Opinion
No. 22758
8-5-1958
SELECT BASE MATERIALS, Inc., a corporation, Plaintiff and Appellant, v. BOARD OF EQUALIZATION of the State OF CALIFORNIA, Defendant and Respondent. *
Wm. J. Clark, Los Angeles, for appellant. Edmund G. Brown, Atty. Gen., James E. Sabine, Asst. Atty. Gen., Dan Kaufmann, James C. Maupin, Deputy Attys. Gen., for respondent.
SELECT BASE MATERIALS, Inc., a corporation, Plaintiff and Appellant,
v.
BOARD OF EQUALIZATION of the State OF CALIFORNIA, Defendant and Respondent.
Aug. 5, 1958.
Hearing Granted Oct. 1, 1958.
Wm. J. Clark, Los Angeles, for appellant.
Edmund G. Brown, Atty. Gen., James E. Sabine, Asst. Atty. Gen., Dan Kaufmann, James C. Maupin, Deputy Attys. Gen., for respondent.
Trippet, Yoakum, Stearns & Ballantyne, Oscar A. Trippet and David Freeman, Los Angeles, amicus curiae.
NOURSE, Justice pro tem.
By its amended and supplemental complaint in this action appellant sought to recover sales taxes in the sum of $10,446.45 paid by it under protest. These sales taxes were based upon transportation charges made by appellant to its customers for the delivery or sending of the materials sold by it during the period from May 1, 1951, through September 30, 1953, and which were assessed upon the grounds that the cost of transportation was incurred prior to the sale of the materials and was taxable as a part of appellant's gross receipts.
The facts so far as relevant to the questions presented here are:
During the period in question appellant was engaged in the business of mining and selling decomposed granite from lands owned by it or held by it under mining leases. Appellant did not stockpile any materials but upon receiving an order for decomposed granite mined the material and placed it directly on trucks to be hauled to the place designated by the purchaser. Appellant did not own any trucks but in all instances contracted for the transportation of the materials with independent licensed' highway carriers.' The charges of these carriers are governed by tariffs promulgated by the Public Utilities Commission which fix the charge that may and must be made for delivery within certain zones. Practically all of appellant's orders with the exception of those hereinafter noted came in by telephone.
When a new customer called he would ask the price and would be quoted the price per ton at the appellant's place and after giving the address to which the materials were to be delivered or sent he would be quoted the transportation cost based upon the applicable tariff and the total of the two items. If the customer was an old one there would be no discussion as to price but an order would be given and taken for so many tons of gravel with the point to which the materials were to be transported given. Unless the customer indicated his desire to pick up the materials in his own trucks no statement was made to the customer as to who would be employed to transport the materials.
Upon receiving the order appellant would call upon an independent 'highway carrier,' would load the amount of the order onto his truck and give him a delivery ticket in duplicate. This ticket contained the name of the consignee, the address to which the materials were to be transported, the purchase order number, if any, and a statement of the weight of the materials delivered, and the name of the highway carrier and it also contained a notation, as follows: 'Our drivers will make every effort to place materials where customer designates, but the shipper assumes no responsibility for damages inside the curb line.'
Upon reaching the destination shown in the delivery slip the carrier would cause one copy thereof to be signed by the consignee and would return it to the appellant and thereafter appellant would pay the transportation charge as fixed by the applicable tariff. Transactions of this character constituted the great bulk of the transactions involved.
In all instances on appellant's books the charges were broken down so as to separately state the price charged for the materials, the sales tax on those materials and the amount charged for transportation which in all cases was the exact amount paid to the highway carrier.
The form of invoice sent to purchasers of the class mentioned above varied. In some invoices the price of the materials was stated, the tax on the materials was stated and the transportation charge was separately stated followed by a total of all three items. On others there was a statement of the number of tons at a price per ton which equalled the pit price of the materials plus the transportation cost followed by a total of the two. There was then a notation such as '3 1/2% tax on materials at $.55' followed by the total of the tax. In others the number of tons was stated at a price per ton equal to the pit price plus transportation and the total amount followed by the notation '3 1/2% on material' followed by a notation of the total tax.
In the case of certain private corporations and municipal corporations the method of handling the transactions varied from what we have stated but, inasmuch as the amount of the tax on these transactions is but a fraction of a per cent of the tax paid and sought to be recovered, and as the facts varied in each case and as the trial court made no distinction between these transactions and the great bulk of the transactions, it would serve no useful purpose to here detail the methods used in the transactions we have just mentioned.
The statutory provisions involved in the determination of this case are the following designated sections of Revenue and Taxation Code: sections 6051, 6006, 6011 and 6012.
Section 6051, Revenue and Taxation Code, in substance provides that for the privilege of selling tangible personal property at retail a tax of 3 per cent of the gross receipts of any retailer is imposed. By section 6011 'Sales price' is defined as the total amount for which tangible personal property is sold including the cost of transportation of property prior to its purchase but excluding transportation charges for transportation occurring after the purchase of the property if that charge is separately stated. By section 6012 'Gross receipts' is defined as the total amount received on the sale without any deduction of the cost of transportation of the property prior to its sale to the purchaser but excluding from the amount received '[t]ransportation charges separately stated' if the transportation occurs after the sale of the property is made to the purchaser. Section 6006 in defining 'sale' provides in part as follows: '(a) Any transfer of title or possession, exchange, barter, lease, or rental, conditional or otherwise, in any manner or any means whatsoever, of tangible personal property for a consideration. 'Transfer of possession,' 'lease,' or 'rental' includes any transactions found by the board to be in lieu of a transfer of title, exchange, or barter. (b) Any withdrawal, except a withdrawal pursuant to a transaction in foreign or interstate commerce, of tangible personal property from the place where it is located for delivery to a point in this State for the purpose of the transfer of title or possession, exchange, barter, lease, or rental, conditional or otherwise, in any manner or by any means whatsoever, of the property for a consideration.' (Emphasis added.)
The trial court found that all the transportation charges made by appellant to its customers during the period in question were for transportation of the materials which occurred prior to this sale; that no sale by appellant to its customers took place until delivery to the customer at the respective places designated by them; and that the appellant's bills to its customers included a charge for both the materials and transportation. The court made no finding as to whether the charges for materials and the charge for transportation were separately stated. By its conclusions of law the court concluded that all transportation charges made by appellant to its customers were for transportation of materials occurring prior to the sale thereof and were a part of the sales price of the property sold by appellant and were properly includable within the gross receipts of appellant and taxable as such. The court further concluded that section 6006(b) of the Revenue and Taxation Code heretofore quoted 'is inapplicable to the facts presented at the trial.'
It was the position of the respondent at the trial of the action and it is its position here that the question as to whether the sales took place before or after the transportation charges were incurred was to be resolved under the provisions of the Uniform Sales Act as adopted in this State (Part 4, title I, et seq., §§ 1721-3268 inc., Civ.Code) and that the definition of 'sale' contained in subdivision (b) of section 6006, Revenue and Taxation Code, had no application and this position is the one adopted by the trial court in determining this case. It is further respondent's contention that the transportation charges made by appellant to its customers were not separately stated within the meaning of section 6012 and that therefore the tax was properly assessed irrespective of whether the charges were incurred before or after the sales took place.
Appellant contends that if the applicable law is the law of sales as set forth in the Uniform Sales Act the evidence establishes without substantial conflict that it was the intention of the parties that title should pass when its materials were placed upon the trucks of the independent contractor (highway carrier) for transportation to its customers. They assert, however, that the question as to what constitutes a sale is to be determined not by the Uniform Sales Act but by the provisions of section 6006 of the Revenue and Taxation Code and that all of the transactions here fell within the definition of sale set forth in subdivision (b) of that section.
While a large part of the briefs of each of the parties is given over to the question of whether a sale took place before or after the transportation charges in question were incurred if the provisions of the Uniform Sales Act are applicable, that question need not be decided here for we are convinced that it is the definition of a sale set forth in section 6006(b) of the Revenue and Taxation Code which must be applied.
Under this section a taxable sale takes place when there is '[a]ny withdrawal * * * of taxable personal property from the place where it is located for delivery to a point in this State for the purpose of the transfer of title * * * of the property for a consideration.' Withdrawal has a common meaning; it is defined by Webster's International Dictionary, second edition, as 'removal, as from a place of deposit * * *.' Applying this statutory definition of 'sale' to the facts here it is clear that a taxable sale was accomplished the moment the decomposed granite was removed from the ground and placed aboard the trucks of the highway carrier consigned to the customer. As none of the transportation charges taxed were incurred until after the material was placed aboard the carrier they did not become a part of appellant's gross receipts except in instances where they were not separately stated.
Respondent makes no contention that the statute is ambiguous but bases its contention that the definition of sale contained in subdivision (b) of the section is not applicable upon the asserted fact that the purpose of the Legislature in enacting this statutory definition was to enable the State to tax retail transactions that would not otherwise be taxable; i. e., transactions where goods were shipped from one point in this State for sale within territory which had been ceded by the State to the United States without the rights of taxation being reserved to the State such as the military reservation known as 'The Presidio' in San Francisco (see Standard Oil Co. v. People of State of California, 291 U.S. 242, 54 S.Ct. 381, 78 L.Ed. 775, decided in 1935).
We may assume for the purposes of this decision that the purpose of the Legislature was as contended for by respondent; but, there being no ambiguity in the statute, was cannot give it any different meaning from that which the language used compels. We may not, under the guise of interpretation, write into the statute something that is not there in order to give it a meaning other than the meaning expressed. Seaboard Acceptance Corp. v. Shay, 214 Cal. 361, 365-366, 5 P.2d 882; People v. One 1940 Ford V-8 Coupe, 36 Cal.2d 471, 475, 224 P.2d 677; In re Miller, 31 Cal.2d 191, 198-199, 187 P.2d 722; People v. White, 122 Cal.App.2d 551, 554, 265 P.2d 115.
In Seaboard Acceptance Corp. v. Shay, supra, in which the Supreme Court was called upon to interpret a statute, the language of which was such as to defeat the evident purpose of the Legislature in enacting it, that court in refusing to place an interpretation on the statute which would accomplish the legislative purpose and render the statute valid rather than void, said (214 Cal. at pages 365-366, 5 P.2d at page 884): 'It is probably safe to assume that the Legislature had in mind the protection of persons dealing with a buyer in possession, but the difficulty is that they have not expressed this intent in the language used. This court has no power to rewrite the statute so as to make it conform to a presumed intention which is not expressed. This court is limited to interpreting the statute, and such inperpretation must be based on the language used. * * * It is elementary that there can be no intent in a statute not expressed in its words; that the intention of the Legislature must be determined from the language of the statute. (Citations.) 'It is a cardinal rule in the construction of statutes that the intent of the legislator should be followed, but this is subject to the imperative and paramount rule that the court cannot depart from the meaning of language which is free from ambiguity, although the consequence would be to defeat the object of the act.''
In order to uphold the judgment of the trial court and the contention of respondent, it would be necessary to read into the statute a provision which would exclude as a sale any withdrawal which was made for delivery to a point in the State where the property would be taxable. This we cannot do for the unambiguous language of the statute makes the definition applicable where the withdrawal is for delivery to any point in the State irrespective of whether a sale at that point would be taxable.
Respondent asserts that if the definition of sale which we have held applicable is applied the provision of section 6012 that the cost of transportation prior to the sale shall be included as a part of the retailer's gross receipts is rendered nugatory. We see no merit in this contention.
In the first place, the retailer is precluded from segregating from his gross receipts that part of the selling price which consists of the transportation cost paid by him in the acquisition of the goods sold. In the second place, section 6012 and the provisions as to transportation as contained in both sections 6012 and 6011 are only applicable to costs before the sale and as we have pointed out the statute has clearly made the withdrawal from the place of deposit a taxable sale. At most this contention of respondent merely creates a doubt as to the intention of the Legislature and where the meaning of a tax statute is doubtful it must be construed most strongly against the taxing power. California Motor Transport Co. v. State Bd. of Equalization, 31 Cal.2d 217, 187 P.2d 745; Pioneer Express Co. v. Riley, 208 Cal. 677, 687, 284 P. 663.
The trial court, as we have pointed out, made no finding upon the issue presented by the pleadings as to whether appellant's charges for transportation were expressly stated. Such a finding was not required under the theory upon which the matter was decided by the trial court, to wit: that subdivision (b) of section 6006 was not applicable and that applying the Uniform Sales Act there was, under the facts proven, no sale until the materials were delivered to the customer. But, as we have come to a contrary conclusion, we must pass upon the question as to whether the procedures adopted by appellant met the requirements of section 6012, Revenue and Taxation Code, that transportation charges incurred after the sale must be separately stated. It is our opinion that those that are in one of the forms of invoice noted above did this.
A taxable sale having been completed by the withdrawal of the materials through placing them upon the trucks for delivery, the purposes of the statute were fully met by the separate entry of the price of the materials and the transportation charges and the tax in appellant's books and by an invoice which was sufficient to advise the customer as to the breakdown in the total amount for which he was billed. Certainly those invoices which separately stated the price of the materials and the amount advanced by appellant for transportation costs fully met the statutory requirement. Those that showed the tax on materials at a certain price per ton of materials required but a simple mathematical calculation by the buyer to segregate the transportation charge from the total for which he was billed. Those that only showed the tax and noted that it was on materials only did not require a complicated calculation.
Our attention has not been directed by respondent to any published regulations, effective during the period involved here, of the Board of Equalization which required any more detailed separation of the charges and, as the methods adopted were sufficient to prevent evasion of tax, they were in our opinion sufficient, in the absence of specific regulations advising the taxpayer as to procedure to be adopted.
The judgment is reversed.
SHINN, P. J., and WOOD, J., concur. --------------- * Opinion vacated 335 P.2d 672. 1 This included the city sales tax. 2 Effective September 15, 1953, this section was amended so as to delete subdivision (b) as above quoted. But the section as quoted was in effect during the entire period for which the taxes were assessed excepting the last 15 days thereof. 3 The definition of sale here in question was first incorporated in the Sales and Use Tax Law as a part of subdivision (a) in 1939 and was not eliminated until 1953 although by federal statute (4 U.S.C.A. §§ 104-110) the State was in 1940 granted authority to levy sales taxes in any federal area.