{ "id": 8300954, "name": "NAVISTAR FINANCIAL CORPORATION, Plaintiff/Appellant v. E. NORRIS TOLSON, in his official capacity as the SECRETARY OF THE DEPARTMENT OF REVENUE OF THE STATE OF NORTH CAROLINA, Defendant/Appellee", "name_abbreviation": "Navistar Financial Corp. v. Tolson", "decision_date": "2006-02-21", "docket_number": "No. COA05-352", "first_page": "217", "last_page": "228", "citations": [ { "type": "official", "cite": "176 N.C. App. 217" } ], "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": "620 S.E.2d 540", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12634184 ], "year": 2005, "pin_cites": [ { "page": "543", "parenthetical": "quoting Three Guys Real Estate v. Harnett County, 345 N.C. 468, 472, 480 S.E.2d 681, 683 (1997)" } ], "opinion_index": 0, "case_paths": [ "/se2d/620/0540-01" ] }, { "cite": "514 U.S. 175", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1338997 ], "weight": 11, "year": 1995, "pin_cites": [ { "page": "185", "parenthetical": "emphasis added" }, { "page": "271", "parenthetical": "emphasis added" }, { "page": "271-72" }, { "page": "197" }, { "page": "279", "parenthetical": "citation and internal quotation marks omitted" }, { "parenthetical": "citations omitted" }, { "page": "199-200" }, { "page": "281", "parenthetical": "emphasis added" }, { "page": "200" } ], "opinion_index": 0, "case_paths": [ "/us/514/0175-01" ] }, { "cite": "463 U.S. 159", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6192779 ], "weight": 6, "year": 1983, "pin_cites": [ { "page": "169", "parenthetical": "emphasis added" }, { "page": "556", "parenthetical": "emphasis added" }, { "page": "169-70" }, { "page": "556", "parenthetical": "citation and internal quotation marks omitted" }, { "page": "170", "parenthetical": "citations and internal quotation marks omitted" } ], "opinion_index": 0, "case_paths": [ "/us/463/0159-01" ] }, { "cite": "488 U.S. 252", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1494127 ], "weight": 10, "year": 1989, "pin_cites": [ { "parenthetical": "emphasis added" }, { "page": "616", "parenthetical": "emphasis added" }, { "page": "261" }, { "page": "261" }, { "page": "262" }, { "page": "266-67" }, { "page": "620" } ], "opinion_index": 0, "case_paths": [ "/us/488/0252-01" ] }, { "cite": "430 U.S. 274", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 12123142 ], "weight": 4, "year": 1977, "pin_cites": [ { "page": "278", "parenthetical": "citations and internal quotation marks omitted" }, { "parenthetical": "citations and internal quotation marks omitted" }, { "page": "279" } ], "opinion_index": 0, "case_paths": [ "/us/430/0274-01" ] }, { "cite": "303 U.S. 177", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6138632 ], "weight": 2, "year": 1938, "pin_cites": [ { "page": "185" }, { "page": "739" } ], "opinion_index": 0, "case_paths": [ "/us/303/0177-01" ] }, { "cite": "437 U.S. 267", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6178910 ], "weight": 3, "year": 1978, "pin_cites": [ { "page": "273" }, { "page": "204" } ], "opinion_index": 0, "case_paths": [ "/us/437/0267-01" ] }, { "cite": "98 L. Ed. 744", "category": "reporters:federal", "reporter": "L. Ed.", "weight": 2, "year": 1954, "pin_cites": [ { "page": "748" } ], "opinion_index": 0 }, { "cite": "347 U.S. 340", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11300709 ], "year": 1954, "pin_cites": [ { "page": "344-45" } ], "opinion_index": 0, "case_paths": [ "/us/347/0340-01" ] }, { "cite": "504 U.S. 298", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11728988 ], "weight": 10, "year": 1992, "pin_cites": [ { "page": "306", "parenthetical": "quoting Miller Brothers Co. v. Maryland, 347 U.S. 340, 344-45, 98 L. Ed. 744, 748 (1954)" }, { "page": "102", "parenthetical": "quoting Miller Brothers Co. v. Maryland, 347 U.S. 340, 344-45, 98 L. Ed. 744, 748 (1954)" }, { "page": "312" }, { "page": "106" }, { "page": "307" }, { "page": "103" }, { "page": "309" }, { "page": "104" }, { "page": "313" }, { "page": "107" } ], "opinion_index": 0, "case_paths": [ "/us/504/0298-01" ] }, { "cite": "531 S.E.2d 223", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 2000, "pin_cites": [ { "page": "225" }, { "page": "225-26" } ], "opinion_index": 0 }, { "cite": "138 N.C. App. 268", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11079369 ], "weight": 3, "year": 2000, "pin_cites": [ { "page": "272" }, { "page": "272" } ], "opinion_index": 0, "case_paths": [ "/nc-app/138/0268-01" ] }, { "cite": "232 S.E.2d 184", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "pin_cites": [ { "page": "192" } ], "opinion_index": 0 }, { "cite": "291 N.C. 451", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8558677 ], "year": 1977, "pin_cites": [ { "page": "465" } ], "opinion_index": 0, "case_paths": [ "/nc/291/0451-01" ] }, { "cite": "388 S.E.2d 134", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "pin_cites": [ { "page": "136" } ], "opinion_index": 0 }, { "cite": "326 N.C. 205", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 5307411 ], "year": 1990, "pin_cites": [ { "page": "209" } ], "opinion_index": 0, "case_paths": [ "/nc/326/0205-01" ] }, { "cite": "480 S.E.2d 681", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1997, "pin_cites": [ { "page": "683" } ], "opinion_index": 0 }, { "cite": "345 N.C. 468", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 53883 ], "year": 1997, "pin_cites": [ { "page": "472" } ], "opinion_index": 0, "case_paths": [ "/nc/345/0468-01" ] }, { "cite": "174 N.C. App. 78", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8350517 ], "year": 2005, "pin_cites": [ { "page": "83", "parenthetical": "quoting Three Guys Real Estate v. Harnett County, 345 N.C. 468, 472, 480 S.E.2d 681, 683 (1997)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/174/0078-01" ] }, { "cite": "218 S.E.2d 379", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1975, "pin_cites": [ { "page": "381", "parenthetical": "internal quotations and citation omitted" } ], "opinion_index": 0 }, { "cite": "288 N.C. 375", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568529 ], "year": 1975, "pin_cites": [ { "page": "378", "parenthetical": "internal quotations and citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/288/0375-01" ] }, { "cite": "209 S.E.2d 795", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "pin_cites": [ { "page": "798" } ], "opinion_index": 0 }, { "cite": "286 N.C. 24", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8563251 ], "year": 1974, "pin_cites": [ { "page": "29" } ], "opinion_index": 0, "case_paths": [ "/nc/286/0024-01" ] }, { "cite": "295 S.E.2d 436", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "pin_cites": [ { "page": "441", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "306 N.C. 618", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573268 ], "year": 1982, "pin_cites": [ { "page": "624", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/nc/306/0618-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 105-83", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 37, "pin_cites": [ { "page": "(a)", "parenthetical": "emphasis added" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 1039, "char_count": 28318, "ocr_confidence": 0.756, "pagerank": { "raw": 2.320019454247871e-07, "percentile": 0.7898842751063865 }, "sha256": "1db4f2fb52e39f01497989d20169e88181f522baf07b4c4959cbd5bf88ee887e", "simhash": "1:8b33140a9a3baefa", "word_count": 4483 }, "last_updated": "2023-07-14T16:09:49.892129+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges HUDSON and BRYANT concur." ], "parties": [ "NAVISTAR FINANCIAL CORPORATION, Plaintiff/Appellant v. E. NORRIS TOLSON, in his official capacity as the SECRETARY OF THE DEPARTMENT OF REVENUE OF THE STATE OF NORTH CAROLINA, Defendant/Appellee" ], "opinions": [ { "text": "CALABRIA, Judge.\nNavistar Financial Corporation (\u201cplaintiff\u2019) appeals the order denying its motion for summary judgment and granting E. Norris Tolson (\u201cdefendant\u201d) summary judgment. We affirm.\nPlaintiff, a Delaware corporation authorized to conduct business in North Carolina, is a subsidiary of International- Truck and Engine Corporation (\u201cInternational\u201d), also a Delaware corporation. Although plaintiff\u2019s truck sales finance business is not located in North Carolina, plaintiff extends credit to North Carolina truck dealers as well as third persons. Dealers acquire inventory such as commercial medium and heavy duty trucks, tractors, and related equipment through \u201cwholesale financing.\u201d The second type of financing plaintiff provides is \u201cretail financing\u201d for third persons purchasing trucks from dealers or directly from the manufacturer of the trucks.\nIn addition to direct loans, plaintiff purchases promissory notes and retains li\u00e9ns on personal property to secure payment of the obligation in the notes. Specifically, as promissory notes are executed by both North Carolina dealerships and third persons, plaintiff retains a security interest in each customer\u2019s personal property located in North Carolina. The wholesale financing branch of the business reserves liens on the current and after-acquired inventory of the dealer, however in the retail financing branch, liens are reserved on the financed equipment.\nFrom 1 January 2000 through 31 March 2003, plaintiff engaged in business with twenty-eight North Carolina dealerships. Over that same time period, plaintiff paid over seven hundred thousand dollars in North Carolina installment paper dealer taxes pursuant to N.C. Gen. Stat. \u00a7 105-83.\nOn 19 June 2003, plaintiff filed a complaint alleging the following: \u201ctaxes paid by [plaintiff] . . . pursuant to N.C. Gen. Stat. \u00a7 105-83 which result from [plaintiff\u2019s]\u201d wholesale and retail financing business \u201cduring the period of 1 January 2000 through 31 March 2003 were overpayments;\u201d taxes assessed pursuant to \u00a7 105-83 were invalid because plaintiff did not \u201cengage in North Carolina in the business of dealing in . . . installment paper ... in connection with\u201d either its wholesale or retail business \u201cwithin the meaning of N.C. Gen. Stat. \u00a7 105-83;\u201d \u201c[a]ll material activities incident to the assignment of promissory notes between International and [plaintiff] took place outside of North Carolina;\u201d and, plaintiff \u201cis entitled to a judgment against the [North Carolina] Department of Revenue refunding $693,788.79 . . . respecting] its wholesale financing operations\u201d and \u201c$14,830.62 . . . respecting] its retail financing operations.\u201d\nCross motions for summary judgment were heard on 27 October 2004. The court determined there was no genuine issue as to any material fact with regard to the claims stated in plaintiff\u2019s complaint and granted defendant\u2019s motion for summary judgment on 17 November 2004. Plaintiff appeals.\nI. Summary Judgment:\nPlaintiff first argues the trial court erred by denying their summary judgment motion and granting defendant the same due to the following assertions: N.C. Gen. Stat. \u00a7 105-83 is not applicable to either plaintiff\u2019s wholesale or retail financing business; that North Carolina' precedent requires a refund of taxes paid; and that material issues of fact remain rendering summary judgment inappropriate. We disagree.\n. Summary judgment \u201cshall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on' file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 56(c) (2005). \u201c[B]efore summary judgment will be properly entered, the moving party has the burden to show the lack of a triable issue of fact and . . . that he is entitled to judgment as a matter of law.\u201d Moore v. Crumpton, 306 N.C. 618, 624, 295 S.E.2d 436, 441 (1982) (emphasis added). The movant carries this burden \u201cby proving that an essential element of the opposing party\u2019s claim is nonexistent or by showing through discovery that the opposing party cannot produce evidence to support an essential element of his claim.\u201d Zimmerman v. Hogg & Allen, Prof\u2019l. Ass\u2019n., 286 N.C. 24, 29, 209 S.E.2d 795, 798 (1974). \u201c[A]ll inferences of fact from the proofs proffered at the hearing must be drawn against the movant and in favor of the party opposing the motion.\u201d Caldwell v. Deese, 288 N.C. 375, 378, 218 S.E.2d 379, 381 (1975) (internal quotations and citation omitted).\n1(a). Applicability of N.C. Gen. Stat. \u00a7 105-83:\nN.C. Gen. Stat. \u00a7 105-83, in pertinent part, provides\nEvery person engaged in the business of dealing in, buying, or discounting installment paper, notes, bonds, contracts, or evidences of debt for which, at the time of or in connection with the execution of the instruments, a lien is reserved or taken upon personal property located in this State to secure the payment of the obligations, shall submit to the Secretary . . . a full. . . statement ... of the total face value of the obligations dealt in, bought, or discounted within the preceding three calendar months and, at the same time, shall pay a tax of two hundred seventy-seven thousandths of one percent (.277%) of the face value of these obligations.\nN.C. Gen. Stat. \u00a7 105-83(a) (2005) (emphasis added). Plaintiff contends that \u201cbecause they do not in North Carolina carry on the business of an installment dealer,\u201d N.C. Gen. Stat. \u00a7 105-83 does not apply to either its wholesale or retail financing business.\n\u201cStatutory interpretation properly begins with an examination of the plain words of the statute.\u201d State ex rel. Banking Comm\u2019n v. Weiss, 174 N.C. App. 78, 83, 620 S.E.2d 540, 543 (2005) (quoting Three Guys Real Estate v. Harnett County, 345 N.C. 468, 472, 480 S.E.2d 681, 683 (1997)). Consequently, \u201c[w]here the language of a statute is clear and unambiguous, there is no room for judicial construction and the courts must construe the statute using its plain meaning.\u201d Burgess v. Your House of Raleigh, Inc., 326 N.C. 205, 209, 388 S.E.2d 134, 136 (1990). According to Black\u2019s Dictionary, \u201cplain meaning\u201d is \u201c[t]he meaning attributed to a document by giving the words their ordinary sense, without referring to extrinsic indications of the author\u2019s intent.\u201d Black\u2019s Law Dictionary 1002 (8th ed. 2004). Thus, the statute \u201cmust be given effeGt and its clear meaning may not be evaded by an administrative body or a court under the guise of construction.\u201d State ex rel. Utilities Comm\u2019n v. Edmisten, 291 N.C. 451, 465, 232 S.E.2d 184, 192 (1977).\nN.C. Gen. Stat. \u00a7 105-83 applies to any individual \u201cdealing in\u201d or buying installment paper obligations secured by personal property located in North Carolina. Simply put, there is no requirement in N.C. Gen. Stat. \u00a7 105-83 limiting the liability for this tax provision to individuals in the installment paper business only located in North Carolina. The essential nexus for application of the statute\u2019s tax provision is that the individual \u201cdealing in\u201d or buying installment paper secures repayment of the obligation by attaching a lien to personal property located in North Carolina. Thus, when appellant secured repayment of promissory notes by attaching liens on personal property located in North Carolina, N.C. Gen. Stat. \u00a7 105-83 became applicable. Consequently, appellant\u2019s assertion that the activities directly related to the actual transfer of the obligation \u2014 the execution, payment, and assignment of the promissory note \u2014 must occur within North Carolina to incur tax liability are unavailing. Therefore, because appellant engaged in the business of buying installment paper reserving liens on property located in North Carolina, appellant was properly assessed tax under N.C. Gen. Stat. \u00a7 105-83 since this statute imposes a tax for the privilege of carrying on business in the State of North Carolina. Furthermore, according to the plain language of the statute, there is no differentiation or distinction to be made as to whether the business is of the wholesale, retail or hybrid variety. Thus, based upon the above analysis, N.C. Gen. Stat. \u00a7 105-83 is applicable to both appellant\u2019s wholesale and retail financing business.\n1(b). Precedent:\nPlaintiff further contends Chrysler Fin. Co., LLC v. Offerman, 138 N.C. App. 268, 531 S.E.2d 223 (2000), is controlling precedent and consequently, necessitates a refund. This Court addressed two essential questions in Chrysler based upon an old version of N.C. Gen. Stat. \u00a7 105-83: \u201cwhether: (I) Chrysler Financial is engaged in the business of dealing in . . . installment paper within the meaning of N.C. Gen. Stat. \u00a7 105-83 and, if so; (II) [whether] Chrysler Financial engaged in this business in the State of North Carolina within the meaning of N.C. Gen. Stat. \u00a7 105-83.\u201d Id., 138 N.C. App. at 272, 531 S.E.2d at 225. This Court read the old statutory language to require that \u201cboth the assignment of a receivable take place in North Carolina and that a lien be reserved or taken upon property located in North Carolina.\u201d Id. Because the old version of N.C. Gen. Stat. \u00a7 105-83 required any person engaging in the business of dealing in installment paper to procure a state license if \u201cpurchasing such obligations in this State,\u201d this Court correctly ascertained in Chrysler that plaintiff had to engage in North Carolina in the business of an installment paper dealer for the tax to apply. However, in the instant case, there is no statutory command requiring a state license to buy obligations in this State as part of N.C. Gen. Stat. \u00a7 105-83. Thus, absent such a requirement, N.C. Gen. Stat. \u00a7 105-83 is applicable whether or not individuals engage in the business of an installment paper dealer in North Carolina as long as they reserve liens on property located in North Carolina to secure the obligation. Therefore, Chrysler is not controlling precedent and plaintiff is not entitled to a refund under its rationale.\n1(c). Material Issues of Fact:\nPlaintiff finally contends material issues of fact exist which precluded the trial court granting summary judgment for defendant. Plaintiff expressly contends the question before this Court is \u201cwhether there is a material issue of fact that [plaintiff] conducts activity in North Carolina which is sufficiently incident to the receipt of promissory notes from [International] to justify taxation. In section 1(a). of this opinion, \u201cApplicability of N.C. Gen. Stat. \u00a7 105-83,\u201d we determined \u201cwhen appellant secured repayment of promissory notes by attaching liens on personal property located in North Carolina, N.C. Gen. Stat. \u00a7 105-83 became applicable.\u201d Because we have already determined plaintiff engaged in activity warranting application of the \u00a7 105-83 tax, there is no genuine issue of material fact regarding plaintiffs actions within North Carolina as it relates to justification of the assessed tax under \u00a7 105-83. \u201cWhen any . . . activity incident to . . . [the] business [of dealing in, buying and/or discounting installment paper] occurs in North Carolina, G.S. 105-83 applies.\u201d 17 NCAC 4B.2905 (June 2002). The assignments of error relating to summary judgment, numbers one through five and eight through ten, are overruled.\nII. Due Process and Commerce Clauses:\n11(a). Due Process Clause:\nPlaintiff argues application of N.C. Gen. Stat. \u00a7 105-83 violates the Due Process Clause of the Fourteenth Amendment of the United States Constitution. We disagree. The United States Supreme Court has held \u201c[t]he Due Process Clause \u2018requires some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax[.]' \u201d Quill Corp. v. North Dakota, 504 U.S. 298, 306, 119 L. Ed. 2d 91, 102 (1992) (quoting Miller Brothers Co. v. Maryland, 347 U.S. 340, 344-45, 98 L. Ed. 744, 748 (1954)). Further, \u201c \u2018income attributed to the State for tax purposes must be rationally related to values connected with the taxing State.\u2019 \u201d Id. (quoting Moorman Mfg. Co. v. Bair, 437 U.S. 267, 273, 57 L. Ed. 2d 197, 204 (1978)). Since \u201c[d]ue process centrally concerns the fundamental fairness of governmental activity . . . due process . . . analysis requires that we ask whether an individual\u2019s connections with a State are substantial enough to legitimate the State\u2019s exercise of power over him.\u201d Id., 504 U.S. at 312, 119 L. Ed. 2d at 106.\nPlaintiff asserts there must be a sufficient nexus between the activity taxed and the activity of the taxpayer within the taxing statute for the application of the tax to be constitutional and not offend due process. Plaintiff contends the transfer of promissory notes from International to them is the activity being taxed and moreover, because this activity occurred exclusively in Illinois, they lack the necessary connections with North Carolina to justify imposition of the \u00a7 105-83 tax. Plaintiff\u2019s argument is. unavailing.\nIn the instant case, plaintiff has substantial connections necessary for the State to legitimately levy taxes upon its business and not violate the Due Process Clause. Plaintiff executed promissory notes with North Carolina dealerships as well as third persons and further, purchased contracts from International which had reserved liens upon each customer\u2019s personal property located in North Carolina. Numerous liens secured payments to the plaintiff for obligations in promissory notes. Thus, from 1 January 2000 through 31 March 2003, plaintiff engaged in wholesale and retail transactions with a variety of North Carolina businesses and individuals. In fact, plaintiff admits \u201c[they] do[] business in Noxth Carolina.\u201d Furthermore, the activity being taxed is'not, as plaintiff believes, the specific transfer of promissory notes, but rather, according to the express language of \u00a7 105-83, the business of \u201cdealing in\u201d installment paper for which liens are reserved upon personal property located in North Carolina. Accordingly, N.C. Gen. Stat. \u00a7 105-83 taxes business activities rationally related to values connected with North Carolina. Thus, according to Quill, swpra, there exists (1) plentiful minimum connections between the plaintiffs wholesale and retail business and \u2022North Carolina and (2) a rational relationship between the business activity taxed and values associated with North Carolina to justify the State\u2019s imposition of the \u00a7 105-83 tax. Consequently, plaintiff has \u201cpurposefully avail[ed] itself of the benefits of an economic market in [North Carolina].\u201d Id., 504 U.S. at 307, 119 L. Ed. 2d at 103. This assignment of error is overruled.\n11(b). Commerce Clause:\nThe plaintiff next argues application of N.C. Gen. Stat. \u00a7 105-83 violates the Commerce Clause, Article I, Section 8 of the United States. Constitution. We disagree. The Constitution expressly grants to Congress the power to \u201cregulate [cjommerce with foreign [n]ations, and among the several [s]tates[.]\u201d U.S. Const, art. I, \u00a7 8, cl. 3. Moreover, \u201cthe Commerce Clause is more than an affirmative grant of power; it has a negative sweep as well\u201d in that \u201c \u2018by its own force\u2019 [it] prohibits certain state actions that interfere with interstate commerce.\u201d Quill, 504 U.S. at 309, 119 L. Ed. 2d at 104 (quoting South Carolina State Highway Dep\u2019t v. Barnwell Bros., Inc., 303 U.S. 177, 185, 82 L. Ed. 734, 739 (1938)). This notion of \u00e1 \u201cdormant\u201d Commerce Clause means \u201c[a] State is ... precluded from taking any action which may fairly be deemed to have the. effect of impeding the free flow of trade between States.\u201d Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 278, 51 L. Ed. 2d 326, 330 n.7 (1977) (citations and internal quotation marks omitted).\nUnder the Complete Auto test, a state tax will be sustained as constitutional under the Commerce Clause so long as the \u201ctax is applied to an activity with a substantial nexus with the taxing State, is fairly apportioned, does not discriminate against interstate commerce, and is fairly related to the services provided by the State.\u201d Id., 430 U.S. at 279, 51 L. Ed. at 331. In Quill, the United States Supreme Court described the effect of the Complete Auto test in the following manner:\nThe second and third parts of that analysis, which require fair apportionment and non-discrimination, prohibit taxes that pass an unfair share of the tax burden onto interstate commerce. The first and fourth prongs, which require a substantial nexus and a relationship between the tax and state-provided services, limit the reach of state taxing authority so as to ensure that state taxation does not unduly burden interstate commerce.\nQuill, 504 U.S. at 313, 119 L. Ed. 2d at 107. A thorough analysis of each prong of the Complete Auto test reveals N.C. Gen. Stat. \u00a7 105-83 does not violate the Commerce Clause.\nFirst, as to the initial prong of the Complete Auto test, that the tax is applied to an activity with a substantial nexus to the taxing state, plaintiff merely reasserts their due process argument. This argument was refuted above and is equally unavailing here. In the instant case, plaintiffs business of dealing in installment paper has a substantial nexus with North Carolina. Plaintiff purchased installment paper from North Carolina wholesale and retail businesses and individuals and secured the multiple obligations to repay the promissory notes by reserving liens upon personal property located in North Carolina. Thus, application of N.C. Gen. Stat. \u00a7 105-83 to plaintiff\u2019s business complies with the first prong of Complete Auto.\nThe second prong of the Complete Auto test requires an answer to whether the tax is fairly apportioned. \u201c[T]he central purpose behind the apportionment requirement is to ensure that each State taxes only its fair share of an interstate transaction.\u201d Goldberg v. Sweet, 488 U.S. 252; 260-61, 102 L. Ed. 2d 607, 616 (1989) (emphasis added). \u201c[W]e determine whether a tax is fairly apportioned by examining whether it is internally and externally consistent.\u201d Id., 488 U.S. at 261.\nThe first. . . component of fairness in an apportionment formula is what might be called internal consistency \u2014 that is the formula must be such that, if applied by every jurisdiction, it would result in no more than all of the . . . business\u2019s income being taxed. The second and more difficult requirement is what might be called external consistency \u2014 the factor or factors used in the apportionment formula must actually reflect a reasonable sense of how income is generated.\nContainer Corp. of America v. Franchise Tax Bd., 463 U.S. 159, 169, 77 L. Ed. 2d 545, 556 (1983) (emphasis added). Consequently, \u201c[t]o be internally consistent, a tax must be structured so that if every State were to impose an identical tax, no multiple taxation would result.\u201d Goldberg, 488 U.S. at 261, 102'L. Ed. 2d at 617. Conversely, \u201c[t]he external consistency test asks whether the State has taxed only that portion of the revenues from the interstate activity which reasonably reflects the in-state component of the activity being taxed.\u201d Id., 488 U.S. at 262. Importantly, \u201c[t]he Constitution does not invalidate] an apportionment formula whenever it may result in taxation of some income that did not have its source in the taxing State.\u201d Container Corp., 463 U.S. at 169-70, 77 L. Ed. 2d at 556 (citation and internal quotation marks omitted). However, the United States Supreme Court \u201cwill strike down the application of an apportionment formula if the taxpayer can prove by clear and cogent evidence that the income attributed to the State is in fact out of all appropriate proportions to the business transacted ... in that State, or has led to a grossly distorted result.\u201d Id., 463 U.S. at 170 (citations and internal quotation marks omitted).\nPlaintiff failed to prove by \u201cclear and cogent evidence\u201d the revenue paid to North Carolina through application of the \u00a7 105-83 tax is either out of reasonable proportion to the business transacted by plaintiff or has led to a grossly distorted result. First, plaintiff renews their argument that the activity subject to the tax occurred outside of North Carolina and thus there was no apportionment provision in the statute. In fact, as to the \u201cexternal consistency\u201d branch of the apportionment prong, this is plaintiff\u2019s entire argument. This argument was dismissed under our analysis regarding due process and remains unavailing here as well for the activities taxed under \u00a7 105-83, including transacting with North Carolina wholesalers and retailers for installment paper and securing those debt obligations through liens reserved on personal property located in North Carolina, were certainly, according to Goldberg, supra, in-state components of the activity being taxed.\nSecond, plaintiff contends the tax violates the \u201cinternal consistency\u201d branch of the apportionment prong in that they would be subject to multiple taxation were another state to enact identical legislation to N.C. Gen. Stat. \u00a7 105-83. However, \u201c[i]nternal consistency is preserved when the imposition of a tax identical to the one in question by every other State would add no burden to interstate commerce that intrastate commerce would not also bear.\u201d Oklahoma Tax Comm\u2019n v. Jefferson Lines, 514 U.S. 175, 185, 131 L. Ed. 2d 261, 271 (1995) (emphasis added). Consequently, \u201c[t]hi's test asks nothing about the degree of economic reality reflected by the tax, but simply looks to the structure of the tax at issue to see whether its identical application by every State in the Union would place interstate commerce at a disadvantage as compared with commerce intrastate.\u201d Id., 131 L. Ed. 2d at 271-72.\nIn the instant case, if any other state passed a statute identical to N.C. Gen. Stat. \u00a7 105-83, that state would tax the following business activity: the purchase of installment paper when, at the time of the execution of the instrument, to secure that obligation, a lien was reserved upon personal property located within the taxing state. Practically speaking then, if Virginia passed such a statute, it would tax such business only if liens were reserved upon personal property located in Virginia, not North Carolina. Consequently, according to Goldberg, supra, there is no danger of multiple taxation because as to that individual business transaction only the state where liens are reserved could impose the tax. Thus, N.C. Gen. Stat. \u00a7 105-83 complies with the second prong of Complete Auto.\nThe third prong of the Complete Auto test requires an answer to whether the state tax discriminates against interstate commerce. \u201cA State may not impose a tax which discriminates against interstate commerce ... by providing a direct commercial advantage to local business.\u201d Jefferson Lines, 514 U.S. at 197, 131 L. Ed. 2d at 279 (citation and internal quotation marks omitted). Consequently, \u201cStates are barred from discriminating against foreign enterprises competing with local businesses and from discriminating against commercial activity occurring outside the taxing State[.]\u201d Id. (citations omitted).\nIn the instant case, N.C. Gen. Stat. \u00a7 105-83 does not discriminate against foreign enterprises competing with local businesses as each must pay the privilege tax if they purchase installment paper reserving liens upon property located in North Carolina. This in no way limits interstate commercial activity for no advantage is given to in-state businesses liable under N.C. Gen. Stat. \u00a7 105-83 for taxes due when compared to out-of-state businesses engaged in the identical practice. Thus, N.C. Gen. Stat. \u00a7 105-83 complies with the third prong of the Complete Auto test.\nThe fourth prong of the Complete Auto test requires an answer to whether the tax is fairly related to the services provided by the State. \u201cThe purpose of this test is to ensure that a State\u2019s tax burden is not placed upon persons who do not benefit from services provided by the State.\u201d Goldberg, 488 U.S. at 266-67, 102 L. Ed. 2d at 620. Moreover,\n[t]he fair relation prong . . . requires no detailed accounting of the services provided to the taxpayer on account of the activity being taxed . . . [for] [i]f the event is taxable, the proceeds from the tax may ordinarily be used for purposes unrelated to the taxable event. Interstate commerce may thus be made to pay its fair share of state expenses and contribute to the cost of providing all governmental services; including those services from which it arguably receives no direct benefit.\nJefferson Lines, 514 U.S. at 199-200, 131 L. Ed. 2d at 281 (emphasis added) (citation and internal quotation marks omitted). Consequently, \u201cthe measure of the tax [need only] be reasonably related to the taxpayer\u2019s presence or activities in the State.\u201d Id., 514 U.S. at 200.\nThe tax is reasonably related to plaintiff\u2019s presence and activities in North Carolina. Specifically, plaintiff executed promissory notes with North Carolina dealerships as well as third persons and further, retained liens through customers upon personal property located in North Carolina. Numerous liens secured payments on obligations in promissory notes. Thus, from 1 January 2000 through 31 March 2003, plaintiff engaged in wholesale and retail transactions with a variety of North Carolina businesses and individuals. Under the rationale provided in Jefferson Lines, supra, the tax was fairly related to the services provided by North Carolina. Thus, N.C. Gen. Stat. \u00a7 105-83 complies with the fourth and final prong of the Complete Auto test. This assignment of error is overruled.\nIn sum, we affirm the trial court\u2019s grant of defendant\u2019s motion for summary judgment and further find N.C. Gen. Stat. \u00a7 105-83 does not violate either the Due Process Clause or Commerce Clause of the United States Constitution.\nAffirmed.\nJudges HUDSON and BRYANT concur.\n. The old version of N.C. Gen. Stat. \u00a7 105-83, applicable in Chrysler, 138 N.C. App. at 272, 531 S.E.2d at 225-26, included the following pertinent language absent from the current version applicable in the instant case: \u201cEvery person... shall apply for and obtain from the Secretary a State license for the privilege of engaging in such business or for the purchasing of such obligations in this State . . . .\u201d (emphasis added).", "type": "majority", "author": "CALABRIA, Judge." } ], "attorneys": [ "Bell, Davis & Pitt, P.A. by D. Anderson Carmen and John W. Babcock for plaintiff-appellant.", "Attorney General Roy Cooper, by Special Deputy Attorney General Kay Linn Miller Hobart, for the State." ], "corrections": "", "head_matter": "NAVISTAR FINANCIAL CORPORATION, Plaintiff/Appellant v. E. NORRIS TOLSON, in his official capacity as the SECRETARY OF THE DEPARTMENT OF REVENUE OF THE STATE OF NORTH CAROLINA, Defendant/Appellee\nNo. COA05-352\n(Filed 21 February 2006)\n1. Taxation\u2014 wholesale and retail financing business \u2014 liens on property in North Carolina\nThere is no distinction in the statute imposing a tax on installment paper dealers, N.C.G.S. \u00a7 105-83, as to whether a business is of the wholesale, retail or hybrid variety, and the statute was applicable to a wholesale and retail business which engaged in the business of buying installment paper reserving liens on property located in North Carolina. Summary judgment was properly granted for defendant.\n2. Taxation\u2014 installment notes with liens on North Carolina property \u2014 due process\nPlaintiff has the substantial connections necessary for the State to legitimately levy taxes upon its business and the application of N.C.G.S. \u00a7 105-83 did not violate the Due Process Clause of the Fourteenth Amendment. The activity being taxed is not the transfer of promissory notes, but the business of dealing in installment paper for which liens are reserved upon personal property located in North Carolina.\n3. Taxation\u2014 wholesale and retail financing \u2014 Commerce Clause \u2014 no violation\nN.C.G.S. \u00a7 105-83 does not violate the Commerce Clause of the United States Constitution. A state tax will be sustained as constitutional so long as the tax is applied to an activity with a substantial nexus within the taxing state, is fairly apportioned, does not discriminate against interstate commerce, and is fairly related to the services provided by the state. This statute meets those criteria.\nAppeal by plaintiff from judgment entered 17 November 2004 by Judge John R. Jolly, Jr. in Wake County Superior Court. Heard in the Court of Appeals 19 October 2005.\nBell, Davis & Pitt, P.A. by D. Anderson Carmen and John W. Babcock for plaintiff-appellant.\nAttorney General Roy Cooper, by Special Deputy Attorney General Kay Linn Miller Hobart, for the State." }, "file_name": "0217-01", "first_page_order": 249, "last_page_order": 260 }