Pacific Intermountain Express Co. v. State Tax Commission

HENRIOD, Justice.

Review of the sales tax levy¹ on motor and tandem equipment incident to a transfer to petitioner of all of the assets, including corporate stock, trucks, trailers and semi-trailers of several concerns that directly or indirectly had been operating highway transportation rolling stock. Affirmed in part and reversed in part, with no costs awarded.

The tax was paid under protest. when the Tax Commission refused to register the vehicles unless paid, ² insisting that all of the units, including trailers and semitrailers were “motor vehicles,” not exempted as an occasional sale of personal property under Titles 59-15-2(e) and 59-15-5, Utah Code Annotated 1953.³

Petitioner urges that 1) the sales tax act applies only to retailers, and that petitioner’s vendor was no retailer, that 2) trailers and semi-trailers are not “motor vehicles” and therefore not taxable if transferred as an occasional sale, that 3) the 1949 amendments⁴ to the sales tax act having to do with definitions and collections did not affect the scope of the tax and that 4) taxing motor vehicle sales alone unconstitutionally discriminates against sales of other commodities transferred and exempted as occasional sales.

The points urged above are the basic issues involved. As a preliminary matter, we may dispose of several arguments or points advanced that we deem of no considerable moment in the disposition of this case. We concede that taxing statutes are to be construed strictly, and in favor of the taxpayer where doubtful.⁵ We do not believe that the tax commission regulations urged by both sides are either controlling or important in this case, and we consider that the Geneva Steel case,⁶ discussed by both sides, has no real pertinency here.

As to the contention that the sales tax act is applicable only to sales made by licensed retailers, we disagree, notwithstanding the able argument of counsel pointing out that the taxing section (59-15-4) is concerned with retail sales, that the definition section (59-15-2) says a retail sale is made by a retailer doing a regular organized retail business known to the public to be such. Before 1949 the contention that the act applied only to retail sales by a licensed dealer would have been conceded, but since the 1949 amendments such concession could not be made. We believe the plain wording of the amendments clearly displays a legislative intent to tax all motor vehicle sales not exempted, irrespective of the vendor’s personality or status, and did not mean to tax only sales of motor vehicles by licensed retailers, the legislation announcing that no sale of a motor vehicle should be deemed occasional (i. e., made by a non-retailer and hence not taxable), and that on all sales of motor vehicles the tax shall be paid by the purchaser (not a licensed dealer). In this connection we cannot go along with the argument that the legislature merely intended to raise a rebuttable presumption that every sale of a motor vehicle is made by a licensed dealer, leaving the purchaser to choose whether he should pay the tax without complaint, or whether he should go to court to prove a non-dealer, occasional sale and thus rebut the presumption. We think it highly unreasonable to attribute to the legislature an intent to exact taxes illegally and at the expense of forcing thousands of citizens purchasing automobiles from other thousands of non-dealer citizens, to resort to litigation in order to establish their honesty in what obviously would entail an expense far in excess of the tax which, under such theory presumptively had been wrung out of them. We think the amendments point up an unmistakable purpose to tax all transfers of motor vehicles save those exempted.⁷

With respect to petitioner’s contention that trailers and semi-trailers transferred as an isolated or occasional sale by a non-retailer are not taxable under the act, we agree. It appears that pertinent Utah legislation evinces no clear intention to include such equipment within the phrase “motor vehicle,” a phrase that naturally connotes and suggests some sort of self-propulsion, and it also appears that the authorities generally refuse to demand such inclusion.

Mindful that definitions in unrelated statutes do not necessarily determine what a “motor vehicle” is,⁸ as was pointed out by the tax commission, nonetheless we believe that where the phrase is not defined in the sales tax act, but clearly is in the Motor Vehicle Act,⁹ (to which the sales tax act refers with respect to registration of vehicles) there is no impropriety in examining the Motor Vehicle Act to assist in determining what the legislature had in mind when it adverted to "motor vehicles” in the sales tax act.

Under the Motor Vehicle Act we find the terms “motor vehicle,” “trailer” and ■“semi-trailer” significantly described separately. It states that a “motor vehicle” is one that is self-propelled. A “trailer” is one without motive power * * * drawn by a motor vehicle, and a “semitrailer” is described as a vehicle without active power * * * drawn by a motor vehicle. These last two definitions do not lend themselves to any compelling conclusion that such pieces of equipment are self-propelled as is the case with the definition of “motor vehicle.” On the other hand the Motor Vehicle Act, by treating them separately, would indicate an intent not to include trailers and semi-trailers in the term “motor vehicle.” Such conclusion is further substantiated in the section that requires motor vehicles, trailers and semitrailers to be registered separately.¹⁰ If the contention of the tax commission that a truck and a trailer together are a “motor vehicle,” it would follow that the two pieces of equipment would be subject to but one registration. This cannot be done under the registration statute.

Aside from the statutes themselves, very respectable authority¹¹ treats a motor vehicle and a piece of tandem equipment as being mutually exclusive, at least if they are not actually operational by attachment, and as a unit, — a problem not presented here. The attitudes of courts that have had the question before them, succinctly are summarized in 60 C.J.S. Motor Vehicles § 1, p. 110, where it is said:

“A trailer or semitrailer is a vehicle, but is not a motor vehicle, except that insofar as it facilitates the primary function of a motor vehicle of transporting persons and things, after being attached to the motor vehicle for that purpose, it may be regarded as becoming a part of the motor vehicle, although as to the latter proposition there is also authority to the contrary.”

A New York case¹² holding that trailers .and semi-trailers were not “motor vehicles,” pointed out that:

“Trailers and semitrailers are vehicles within the meaning of the Vehicle and Traffic Law, * * * but they are not motor vehicles. The Legislature having defined and classified a trailer and semitrailer as separate and distinct vehicles, * * * it is presumed that it would have referred to them by name had it intended to include them within the provisions of section 59.”

We approve the above statement and consider it particularly applicable to our statutes and the definitions therein contained.

As to petitioner’s contention that amendment of the definition (59-15-2) and collection (59-15-4) sections of the act did not alter the scope of the tax, we cannot subscribe thereto. The amendments clearly evince an intention to tax all motor vehicle sales not specifically exempted, as we have pointed out supra, and to determine otherwise, we believe, would be to conclude that the legislature intended a more or less useless thing.

Counsel’s argument that it is discriminatorily unconstitutional to levy a tax on motor vehicle sales and not on sales of other commodities, seems to us to be without merit, since the classification appears to be reasonable and the subject matter proper. We know of no authority holding a tax on sales of motor vehicles generally to be discriminatory and counsel have pointed to none that does. As a matter of fact, petitioner’s argument is somewhat watered down by its own position that the act should apply only to sales made by retailers. In so contending it seems obvious that the tax would attach to something less than sales of motor vehicles generally, being levied against only a fraction thereof, thus not only narrowing the scope of taxable incidents, but widening the range of discrimination, if any there be.

The dissent points to five cases in support of its conclusion. It would appear that none of them is pertinent or an authority for what the dissent concludes. In four of the cases the statute itself determined whether the tandem equipment was to be included within the term “motor vehicle” or not, and in the fifth an entirely different fact situation prevails. Taking each case cited, we find the court saying in State v. Schwartzman Service, Inc. [225 Mo.App. 577, 40 S.W.2d 481] that:

“The title of the act under which this prosecution proceeds shows that the Legislature regards a trailer as a motor vehicle; for the title declares that it is an act to prescribe the maximum size * * * of ‘motor vehicles,’ and any ‘combination of motor vehicles.’ ”

In Vest v. Kramer, the statute, unlike ours, included trailers within the term “motor vehicle,” when, under Subd. 7 of Sec. 6290 thereof the term “motor vehicle” was defined as being “any vehicle propelled or drawn by power other than muscular power * *

In State v. Rowell, 120 Vt. 166, 136 A. 2d 349, 351, the court pointed out that under the statute involved, a

“ ‘Motor Vehicle’ shall include all vehicles propelled or drawn by power other than muscular power * * * The semi-trailer was being drawn by motor power and so was a motor vehicle as defined by the statute."

In State v. Harper, 353 Mo. 821, 184 S.W.2d 601, 605, a case where tires, tubes and wheels were taken from a trailer which was attached to a motor vehicle, the court said:

“We hold, but go no further, that the tires, tubes, and wheels, circumstanced as they were at the time of the instant larceny, were within the phrase ‘any part, tire or equipment of a motor vehicle.’ ”

The court then specifically went on to say, under a statute defining motor vehicles and trailers, almost identical to our own, that:

“A trailer is not a motor vehicle under Sec. 8367.”

In the Fruehauf case the dissimilarity is apparent upon perusal.

The tax commission is ordered to refund all taxes paid on the transfer to petitioners of trailers and semi-trailers or other equipment not falling within the term “motor vehicle” as we have construed that term to mean under our statutes.

McDonough, c. j., and wade, j., concur. WORTHEN, J., concurs in the result.

1 . Title 59-15-4, U.C.A.1953.

2 . Title 41-1-19, U.C.A.1953.

3 . Pertinent language:

59-15-2 (e) : “But the term ‘retail sale’ is not intended to include isolated nor occasional sales by persons not regularly engaged in business, * * * provided, however, that no sale of a motor vehicle shall be deemed isolated or occasional for the purposes of this act.”

59-15-5: “Provided, however, that on all motor vehicle sales made by other than a regular licensed dealer the tax shall be paid by the purchaser directly to the state tax commission upon every sale of a motor vehicle subject to registration and licensing under the laws of this state, and shall be collected by the state tax commission at the time of such registration and licensing.”

4 . Laws of Utah 1949, Chap. 83.

5 . Gould v. Gould, 1917, 245 U.S. 151, 38 S.Ct. 53, 62 L.Ed. 211; 3 Sutherland Statutory Construction 293.

6 . Geneva Steel Co. v. State Tax Commission, 1949, 116 Utah 170, 209 P.2d 208.

7 . Title 59-15-6, U.C.A.1953.

8 . Fruehauf Trailer Co. v. South Carolina Electric & Gas Co., 1952, 223 S.C. 320, 75 S.E.2d 688.

9 . Title 41, U.O.A.1953.

10 . Title 41-1-19, U.C.A.1953.

11 . Hayes Freight Lines v. Cheatham, Okl. 1954, 277 P.2d 664, 48 A.L.R.2d 1278; Prudential Ins. Co. of Great Britain, v. Associated Emp. Lloyds, supra; Vest v. Kramer, Ohio App. 1951, 111 N.E.2d 696, where the statute is very similar to Utah’s; Gendreau v. State Farm Fire Ins. Co., of Bloomington, Ill., 1939, 206 Minn. 237, 288 N.W. 225, contra.

12 . Hennessy v. Walker, 1938, 279 N.Y. 94, 17 N.E.2d 782, 784, 119 A.L.R. 1029.