(dissenting in part).
If the cost of materials to the customer represented only 6% of the total charge to the customer I would have no hesitancy in agreeing that the materials were merely incidental, as opposed to a substantial, part of the service.
It seems to me that if careful attention is given to the facts shown and to the exact wording of the stipulation, no one can possibly tell what percentage of the charge to the customer is represented by materials. It appears that the total sales for the period under audit were $244,986.01 and that of this the cost to the company of materials used was $14,698.75 which admittedly is about 6% of the total billings to customers, the significant and important fact is that it is not shown, nor can it be determined, at what price these materials were charged or billed to the customer. The stipulation states that the “fair selling price” would be a markup of 100%. It can be assumed that in making charges to the customer the company did mark up at least the 100% which would mean that customers were charged a total of $29,397.50, or 12% of the total billing. But under the stipulation, which merely recites that the fair selling price would be a 100% markup, without saying what the company did in fact charge the customer. The actual charge to the customer could be 30%, 50% or any other portion of the billing. '
*248For instance, in a repair for which the customer was charged $10, the company could theoretically install a part costing the company 60 cents, use $5 labor to install it and bill the customer for $10, the additional $4.40 representing a profit on the part used. But under those facts the company could truthfully say that the cost of material to the company was only 6% of the total bill to the customer. The fact that the company does not say, and appear to be unwilling to specify on their billing, what portion of the charge to the customer represents service, and what portion represents charge for materials, leaves the way open for the company to actually make charges for, and therefore sell materials which in given instances may amount to a very high percentage, even approaching the total of a given bill, without collecting any sales tax therefor. The inequity of the situation and the unfairness to other taxpayers in failing to evenly distribute the tax burden is apparent.
From the foregoing it is obvious how important it is that the proportion of the materials bears to the total price should be gauged by the price of materials charged to the customer, rather than the amount it costs the seller.
It seems to me that the order made by the Commission with respect to the collection of tax on materials furnished in connection with the repair sales is so eminently fair, and so necessary from the standpoint of practical administration that it should be sustained. It simply required the company to collect 2% of the fair selling price of the materials if the company is willing to disclose what they are, and if the company is unwilling to do so, then imposes 2% of the total billing because it can’t be told what the correct amount would be.
I would affirm the order of the Commission in its entirety.