Pohnpei v. Lawrence

POHNPEI LAW REPORTS

VOL. 3

[3 PN.L.R. 94]

STATE OF POHNPEI,

Plaintiff

ONLINO LAWRENCE,

Defendant

Pohnpei Civil Action No. 128-87

Trial Division of the Pohnpei Supreme Court

May 12, 1988

Action by the State to recover use tax on two motor cars imported by the defendant into Pohnpei State. The tax was levied pursuant to D.L. 4L-187-79. The defendant denied liability to the use tax and challenged the constitutionality of the statute, contending that the tax was a tax on imports, that under Art. VIII, Section 1 and Article IX, Section 2(d) of the Constitution of the Federated States of Micronesia the Congress of the Federated States of Micronesia had the power to impose taxes, duties and tariffs on imports and that the States were prohibited from imposing such a tax.

The Trial Division of the Pohnpei Supreme Court, YOSTER CARL, Associate Justice, granting the plaintiff's complaint, held (1) that the burden was on the defendant to prove that the State use tax was a tax on imports; (2) that use tax, variously described as compensating tax, license, sales tax or privilege tax, could be levied on imported goods; (3) that the use tax was not a tax on the act of importation, nor was it a tax on the privilege of entering or leaving port, but rather a tax upon something which occurred after the merchandise had entered port, viz, the use, storage or consumption of the property within the State; (4) that though a tax based upon imports and use tax might secure the same revenues they were taxes on different transactions and purposes; (5) that a tax on imports was levied because of the entry of goods into a port of entry and was based upon the value or quality of the goods imported; and (6) that the use tax imposed by D.L. 4L-187-79 was not violative of Art. VIII, Section 1 and Art. IX, Section 2(d) of the Constitution of the Federated States of Micronesia.

[3 PN.L.R. 95]

1. Evidence - Burden of Proof

A party who alleges that a use tax imposed by statute is a tax based on imports must prove that the tax emanates from the exercise by the State Government of a power reserved exclusively to the national government to impose taxes, duties and tariffs based on imports.

2. Constitutional Law - Powers of National and States Governments - Taxation - Import Tax

The imposition by a State of a tax on goods because of their entry into a port of entry in amounts based upon the quality or value of imported goods, which tax must be paid to the Division of Revenue or other authority prior to release of the items from the port of entry represents an effort to exercise powers expressly delegated to the national government of the Federated States of Micronesia and is beyond the powers of the State and is null and void.

3. Constitutional Law - Taxation - Constitutionality of Tax - Test

A tax imposed on goods shall not be based upon imports if it is to pass the test of constitutionality under the Constitution of the Federated States of Micronesia.

4. Taxation - Use Tax

Use tax has been variously described, for example, as compensating tax, license, sales tax or privilege tax and any of these may be levied on imported goods.

5. Statutes - Construction

The purpose of section 2-501 of Subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L.4L-187-79 is to levy or impose on all merchandise, excluding staple foods as defined "a license or privilege tax upon every person for... use or consumption of such merchandise."

[3 PN.L.R. 96]

6. Taxation - Use Tax

Use tax may be levied on merchandise purchased outside the state and shipped into the state for use in the state.

7. Taxation - Use Tax

A tax upon use, after importation is over, is not a clog upon the process of importation at all, any more than a tax upon the income or profits of a business.

8. Taxation - Use Tax

A use tax is not a tax on the act of importation, nor is it a tax on the privilege of entering or leaving port, it is a tax upon something which occurs after the merchandise has entered port, viz., the use, storage or consumption of the property within the state.

9. Taxation - Use Tax

A use tax is a tax on the enjoyment of that which is purchased, and it may be levied on merchandise whether or not they are imported.

10. Taxation - Use Tax

A use tax is a tax imposed upon property when such property is put to use in the manner contemplated by a given taxing act, with presumption of ownership, and is an excise measured by the purchase price on the privilege of using property in the state.

11. Taxation - Use Tax and Import Tax

Though a tax based on imports and a use tax may secure the same revenues, they are taxes on different transactions and purposes.

[3 PN.L.R. 97]

12. Taxation - Import Tax

A tax on imports is levied because of the entry of goods into a port of entry, and is based upon the value or quality of the goods imported.

13. Taxation - Use Tax - Constitutional Law - Statutes - Constitutionality of Statute

The use tax imposed by section 2-501 of Subchapter G of the Pohnpei Code as amended by D.L.4L-187-79 is not violative of Art. VIII Section 1 and Art. IX Section 2(d) of the Constitution of the Federated States of Micronesia.

Counsel for Plaintiff: Herold Henry

Trial Counselor

Kolonia, Pohnpei 96941

Counsel for Defendant: Pro se

YOSTER CARL, Associate Justice

This action, brought by the plaintiff to recover use tax levied against the defendant pursuant to Section 205 of Subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L.4L-187-79, came before me for hearing on April 29, 1988.

FINDINGS OF FACT

The defendant in this action in 1984 purchased from Guam and imported into Pohnpei two Mazda Sedans in respect of which under the Pohnpei State Code Use Tax on General Merchandise

[3 PN.L.R. 98]

and Motor Vehicle provisions as amended by D.L.4L-187-79, he was required to pay use tax. The tax to be paid by the defendant was computed by the Pohnpei State Government Division of Revenue and Taxation, Department of the Treasury. But the defendant, owing to financial problems was unable to pay. By reason of that he entered into an agreement with a representative of the Pohnpei Government Department of Administration on the 13th day of September 1985, by which he, the defendant "shall be given a period of not more than 24 months to liquidate the total amount of $1,153.88, which [was] outstanding as of September 5, 1985. The liquidation period was to commence September 20, 1985 and end September 20,1987." However, after entering into the agreement to settle by instalments the defendant repudiated liability to the use tax and he now challenges the constitutionality of the use tax law.

DISCUSSION OF LAW

The defendant contends that when Article VIII, Section 1 and Article IX, Section 2(d) of the Constitution of the Federated States of Micronesia are read in conjunction the power to impose tax, duties and tariffs based on imports vests in the Congress of the

[3 PN.L.R. 99]

Federated States of Micronesia, and that the states and local governments of the Federation are prohibited from imposing such taxes, duties and tariffs. His wish to challenge Pohnpei State Statute D.L.4L-187-79 which imposes the use tax was "ignited" by the Supreme Court of the Federated States of Micronesia decision in Innocenti v. Wainit, 2 FSM Intrm. 173 (App. 1986).

The pertinent articles of the FSM Constitution provide as follows:

Art. VIII s. 1: "A power expressly delegated to the national government, or a power of such an indisputable national character as to be beyond the power of a state to control, is national power."

Art. IX s. 2(d): "The following powers are expressly delegated to Congress: . . . to impose taxes, duties, and tariffs based on imports. . ."(emphasis added)

Undoubtedly, Innocenti v. Wainit, 2 FSM Intrm. 173 (App. 1986) supports the contention that taking section 2 of art. IX of the FSM Constitution together, the nature of the expressly delegated power of the section strongly suggests those powers are intended to be exclusive to the national government. Accordingly any state legislation in those exclusive areas is violative of the FSM Constitution.

[3 PN.L.R. 100]

[1-2] For the defendant in this case to succeed, therefore, he must show that the use tax imposed by the State of Pohnpei is a tax emanating from the exercise by the Pohnpei State Government of a power reserved exclusively to the national government. In short, he must show that the use tax is a tax based on imports. In my opinion the defendant failed to discharge this burden. Innocenti defines taxes based on imports in the following words:

"taxes imposed on goods because of their entry into a port of entry in amounts based upon the quality or value of imported goods and which must be paid to the Division of Revenue [or other authority] prior to release of the items from the port of entry . . ."

The FSM Supreme Court decision in Innocenti shows that "Such a tax represents an effort to exercise powers expressly delegated to the national government," of the FSM "is beyond the powers of the state, and is null and void."

[3] One other thing is significant from Innocenti. It shows that in order to categorize the tax the Court looks at the reason, purpose, and effect of the tax. A tax shall not be based upon imports if it is to pass the test of constitutionality under the FSM Constitution.

[4] This is a case of first impression in this Court and Pohnpei lacks precedents to assist me in forming an opinion. I have

[3 PN.L.R. 101]

therefore looked at the United States cases for guidance. The cases show that the use tax has been variously described, for example, as compensating tax, license, sales tax or privilege tax. Any of these may be levied on imported goods. But it is immaterial by what name the tax is called. "The state court could not render valid, by misdescribing it, a tax law which in substance and effect was repugnant to the Federal Constitution; neither can it render unconstitutional a tax, that in its actual effect violates no constitutional provision, by inaccurately defining it. See McLead v. J.E. Dilworth Co. 322 US 1023,1026, citing Wagner v. City of Covington 251 US 95, 102, 104.

[5] The tax challenged by the defendant in this case is the Use Tax imposed by section 2-501 of Subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L. 4L-187-79. In my opinion the purpose of the section is quite clear since it levies and imposes on all merchandise, excluding staple foods as defined, "a license or privilege tax upon every person for... use or consumption." Though it cannot be denied that virtually all the merchandise on which the use tax is to be levied are imported, there is no reason to contend that the tax is a tax based on imports. Nothing suggests in the law

[3 PN.L.R. 102]

that the tax is to be levied solely on imported goods or by reason solely of their being imported. Nor does anything in the law show that the release of the merchandise on which that tax is to be levied is to be subject to the prior payment of the tax to the appropriate authority. In any case the use tax shall be due and payable by the consumer or user not more than sixty days following the commencement of the use or consumption of the merchandise within Pohnpei. This is not the case with a tax based on imports as defined by Innocenti.

The only thing that suggests a connection between the use tax and imported merchandise is the definition of "terminal operator" in section 2-500(g) of subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L. 4L-187-79 which says that "terminal operator means an individual who is designated by the District Treasurer to hold merchandise subject to the use tax at any port or point of entry into Pohnpei, until the purchaser has filled out the appropriate declaration forms necessary to release the merchandise." (emphasis added). It may be noted that the law does not require the terminal operator to hold the merchandise until the tax levied thereon is paid.

[3 PN.L.R. 103]

[6-8] Southern Pacific Co. v. Gallagher (1939) 306 US 167 shows that the use tax may be levied on merchandise purchased outside the state and shipped into the state for use in the state. But even if the use tax is levied on imported goods Cardozo J. said in Henneford v. Silas Mason Co. 300 US 577, 586 that a "tax upon use, or, what is equivalent for present purposes, a tax upon property after importation is over, is not a clog upon the process of importation at all, any more than a tax upon the income or profits of a business..."; and In re Los Angeles Lumber Products Co. Ltd. 45 Fed. Supp.77 holds that the use tax is not a tax on the act of importation, nor is it a tax on the privilege of entering or leaving port. It is a tax upon something which occurs after the merchandise has entered port, viz., the use, storage or consumption of the property within the state.

[9-10] A use tax is a tax on the enjoyment of that which is purchased. Connecticut Light and Power Co. v. Walsh 1 ALR 2d 453. Accordingly it may be levied on merchandise whether or not they are imported. It is a tax imposed upon property when such property is put to use in the manner contemplated by a given taxing act, with presumption of ownership. St. Minnesota v. Ristine D.C.

[3 PN.L.R. 104]

Minnesota 36 Fed Supp. 3, 5. The use tax is an excise measured by the purchase price on the privilege of using property in the state. Lane Construction Corp. v. Comp. of Treasury 178 A 2d 904, 906.

CONCLUSION

[11-13] In my opinion the use tax imposed by section 2-501 Subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L. 4L-187-79 is not a tax based on imports. I hold the contention that the tax at issue is a tax based on imports untenable. Innocenti is distinguishable from this case in that the law challenged in that case imposed a tax on imported items, whereas the Pohnpei use tax law imposes a tax upon the use or consumption of merchandise. A use tax is not the same as import tax. Though a tax based upon imports, and a use tax may secure the same revenues, they are taxes on different transactions and purposes. A tax on imports is levied because of the entry of goods into a port of entry. It is based upon the value or quality of the goods imported. Innocenti v. Wainit (supra). I accordingly hold that the use tax imposed by section 2-501 Subchapter G of the Pohnpei Code as amended by D.L. 4L-187-79 is not violative of art. VIII section 1 and art. IX section 2(d) of the FSM Constitution.

[3 PN.L.R. 105]

Judgment therefore will be for the plaintiff for the recovery from the defendant of use tax in the amount of $678.72 due as of July 16,1984, or any portion thereof remaining unpaid, plus penalty thereon at the rate of 5% per month until the tax and the penalties are paid in full. I should observe in this regard that the defendant in his pleadings requests the Court to allow "him to be liable for only the tax and not the interest" should he lose this case. He gives no reasons for this request and in his testimony did not even attempt to justify it. I, myself, cannot find any justification. I therefore deny the request.

It is Ordered, Adjudged, and Decreed accordingly.


	POHNPEI LAW REPORTS VOL. 3 [3 PN.L.R. 94] STATE OF POHNPEI, Plaintiff v. ONLINO LAWRENCE, Defendant Pohnpei Civil Action No. 128-87 Trial Division of the Pohnpei Supreme Court May 12, 1988 Action by the State to recover use tax on two motor cars imported by the defendant into Pohnpei State. The tax was levied pursuant to D.L. 4L-187-79. The defendant denied liability to the use tax and challenged the constitutionality of the statute, contending that the tax was a tax on imports, that under Art. VIII, Section 1 and Article IX, Section 2(d) of the Constitution of the Federated States of Micronesia the Congress of the Federated States of Micronesia had the power to impose taxes, duties and tariffs on imports and that the States were prohibited from imposing such a tax. The Trial Division of the Pohnpei Supreme Court, YOSTER CARL, Associate Justice, granting the plaintiff's complaint, held (1) that the burden was on the defendant to prove that the State use tax was a tax on imports; (2) that use tax, variously described as compensating tax, license, sales tax or privilege tax, could be levied on imported goods; (3) that the use tax was not a tax on the act of importation, nor was it a tax on the privilege of entering or leaving port, but rather a tax upon something which occurred after the merchandise had entered port, viz, the use, storage or consumption of the property within the State; (4) that though a tax based upon imports and use tax might secure the same revenues they were taxes on different transactions and purposes; (5) that a tax on imports was levied because of the entry of goods into a port of entry and was based upon the value or quality of the goods imported; and (6) that the use tax imposed by D.L. 4L-187-79 was not violative of Art. VIII, Section 1 and Art. IX, Section 2(d) of the Constitution of the Federated States of Micronesia. [3 PN.L.R. 95] 1. Evidence - Burden of Proof A party who alleges that a use tax imposed by statute is a tax based on imports must prove that the tax emanates from the exercise by the State Government of a power reserved exclusively to the national government to impose taxes, duties and tariffs based on imports. 2. Constitutional Law - Powers of National and States Governments - Taxation - Import Tax The imposition by a State of a tax on goods because of their entry into a port of entry in amounts based upon the quality or value of imported goods, which tax must be paid to the Division of Revenue or other authority prior to release of the items from the port of entry represents an effort to exercise powers expressly delegated to the national government of the Federated States of Micronesia and is beyond the powers of the State and is null and void. 3. Constitutional Law - Taxation - Constitutionality of Tax - Test A tax imposed on goods shall not be based upon imports if it is to pass the test of constitutionality under the Constitution of the Federated States of Micronesia. 4. Taxation - Use Tax Use tax has been variously described, for example, as compensating tax, license, sales tax or privilege tax and any of these may be levied on imported goods. 5. Statutes - Construction The purpose of section 2-501 of Subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L.4L-187-79 is to levy or impose on all merchandise, excluding staple foods as defined "a license or privilege tax upon every person for... use or consumption of such merchandise." [3 PN.L.R. 96] 6. Taxation - Use Tax Use tax may be levied on merchandise purchased outside the state and shipped into the state for use in the state. 7. Taxation - Use Tax A tax upon use, after importation is over, is not a clog upon the process of importation at all, any more than a tax upon the income or profits of a business. 8. Taxation - Use Tax A use tax is not a tax on the act of importation, nor is it a tax on the privilege of entering or leaving port, it is a tax upon something which occurs after the merchandise has entered port, viz., the use, storage or consumption of the property within the state. 9. Taxation - Use Tax A use tax is a tax on the enjoyment of that which is purchased, and it may be levied on merchandise whether or not they are imported. 10. Taxation - Use Tax A use tax is a tax imposed upon property when such property is put to use in the manner contemplated by a given taxing act, with presumption of ownership, and is an excise measured by the purchase price on the privilege of using property in the state. 11. Taxation - Use Tax and Import Tax Though a tax based on imports and a use tax may secure the same revenues, they are taxes on different transactions and purposes. [3 PN.L.R. 97] 12. Taxation - Import Tax A tax on imports is levied because of the entry of goods into a port of entry, and is based upon the value or quality of the goods imported. 13. Taxation - Use Tax - Constitutional Law - Statutes - Constitutionality of Statute The use tax imposed by section 2-501 of Subchapter G of the Pohnpei Code as amended by D.L.4L-187-79 is not violative of Art. VIII Section 1 and Art. IX Section 2(d) of the Constitution of the Federated States of Micronesia. Counsel for Plaintiff: Herold Henry Trial Counselor Kolonia, Pohnpei 96941 Counsel for Defendant: Pro se YOSTER CARL, Associate Justice This action, brought by the plaintiff to recover use tax levied against the defendant pursuant to Section 205 of Subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L.4L-187-79, came before me for hearing on April 29, 1988. FINDINGS OF FACT The defendant in this action in 1984 purchased from Guam and imported into Pohnpei two Mazda Sedans in respect of which under the Pohnpei State Code Use Tax on General Merchandise [3 PN.L.R. 98] and Motor Vehicle provisions as amended by D.L.4L-187-79, he was required to pay use tax. The tax to be paid by the defendant was computed by the Pohnpei State Government Division of Revenue and Taxation, Department of the Treasury. But the defendant, owing to financial problems was unable to pay. By reason of that he entered into an agreement with a representative of the Pohnpei Government Department of Administration on the 13th day of September 1985, by which he, the defendant "shall be given a period of not more than 24 months to liquidate the total amount of $1,153.88, which [was] outstanding as of September 5, 1985. The liquidation period was to commence September 20, 1985 and end September 20,1987." However, after entering into the agreement to settle by instalments the defendant repudiated liability to the use tax and he now challenges the constitutionality of the use tax law. DISCUSSION OF LAW The defendant contends that when Article VIII, Section 1 and Article IX, Section 2(d) of the Constitution of the Federated States of Micronesia are read in conjunction the power to impose tax, duties and tariffs based on imports vests in the Congress of the [3 PN.L.R. 99] Federated States of Micronesia, and that the states and local governments of the Federation are prohibited from imposing such taxes, duties and tariffs. His wish to challenge Pohnpei State Statute D.L.4L-187-79 which imposes the use tax was "ignited" by the Supreme Court of the Federated States of Micronesia decision in Innocenti v. Wainit, 2 FSM Intrm. 173 (App. 1986). The pertinent articles of the FSM Constitution provide as follows: Art. VIII s. 1: "A power expressly delegated to the national government, or a power of such an indisputable national character as to be beyond the power of a state to control, is national power." Art. IX s. 2(d): "The following powers are expressly delegated to Congress: . . . to impose taxes, duties, and tariffs based on imports. . ."(emphasis added) Undoubtedly, Innocenti v. Wainit, 2 FSM Intrm. 173 (App. 1986) supports the contention that taking section 2 of art. IX of the FSM Constitution together, the nature of the expressly delegated power of the section strongly suggests those powers are intended to be exclusive to the national government. Accordingly any state legislation in those exclusive areas is violative of the FSM Constitution. [3 PN.L.R. 100] [1-2] For the defendant in this case to succeed, therefore, he must show that the use tax imposed by the State of Pohnpei is a tax emanating from the exercise by the Pohnpei State Government of a power reserved exclusively to the national government. In short, he must show that the use tax is a tax based on imports. In my opinion the defendant failed to discharge this burden. Innocenti defines taxes based on imports in the following words: "taxes imposed on goods because of their entry into a port of entry in amounts based upon the quality or value of imported goods and which must be paid to the Division of Revenue [or other authority] prior to release of the items from the port of entry . . ." The FSM Supreme Court decision in Innocenti shows that "Such a tax represents an effort to exercise powers expressly delegated to the national government," of the FSM "is beyond the powers of the state, and is null and void." [3] One other thing is significant from Innocenti. It shows that in order to categorize the tax the Court looks at the reason, purpose, and effect of the tax. A tax shall not be based upon imports if it is to pass the test of constitutionality under the FSM Constitution. [4] This is a case of first impression in this Court and Pohnpei lacks precedents to assist me in forming an opinion. I have [3 PN.L.R. 101] therefore looked at the United States cases for guidance. The cases show that the use tax has been variously described, for example, as compensating tax, license, sales tax or privilege tax. Any of these may be levied on imported goods. But it is immaterial by what name the tax is called. "The state court could not render valid, by misdescribing it, a tax law which in substance and effect was repugnant to the Federal Constitution; neither can it render unconstitutional a tax, that in its actual effect violates no constitutional provision, by inaccurately defining it. See McLead v. J.E. Dilworth Co. 322 US 1023,1026, citing Wagner v. City of Covington 251 US 95, 102, 104. [5] The tax challenged by the defendant in this case is the Use Tax imposed by section 2-501 of Subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L. 4L-187-79. In my opinion the purpose of the section is quite clear since it levies and imposes on all merchandise, excluding staple foods as defined, "a license or privilege tax upon every person for... use or consumption." Though it cannot be denied that virtually all the merchandise on which the use tax is to be levied are imported, there is no reason to contend that the tax is a tax based on imports. Nothing suggests in the law [3 PN.L.R. 102] that the tax is to be levied solely on imported goods or by reason solely of their being imported. Nor does anything in the law show that the release of the merchandise on which that tax is to be levied is to be subject to the prior payment of the tax to the appropriate authority. In any case the use tax shall be due and payable by the consumer or user not more than sixty days following the commencement of the use or consumption of the merchandise within Pohnpei. This is not the case with a tax based on imports as defined by Innocenti. The only thing that suggests a connection between the use tax and imported merchandise is the definition of "terminal operator" in section 2-500(g) of subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L. 4L-187-79 which says that "terminal operator means an individual who is designated by the District Treasurer to hold merchandise subject to the use tax at any port or point of entry into Pohnpei, until the purchaser has filled out the appropriate declaration forms necessary to release the merchandise." (emphasis added). It may be noted that the law does not require the terminal operator to hold the merchandise until the tax levied thereon is paid. [3 PN.L.R. 103] [6-8] Southern Pacific Co. v. Gallagher (1939) 306 US 167 shows that the use tax may be levied on merchandise purchased outside the state and shipped into the state for use in the state. But even if the use tax is levied on imported goods Cardozo J. said in Henneford v. Silas Mason Co. 300 US 577, 586 that a "tax upon use, or, what is equivalent for present purposes, a tax upon property after importation is over, is not a clog upon the process of importation at all, any more than a tax upon the income or profits of a business..."; and In re Los Angeles Lumber Products Co. Ltd. 45 Fed. Supp.77 holds that the use tax is not a tax on the act of importation, nor is it a tax on the privilege of entering or leaving port. It is a tax upon something which occurs after the merchandise has entered port, viz., the use, storage or consumption of the property within the state. [9-10] A use tax is a tax on the enjoyment of that which is purchased. Connecticut Light and Power Co. v. Walsh 1 ALR 2d 453. Accordingly it may be levied on merchandise whether or not they are imported. It is a tax imposed upon property when such property is put to use in the manner contemplated by a given taxing act, with presumption of ownership. St. Minnesota v. Ristine D.C. [3 PN.L.R. 104] Minnesota 36 Fed Supp. 3, 5. The use tax is an excise measured by the purchase price on the privilege of using property in the state. Lane Construction Corp. v. Comp. of Treasury 178 A 2d 904, 906. CONCLUSION [11-13] In my opinion the use tax imposed by section 2-501 Subchapter G of Chapter 2 of the Pohnpei Code as amended by D.L. 4L-187-79 is not a tax based on imports. I hold the contention that the tax at issue is a tax based on imports untenable. Innocenti is distinguishable from this case in that the law challenged in that case imposed a tax on imported items, whereas the Pohnpei use tax law imposes a tax upon the use or consumption of merchandise. A use tax is not the same as import tax. Though a tax based upon imports, and a use tax may secure the same revenues, they are taxes on different transactions and purposes. A tax on imports is levied because of the entry of goods into a port of entry. It is based upon the value or quality of the goods imported. Innocenti v. Wainit (supra). I accordingly hold that the use tax imposed by section 2-501 Subchapter G of the Pohnpei Code as amended by D.L. 4L-187-79 is not violative of art. VIII section 1 and art. IX section 2(d) of the FSM Constitution. [3 PN.L.R. 105] Judgment therefore will be for the plaintiff for the recovery from the defendant of use tax in the amount of $678.72 due as of July 16,1984, or any portion thereof remaining unpaid, plus penalty thereon at the rate of 5% per month until the tax and the penalties are paid in full. I should observe in this regard that the defendant in his pleadings requests the Court to allow "him to be liable for only the tax and not the interest" should he lose this case. He gives no reasons for this request and in his testimony did not even attempt to justify it. I, myself, cannot find any justification. I therefore deny the request. It is Ordered, Adjudged, and Decreed accordingly.