Adams County v. National Box Co. , 125 Miss. 598 ( 1921 )

Holder J.

delivered the opinion of the court.

The National Box Company, located in Adams county, wras assessed on the personal tax rolls of the county with certain personal property consisting of lumber, manufactured products, and certain raAV materials and supplies to be used for manufacturing purposes, of the value of ten thousand dollars, and one steamboat used exclusively for transporting logs to the plant of the box company, of the value of ten thousand dollars.

The box company filed its written objection to the assessments on the ground that the box factory was exempt from all taxation for five years, under chapter 100, Laws of 1916 (Hemingway’s Code, sections 6878, 6879). The objection to the assessment being overruled by the board of supervisors, appeal was taken to the circuit court, where the judge heard the case and rendered a decision that the box company ivas liable for the ten thousand dollar assessment on its raw materials and finished products, but was exempt from taxation on the ten thousand dollar steamboat. From this judgment Adams county appeals direct, and the box company cross-appeals. •

The agreed statement of facts is here set out as follows:

“It is hereby agreed by and between the attorneys for plaintiff and defendant that all matters involved in this suit.shall be submitted to the court for hearing and decision upon the following agreed statement of facts:

“(1) That the National Box Company is a manufacturing concern established in the city of Natchez, Adams county, Miss., subsequent to the passage of chapter 100 of the Laws of 1916, and is a factory entitled to such tax exemptions as are permitted by said act.

“(2) That attached is a copy of a communication from Robert E. 'Wilson, Auditor of Public Accounts, upon which the tax exemption of the National Box Company is based.

“(3) That the property assessed in this proceeding is of the value and of the kind as appears on the assessment rolls of said Adams county of the year 1920; is the property of the National Box Company, and is located in Adams county, Miss.

“(4) That the boat assessed was used exclusively by said box company in transporting logs on the Mississippi river to its plant on the bank of the Mississippi river, and was purchased exclusively for that purpose.

“(5) That said plant owns and keeps on hand only such raw materials, such as logs and the lumber, and veneer made therefrom, as is necessary for turning out its finished product, and that all of its finished product is made to fill orders given before the same is manufactured, and that all of said finished product is shipped as fast as cars can be obtained, as the same is manufactured.

“(6) That the National Box Company claims that it is exempt from the payment of all taxes for a period of five years from the date when the exemption was permitted under the provisions of said chapter 100 of the Laws of 1916, and Adams county claims that only its real estate, machinery, and equipment is exempt, and that this does not include its raw materials or finished .product.”

The contention of the appellant, Adams county, is that the exemption allowed the appellee, National Box Company, extended only to its factory and plant, including the land, buildings, machinery, improvements, and equipments situated on said property and belonging to said box company, and all real and personal property forming a part of said manufacturing plant; that the exemption claimed does not cover the raw materials and finished products, nor the steamboat used in transporting logs to the factory.

The cross-appellant, the box company, contends that the personal property consisting of raw materials and finished products is exempt .from all taxes as a part of the factory and plant; that the steamboat was exempt as a part of the plant because it was used exclusively in transporting raw materials to the plant to be manufactured into the finished product.

After a careful consideration of the questions involved we think the conclusion of the lower court that the raw materials and finished products on hand at the plant were subject to taxation is correct; and the ruling that the boat was exempt from taxation is erroneous, under the act in question.

The exemption allowed goes only to the5 manufacturing plant, which includes those things necessary in and to its operation. The language of the act, “all permanent factories or plants of the kind hereinafter named . . . shall be exempt from all state, county, and levee taxation,” means all of the real estate, buildings, machinery, improvements, and equipments forming a part of and belonging to the plant, or any other personal property forming a part of the plant, essential to, and necessarily used in, its operation. Exemption statutes are to be strictly construed against exemptions to persons or corporations for gain; and it seems clear to ns the act here involved does not grant exemption to the box company on its raw materials and finished products, bnt goes only to the manufacturing plant and the things necessarily used in its operation. The personal property here assessed was no essential part of the plant, and is therefore subject to taxation.

The steamboat used exclusively in transporting logs to the factory is not exempt from taxation because it is not a necessary part, or equipment, of the plant. It is not shown by the record that logs could not have been transported to the factory by other means, or that the plant could not have operated without the use of the boat to transport the materials for manufacturing purposes. Those things or equipments of the plant which are exempt from taxation must be used directly in the manufacturing operations of the factory; otherwise they are not exempt. In this view it appears that the steamboat was not exempt as a necessary part of the factory.

Another point raised by the cross-appellant is that the method of assessing the box company was void for the reason that it is a corporation, and should be assessed in the manner provided for the assessment of corporations. The point is unavailing because the objection to the assessment below was not put on this ground at all but was based upon the claim of exemption from taxation. Furthermore, the facts in this record do not show that the box company is a corporation.

The judgment of the lower court on direct appeal is reversed, affirmed on cross-appeal, and the cause remanded.

Reversed in part, affirmed in part, a/nd remanded.