Sperry Corp. v. Lynch , 76 N.C. App. 327 ( 1985 )

PHILLIPS, Judge.

The taxation statute that governs this appeal, G.S. 105-164.4, in pertinent part reads as follows:

There is hereby levied and imposed, in addition to all other taxes of every kind now imposed by law, a privilege or license tax upon every person who engages in the business of . . . renting or furnishing tangible personal property ... in this State, the same to be collected and the amount to be determined by the application of the following rates against gross . . . rentals, to wit:

(2) At the rate of three percent (3%) of the gross proceeds derived from the lease or rental of tangible personal property as defined herein, . . . (Emphasis supplied.)

The solitary question before us is whether the payments plaintiff received for maintaining the machines and equipment leased to its various lessees were “derived from the lease or rental of tangible personal property” within the contemplation of the above statute. We believe that they were and that the tax applied to them as a matter of course. The maintenance payments Sperry received were made because its leases required the lessees to make them; if the payments had not been made the lease agreements would have been broken and probably would have been cancelled. That the charges for using the different articles and maintaining them were stated separately on the various invoices or bills is immaterial; the obligation to pay both charges was established by the leases. In maintaining the leased articles Sperry did only what the lease and rental agreements required it to do and the lessees received only what the different leases entitled them to. Under the circumstances it seems plain to us that the maintenance payments plaintiff received from its many lessees were part of the gross proceeds derived from the renting of machines and equipment, and we affirm the judgment of the trial court.

Plaintiffs reliance upon a ruling to the contrary that it obtained from the Georgia courts in Strickland v. Sperry Rand Corporation, 248 Ga. 535, 285 S.E. 2d 1 (1981) is misplaced. The Georgia statute is less inclusive than ours. § 92-3402a(c) (1974) and § 92-3403a (1979 Supp.) of the Georgia Code taxes “the gross lease or rental charge," or “gross lease or rental proceeds.” (Emphasis supplied.) Whereas G.S. 105-164.4 taxes all “proceeds derived from the lease or rental” of personal property. (Emphasis supplied.) The wider scope of our Act is self-evident, we think, and the trial judge simply applied it as the legislature wrote it.

Affirmed.

Judges Arnold and Cozort concur.