John S. Owen Lumber Co. v. Wisconsin Tax Commission

The following opinion was filed July 22, 1930: Rosenberry, C. J. We shall follow the same general method of treatment in this case that was followed in the Northwestern Lumber Co. v. Wis. Tax Comm. Case above referred to. Ftumpage Vallies. In this case the commission found that the plaintiff had on hand January 1, 1911, 258,319,752 feet of timber valued at $3 per M. There were purchases as follows: 1911. 15,043,000 ft. @ $1,181 per M. 1912. 18,832,000 ft. @ 1.84 per M. 1913. 8,265,000 ft. @ 2.07 per M. 1914. 3,569,000 ft. @ 3.66 per M. 1915. 2,630,000 ft. @ 1.70 per M. Adding to the amount on hand January 1, 1911, these purchases and deducting the amount cut and sold prior to January 1, 1916, the commission found that there was on hand January 1, 1916, 245,849,000 feet of the value of $2.3198 per M or the sum of $570,311.54. [394] There was not in this case as there was in the Northwestern Lumber Company Case a tract oí pine, the cutting of which materially diminished the average value of the timber. We are unable to determine from the record how the depletion value was established. In the year 1911 it was $4.06, in 1912 $5.55, in 1913 $4.95, in 1914 $5.40, and in 1915 $3.79. Nor are we able to determine in what year the purchased timber was cut. If the taxpayer in the years prior to 1916 applied a higher depletion rate than it was entitled to apply, that did not affect the value of the timber which remained on hand January 1, 1916. Allowing the depletion to stand at the higher rate permits the state in effect to recapture the amounts lost by reason of over-depletion in years prior to 1916. This the state has no authority to do' under the law. The timber valuation should be revised so as to show the depletion at the regular rate. The amount on hand as of January 1, 1916, should be the amount remaining of that on hand January 1, 1911, at $3 per M plus such amounts as were purchased thereafter and remained uncut on January 1, 1916, valued at the purchase price. Depletions should not have been reckoned at the higher rate in the prior years. The stumpage values applicable to the various years subsequent to January 1, 1916, must therefore be adjusted to conform to this rule so as to allow the plaintiff depletion at the full value of the timber on January 1, 1916. Inventory Values. What was said in the Rust-Owen Lumber Co. v. Wisconsin Tax Commission Case, decided herewith (ante, p. 385, 231 N. W. 870), in respect to inventories applies in this case and the determination of the commission is in that respect approved. With respect to surtaxes and constitutional questions raised, what was said in the Northwestern Lumber Co. v. Wisconsin Tax Commission Case, decided herewith (ante, [395] p. 372, 231 N. W. 865), applies in this case, and it is referred to and made a part hereof as if set out at length herein. By tke Court. — Judgment of the circuit court is reversed, and cause remanded with directions to transmit the record to the Tax Commission for restatement of so much of the determination as applies to stumpage values and for adjustment of the tax accordingly. In other respects the judgment of the circuit court is affirmed. The following opinion was filed November 11, 1930: