John W. McDougall Company v. Atkins

John W. McDougall Company, as a contractor, makes ducts and installs them in buildings. It paid the sales tax on all the sheet metal used, but did not pay any sales tax based on the cost of the labor used in fashioning this sheet metal into ducts. The State exacted an additional payment based on such labor cost. McDougall paid under protest on the theory that it is a tax on labor rather than a sales tax on tangible personalty, and sued to recover the deficiency assessment so paid. The Chancellor upheld the action of the State, and dismissed the bill. McDougall has appealed.

This may seem at…