Opinion
No. 32477.
January 25, 1937. Suggestion of Error Overruled March 8, 1937.
LICENSES.
Solvent used in manufacture of turpentine and kindred products which was not used in propelling motor vehicles and was not practically and commercially usable therein held not subject to excise tax under statute as a "gasoline" on ground that it was "usable in propelling motor vehicles," where to make the solvent so usable would make the cost more than double the cost of gasoline, the word "usable" meaning that which could be used and is convenient and practicable for use (Laws 1936, c. 162, secs. 5(a), 8(a), 13-17, 35).
APPEAL from chancery court of Hinds county. HON. V.J. STRICKER, Chancellor.
T.J. Wills, of Hattiesburg, for appellant.
It is very clear and convincing, by the language of the statute itself, that it was the intention and purpose of the Legislature to impose this excise tax in aid of the highways of the state.
Section 8 of the act, chapter 162, Acts of 1936, imposes the tax upon the person engaged in business as a distributor. Paragraph (a) provides that six cents per gallon is levied on all gasoline stored, sold, distributed, manufactured, refined, distilled, blended or compounded in the state or received in the state for sale, use on the highways, storage, distribution, use in internal combustion engines or for any commercial purpose. Appellant, in receiving the solvent for its own use, does not store it, sell it, distribute it, manufacture it, refine it, distill it, blend or compound it in this state. It receives it in the state but does not receive it for sale, for use on the highways, for storage, for distribution, use in internal combustion engines or for any commercial purpose.
On the presentation of the demurrer the chancellor became confused and sustained the demurrer on the ground that the solvent was received for commercial purposes. The Legislature, having the right to define the terms used in the act, within the reasonable scope of their meaning, defined the use to which appellant is putting the solvent, as a domestic purpose rather than a commercial purpose.
It will be observed that the use to which appellant is putting the solvent, so used by it, is defined by the Legislature in the act itself, to be domestic purposes, as distinguished from commercial purposes.
Treas v. Price, 167 Miss. 650, 146 So. 630.
The legislative intent and purpose being to levy the excise tax in aid of the highways of the state, specifically used the words, when referring to the receipt of gasoline in the state of Mississippi, to be used by the recipient, confined that use, upon which the tax would apply, to use on the highways or in internal combustion engines. If the tax is made to apply to gasoline used otherwise than on the highways, then the tax would not be in aid of the highways but would become a general revenue measure. The Legislature can enact a law levying the tax as a general revenue measure, as distinguished from a tax in aid of the highways. To do so, however, limits the application of the tax to much narrower boundaries than the levying of a tax in aid of the highways.
283 U.S. 788, 51 Sup. Ct. Rep. 352; Bingaman v. Golden Eagle Western Lines, 56 Sup. Ct. Rep. 624; Tax Commission v. Flora Drug Co., 148 So. 373.
This is an excise tax levied on gasoline and oils used in the state in aid of the highways of the state and confined, by the provisions of the statute itself, to gasoline and oils used on the highways. Section 35, chapter 162, Acts of 1936, makes the prima facie presumption that all gasoline and oil imported, sold, etc., in the state is intended for use in propelling motor vehicles.
Any person who stores gasoline, not for his own use, or sells it and distributes it, manufactures it, refines it, distills it, blends or compounds it in this state, cannot overcome the presumption that it will be used on the highway because in each instance the gasoline or oil is to be ultimately consumed by some other person other than the person so dealing with it. Likewise if a person receives it in the state for sale, for storage, for distribution, or any commercial purpose, they cannot overcome the presumption because they are not the ultimate consumers of the gasoline and not being the ultimate consumer they lose control of it when they part with the title and it may or may not be used on the public highways, in accordance with the whim and caprice of the ultimate consumer.
The tax for that reason applies to every person who receives that gas and oil and passes it on to another for consumption. When a person received gasoline or oil from without the state for his own use and is the ultimate consumer thereof, and where he controls the use to which it is to be put, and such use is not on the highway or in an internal combustion engine, he is in a position to overcome the prima facie presumption and no tax is imposed under the provisions of the statute.
Appellant herein is the receiver of the solvent from without the state and they receive it for their own use and are in a position to rebut the prima facie presumption raised by the statute and by rebutting the prima facie presumption bring themselves within the class of users upon whom no tax is imposed. The solvent is not gasoline or oil, within the provision of the statute.
Wm. H. Maynard, Assistant Attorney-General, for appellee.
The solvent received and used by appellant was gasoline.
Subsection (a), section 5, chapter 162, Laws of 1936.
In deciding whether the solvent was gasoline, we must be guided entirely by the definition of that term as set out in chapter 162, regardless of what might be the commonly accepted definition. The Legislature has power to define words for itself and its definition outweighs dictum of lexicographers.
Mathison v. Brister, 166 Miss. 67, 145 So. 358.
If petroleum products, such as this solvent, were held not to come under the definition of gasoline and thus escape taxation, the collection of gasoline excise taxes would suffer a severe blow. It would be relatively simple for a person to purchase a gallon of gasoline and then blend said gasoline with the solvent and thereby secure a product which would be satisfactory in operating motor vehicles. As an illustration, a gallon of gasoline could be mixed with three gallons of solvent and the four gallons thus produced could be used to operate a motor vehicle and yet only one gallon thereof would be subject to taxation. This was not intended by the Legislature and the definition of gasoline, given by it, is comprehensive in scope and includes the solvent received and used by appellant.
The Pantorium v. McLaughlin, 215 N.W. 798; Lujan v. Triangle Oil Co., 37 P.2d 797.
Appellant is a distributor as defined in subsection (e) of section 5 of chapter 162.
Appellant is liable for a six cent per gallon tax under subsection (a) of section 8 of chapter 162.
We respectfully submit that the solvent received by appellant in Mississippi was used for commercial purposes and thus appellant is liable for the tax on said solvent.
The taxing provisions of chapter 162 are not confined to gasoline used to propel motors on the public highways.
If we understand appellant's position correctly, it is contended that if the tax were held to be imposed on gasoline received in Mississippi, which gasoline was used for other purposes than to propel a motor vehicle on the public highways, that said tax would be unconstitutional. This method of taxation has been upheld so many times by the Supreme Court of the United States as to be beyond controversy.
The facts in our case showed that appellant ordered the solvent in question from out of the state and that it was shipped to appellant in Hattiesburg; that said solvent was received and unloaded by appellant in Hattiesburg, Mississippi, and was then placed by appellant in tanks or reservoirs where it was used to extract rosin from pine stumps. Under this state of facts, no question can arise that the tax constituted a burden on interstate commerce, for at the time the tax accrued the interstate journey was at an end. The ending of the interstate commerce is "the point of time at which it arrived at its destination."
Brown v. Houston, 14 U.S. 62, 29 L.Ed. 257; Pittsburg Coal Co. v. Bates, 156 U.S. 577, 39 L.Ed. 538; Bacon v. Illinois, 227 U.S. 504, 57 L.Ed. 615; Atlantic Coast Railroad Co. v. Standard Oil Co., 275 U.S. 257, 72 L.Ed. 270; Nashville, Chattanooga St. L. Ry. v. Wallace, 288 U.S. 249, 77 L.Ed. 730; Edelman v. Boeing Air Transport, 289 U.S. 249, 77 L.Ed. 1155; Sonneborn Bros. v. Keeling, 262 U.S. 506, 67 L.Ed. 1095; Gregg Dyeing Co. v. Query, 286 U.S. 472, 76 L.Ed. 1232; Superior Oil Co. v. State of Mississippi, 280 U.S. 390, 74 L.Ed. 504.
In summary, we respectfully submit that appellant received and used in the State of Mississippi for commercial purposes gasoline on which the excise tax has not been paid nor covered by the bond of a qualified Mississippi distributor and that appellant is, therefore, liable to the State of Mississippi for a six cent per gallon tax on this gasoline and that appellee's demurrer to appellant's bill of complaint was, therefore, properly sustained.
Argued orally by T.J. Wills, for appellant, and by Wm. H. Maynard, for appellee.
This is an appeal from a decree of the chancery court of the First Judicial District of Hinds county sustaining a demurrer to a bill of complaint, seeking to enjoin the state motor vehicle commissioner from collecting or attempting to collect a gasoline excise tax on a solvent or reducing agent used by appellant in extracting rosin from pine stumps and wood.
The bill of complaint alleged that the appellant is engaged in the manufacture of turpentine, pine oil, and rosin from pine stumps and wood, which are ground into small chips and shavings; that the turpentine and pine oil are removed from these chips and shavings by the application of steam of a high temperature, and thereafter the rosin is removed from said chips and shavings by placing them in large reservoirs or tanks and treating them with a solvent or reducing agent specially manufactured for that purpose.
The bill further charges that the appellant does not use the said solvent on the streets, roads, or highways of the state, or in internal combustion engines, or for any commercial purpose; that it does not sell, deliver, or otherwise dispose of the solvent, but only uses it in tanks, which are stationary, through which the pine chips and shavings are passed for the purpose of dissolving and extracting the rosin contained therein.
While the bill alleged that the said solvent is a petroleum product, with a specific gravity above 56 degrees Tagliaubes baume scale, at a temperature of 60 degrees Fahrenheit, with a boiling range beginning at 230 degrees Fahrenheit, and vanishing at 290 degrees Fahrenheit, it further charged that it "is not gasoline, within the definition of section 5, paragraph (a) of the laws of the State of Mississippi, chapter 162, Acts of 1936, in that the said solvent is not used or usable in propelling motor vehicles, when used alone, and is not a liquid that is ordinarily and practically commercially usable in internal combustion engines for the generation of power, neither is it a distillate or a condensate of petroleum, natural gas, coal, coal tar, vegetable ferments and other products so usable in said internal combustion engines for the generation of power. Complainant reiterates, however, that the said solvent is a petroleum product, and has a gravity test above 46 degrees Tagliaubes baume scale, at a temperature of 60 degrees Fahrenheit. Complainant would show, however, that the said solvent could be mixed or blended with other petroleum products so as to make it usable in motor vehicles. To so make it usable a petroleum product with a boiling range beginning at 80 degrees Fahrenheit, and vanishing at 230 degrees Fahrenheit, and also a petroleum product with a boiling range beginning at 290 degrees Fahrenheit and vanishing at 420 degrees Fahrenheit, must be mixed or blended with said solvent. The mixing of said solvent with the two above described products, in the proper proportions, would make a petroleum product usable in motor vehicles or internal combustion engines, but complainant is not advised as to the proportions of each necessary to be used in mixing or compounding the same. Complainant would show, however, that to so blend or mix said solvent would cost more than twice the cost of gasoline on the open market. Complainant shows this Honorable Court that said solvent will start an internal combustion engine, or motor in a motor vehicle provided said engine or motor has been previously heated, but that said solvent will not start a cold engine or motor. After an internal combustion engine, or a motor in a motor vehicle, has been started, said solvent will run said internal combustion engine, or propel said motor vehicle, but the acceleration would be poor and the mileage power so low that the use of said solvent for said purpose would be impracticable."
The act of the Legislature imposing this excise tax on gasoline and oils is chapter 162, Laws 1936, and by section 35 of this act the purpose thereof in imposing the tax on gasoline is fully declared and set forth. By this section, it is declared to be the purpose and intention of the Legislature to impose an excise tax on all persons engaged in the business of importing, receiving, purchasing, acquiring, using, storing, manufacturing, refining, distilling, blending, compounding, selling, or distributing gasoline and oil, or either in the state of Mississippi; and for the purpose of enforcing the provisions of the act, there is thereby created a prima facie presumption that all gasoline and oil utilized for any of the above-stated purposes is intended for use in propelling motor vehicles on the public roads and highways. The further purpose of this act to provide for the permanent exaction of the full tax only on gasoline used in propelling motor vehicles used on the public highways and roads is expressly recognized by the further declaration of this section that, "It is the further purpose of this act to provide for the refunding to the consumer of all tax actually paid, less one cent (1c) per gallon, on gasoline not used in propelling motor vehicles on the public highways and roads." Full and detailed provisions for securing this refund on gasoline not used in operating motor vehicles upon the streets, public roads, and highways of the state are contained in sections 13 to 17, inclusive, of the act.
The inquiry here then recurs to the question whether or not the solvent used by the appellant in the manner set forth in the bill of complaint is gasoline within the definition thereof as contained in section 5 (a) of the act, and upon which a tax is imposed by section 8 (a) of the act, levying a tax of "six cents (6c) per gallon on all gasoline stored, sold, distributed, manufactured, refined, distilled, blended or compounded in this state or received in this state for sale, use on the highways, storage, distribution, use in internal combustion engines, or for any commercial purposes."
Section 5 (a) of the said chapter 162 defines the word "gasoline" as follows: "The word `gasoline' as used in this act shall include all liquid fuels which are used or usable in propelling motor vehicles, either when used alone or when mixed, blended, or compounded, including liquids ordinarily, practically and commercially usable in internal combustion engines for the generation of power, and all distillates of, and condensates from petroleum, natural gas, coal, coal tar, vegetable ferments, and other products so usable and received in this state, having a gravity test above 46° tagliaubes baume scale, at a temperature of 60° F."
The bill of complaint specifically charged, and it is admitted that the solvent in question is not used in propelling motor vehicles, and if it is brought under the above definition, it must be because it is "usable in propelling motor vehicles." The question then is, What did the Legislature intend to include within the designation of liquid fuels "usable in propelling motor vehicles?"
The bill of complaint alleges that said solvent can be mixed with other petroleum products of stated boiling ranges, in undisclosed and uncertain proportions, so as to make it usable in propelling motor vehicles or in internal combustion engines, but that so to do would make the cost more than double the cost of gasoline on the market; that said solvent will start an engine or motor in a motor vehicle only after the motor has been heated, and that while it will propel a motor vehicle or internal combustion engine after the motor or engine has been heated, the acceleration would be so poor and the mileage power so low that the use of the solvent for that purpose is impracticable.
Webster's New International Dictionary (2 Ed.), gives two meanings of the word "usable," (1) "that can be used" and (2) "that is convenient and practicable for use." It seems clear to us that the Legislature intended that the latter meaning should apply in determining what liquid fuels should come under the general classification of gasoline. After designating as gasoline all liquid fuels which are used or usable in propelling motor vehicles, there is added a general provision designating as gasoline all liquids ordinarily, practically, and commercially usable in internal combustion engines for the generation of power, and all distillates of, and condensates from petroleum, natural gas, coal, coal tar, vegetable ferments, and other products so usable. There is no apparent reason why the Legislature, in the first provision, should include in the definition of gasoline, mixed, blended, or compounded liquid fuels which are not ordinarily, practically, and commercially usable in propelling motor vehicles, while in the general provision immediately following, the liquids, distillates of, and condensates from petroleum, natural gas, coal, coal tar, vegetable ferments, and other products which are defined as gasoline, are limited to those ordinarily, practically, and commercially usable in internal combustion engines for the generation of power. We conclude, therefore, that the Legislature intended to include in the definition of gasoline only those liquid fuels which are ordinarily, practically, and commercially usable in internal combustion engines or in propelling motor vehicles.
The bill of complaint herein clearly alleges that the solvent or reducing agent used by appellant is not used in propelling motor vehicles, and is not ordinarily, practically, and commercially usable in internal combustion engines or in propelling motor vehicles, and states the facts upon which these allegations are based, and consequently upon the pleading here we think it must be held that this solvent does not come within the definition of gasoline upon which a tax is imposed by section 8 (a) of the act. The demurrer interposed to the bill of complaint should, therefore, have been overruled, and the decree of the court below will be reversed and the cause remanded.
Reversed and remanded.