On January 25, 1956, the State Department of Revenue made a final assessment against Hotz GMC Trucks, Inc., a corporation, having its principal place of business in Mobile County, Alabama, for mileage tax claimed to be due under Act No. 664, appvd. July 5, 1940, Gen.Acts 1939, p. 1050 (Code 1940, Tit. 48, Art. 4, §§ 301(33) through 301(51), Cum.Pocket Part), for the period Sept. 9, 1955, through Oct. 31, 1955, in the amount of $292.33, the said sum including the tax, penalty and interest. Hotz appealed to the circuit court of Mobile County, in equity, where the trial court, after taking testimony ore tenus, set aside and cancelled the assessment. The State brings this appeal from that decree.
We are concerned here with §§ 1 and 2 of Act No. 664 (§§ 301(33) and 301(34), Tit. 48, Code 1940, Cum.Pocket Part), supra, which provide, in pertinent part, as follows:
The question presented is whether Hotz, as lessor of vehicles to Bemis Bros. Bag Company under the circumstances of this case, is liable for the mileage tax prescribed by the foregoing provisions of Act No. 664. We agree with the trial court's holding that it is not.
During the assessment period Hotz had six tractors and seven trailers under lease to Bemis, each of which was covered by a separate lease. It seems to us that the evidence clearly shows that Bemis had exclusive control of the operation and management of all the vehicles at all times during the assessment period. Bemis loaded them with its own property exclusively, operated them with its own drivers, supplied its own motor fuel, carried public liability insurance on its drivers and itself, and carried its own cargo damage insurance. It sent the vehicles where it pleased, when it pleased and how it pleased. Hotz had no voice in determining any of these factors. The drivers were employees of Bemis and were, in all respects, in the same status as Bemis' other factory employees, except that they were paid on a mileage rather than on an hourly basis. They belonged to the plant employees' union, had the same vacation, holiday, insurance, seniority and other benefits accorded other employees.
Bemis paid Hotz as rental the sum of eight cents per mile for each tractor and four cents per mile for each trailer. The rental was paid whether the vehicles were loaded, empty or overloaded, and whether operated on or off the public highways. There is no indication that the rental was to be computed on the basis of a reasonable compensation for the amount of Bemis' property transported. Hotz maintained the vehicles in running order, kept fire, theft and collision insurance coverage in force on them and also bought the license tags for them.
Hotz' primary business was the selling and servicing of GMC trucks and related equipment. The leasing of the trucks and trailers to Bemis was a sideline. (However, there is evidence tending to prove that Hotz leased or loaned trucks to Stone Container Corporation from time to time for "special runs". Whether any mileage tax is due in connection therewith is not here involved.) The leases with Bemis contained a provision giving it an option to purchase the vehicles.
There appears to be ample evidence supporting the finding of the trial, court that the leases between Hotz and Bemis were "not in any wise a subterfuge, but a bona fide business arrangement, entered into for a legitimate purpose," and that Hotz was not "controlling, operating or managing, during the time complained of, motor vehicles transporting property for compensation in this state, nor was it in any wise conducting a hauling operation whereby it became subject to the mileage tax."
We have held that the Mileage Tax Act of 1939 (Act No. 664, supra) "is an independent act dealing with taxation and distinct from the Alabama Motor Carrier Act, Art. 3, §§ 301(1) to 301(32), Title 48, Code 1940, as amended, and is separately administered. * * * [T]he tax act itself fixes the status of the taxpayer * * *." Griffin v. Edwards, 260 Ala. 12, 16, 68 So.2d 705, 708.
A motor carrier, as defined in § 1 of Act No. 664, supra, is required to pay the mileage tax prescribed by § 2 of said Act only if such motor carrier is "traversing the highways of the State subject to
Whether the State can levy a tax on the business of leasing vehicles for use by the lessee in transporting the lessee's own property is not a question now before us. And whether it is desirable that such business be taxed is a matter which addresses itself to the legislature. We do not think the Mileage Tax Act, as presently written, was intended, under the facts and circumstances of this case, to apply to Hotz.
The decree appealed from is due to be affirmed.
LIVINGSTON, C. J., and LAWSON, SIMPSON and MERRILL, JJ., concur.