Hajoca Corporation v. Clayton

Chief Justice Bobbitt

dissenting:

I dissent from the view that the additional one per cent sales and use tax authorized by Chapter 1228, Session Laws of 1969, is “a State tax.” The State does not impose the tax. Nor does the State receive for its use any of the revenues therefrom.

The Act required that the initial election be held on the same date in every county of the State. In this manner, the identity of the counties which wished to avail themselves of the provisions of the Act was determined. The Act authorized the voters in each county to determine whether their county would impose the tax. When the tax was imposed by a majority of the voters of a county, the provisions of the Act became operative in that county in respect of (1) the transactions to which the tax applies, (2) the collection of the taxes, and (3) the distribution of the revenues therefrom.

Since the Act enables the voters of every county to determine whether the tax is to be imposed by that county, it is not a local act in contravention of Article II, Section 29, of the Constitution of North Carolina. Whitney Stores v. Clark, 277 N.C. 322, 177 S.E. 2d 418, and cases cited. The special provision relating to Nash and Edgecombe Counties simply recognizes that the Nash-Edgecombe line divides the City of Rocky Mount and the absurdity of having a sales and use tax apply to one portion of the city but not to the other. In my opinion, this special provision appropriate to a unique situation affords no substantial basis for holding the Act is a local act rather than a general law.

The tax, when imposed in a particular county by the majority of the voters thereof, is not a tax on real and personal *572property, tangible or intangible, according to the value thereof, and therefore is not void as violative of Article V, Sections 3 and 5, of the Constitution of North Carolina. Sykes v. Clayton, Comr. of Revenue, 274 N.C. 398, 163 S.E. 2d 775, and cases cited.

The Act contains this provision: “(I)t is immaterial that the sale of tangible personal property is consummated by delivery in another county or that tangible personal property leased or rented is or may be located in another county . . . .” In contrast, as noted in the majority opinion, the statute applicable to Mecklenburg County considered in Sykes v. Clayton, Comr. of Revenue, supra, contains the following provision: “No tax shall be imposed where the tangible personal property is delivered to the purchaser at a point outside this State or Mecklenburg County.”

A sales tax is an excise or license tax. Sykes v. Clayton, Comr. of Revenue, supra at 404, 163 S.E. 2d at 779-780. A sale, if taxable at all, is taxable where the sale is made. The General Assembly may not constitutionally confer authority upon the voters of one county to impose and collect sales and use taxes except on transactions within the taxing county. Thus, in my opinion, the provision (s) of the Act which purports to authorize a taxing county, e.g., Buncombe County, to impose a tax on a sale made in Rutherford County, i.e., a nontaxing county, because the merchandise is delivered from the seller’s place of business in Buncombe to the purchaser in Rutherford, is invalid and unenforceable.

“Legislative power vests exclusively in the General Assembly, Constitution of North Carolina, Article II, and, except as authorized by the Constitution, as in case of municipal corporations, may not be delegated. Coastal Highway v. Turnpike Authority, 237 N.C. 52, 74 S.E. 2d 310. While an act, otherwise valid, may be enacted so as to take effect upon approval by a majority of the qualified voters of the affected locality, Cottrell v. Town of Lenoir, 173 N.C. 138, 91 S.E. 827, 16 C.J.S., Constitutional Law, Section 142, and 11 Am. Jur., Constitutional Law, Section 216, the General Assembly cannot constitutionally provide that the qualified voters in one governmental unit, e.g., a town, shall decide whether a statute shall be in force and effect elsewhere than in the territory comprising that particular governmental unit. Levering v. Board of Supervisors of Elec*573tions of Baltimore City, 137 Md. 281, 112 A. 301.” Taylor v. Racing Asso., 241 N.C. 80, 95, 84 S.E. 2d 390, 401.

The Act, as is customary in an extended legislative enactment, contains a separability clause. My vote is to hold invalid only that provision of the Act which purports to tax transactions outside the jurisdictional limits of the taxing county. With this exception, I would uphold the validity of the Act as against the other grounds on which plaintiffs attack it.

Accordingly, upon the facts of the present case, I would hold that plaintiff is entitled to recover the amount collected as taxes on sales made by plaintiff outside Buncombe County ($436.41) but not the amount collected as taxes on sales made by plaintiff within Buncombe County ($733.73).

Justices Sharp and Moore join in this dissenting opinion.