{
  "id": 8527178,
  "name": "SPERRY CORPORATION v. MARK G. LYNCH, SECRETARY OF REVENUE OF THE STATE OF NORTH CAROLINA",
  "name_abbreviation": "Sperry Corp. v. Lynch",
  "decision_date": "1985-08-06",
  "docket_number": "No. 8410SC892",
  "first_page": "327",
  "last_page": "329",
  "citations": [
    {
      "type": "official",
      "cite": "76 N.C. App. 327"
    }
  ],
  "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": "285 S.E. 2d 1",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "year": 1981,
      "opinion_index": 0
    },
    {
      "cite": "248 Ga. 535",
      "category": "reporters:state",
      "reporter": "Ga.",
      "case_ids": [
        1183700
      ],
      "year": 1981,
      "opinion_index": 0,
      "case_paths": [
        "/ga/248/0535-01"
      ]
    }
  ],
  "analysis": {
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    "char_count": 4972,
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    "pagerank": {
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      "percentile": 0.2055855379985474
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    "sha256": "51fb1eb893ff46b3efb6434cb5f197663654d908a3b362f9c5d4f1fdd8d8ab08",
    "simhash": "1:c9c8ffa7f26b4e32",
    "word_count": 797
  },
  "last_updated": "2023-07-14T20:46:57.071049+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Judges Arnold and Cozort concur."
    ],
    "parties": [
      "SPERRY CORPORATION v. MARK G. LYNCH, SECRETARY OF REVENUE OF THE STATE OF NORTH CAROLINA"
    ],
    "opinions": [
      {
        "text": "PHILLIPS, Judge.\nThe taxation statute that governs this appeal, G.S. 105-164.4, in pertinent part reads as follows:\nThere is hereby levied and imposed, in addition to all other taxes of every kind now imposed by law, a privilege or license tax upon every person who engages in the business of . . . renting or furnishing tangible personal property ... in this State, the same to be collected and the amount to be determined by the application of the following rates against gross . . . rentals, to wit:\n(2) At the rate of three percent (3%) of the gross proceeds derived from the lease or rental of tangible per sonal property as defined herein, . . . (Emphasis supplied.)\nThe solitary question before us is whether the payments plaintiff received for maintaining the machines and equipment leased to its various lessees were \u201cderived from the lease or rental of tangible personal property\u201d within the contemplation of the above statute. We believe that they were and that the tax applied to them as a matter of course. The maintenance payments Sperry received were made because its leases required the lessees to make them; if the payments had not been made the lease agreements would have been broken and probably would have been cancelled. That the charges for using the different articles and maintaining them were stated separately on the various invoices or bills is immaterial; the obligation to pay both charges was established by the leases. In maintaining the leased articles Sperry did only what the lease and rental agreements required it to do and the lessees received only what the different leases entitled them to. Under the circumstances it seems plain to us that the maintenance payments plaintiff received from its many lessees were part of the gross proceeds derived from the renting of machines and equipment, and we affirm the judgment of the trial court.\nPlaintiffs reliance upon a ruling to the contrary that it obtained from the Georgia courts in Strickland v. Sperry Rand Corporation, 248 Ga. 535, 285 S.E. 2d 1 (1981) is misplaced. The Georgia statute is less inclusive than ours. \u00a7 92-3402a(c) (1974) and \u00a7 92-3403a (1979 Supp.) of the Georgia Code taxes \u201cthe gross lease or rental charge,\" or \u201cgross lease or rental proceeds.\u201d (Emphasis supplied.) Whereas G.S. 105-164.4 taxes all \u201cproceeds derived from the lease or rental\u201d of personal property. (Emphasis supplied.) The wider scope of our Act is self-evident, we think, and the trial judge simply applied it as the legislature wrote it.\nAffirmed.\nJudges Arnold and Cozort concur.",
        "type": "majority",
        "author": "PHILLIPS, Judge."
      }
    ],
    "attorneys": [
      "Hunton & Williams, by Edgar M. Roach, Jr. and David Dreifus, for plaintiff appellant.",
      "Attorney General Edmisten, by Assistant Attorney General Marilyn R. Rich, for defendant appellee."
    ],
    "corrections": "",
    "head_matter": "SPERRY CORPORATION v. MARK G. LYNCH, SECRETARY OF REVENUE OF THE STATE OF NORTH CAROLINA\nNo. 8410SC892\n(Filed 6 August 1985)\nTaxation \u00a7 15\u2014 mandatory maintenance charge in lease \u2014 derived from rentals of machines \u2014 taxable\nPayments received by plaintiff for maintaining leased machines and equipment were derived from a lease or rental of tangible personal property and were taxable under G.S. 105-164.4 where the maintenance payments were made because the leases required them; that the charges for using the different articles and maintaining them were stated separately on the various invoices or bills was immaterial.\nAppeal by plaintiff from Brewer, Judge. Judgment entered 10 April 1984 in Superior Court, Wake County. Heard in the Court of Appeals 16 April 1985.\nSperry Corporation, which designs, manufactures, leases and sells computers and other business machines and equipment, brought this action to recover $268,925.15 in sales taxes, penalties, and interest that it paid the Revenue Department under protest in 1982. The only phase of plaintiffs business that is involved in this action is its leasing of machines and equipment to various North Carolina lessees during the audit period 1 October 1975 through 31 August 1978. In each of the many leases in question Sperry agreed to furnish the equipment and to maintain it during the lease period and for each item leased the different lessees agreed to pay both a \u201cmonthly equipment charge\u201d and a \u201cbase monthly maintenance charge.\u201d If the lessees had not agreed for Sperry to maintain the machines and equipment and to pay Sperry\u2019s charges therefor Sperry would not have leased the machines and equipment to them. No lessee was given the option of doing its own maintenance or contracting therefor with a third party. Sperry billed its various lessees monthly and on each bill or invoice the rental and maintenance charges were stated separately. The taxes that plaintiff sues to recover were levied on the total amount that Sperry\u2019s various North Carolina lessees paid it for maintaining the leased articles during the audit period involved. After discovery was completed summary judgment was entered upon defendant\u2019s motion and plaintiffs action was dismissed.\nHunton & Williams, by Edgar M. Roach, Jr. and David Dreifus, for plaintiff appellant.\nAttorney General Edmisten, by Assistant Attorney General Marilyn R. Rich, for defendant appellee."
  },
  "file_name": "0327-01",
  "first_page_order": 361,
  "last_page_order": 363
}
