Pratt-Gilbert Hardware Co. v. O'Neil , 65 Ariz. 90 ( 1946 )

In arriving at my original opinion in this case, I was guided to a very great extent by the decisions of the Supreme Court of the United States in McGoldrick v. Berwind-White Coal Min. Co.,309 U.S. 33, 60 S. Ct. 388, 84 L. Ed. 565, 128 A.L.R. 876, and McGoldrick v. Felt Tarrant Mfg. Co., 309 U.S. 70, 60 S. Ct. 404,84 L. Ed. 584 (Citations in the original opinion.) These cases were determined on writs of certiorari to the Supreme Court of the State of New York. The Comptroller of the City of New York in each of these cases had determined that the respondents were subject to the tax. The Appellate Division of the New York Supreme Court set the levies aside. Matter of Felt Tarrant Mfg. Co. v. Taylor, 254 A.D. 246, 4 N.Y.S.2d 615; Matter of A.H. DuGrenier, Inc. v. McGoldrick, 255 A.D. 961, 8 N.Y.S.2d 667. The New York Court of Appeals, without opinion, affirmed the judgment in each case 279 N.Y. 678, 18 N.E.2d 311; 281 N.Y. 608,22 N.E.2d 172, but by its amended remittitur declared that the affirmance was upon the sole ground that the tax infringed the commerce clause of the Federal Constitution. Const. U.S. art. 1, § 8, cl. 3. In the opinions of the Supreme Court of the United States it was determined that the tax was not an undue burden upon interstate commerce. I concur in the reasoning of these cases and I am still of the opinion that the Arizona tax does not infringe the federal commerce clause as applied to the transactions in question. What I overlooked in analyzing these cases was that the state question of the right of the City of New York to levy the tax was not an issue, this apparently for the reason that the New York City ordinance, Local Law No. 24 of 1934, page 164, published as Local Law No. 25, laid a tax on every sale in the City of New York, "sale" being defined by section 1(e) as "any transfer of title or possession or both * * * in any manner or by any means whatsoever for a consideration,or any agreement therefor." (Emphasis supplied.) Our statute does not include as a taxable event any contract or agreement consummated within the state looking to the transfer of title or possession of tangible personal property outside the state. Had I fully taken cognizance of this difference in the statutes, I would have been of the opinion, as I now am, that the Arizona Excise Revenue Act, Code 1939, § 73-1301 et seq., does not impose a tax upon the transactions which are the subject matter of this appeal.

The state question as to whether these transactions are subject to our excise revenue (sales) tax is entirely separate and apart from the question as to whether the transactions are so related to interstate commerce as to be exempt from state taxation under the federal commerce clause. These sales f.o.b. outside the state of Arizona were not sales within the state. Sales "`In this state' or `in the state' means within the exterior limits of the state of Arizona." Section 73-1302, A.C.A. 1939. There was no occasion to determine whether the imposition of the tax infringed the commerce clause. Our Excise Revenue Act as applied to the transactions involved herein imposes the tax on the business of selling tangible personal property within the state of Arizona.

For these reasons I concur in the dissenting opinion of Judge Morgan that the judgment of the lower court should be reversed with instructions to overrule defendants' motion to dismiss and reinstate plaintiff's complaint.

MORGAN, J., concurs in the result.