales which a State would be without power to tax under the limitations of the Constitution of the State or the United States,” are the exact equivalent of saying that sales which a Georgia retail dealer in tangible personal property makes to the United States are exempt from the tax imposed by the act. Section 12 (b) of the act provides: “Dealers shall, as far as practicable, add the amounts of the tax imposed under this act to the sales price or charge, which shall be a debt from the purchaser or consumer to the dealer, until paid, and shall be recoverable at law in the same manner as other debts.” But the add-on provision of this section does not have the legal effect of changing the character of the added tax and thus making it a component part of the retail selling price or charge for the article, though added to the price or charge it is nonetheless a tax on the article; and this is true since a State cannot accomplish by indirection that which it is prohibited from accomplishing directly. United States v. Allegheny *626County, 322 U. S. 174, 189 (64 S. Ct. 908, 88 L. Ed. 1209). As previously pointed out, it is not only the legal duty of a Georgia retail dealer in tangible personal property to collect the tax imposed by the act upon any, every, and all retail sales made by him, except those sales which the act exempts from the tax, and he commits a penal offense if he fails or refuses to- do so. In Kern-Limerick, Inc. v. Scurlock, 347 U. S. 110 (74 S. Ct. 403, 98 L. Ed. 546), the Supreme Court of the United States clearly held that a tax imposed upon a vendor who, in turn, is required to collect the tax from the purchaser is a tax upon the purchaser and the imposition of such a tax in a transaction where the purchase was actually made for the United States is one which a State is without power to impose and collect. That case involved a construction of Arkansas’ Gross Receipts Tax Law of 1941, which requires the seller of tangible personal property to collect the tax imposed by the act from the purchaser and remit it to- the State’s Tax Commissioner, and the act makes the seller a taxpayer of the State with respect to the proceeds derived from his sales. The facts involved in that case were briefly these: Certain private contractors agreed to construct a naval ammunition depot in that State for the United States under a “cost-plus-a fixed-fee contract.” They purchased two Diesel tractors from Kern-Limerick, Inc., a local dealer, for use in the construction of such depot. The Supreme Court of Arkansas held that the seller was liable for the tax which that State’s act imposed. The case was reversed by the Supreme Court of the United States, and it is said in the reversing opinion: “The circumstances of the transaction would concededly make Kern-Limerick liable for the tax if the real purchaser were not the United States.” The opinion by the majority in this case frankly states that Georgia’s sales tax act has two faces. One, that of a vendor tax; the other a vendee tax. Being such, the rule unanimously announced by this court in State of Georgia v. Camp, 189 Ga. 209 (6 S. E. 2d 299), and the several cases there cited, that ambiguous tax statutes should be given that construction most favorable to the citizen or taxpayer, should' be here applied. And section 12 (a) of the act emphatically declares that the tax shall be collected by the dealer from the purchaser *627or consumer and that, notwithstanding any other provision of the act, it is the purpose and intent of the act to' levy a tax on the purchaser or consumer of the tangible personal property which he purchases from a retail dealer and for the service which such a dealer is required to render the State in collecting the tax imposed by the act from the purchaser or consumer— the one ultimately liable for its payment, section 16 (b) of the act provides for compensating or paying him for such service. Connecticut’s sales tax act is very similar in its provisions to our act and on March 25, 1958, the Supreme Court of Errors of that State in the case of Avco Mfg. Corp. v. Connelly, 145 Conn. 161 (140 A. 2d 479), held that a retail sale of tangible personal property to the United States was not taxable under its act for want of the State’s power to do so and cited Kern-Limerick, Inc. v. Scurlock, 347 U. S. 110, supra, in support of its ruling. That case involved precisely the same question as is involved here, namely, the applicability of a sales tax imposed upon a retail dealer, who, in turn is required to collect the tax from the purchaser, and it was there said by the court: “The defendant emphasizes the fact that the sales tax is levied on retailers for the privilege of selling tangible personal property at retail and, although § 2092 (2) provides that the retailer shall, in turn, collect the full amount of the tax from the consumer, refuses to concede that it is, in effect, a tax on the purchaser or consumer.” In Williams v. Bear’s Den, Inc., 214 Ga. 240 (104 S. E. 2d 230), I agreed to the decision which the majority rendered; but there the retail dealer could legally and actually did collect the sales tax from its purchasers which the Revenue Commissioner sought to recover from it, and the dealer’s sole defense was that the tax it had collected had been stolen from it. That decision should, I think, be interpreted as holding, that, under the provisions of Georgia’s Sales Tax Act, a retail dealer is a taxpayer only with respect to the amount of tax collected by him from retail sales of tangible personal property to those who are, under the act, required to pay a sales tax, and that it is his legal duty to pay to the Revenue Commissioner the amount so collected by him; and having such a status, in consequence of the privilege or license the State grants to him to engage in the business of selling *628tangible personal property at retail, he is not relieved of his legal liability to account for and pay to the Revenue Commissioner the amount of tax so collected- by him, even if it were, lost without fault on his part before he remits it to the Revenue Commissioner. This case differs on its facts from the Bear’s Den case in that here the retail dealer could not and did not collect any tax on its sales to the United States, but paid to the Revenue Commissioner the amount which would have been due under the act except for the government’s sovereign immunity from taxation and sued for a refund of it, and I think the trial judge properly held that he was entitled to prevail. A ruling different from the one made by the trial judge in the case at bar would preclude a Georgia retail dealer in tangible personal property from selling his products to the United States, since he cannot collect a sales tax from the United States because of its sovereign immunity from taxation and because he commits a penal offense under our Sales Tax Act if he sells his products to anyone without collecting the tax imposed by the act, except to those purchasers or consumers who are not required by the act to pay a sales tax to a retail dealer from whom they buy.