Pan-American Petroleum Corp. v. Miller , 154 Miss. 565 ( 1929 )

The state tax collector brought suit against the Pan-American Petroleum Corporation for taxes alleged to be due by the appellant on gasoline on hand on the 26th day of April, 1928, said taxes being claimed under chapter 198 of the Laws of 1928. There was a judgment in the court below for thirty-nine thousand five hundred thirty-seven dollars and five cents. If the statute taxes gasoline on hand at the time of the passage of chapter 198, then the judgment is correct; but, if the statute does not apply to gasoline on hand at the time of the passage of the act, the judgment must be reversed.

Chapter 198 amends section 3 of chapter 119 of the Laws of 1926, and is divided into sections; that is to say, section 3 as amended, is divided into ten sections. By section 3 of chapter 198 it is provided:

"Before any person, firm, corporation, association, or co-partnership shall engage in business as a distributor or wholesale dealer of gasoline in the state of Mississippi, he shall first make application to the auditor of public accounts, upon forms prepared by the attorney general, for a permit to engage in said business.

"Each application shall state the name or names of the individuals, association, corporation or co-partnership desiring to engage in said business and give the domicile and principal place, or places of business in this state of the applicant from which gasoline will be distributed and the approximate amount of gasoline expected to be sold or distributed monthly, and no permit shall be issued to any applicant who is in arrears or default to the state, or any subdivision thereof, for any taxes or public funds, and if said application shall be approved by the auditor of public accounts, a permit shall be issued by the auditor of public accounts upon the said applicant entering into a good and sufficient surety bond, payable to the state of Mississippi; which bond shall not exceed all excise taxes estimated to become due by said distributor or wholesale dealer for any sixty day period, based upon the gallonage to be sold as shown by the application for a permit, if applicant has not heretofore been engaged in the business of distributor or wholesale dealer of gasoline as herein defined; or shown by sales for the previous year, if applicant heretofore has been engaged in such business in this state; provided that the minimum bond to be required of any licensee under this act shall not be less than three thousand dollars. The bond herein required shall be increased from time to time if deemed insufficient by the auditor upon giving to the licensee thirty days' notice in writing, to increase said bond, said notice to state the amount of increase demanded.

"Said bond to be conditioned that the licensee will fully comply with all laws pertaining to distributors or wholesale dealers of gasoline and to pay all excise taxes and penalties provided for or required by this act for the year for which a permit has been granted."

By section 6 of chapter 198 of the Laws of 1928 it is provided.

"Each distributor, or wholesale dealer of gasoline, within the state, shall report monthly to the auditor of public accounts, all purchases of gasoline, for sale or use over the streets and highways of this state, made by him during the preceding month, which report shall give the names and addresses from whom all gasoline received by him for above stated purposes, during the preceding month was acquired, and the excise tax herein provided shall be paid upon all of the gasoline purchased or acquired by said distributor or wholesale dealer for said purposes, during the preceding month, less three per cent for loss by evaporation, spillage, and other causes and except such as is exempted by section 1 of this act, and an invoice of all purchases of gasoline shall be kept on file by said wholesale dealer or distributor for twelve months from the date of purchase and shall be open to inspection by any state officer at all reasonable hours. The report herein required shall be filed with the auditor of public accounts, on or before the 20th day of each month, and shall be accompanied by an amount equal to the required tax per gallon on all gasoline received by said distributor for sale or use on the streets and highways in the preceding month except as herein otherwise provided. In case gasoline in storage is destroyed by explosion, fire, or tornado, then the wholesale dealer or distributor may deduct the amount so destroyed, on making proof thereof, approved by the state auditor."

Section 7 provides that:

"All retailers of gasoline shall procure from the distributor or wholesaler, or persons from whom gasoline is acquired in any manner, invoices showing the amount of gasoline purchased or acquired, which invoices shall be preserved for two years from the date of the invoices and shall be opened for inspection at all reasonable hours by any official of the state of Mississippi."

By section 8 all conflicting laws are repealed.

By section 9 it is provided that:

"If any section, paragraph, sentence, or clause of this act shall be declared unconstitutional, or illegal, such unconstitutionality or illegality shall not affect or destroy any other part, provisions, or sections of this act."

The first section of chapter 198 after the enacting clause provides for the construction of the act, and that it shall not be construed to require the inclusion in the measure of tax any gasoline shipped in interstate commerce while the same is in transportation, but the gallonage of gasoline shipped or brought from another state or person into Mississippi shall be included in the measure of tax by the person first selling or declaring it to be his intention to sell, or using or expecting to use, the same on the streets or highways after it shall have been commingled with the general mass of property in this state.

By section 2 of chapter 119 of the Laws of 1926, any person engaged in the business of distributor of gasoline, or retail dealer of gasoline, is required to pay for engaging in such business a tax of four cents a gallon upon the sale of gasoline in this state by such dealer. No retail dealer shall be required to pay said excise tax when such tax may be paid by the distributor of gasoline, which may be sold at retail by such retailer, nor shall the distributor pay such tax when the same is paid by the retailer.

The next section, which is amended by the Laws of 1928, imposes a tax upon the use of gasoline in motor driven vehicles upon the public roads and streets of this state of four cents a gallon.

The act of 1928 as to gasoline, and substitutes for gasoline, used upon the highways of the state, changed the method of collecting the tax, making the tax payable by the distributor, and imposing it upon the amount received by such distributor for use upon the highways of the state.

By section 3 of chapter 198 of the Acts of 1928, supra, any person, association, or partnership desiring to engage in the business of wholesale distributor or dealer was required to make an application to the auditor of public accounts upon a form prepared by the attorney-general for a permit to engage in said business, and is required to enter into bond to comply with the act, and make all remittances required thereby. The applicant is required to give the names of the persons comprising the partnership, or the name of the corporation or association or individuals, and their addresses, and principal place or places of business in the state, which bond should not exceed all the taxes estimated to become due by the distributor or wholesale dealer in the sixty days' period, based upon the gallonage to be sold, as shown by the application.

As above stated, the first section of the act of 1928 provides that certain gasoline shall not be included in the scope of the act. By section 6, above set out, each distributor, etc., is required to report monthly to the auditor of public accounts all purchases of gasoline for sale or use over the streets and highways, etc., made by him during the preceding month (emphasis supplied), which report shall give the names and addresses of those from whom all gasoline is received by him for the above-stated purposes during the preceding month, and the excise tax therein provided shall be paid upon all the gasoline purchased or acquired by the distributor or wholesale dealer for said purposes, during the precedingmonth, less three per cent loss by evaporation, spillage, and other causes, and except such as is exempted by section 1 of this act, and an invoice of all purchases of gasoline shall be kept on file by such wholesale dealer or distributor for twelve months from the date of purchase, and shall be open to inspection by any state officer at any reasonable hour.

The report required to be filed with the auditor of public accounts on or before the 20th day of any month, and is required to be accompanied by an amount equal to the required tax per gallon on all gasoline received by said distributor for use on the streets and highways in the preceding month, except as otherwise provided.

It is further provided that, in case the gasoline in storage is destroyed by explosion, fire, or tornado, then the wholesale dealer or distributor may deduct the amount so destroyed, on making proof of such fact.

It will be seen from an analysis of section 6 that the tax is upon purchases of gasoline, or gasoline received or acquired by the wholesale dealer or distributor during the preceding month. The plan of the statute is to require the dealer first to apply for a license to do business, stating in the application the amount he expects to handle for the purposes of his business upon the streets and highways of the state, and to give bond to comply with the provisions contained in section 6, and other provisions of the act.

The statute requires the dealer to make report to the auditor of public accounts for all such purchases for the purposes stated, made by him during the preceding month, on or before the 20th day of the succeeding month. The act nowhere provides in terms that the distributor or wholesale dealer shall report the amount of gasoline on hand at the time of the passage of the act. It cannot, by fair construction, be held that the words, "Purchases of gasoline during the preceding month or received by him during the preceding month for said purposes, or acquired by the distributor or wholesale dealer," includes gasoline on hand. The act, by its language, clearly imports that the wholesaler or distributor shall report purchases of gasoline, or gasoline received or acquired after the passage of the act. It is a familiar rule of construction that a statute will be construed to operate prospectively, unless the language of the statute clearly means that it shall have a retroactive construction.

"It is an established rule of construction of statutes that a retroactive operation shall not be given to a statute unless it be the manifest intention of the legislature that it should have that effect." Eastin v. Vandorn, Walk. 214; Gayden v.Bates, Walk. 209; Brown v. Wilcox, 14 Smedes M. 127; First Decennial Digest. Statutes.

Before a statute will be given a retroactive effect, there must be a plain declaration therein that it is so to operate. Hooker v. Hooker, 10 Smedes M. 599; Stewart v. Davidson, 10 Smedes M. 351.

A statute is not construed so as to give it a retroactive effect, unless its words admit of no other meaning. Garrett v.Beaumont, 24 Miss. 377.

The courts will not give a statute a retroactive operation, unless the intention of the legislature to that effect be plain and clear. Such legislation is unjust and condemned by the courts; but where the intent is plain, and it is liable to no other constitutional objection, it will be carried out. Carson v. Carson, 40 Miss. 349.

We think, therefore, that the statute is to have prospective operation, and that the first section of chapter 198, amending section 3 of the Laws of 1926, and providing what shall be excluded from provisions of the act, means such transactions as are had after the passage of the act, and does not have reference to past transactions, or to the amount of gasoline on hand at the time of the passage of the act.

It is, of course, a well-recognized rule of construction that, where an act enumerates the things to be excluded, the enumeration will be held to contain all that is to be excluded. But there is nothing in this act to indicate that this section, or any other part of the act, is to have a retroactive operation.

It is also a well-recognized and fundamental rule of statutory construction that tax laws are to be construed in favor of the taxpayer, and the rule of strict construction in favor of the taxpayer prevails. As we understand this rule, the courts will not extend and expand a statute, imposing a tax burden, to make it include either subjects or persons not within the terms of the statute. Laws imposing privilege taxes are to be construed favorably to the citizen, and no occupation is to be taxed, unless clearly within the provisions of such law. Vicksburg Meridian R. Co. v. State, 62 Miss. 105.

Unless plainly expressing a different purpose, a statute will be construed as intended to levy a single tax on property, even though the words of the law would ordinarily and naturally bear a broader and more general meaning. The courts will, as far as possible without doing violence to the words of the law, restrain such provisions of statutes as apparently authorize a double burden to be laid upon the same property or person. State v.Simmons, 70 Miss. 485, 12 So. 477.

Laws imposing privilege taxes approximate an abridgement of the liberty of the citizen guaranteed to him by the Fourteenth Amendment of the Constitution of the United States, and should receive the strictest construction. Wilby v. State, 93 Miss. 767, 47 So. 465, 23 L.R.A. (N.S.) 677.

Laws imposing duties or taxes are not to be construed beyond the natural import of the language, and are never to be construed as imposing burdens upon doubtful interpretation. State v. Grenada Cotton Compress Co.,123 Miss. 191, 85 So. 137.

Laws imposing taxes are not to be construed as imposing burdens upon doubtful interpretation. Sperry Hutchison Co. v.Harbison, 123 Miss. 674, 86 So. 455.

Revenue statutes are considered favorably to the citizen and the taxpayer, and the court will not place a construction thereon that will impose double taxation on the citizen, unless the language is plain. Middleton v. Lincoln County, 122 Miss. 673, 84 So. 907.

Tax sales are proceedings in invitum, and statutes authorizing such sales must be strictly construed as to time and place of sale. Cuevas v. Cuevas, 145 Miss. 456, 110 So. 865.

Tax laws are to be strictly construed against taxing power, and, if right to tax is not plain, it cannot be implied; all doubts being resolved in favor of the taxpayer. Miller v.Illinois C.R. Co., 146 Miss. 422, 111 So. 558.

On doubtful interpretation, privilege tax laws will not be construed as imposing burdens on citizens, and courts will not extend a statute imposing such tax beyond the clear meaning of the language employed. Board Levee Com'rs v. Howze MercantileCo., 149 Miss. 843, 116 So. 92.

A law imposing a privilege tax should be liberally construed in favor of citizens sought to be assessed with the tax, and no occupation will be taxed, unless it clearly appears that it comes within the provision of the law. Same case as above cited.

These cases demonstrate the proposition that the language of the statute should not be extended so as to include doubtful cases, but that the language will be interpreted, where it can be fairly done, in favor of the citizen, as against the sovereign. We must presume that the legislature was familiar with these rules of construction, and that they used the language in the statute with full knowledge of these rules; and the courts must determine the intention of the legislature, in passing an act, by the language used in the act itself.

In this case it is seriously argued that to give the act a retroactive effect, and make it include the gasoline on hand at the time of its passage, would make the tax as to this gasoline on hand a tax on property, and that it could not be taxed by this method under section 112 of the state Constitution.

Without passing any judgment whatever upon this contention, it is possible that the legislature was influenced by that view, and it might have purposely omitted the gasoline on hand to avoid the effect of any such construction. Anyway, it was for the legislature to determine whether it would tax the gasoline on hand, or whether it would, in changing its system, leave that free from the tax, making the tax operative in the future only.

We do not think that, construing the act as we have, and as we feel we must, from its plain language, in its ordinary significance, it has any unconstitutional effect, as contended by the state tax collector. The fact that one person or corporation may have a considerable amount of gasoline on hand, and another a relatively small stock, does not unconstitutionally affect the act, but that is a mere condition or fact that exists, which would have no effect in rendering the law unequal in its operation.

Under the construction we have placed upon the act, every person is taxed upon all of the gasoline purchased, acquired, or received, for the uses mentioned, after the passage of the act; and no person having gasoline on hand at that time is taxed thereon. The provision applies to all persons alike, and the gasoline which may have been on hand at the time, and may have been sold without the payment of this tax, cuts no constitutional figure, as we understand the law.

It follows from what we have said that the judgment of the court below was erroneous, and the judgment will be reversed, and the bill dismissed.

Reversed and rendered.