On appeal from a final judgment of the Tax Court of New Jersey. 5 N.J. Tax 181 (Tax Ct. 1983).
Bischoff, Petrella and Brody.
The judgment of the Tax Court under review is affirmed essentially for the reasons express by Judge Conley in his opinion published at 5 N.J. Tax 181 (Tax Ct.1983).
The following observations are necessary to resolve contentions made by plaintiff in this court which are not covered in the published opinion.
In 1970 and 1971 Dow Jones purchased the printers here involved at a price of approximately $14,000,000 from General Electric. The unit price of the printers was $2,030. Dow Jones paid sales tax on this purchase to the States in which it took delivery of the tickets. Plaintiff has a warehouse in New Jersey and took delivery of many of the machines here and paid a sales tax for the machines delivered and used here as well as on some which were ultimately used in other States.
Plaintiff argues that the imposition of the sales tax on rental agreements constitutes unfair and inequitable double taxation. We disagree. The sales tax is imposed upon retail sales of tangible personal property. N.J.S.A. 54:32B-3(a). A lease of construction equipment has been held to constitute a
retail sale within the provisions of N.J.S.A. 54:32B-3(a). Mal Brothers Contracting Co. v. Division of Taxation, 124 N.J. Super. 55 (App.Div.1973). We see no distinction between a lease of construction equipment and the lease of equipment before us. In response to plaintiff's claim of double taxation the deputy attorney general pointed out that at the time of purchase the plaintiff could have sought an exemption from the sales tax pursuant to N.J.S.A. 54:32B-2(e)(1)(A). Plaintiff alone is responsible for its present predicament.
Plaintiff also argues that it is subject to discriminatory treatment due to the imposition of the tax which places it at an economic disadvantage with respect to its competitors. The factual basis for this argument is as follows. Until the latter part of 1967 plaintiff charged its News Service subscribers without breaking out separate charges for the News Service or the tickers. With the advent of CRTs this practice was changed so that a subscriber to the News Service who did not use a ticker was not charged for one. However, a subscriber who takes the News Service over a CRT is charged $140 per month in addition to the charge for the News Service. This monthly fee has component parts which include charges for the printer, a CRT display fee, the cost of the telephone lines and a service and maintenance charge. Plaintiff's records contained a breakdown, by customer, of the charges for the News Service and for the use of the ticker. The sales tax is not assessed on the News Service.
On the other hand, competitor news services subscribers have the option of using a teleprinter similar to the tickers utilized by the plaintiff. If a subscriber takes the news service but not the teleprinter it pays less than the subscriber who uses the teleprinter. The bill submitted to the subscriber does not break out separate charges for the service and the printer.
In response to this charge of unfair and discriminatory treatment the Attorney General points out that this sales and use tax is a self-executing tax which must be reported and paid by the
taxpayer. The defendant does not audit and assess each and every taxpayer, but rather undertakes to audit some taxpayers in accordance with its standard auditing and enforcement procedure. If the auditor consequently finds a deficiency an assessment is made. The fact one taxpayer is subject to an audit and assessment while another similarly situated may not have been, even though subject to the same law, does not constitute discrimination against the audited taxpayer. Nor does it represent approval of the practices of the unaudited taxpayer. In fact, this is probably the first audit conducted of this type of ...