No. J-563.Court of Claims.
April 30, 1930.
Suit by the Sayers Scoville Company against the United States.
Petition dismissed.
The plaintiff in this suit sues to recover the sum of $2,434.84, with interest thereon as provided by law, an alleged overpayment of excise taxes levied and collected under section 900 of the Revenue Acts of 1918 and 1921 (40 Stat. 1122, and 42 Stat. 291). The taxes were paid from January, 1920, to February, 1923, inclusive.
The taxes were levied and collected upon the manufacture and sale by plaintiff of motor-propelled combination hearses and ambulances.
The sole question for determination is whether such vehicles are taxable at the rate of 5 per cent. as determined by the Commissioner of Internal Revenue, or at the rate of 3 per cent. as contended by the plaintiff.
This case having been heard by the Court of Claims, the court, upon the report of a commissioner and the evidence, makes the following special findings of fact:
1. Plaintiff was from January, 1920, to February, 1923, and now is, a corporation organized, existing, and operating under and by virtue of the laws of the state of Ohio, with its principal place of business located at Cincinnati, Ohio.
2. From January, 1920, to February, 1923, the plaintiff was engaged in the manufacture and sale of motor-propelled hearses, ambulances, limousines, combination hearses and ambulances, and passenger cars.
The combination hearses and ambulances were so designed and constructed that they could be and were used as hearses, or by the installation and use of certain accessories and auxiliary equipment furnished and sold therewith by plaintiff, such hearses became adaptable for use, and were used, as ambulances.
The accessories and auxiliary equipment required to make and constitute these vehicle ambulances were not manufactured by the plaintiff but were purchased by it from other manufacturers, as and when needed. These vehicles, without the accessories and extra equipment, admittedly are hearses.
The said accessories and extra equipment consisted of cots and seats which fit into sockets which are designed and placed in said vehicles or hearses for the attachment and use of such accessories and extra equipment.
The number of combination hearses and ambulances manufactured and sold by the plaintiff during the time above stated amounted to about 3 per cent. of the number of hearses manufactured and sold by it during such time.
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3. For the period January, 1920, to February, 1923, inclusive, plaintiff filed returns and paid taxes on sales of such motor-combination hearses and ambulances, fitted with the accessories above described, at the rate of 3 per cent. of the selling price.
Subsequently the Bureau of Internal Revenue held that vehicles sold with the equipment herein described were taxable at the rate of 5 per cent. and assessed additional taxes on sales of such for the period January, 1920, to February, 1923, inclusive, which taxes together with penalties and interest amounted to $2,434.84.
The additional taxes, penalties, and interest thus assessed were paid by plaintiff on July 23, 1923. On September 16, 1925, plaintiff filed claim for refund of said sum of $2,434.84, which claim was duly rejected by the Commissioner of Internal Revenue on July 22, 1926.
4. Plaintiff and all the officers thereof have at all times borne true allegiance to the United States of America and have not, nor have any of them, in any way voluntarily aided, abetted, or given encouragement to rebellion against the United States. The plaintiff is a citizen of the United States, the sole owner of the claim herein stated, no action has been had thereon before Congress or any government department, and no part of same has ever been sold or assigned.
George M. Wilmeth, of Washington, D.C., for plaintiff.
Ralph C. Williamson and Charles F. Kincheloe, both of Washington, D.C., for the United States.
Before BOOTH, Chief Justice, and GRAHAM, GREEN, LITTLETON, and WILLIAMS, Judges.
WILLIAMS, Judge.
The plaintiff seeks to recover the sum of $2,434.84, which it is alleged, was wrongfully assessed and collected as excise taxes under section 900 of the Revenue Acts of 1918 and 1921. The taxes were levied and collected on the manufacture and sale by the plaintiff, during the period from January, 1920, to February, 1923, of certain motor-propelled combination hearses and ambulances.
The question to be determined is whether such motor-propelled vehicles are subject to the 3 per cent. tax imposed by subdivision (1) section 900, in the respective Revenue Acts of 1918 and 1921, or at the rate of 5 per cent. tax imposed by subdivision (2) thereof.
The plaintiff during the time in question was engaged in the business of manufacturing and selling hearses, ambulances, limousines, passenger cars, and combination hearses and ambulances.
The taxes in question were levied on the manufacture and sale by the plaintiff of combination hearses and ambulances, there being no question raised as to the taxes assessed and collected on hearses and ambulances manufactured and sold as such respectively.
The vehicles on which the taxes sought to be recovered were collected, were designed, and constructed in such manner that they were adaptable for use, and were used by those to whom they were sold as either hearses, or ambulances, or both hearses and ambulances.
Section 900 of the Revenue Act of 1918 (40 Stat. 1122) provided:
“That there shall be levied, assessed, collected, and paid upon the following articles sold or leased by the manufacturer, producer, or importer, a tax equivalent to the following percentages of the price for which so sold or leased —
“(1) Automobile trucks and automobile wagons (including tires, inner tubes, parts, and accessories therefor, sold on or in connection therewith or with the sale thereof), 3 per centum;
“(2) Other automobiles and motor cycles (including tires, inner tubes, parts, and accessories therefor, sold on or in connection therewith or with the sale thereof), except tractors, 5 per centum. * * *”
(The provisions of section 900 of the Revenue Act of 1921 are identical.)
Pertinent articles of Regulations No. 47, promulgated by the Treasury Department for the proper administration of these acts, are:
“Art. 11. Automobiles; Scope of tax. — An automobile truck, automobile wagon, or other automobile is a self-propelling vehicle designed to transport along highways and roads persons or property or both.
“Where such vehicle is capable of transporting both property and persons, the primary use for which it is designed will control as to whether it is taxable at 3 per cent under subdivision (1) as an automobile truck or automobile wagon, or at 5 per cent under subdivision (2) as an `other automobile’ * * *
“Art. 12. Automobile trucks and automobile wagons. — The tax is 3 per cent. of the price for which automobile trucks and automobile wagons are sold by the manufacturer.
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It applies to automobile trucks and automobile wagons primarily designed or adapted for transportation of property along highways and roads, although persons may incidently be transported at the same time. * * * Automobile hearses are taxable as automobile trucks or automobile wagons. * * *
“Art. 13. Other automobiles and motor cycles. — The tax is 5 per cent of the price for which such articles are sold by the manufacturer. It applies to automobiles primarily designed for carrying persons, although property may incidentally be transported at the same time, as outlined in article 11, and to other automobile chassis as defined in article 15. * * *
“Automobiles that are designed and primarily adapted for the transportation of persons as distinguished from property, are taxable as `other automobiles’: For example, * * * ambulances. * * *”
Under article 13 of Regulation No. 47 ambulances are taxable under subdivision (2) at the rate of 5 per cent. of the sales price. Automobile hearses under article 12 are taxable at the rate of 3 per cent.
The plaintiff in its returns made monthly for the period from January, 1920, to February, 1923, inclusive, reported its sales of such combination hearses and ambulances as sales of hearses, and paid taxes thereon at the rate of 3 per cent. The commissioner later held that the proper rate on the sales of such vehicles is 5 per cent. and assessed and collected the additional taxes in question.
The provisions of the regulations that hearses are taxable at a rate of 3 per cent. and ambulances at a rate of 5 per cent. are reasonable and seem to be a correct interpretation of the statutes imposing these taxes. The plaintiff does not contend that ambulances, as such, are not properly taxable at the 5 per cent. rate. It does contend, however, that the vehicles in question cannot be properly classified as ambulances. It is urged that they are designed, manufactured, and sold primarily for use as hearses, and that this is controlling in determining the applicable tax rate; that their use as ambulances is secondary and incidental to the primary purpose for which they are intended, and in fact used; that as sold by the plaintiff they are hearses and not ambulances.
Unfortunately for the plaintiff’s contention, it has stipulated (page 2, typewritten record of the evidence) that the motor vehicles in question are combination hearses and ambulances. The court is bound by this stipulation and has found the facts accordingly. They are manufactured and sold as combination hearses and ambulances.
If they are ambulances, they are none the less so because they can be and are also used for other purposes. These vehicles as sold and delivered by the plaintiff to its customers are completely equipped ambulances in every sense of the word. Before they can be used as hearses it is necessary to remove the accessories and ambulance equipment with which they are provided when delivered to purchasers.
We think the decision of the Commissioner that such motor-propelled combination hearses and ambulances are properly subject to the tax at the rate of 5 per cent. under the provisions of the Revenue Acts of 1918 and 1921 is correct.
The plaintiff’s petition should be dismissed. It is so ordered.
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