Opinion
No. 30959.
January 8, 1934.
1. LICENSES.
Privilege taxes are construed strictly against taxing powers, and liberally in favor of citizens.
2. MERCANTILE AGENCIES.
Brokerage company investigating credit of persons applying for loans from certain company and not reporting on credit for any one other than loan company held not subject to tax as "commercial agency" (Laws 1932, chapter 89, section 57).
APPEAL from Circuit Court of Harrison County.
Wadlington, Corban Grant, of Biloxi, for appellant.
It is the contention of the appellant that the appellee is a commercial agent within the meaning of the privilege tax code. The facts clearly indicate that the appellee is a corporation engaged in the business of inquiring into the credit and financial standing of other persons engaged in business in this state.
The evidence, application, and contract when summarized and boiled down conclusively show that although the appellee may make the investigation for their own use (but it is not admitted that they do so) they, nevertheless, turn their findings over the Gulf Coast Industrial Loan Company, and the Gulf Coast Industrial Loan Company not only just files this report away, but it also, as shown by the evidence, reads said report and relies greatly on said report in its decision to accept or reject the loan. It is the appellant's contention that such procedure amounts to reporting, within the meaning of the statute.
J.C. Ross, of Gulfport, for appellee.
A commercial agency is a person, firm or corporation engaged in the business of collecting information as to the financial standing, ability and credit of persons engaged in business, and reporting on same to subscribers or customers applying and paying therefor.
State v. Morgan, 48 N.W. 314, 321, 2 S.D. 32; Eaton, Cole Burnham Co. v. Avery, 83 N.Y. 31, 34, 38 Am. Rep. 389; Genesee Savings Bank v. Michigan Barge Co., 17 N.W. 790, 793, 52 Mich. 164; Zugalla v. International Mercantile Agency, 142 Fed. 927, 74 C.C.A. 97.
By reference to the charter of this corporation and referring to the contract entered into by and between the appellee here and the Gulf Coast Industrial Loan Company, it is certainly clear and unquestionable that appellee here was within its charter by entering into and executing the said contract and there is no provision in the charter authorizing the corporation to conduct a commercial agency or anything that might be construed as being a commercial agency.
It is the law unquestionably of Mississippi that "law imposing a privilege tax should be liberally construed in favor of the citizen sought to be assessed with tax, and no occupation will be taxed unless it clearly appears that it comes within the provisions of the law."
Board of Levy Commissioners v. Howze Mercantile Company, 116 So. 92; Miller v. I.C.R.R., 146 Miss. 422, 111 So. 558; Railway Company v. Clark, 95 Miss. 689, 29 So. 177; Ex rel. Collins, Atty. Gen. v. Grenada Cotton Company, 123 Miss. 191, 85 So. 137; Planter Lumber Co. v. Wells, 147 Miss. 279, 112 So. 9; Town of Utica v. State, ex rel. Rice, 148 So. 635.
The state tax collector filed suit against the Gulfport Loan Brokerage Company to collect a certain privilege tax and the penalty for failure to pay same, which privilege tax is imposed by section 57, chapter 89, Laws 1932, reading as follows:
"Commercial Agencies. — Upon each person engaged in the business of inquiring into and reporting the credit and financial standing of other persons engaged in business in this state, a state-wide tax of three hundred dollars."
It appears that the appellee, the Gulfport Loan Brokerage Company, had a contract with the Gulf Coast Industrial Loan Company to lend its money, such loans to be approved by the Gulf Coast Industrial Loan Company. The appellee was to investigate the credit of parties applying for such loans, and for its services in procuring such loans and guaranteeing their payment was to receive not exceeding six per cent. of such loans as were approved by the Gulf Coast Industrial Loan Company. The Gulf Coast Industrial Loan Company made other loans without the agency of the appellee, securing its own data therefor.
The appellee was not engaged in reporting on the credit of persons for any other than the Gulf Coast Industrial Loan Company, so far as appears in the record; and the appellee contended in the court below, and the court held, that it did not come within the purview of section 57, chapter 89, Laws 1932.
Privilege taxes are construed strictly against the taxing powers, and liberally in favor of the citizens. The heading of section 57, "Commercial Agencies," indicates what was intended to be taxed; and, in our opinion, it was not the intention of the Legislature to tax a person or corporation under the circumstances indicated in the above statement of facts. There was not the doing of a general business of inquiring into and reporting the financial standing of persons for any other than the Gulf Coast Industrial Loan Company.
We think the court below was correct in holding the appellee not liable, and the judgment will be affirmed.
Affirmed.