1. The term "games," as used in § 609, of the Revenue Act of
1932, does not include jigsaw picture puzzles. P.
302 U. S.
17.
This section, headed "Tax on Sporting Goods," imposes a
manufacturer's sales tax on a wide variety of articles used in
sports and games, named specifically, and generally on "games and
parts of games," "and all similar articles commonly or commercially
known as sporting goods."
2. It is to be presumed that Congress, in enacting § 609 of the
Revenue Act of 1932, was aware that, under earlier like provisions,
no tax assessments were laid on sales of puzzles, and that Congress
knew that, in litigation over the question, there was proof that,
in commercial usage, jigsaw puzzles were never regarded as games,
but a recognized distinction was made between games and puzzles. P.
302 U. S.
20.
3. Where there is a reasonable doubt as to the meaning of a
taxing act, it should be construed most favorably to the taxpayer.
Id.
87 F.2d 272 affirmed.
Page 302 U. S. 17
Certiorari, 301 U.S. 675, to review a judgment reversing a
judgment of the District Court, 13 F. SUPP 913, in an action, tried
without a jury, to recover money paid as taxes.
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
Respondent, Aronson, trustee in bankruptcy of the Viking
Manufacturing Company, Inc., brought suit in the United States
District Court for Massachusetts to recover $37,021.63 exacted of
the bankrupt by the collector, under color of § 609, Revenue Act
1932, [
Footnote 1] c. 209, 47
Stat. 264, on account of jigsaw picture puzzles manufactured and
sold from June 21, 1932, to May 1, 1933.
The puzzles were made by cutting selected pictures backed up by
rigid cardboard into from 162 to 500 separate pieces. These were
sold to those who found diversion or amusement in putting them
together so as to reproduce the original picture.
Obviously the word "games" in the statute was intended to
designate instrumentalities used in playing them.
The collector maintained that the effort properly to arrange the
pieces was for amusement or diversion, and amounted to a game
within the appropriate definition of the word. Accordingly, he
said, these instrumentalities were taxable.
Page 302 U. S. 18
On the other hand, respondent insisted that the word "games"
refers to contests, physical or mental, conducted according to set
rules, undertaken for amusement or recreation or for winning a
stake, requiring the participation of two or more persons;
[
Footnote 2] also that the
sundry pieces were parts of a puzzle, a contrivance designed for
testing ingenuity -- something not within the scope of the statute.
[
Footnote 3]
The trial judge, having heard the cause upon pleadings and
evidence without a jury, sustained the collector's defense. The
Circuit Court of Appeals concluded otherwise, and directed judgment
for the trustee. It said:
"The section [609] is headed 'Tax on Sporting Goods.' The
articles or instrumentalities there specifically named are sporting
goods whether they are used in connection with games or in some
recreation or diversion other than a game. But the larger portion
of the article specifically named are all used in games of contest
between two
Page 302 U. S. 19
or more persons, and the question of construction is whether the
articles or instrumentalities intended to be covered by the phrase
'games and parts of games' means articles or instrumentalities used
in games or contest like the specific articles previously named in
the section, which are used in games of tennis, polo, baseball,
etc., all of which involve a contest. . . ."
"Furthermore, the particular article here sought to be taxed is
a puzzle. A puzzle is defined as 'something which perplexes or
embarrasses; a difficult problem or question; hence a toy,
contrivance, question or problem designed for testing ingenuity, as
a crossword puzzle.' Webster's New International Dictionary. A
jigsaw picture puzzle comes squarely within this definition -- 'a
contrivance . . . designed for testing ingenuity.' None of the
articles specifically named in the statute and used in games is a
contrivance designed for testing ingenuity. They are designed for
use in games of contest, while a jigsaw puzzle is not."
Section 600(f), c. 63, 40 Stat. 316, Revenue Act 1917, and §
900(5), c. 18, 40 Stat. 1122, Revenue Act 1918 (repealed in 1921),
laid a tax upon tennis rackets, golf clubs, baseball bats, etc.,
"chess and checker boards and pieces, dice, games and parts of
games." Jigsaw picture puzzles were then well known articles of
commerce. They go back at least to the first part of the last
century -- perhaps much farther. The same words, "games or parts of
games," appear again in the like section -- 609 -- Revenue Act
1932.
The court below pointed out that:
"A jigsaw puzzle was never taxed under Section 900(5) of the
Revenue Act of 1918. It was not taxed until after the passage of
Section 609 of the Revenue Act of 1932, when the government
attempted to tax it as a game. The act of 1932 became effective
June 6, 1932. On August 26, 1932, the Commissioner issued a ruling
stating that
Page 302 U. S. 20
jigsaw or die-cut picture puzzles were not taxable. On November
14, 1932, he issued a ruling that they were taxable. On February 7,
1933, he ruled that, after February 7, 1933, they were taxable if
they contained more than fifty pieces. And on April 20, 1933, he
ruled that they were taxable after June 21, 1932, if they contained
more than fifty pieces."
Ample evidence disclosed that, in commercial usage, jigsaw
picture puzzles were never regarded as games; also that the trade
recognized a definite distinction between puzzles and games. We
must assume that Congress had knowledge of these things, also knew
that jigsaw picture puzzles were not assessed for taxes under the
acts of 1917 and 1918, and, further, was not unmindful of the
uncertainties concerning the meaning of "game" disclosed by
Baltimore Talking Board Co. v. Miles, 280 F. 658, and
Mills Novelty Co. v. United States, 50 F.2d 476.
The claim for the taxpayer here does not rest upon an exception
to a general rule, but upon construction of general language found
in the act.
The Circuit Court of Appeals rightly concluded that:
"The words 'games and parts of games' bring into the list of
taxables only such other articles as are used in games of contest,
the same as those particularly named are and with which they are
closely associated."
Certainly we cannot say that this construction was clearly
erroneous. Other judges had accepted it. Nor can we affirm that the
statute, as framed, gave adequate notice to the bankrupt that its
puzzles were to be taxed.
Where there is a reasonable doubt as to the meaning of a taxing
act, it should be construed most favorably to the taxpayer.
Gould v. Gould, 245 U. S. 151.
"Tax laws, like all other laws, are made to be obeyed. They
Page 302 U. S. 21
should therefore be intelligible to those who are expected to
obey them."
Philadelphia Storage Battery Co. v.
Lederer, 21 F.2d
320, 321, 322.
Counsel for the collector maintain that
Baltimore Talking
Board Co. v. Miles, supra,
the "Ouija Board" case,
and Mills Novelty Co. v. United States,
supra, "Coin
Operated Gambling Machine" case, are in conflict with the ruling
under review.
These causes involved the act of 1918, and in both the judges
expressed sharply opposing views. Of course, the general language
of the opinions must be read in connection with the facts.
The ouija board is wholly different from the puzzle here under
consideration; nothing indicates that it was commonly regarded by
the trade as a puzzle, and, in an application for a patent, it had
once been described as a game. If the opinion construes the statute
as embracing all instrumentalities, not necessary for comfort,
whose chief use is to afford amusement and diversion, it is
obviously too broad. Knitting for diversion is not a "game;" nor is
horseback riding.
The coin-operated gambling machine has no resemblance to a
jigsaw picture puzzle, and what was said concerning it is not
helpful in the problem now before us.
Both of these causes were decided prior to the act of 1932, in
which the words of the 1918 act were repeated notwithstanding the
disclosed uncertainties concerning their meaning and with knowledge
of the fact that, theretofore, puzzles had not been assessed for
taxation under them.
The challenged judgment must be
Affirmed.
MR. JUSTICE STONE and MR. JUSTICE CARDOZO concur in the
result.
[
Footnote 1]
Revenue Act 1932.
"Sec. 609. Tax on Sporting Goods."
"There is hereby imposed upon the following articles, sold by
the manufacturer, producer, or importer, a tax equivalent to 10
percentum of the price for which so sold: tennis rackets, tennis
racket frames and strings, nets, racket covers and presses, skates,
snowshoes, skis, toboggans, canoe paddles, polo mallets, baseball
bats, gloves, masks, protectors, shoes and uniforms, football
helmets, harness and uniforms, basket ball goals and uniforms, golf
bags and clubs, lacrosse sticks, balls of all kinds, including
baseballs, footballs, tennis, golf, lacrosse, billiard and pool
balls, fishing rods and reels, billiard and pool tables, chess and
checker boards and pieces, dice, games and parts of games (except
playing cards and children's toys and games), and all similar
articles commonly or commercially known as sporting goods."
[
Footnote 2]
Webster's New International Dictionary, 2d ed., gives the word
game 17 definitions.
"2a An amusement or diversion; as, make-believe is a children's
game; formerly, specif., amorous play, 'Daughters of the
game.' Shak."
"
* * * *"
"4. A contest, physical or mental, conducted according to set
rules, and undertaken for amusement or recreation, or for winning a
stake. . . ."
[
Footnote 3]
"Puzzle. 2. Something which perplexes or embarrasses; a
difficult problem or question; an enigma; hence, a toy,
contrivance, question, or problem designed for testing ingenuity,
as a crossword
puzzle."
Webster's New International Dictionary (2d Ed.).