{ "id": 8523559, "name": "In the Matter of: ROCK-OLA CAFE, T. K. TRIPPS, INC. 41-48752; ROCK-OLA CAFE, T. K. TRIPPS, INC. 92-41165; T. K. TRIPPS OF ASHEVILLE, INC. 11-26547; T. K. TRIPPS OF CHARLOTTE, INC. 60-55718; T. K. TRIPPS OF DURHAM, INC. 32-22431; T. K. TRIPPS OF GREENSBORO, INC. 41-42543; T. K. TRIPPS OF RALEIGH, INC. 92-33500; T. K. TRIPPS OF RIDGEWOOD, INC. 92-34759", "name_abbreviation": "In re Rock-Ola Cafe", "decision_date": "1993-08-17", "docket_number": "No. 9218SC311", "first_page": "683", "last_page": "686", "citations": [ { "type": "official", "cite": "111 N.C. App. 683" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "N.C. Gen. Stat. \u00a7 105-164.28", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1992, "opinion_index": 0 }, { "cite": "69 S.E.2d 505", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1952, "pin_cites": [ { "page": "511" } ], "opinion_index": 0 }, { "cite": "235 N.C. 203", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8622519 ], "year": 1952, "pin_cites": [ { "page": "211" } ], "opinion_index": 0, "case_paths": [ "/nc/235/0203-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 105-164.3", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1992, "pin_cites": [ { "page": "(15)" } ], "opinion_index": 0 }, { "cite": "166 S.E.2d 671", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1969, "pin_cites": [ { "page": "677" } ], "opinion_index": 0 }, { "cite": "275 N.C. 215", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8558315 ], "year": 1969, "pin_cites": [ { "page": "223" } ], "opinion_index": 0, "case_paths": [ "/nc/275/0215-01" ] }, { "cite": "151 S.E.2d 574", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1966, "pin_cites": [ { "page": "576" } ], "opinion_index": 0 }, { "cite": "268 N.C. 673", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8564745 ], "year": 1966, "pin_cites": [ { "page": "675" } ], "opinion_index": 0, "case_paths": [ "/nc/268/0673-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 105-164.6", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 1992, "pin_cites": [ { "page": "(a)" }, { "page": "214" } ], "opinion_index": 0 }, { "cite": "86 L.E.2d 710", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1985, "opinion_index": 0 }, { "cite": "472 U.S. 1001", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1512297, 1512555, 1512436 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/us/472/1001-03", "/us/472/1001-02", "/us/472/1001-01" ] }, { "cite": "322 S.E.2d 155", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1984, "pin_cites": [ { "page": "158" }, { "page": "158", "parenthetical": "citations omitted" }, { "page": "158" }, { "page": "215" }, { "page": "159" } ], "opinion_index": 0 }, { "cite": "312 N.C. 211", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4749915 ], "year": 1984, "pin_cites": [ { "page": "214" } ], "opinion_index": 0, "case_paths": [ "/nc/312/0211-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 105-164.4", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1992, "pin_cites": [ { "page": "(a)" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 400, "char_count": 6692, "ocr_confidence": 0.787, "pagerank": { "raw": 4.330312773995912e-07, "percentile": 0.9176838109094391 }, "sha256": "bb2c64c0e6048f894ad5b0ce2397a3dac812e8cf4e048713fea1e65ae7e82843", "simhash": "1:8afb0ccad0ddf4d2", "word_count": 1146 }, "last_updated": "2023-07-14T15:07:55.768244+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges GREENE and McCRODDEN concur." ], "parties": [ "In the Matter of: ROCK-OLA CAFE, T. K. TRIPPS, INC. 41-48752; ROCK-OLA CAFE, T. K. TRIPPS, INC. 92-41165; T. K. TRIPPS OF ASHEVILLE, INC. 11-26547; T. K. TRIPPS OF CHARLOTTE, INC. 60-55718; T. K. TRIPPS OF DURHAM, INC. 32-22431; T. K. TRIPPS OF GREENSBORO, INC. 41-42543; T. K. TRIPPS OF RALEIGH, INC. 92-33500; T. K. TRIPPS OF RIDGEWOOD, INC. 92-34759" ], "opinions": [ { "text": "ARNOLD, Chief Judge.\nFood, such as peanuts, pretzels, and other \u201cmunchies\u201d are offered by the respondent restaurants to customers purchasing beverages at their bars. There is no direct charge for the food at the bar, but the cost of food is included and recovered in menu-item prices and sales taxes are collected on the sale of the menu-items. In addition, because the restaurants are busiest during meal hours it is difficult for their managers to take time to eat, so meals are offered without charge to the managers. Here again, the cost of this food and beverage is recovered in the sale of food and beverages to customers of the restaurants.\nMatches are also provided free of charge to customers. But just as with the cost of bar food and food for the managers, the cost of the matches is included as a part of the menu-item prices, and recovered in sales to restaurant customers. Sales taxes are collected on all sales from the menu-items.\nPetitioners argue that the matches and food provided for bar customers and managers are subject to a use tax because customers purchase only the specific meals actually ordered from the menus, and because restaurant customers acquire no possession of the managers\u2019 meals, or of matches and bar food consumed by others. Such items, according to petitioners, are used by the taxpayers, not sold to customers.\nN.C. Gen. Stat. \u00a7 105-164.4(a) (1992) imposes a sales tax on persons engaged in the business of selling tangible personal property at retail in this State at a general percentage rate of the sales price of each item sold. See In re Assessment of Taxes Against Village Publishing Corp., 312 N.C. 211, 214, 322 S.E.2d 155, 158 (1984), appeal dismissed, 472 U.S. 1001, 86 L.E.2d 710 (1985). \u201cThe sales tax is, in effect, a tax imposed upon the retail merchant as a privilege tax for the right to engage in that business. The tax, is, however, designed to be passed on to the consumer.\u201d Id. at 214-15, 322 S.E.2d at 158 (citations omitted). N.C. Gen. Stat. \u00a7 105-164.6(a) (1992) imposes a complementary use tax \u201cupon the storage, use, or consumption in this State of tangible personal property purchased within and without this State for storage, use, or consumption within this State\u201d at the general percentage rate (the same rate that applies to a sale of the property) of the cost price of such property that is stored, used or consumed in this State. See id. at 214, 322 S.E.2d at 158.\nThe use tax \u201cis designed to complement the sales tax and to reach transactions which cannot constitutionally be subject to a sales tax. The sales tax and the use tax may often bring about the same result but \u2018they are different in conception. They are assessments upon different transactions and are bottomed on distinguishable taxable events.\u2019 \u201d Id. at 215, 322 S.E.2d at 159 (quoting Atwater-Waynick Hosiery Mills, Inc. v. Clayton, Comm\u2019r of Revenue, 268 N.C. 673, 675, 151 S.E.2d 574, 576 (1966)). \u201cA sales tax is assessed on the purchase price of property and is imposed at the time of sale. A use tax is assessed on the storage, use or consumption of property and takes effect only after such use begins.\u201d Colonial Pipeline Co. v. Clayton, Comm\u2019r of Revenue, 275 N.C. 215, 223, 166 S.E.2d 671, 677 (1969).\nN.C. Gen. Stat. \u00a7 105-164.3(15) (1992), in pertinent part, defines a \u201csale\u201d to mean \u201cany transfer of title or possession, or both, ... in any manner or by any means whatsoever, however effected and by whatever name called, for a consideration paid or to be paid.\u201d This definition does not specify who must pay the consideration or when that consideration must be paid.\nWe note that \u201c[t]ax statutes are to be strictly construed against the State and in favor of the taxpayer.\u201d Watson, Inc. v. Shaw, 235 N.C. 203, 211, 69 S.E.2d 505, 511 (1952).\nWe agree with the taxpayers\u2019 argument that the items here involved are not subject to a use tax because the items were purchased for resale. Sales taxes due on the items are fully paid by virtue of the corresponding increase in each menu-item price for which customers are charged.\nIn order for the taxpayers to be liable for payment of a use tax on the various items it must be shown that such items were purchased for purposes other than resale, and that no sales tax was paid when the purchases were made.\nThe record reveals that the taxpayers gave their suppliers a certificate of resale, a form which excuses the seller from collecting and the purchaser from paying a sales tax. N.C. Gen. Stat. \u00a7 105-164.28 (1992). Petitioners have shown that the respondent taxpayers did not pay a sales tax at the time of purchase, but there is no showing that the items were purchased for purposes other than resale. The taxpayers included the cost of all the various items in their menu-item prices and collected sales taxes on those prices. This is certainly equivalent to reselling the items.\nThe decision of the trial court is affirmed.\nAffirmed.\nJudges GREENE and McCRODDEN concur.", "type": "majority", "author": "ARNOLD, Chief Judge." } ], "attorneys": [ "Attorney General Lacy H. Thornburg, by Special Deputy Attorney General George W. Boylan, for petitioner appellants.", "Brooks, Pierce, McLendon, Humphrey & Leonard, by William G. McNairy, for respondent appellees." ], "corrections": "", "head_matter": "In the Matter of: ROCK-OLA CAFE, T. K. TRIPPS, INC. 41-48752; ROCK-OLA CAFE, T. K. TRIPPS, INC. 92-41165; T. K. TRIPPS OF ASHEVILLE, INC. 11-26547; T. K. TRIPPS OF CHARLOTTE, INC. 60-55718; T. K. TRIPPS OF DURHAM, INC. 32-22431; T. K. TRIPPS OF GREENSBORO, INC. 41-42543; T. K. TRIPPS OF RALEIGH, INC. 92-33500; T. K. TRIPPS OF RIDGEWOOD, INC. 92-34759\nNo. 9218SC311\n(Filed 17 August 1993)\nTaxation \u00a7 31.1 (NCI3d)\u2014 free matches and food at restaurants \u2014 no use tax\nItems such as matches and food offered at no charge to patrons of restaurant bars and .to restaurant managers are not subject to use taxes in North Carolina.\nAm Jur 2d, Sales and Use Taxes \u00a7\u00a7 218, 219.\nOn writ of certiorari from judgment entered 30 October 1991 by Judge Peter M. McHugh in Guilford County Superior Court. Heard in the Court of Appeals 26 February 1993.\nTaxpayers, a group of affiliated companies that operate restaurants, protested assessments by the Secretary of Revenue that items such as matches and food offered at no charge to patrons of restaurant bars, as well as restaurant managers, are subject to use taxes in North Carolina. The Tax Review Board confirmed the Secretary\u2019s decision that matches, food, and beverages offered at no charge to bar patrons and managers were subject to use taxes, but upon judicial review this decision was reversed in superior court, and refunds on the assessments were granted to taxpayers. Certiorari was granted by this Court upon petition by the Secretary and the Tax Review Board.\nAttorney General Lacy H. Thornburg, by Special Deputy Attorney General George W. Boylan, for petitioner appellants.\nBrooks, Pierce, McLendon, Humphrey & Leonard, by William G. McNairy, for respondent appellees." }, "file_name": "0683-01", "first_page_order": 713, "last_page_order": 716 }