Foremost Dairies, Inc. v. State Tax Commission

Hunter, C. J.

(dissenting)—I dissent. RCW 82.04.270(2) provides a tax upon “functions essentially comparable to those of a wholesaler.” The majority opinion correctly points out that delivery trucks or vans are not considered to be retail outlets under said statute. However, we are not dealing in terms of mere delivery vans. The activity of Forenmst at the Renton and Northgate stations bears this out. The Renton station serves 18 Foremost delivery routes and 9 independent distributors. It has a cold storage room and automotive repair shop. Employees working there, in *764addition to the route drivers, are a drivers’ supervisor, four relief drivers, two loaders, and two office girls. The office girls check the products in and out, make settlements with the route drivers, and deposit cash received directly in the bank rather than forwarding it to the main plant. There is a listed telephone by means of which customers may place orders. Any such orders are referred to the main office for acceptance and processing. The main plant sends two vans daily to the station. These are unloaded into the cold storage room, and the route trucks are loaded during the night from that room.

The Northgate station, which serves 4 Foremost delivery routes, also serves 15 independent distributors. At North-gate there is a loading platform, a refrigerated storage room, and a listed telephone. Two loaders are employed at this station. The loaders unload the dairy products from the van which comes every day from the main plant and reload them onto the delivery trucks. At the two stations Foremost serves a total of 24 independent distributors, but only 22 company routes.

Foremost contends that both the tax commission and the trial court erred in holding that the Renton and Northgate stations are “retail stores or outlets” as. defined in RCW 82.04.270(2). It argues that its stations are not “retail outlets” because retail sales are not made from the stations, but rather are made from the main plant. This is not what the tax statute encompasses. It is a tax upon functions essentially comparable to those of a wholesaler:

(2) The tax imposed by this section is levied and shall be collected from every person engaged in the business of distributing in this state articles of tangible personal property, owned by them from their own warehouse or other central location in this state to two or more of their own retail stores dr outlets, where no change of title or ownership occurs, the intent hereof being to impose a tax equal to the wholesaler’s tax upon persons performing functions essentially comparable to those of a wholesaler, but not actually making sales: . . .

(Italics ours.)

*765Applying. the statute to the instant case, the test is whether the functional operations of the two stations are, in the language of RCW 82.04.270 (2), “essentially comparable to those of a wholesaler,” even though no actual sale is made and even “where no change of title or ownership occurs.”

The chief distinction between distribution by Foremost to the independent distributors and to its own delivery trucks is that in the latter instance there is no change of title or ownership of the dairy products. However, the statute, supra, specifically provides that this distinction- is not enough to justify the exemption as long as the function is otherwise comparable to a wholesale operation.

In summary, the record discloses that the functions performed by the Renton and Northgate stations include functions normally performed by retail stores or outlets. The stations can and do receive direct customer orders by telephone. The route drivers, who work from the stations, can and do solicit and accept orders from new prospective customers—other solicitation is prohibited by union, not company, rules. Surplus products are left at the stations after each day’s deliveries to be reloaded the following day. Route drivers have physical contact only with the stations. Foremost maintains a supervisor, relief drivers, and an office force at the Renton station. The stations are not mere loading platforms, and even though they may not be retail “stores” in the sense in which the word is commonly understood, they are within the meaning of retail “outlets” as used by the legislature in RCW 82.04.270(2), in that the entire operation of Foremost is essentially comparable to that of a wholesaler, although such sales are not actually made. See, Standard Oil Co. v. State, 57 Wn.2d 56, 355 P.2d 349 (1960).

The judgment should be affirmed.

Hamilton, J., concurs with Hunter, C. J.