Gross Income Tax Division v. L. S. Ayres & Co.

Concurring Opinion

Bobbitt, J.

I concur in the result and the reasoning of the majority opinion as to Classes Two, Three and Four.

Each transaction in Classes Two, Three and Four involved a service connected with and incidental to a sale. The clear intention of the customer was to pur*203chase a dress, suit, linoleum, carpet or draperies, as the case might be, and applying the rule in Samper v. Indiana Dept. of State Revenue (1952), 231 Ind. 26, 106 N. E. 2d 797, the transactions involved in these classes were indivisible contracts of sale of tangible personal property. Since such sales were made by a retail merchant from his established place of business income therefrom is taxable at % of 1%.

As to 'Class One, I desire to state more fully my reasons for the result reached.

The transactions in Class One consisted of contracts of sale between Indiana resident-customers and an Indiana retail merchant wherein the shipment and delivery of the merchandise purchased to persons-consignees outside the state were a part of the sales contract and necessary and essential to the consummation thereof.

The transactions, therefore, were not consummated until the merchandise purchased was received by the out of state consignee and the consummation of such transactions was an event which took place outside the state of Indiana and not within its borders. Cf: International Harvester Co. v. Dept. of Treasury (1944), 322 U. S. 340, 64 S. Ct. 1019, 88 L. Ed. 1313; Department of Treasury v. Wood Preserving Corp. (1941), 313 U. S. 62, 61 S. Ct. 885, 85 L. Ed. 1188.

The interstate shipment of the merchandise by appellee was an essential and necessary part of the sale and not merely incidental thereto. Cf: Department of Treasury v. Allied Mills, Inc. (1942), 220 Ind. 340, 42 N. E. 2d 34; Gross Income Tax Division, etc. v. Warner Bros. Pictures Dist. Corp. (1954), 233 Ind. 345, 118 N. E. 2d 117, (Dissenting opinion).

*204The source of the income here sought to be taxed was a sale which depended for its consummation upon the movement of the merchandise in interstate commerce. Such transactions, consummated by direct shipment of the merchandise purchased to out of state consignees are not intrastate transactions, although part of the sale took place in Indiana, but are interstate business, the income from which is not subject to the Indiana Gross Income tax. Freeman v. Hewit (1947), 329 U. S. 249, 67 S. Ct. 274, 91 L. Ed. 265; Gross Income Tax Dir. v. Surface Comb. Corp. (1953), 232 Ind. 100, 111 N. E. 2d 50; Gross Income Tax Division, etc. v. Warner Bros. Pictures Dist. Corp. (1954), 233 Ind. 345, 118 N. E. 2d 117.

Note. — Reported in 118 N. E. 2d 480.