(dissenting).
I listened with much interest to the reading of the opinion by the Chief Justice, which now becomes the majority opinion in this case, during the consultation to ascertain what conclusion had been reached. After discussing broadly the tax laws levying the sales tax, the use tax and the excise tax in respect to many subjects 'covering this broad field, I concluded that I could not concur in the opinion.
I have since examined the opinion with much care and conclude that it is ambiguous, illogical and unsound. It concludes:
“We can find no authority in the Sales Tax Act to justify a holding that bona fide rentals of tangible personal property is subject tO‘ that act, and we are clear to the conclusion, that there was no legislative intent to impose, under the Use Tax Act, a tax upon any property sold subject to the Sales Tax Act; and no’ intent in the Use Tax Act to impose á tax upon any áctivity or incident subject to the tax under the Sales Tax Act. And since this taxpayer’s business is specifically and separately subjected to' a tax under the Sales Tax Act in Section 753(b) to the extent of 2% of the entire gross receipts of such business, and the picture produced from the films constitute, in a sense, this taxpayer’s stock in trade, there is no> reason to' assume that the legislature intended also' to tax the rental or the license fees paid by this taxpayer for the privilege of exhibiting such photo-plays.
“To the. contrary, there is every reason to. conclude that the legislature intended by the specific exemption contained in Section 789 to eliminate and exempt from the use tax any and all property purchased subject*531ed to the sales tax and each and every incident or activity specifically subjected to the sales tax.
“The appellant is therefore not liable under the allegations of the bill for the tax assessed.”
This conclusion is clearly based on the idea and concept that the tax levied exempts the use, storage and possession and is a property tax, while the authorities hold that it is an excise tax acquired by purchase as defined in subsection (i) Sec. 787, Title 51, Code of 1940, which is in the following language: “The term 'purchase’ means acquired for a consideration, whether such acquisition was effected by a transfer of title, or of possession, or of both, or a license to use or consume; whether such transfer shall have been absolute or conditional, and by whatsoever means the same shall have been effected; and whether such consideration be a price or rental in money, or by way of exchange or barter.”
The allegations in the bill show conclusively that each film delivered for use is a separate transaction and the compilation of the tax is based on the gross receipts of that spécific' film used by the theatre operator in its business. The effect of the shipment and delivery by the distributor to the operator of the theatre vests in the operator a special property right, which gives -him the right of possession, the right to store and the right to use the film in his business. A tax on that property is not contemplated by the act, but on its use, possession, storage and right to store the film. It follows as a necessary consequence that if there is a. purchaser as defined in the act, there is bound to be a purchase. And if the purchase is made in this state, it is subject to the sales tax act, which is passed on to the consumer. The contract or license under which the parties operate, as the allegations show, was a purchase made by the operator outside the State of Alabama and the films are shipped in interstate commerce and delivered and come to rest in Alabama, where the purchaser is engaged in business, and delivered to him. In one paragraph of the opinion, following the opinion on former appeal, it is held that when such interstate shipment ceased, there was no burden on interstate commerce. If the film was delivered to the carrier outside the state, f. o. b., the carrier became the agent of the operator to deliver the shipment as contemplated in the license or rental contract set out in the bill. Pilgreen v. The State, 71 Ala. 368.
The question of whether the carrier is the agent of the distributor or the purchaser is not important. Under the terms of the license act, the lease contract, the purchase is bound to have been in a foreign state. The clear intent and purpose of the legislature by defining “purchase” so as to bring the transaction here involved within the influence of the Use Tax Act clearly manifests that it was the purpose to tax the use or storage of the film acquired as defined. The license or lease to use shows that the business of the distributor was not subject to the jurisdiction of the state taxing authorities and, therefore, that the purchase and sale did not occur in Alabama and the levy made in the instant case was not made under the sales tax act but under the Use Tax Act.
I quote from the majority opinion:
“The tax imposed under the provisions of the Use Tax Act is specifically measured by a percentage of the retail sales price of the property. Sec. 788 [Title 51, Code of 1940], .
“The technical means of confining the use tax to interstate sales or sales (purchases) made outside of the state for use in the state, is accomplished by exempting from the provisions of the use tax any property sold under such circumstances as would make the sale taxable under the provisions of the Sales Tax Act. In other words, the Use Tax Act is drafted in such manner as to impose a use tax upon the use of tangible personal property within the state, at the same rate as the sales tax. In order to limit the use tax to interstate transactions, the Act is so- worded as to exempt from the measure of the tax all retail sales of tangible personal property made within the state. Sec. 789, Title 51, Code 1940. But for this provision, the Use Tax Act would have the effect of imposing an additional tax in the same amount as imposed by the Sales Tax *532Act. In this way, retail sales made within the state would be subjected to a double tax.”
These utterances overlook the fact that when a retail sale is made to a purchaser, he acquires the entire title to the property and the tax is passed on to him. The out of state seller or lessor is not subject to the jurisdiction of the state for taxing purposes. Therefore, the excise tax is levied on the purchaser within the meaning of said subsection (i) quoted above. See also § 787, subsections (h), (g) and (i) and § 788(b) and § 788, Title 51, Code of 1940. The prevailing opinion reads out of the statute the definition of “purchase” and the Use Tax Act makes the basis of the levy, when considered in connection with section (i), the gross receipts of the earning of each film, as shown in this case.
The use of materials for the construction of buildings by the manufacturer is not a question in this case and what the opinion says in that respect is not pertinent to the facts of this case.
We quote further from the prevailing -opinion: “If the legislature had intended to impose a tax upon the rental of tangible personal property within the state, in addition to imposing a tax upon the sale of such property, such tax would no doubt have been included in the Sales Tax Act. The rental of property within the state, so- far as the same involves the lessor as well as the lessee, is an event which transpires within the state, and is therefore a local activity, subject to state taxation. This is true whether the contract for the rental of property within the state is made by means of interstate commerce or is signed or executed wholly outside of the state. If the contract or rental provides for the renting of property actually situated within the state, the renting becomes a local event subject to state taxation, irrespective of the fact that the property to be rented is brought into the state in interstate commerce or is thereafter to be shipped out of the state in interstate commerce.”
This statement is clearly inconsistent with the taxing statutes.
Said opinion further observes: “If the legislature had imposed a rental tax only upon property shipped into the state in interstate commerce or purchased outside of the state, it would constitute a direct discrimination against interstate commerce, and such provision would therefore be invalid as being in conflict with the interstate commerce clause in the Constitution of the United States. * * * ” (Italics supplied.)
This statement of the law would destroy the power of the legislature to levy such tax and is unsound. As we held on the former appeal and was held in this opinion in another paragraph, when the shipment of the film came to rest at the destination of the shipment,. interstate commerce ended. There is nothing in such transaction to burden interstate commerce.
We quote from the opinion again: “If a rental tax had been intended to- apply to all transactions involving the rental of tangible personal property within the state, it would only have been necessary to include such tax in the Sales Tax Act. It would not be necessary to include a similar provision in the Use Tax Act.”
This is a matter left to the discretion of the legislature in passing the Use Tax Act to prevent evasion of taxation under the Sales Tax Act. Moreover it assumes, contrary to the facts, that the entire transaction occurred in Alabama.
Another inconsistent, unsound and misleading statement follows: “The Use Tax Act, as it now stands, if it should be construed as imposing a use tax upon rentals, measured by the amount of the rent paid, such construction would result in the imposition of a double tax for the reason that the sale of the property to the lessor for the purposes of rental to others would still be construed as a retail sale.”
No such transaction is involved in this case.
Another misleading and unsound statement in the opinion is:
“The lessor would be required to pay the tax upon such sale to him, whether sales tax or use tax, and this same property would also be subject to a tax measured by the *533amount of rental paid by the lessee to the lessor. The lessor could not claim that the sale to him was a wholesale sale for the reason that his purchase would not be for the purpose of resale; and the lessor would actually be making use of the property in renting it to his customers.”
No such question is presented in this case.
The following observations purporting to interpret the true meaning of subsection (i), Section 787, Title 51, Code of 1940, are ■obviously unsound: “This provision of the Use Tax Act was obviously intended to prevent evasions of the act where there is an actual sale of tangible personal property. It was designed to prevent camouflaging an actual sale by designating it as a lease, license, or rental and was not intended to include a bona fide rental of tangible personal property. In any event,' it can only apply to transactions consummated by the consumer outside the state of Alabama, and does not apply to transactions between the ■consumer and others in this state.”
If the rental and possession were acquired under the contract set out in the bill, and the films were delivered from outside the state from which the purchaser had ordered the film, this would bring the transaction clearly within the provisions of the Use Tax Act.
The opinion further observes: “But such a construction necessarily presupposes two consumers of the same property, and we are clear to the conclusion that the legislature never intended such a result. This is clearly demonstrated by such businesses as are engaged in the rental of tangible personal property purchased at retail, such as U-Drive-It businesses, the renting of skates by operators of skating rinks, the purchase of books to be used in a rental library, persons engaged in the renting of boats, bath suits, fishing tackle and other articles of personal property, and many others.”
These activities are foreign to the issues presented in this case and are wholly impertinent thereto.
The last sentence in the quotation from the New York case United Artists v. Taylor, 273 N.Y. 334, 7 N.E.2d 254, “In so far ns this sale originates and is consummated in New York City, it is subject to the tax”, shows that the court was dealing with a sales tax.
The quotation from, the Tennessee Statute, Public Acts of Tenn. of 1947, Chapter 3, Section 3:
“(c) At the rate of two^ percent (2%) of the gross proceeds derived from the lease or rental of tangible personal property, as defined herein, where the lease or rental of such property is an established business, or part of an established business, or the same is incidental or germane to said business.
“(d) At the rate of two percent (2%) of the monthly lease or rental price paid by lessee or rentee, or contracted or agreed to be paid by lessee or rentee, to the owner of the tangible personal property”, shows that this, in substance, is what is provided in the Use Tax Act in Alabama.
We further quote from the majority opinion: “Whenever the tax under sales or use tax act is extended to cover the rental of tangible personal property, measured by the amount of the rental (such as in New York, Louisiana and Tennessee), the lessor is not construed as the consumer, and the sale to' the lessor is not construed as a retail sale; and the levy of the tax upon the lessee, measured by the rental, is in lieu of any levy upon the lessor or upon the sale of the property to the lessor. Such a construction is necessary to avoid a double tax; or to- prevent what is termed as a pyramiding of the tax, or as imposing an intermediary tax.”
The only tax against the operator of the theatre is the license tax for doing business and this tax is passed on to its customers in the sale of tickets for attending the exhibition of the film. In effect the operator is not taxed any more than the seller is taxed who makes a retail sale, It passes on to the consumer. There is no double taxation. In the circumstances in the instant case, the tax is levied upon the use, consumption or storage of personal property acquired under a lease license entered into by the distributor in a foreign state. So 1he citation of authority and observations *534in respect to double taxation are inapplicable in the instant case.
We quote further from the majority opinion: “Under the Alabama rule, it was not necessary to impose a tax upon rental to prevent escapes, for the reason that the lessor could not buy free of tax- — the sale to him was by law construed as a retail sale. It is for this reason, no doubt, that the Legislature in its 1939 revision of the Sales and Use Tax Act did not attempt specifically' to change the Alabama rule.”
There was no necessity for changing the Alabama rule.
Many other utterances like these quoted from the majority holding, in my opinion, show that it is inconsistent, uncertain, ambiguous and their effect, if allowed to stand, trenches on the power of the legislature to levy such use tax as here involved.
I, therefore, respectfully dissent.