Case Title: Berdahl v. Gillis

Citation: 136 N.W.2d 633

Docket Number: 

State: south-dakota

Court: South Dakota Supreme Court

Date: 1965-09-02T00:00:00Z

Document:
136 N.W.2d 633 (1965) James O. BERDAHL, Petitioner-Appellant, v. Bruce D. GILLIS, as Commissioner of Revenue of the State of South Dakota, Respondent. No. 10266. Supreme Court of South Dakota. September 2, 1965. *634 Christopherson, Bailin, Wilds & Bailey and Mead Bailey, Sioux Falls, for petitioner-appellant. Frank L. Farrar, Atty. Gen., John Dewell, Asst. Atty. Gen., Pierre, for respondent. RENTTO, Judge. The legislature in its 1965 session broadened the base of our sales tax by extending it to certain services and professions. The petitioner, a citizen, resident and taxpayer of the state, licensed to practice law therein and engaged in the active practice thereof, claiming that such act is unconstitutional, on May 13, 1965, instituted this proceeding for a writ of prohibition to restrain the respondent from taking any action thereunder. His right to maintain the proceeding is not questioned. On June 17, 1965 the trial court held the law to be constitutional and denied his application. This appeal is from that action. The act in question, H.B. 743, now Ch. 296, Laws of 1965, approved on March 18th and effective on July 1st provides: His claim here is that the law is unconstitutional on its face for these reasons: While his reply brief mentions a letter by the Commissioner in the nature of an interpretation of the act it should be noted that nothing of this kind was before the trial court. Consequently, it is not before us. Our function is limited to a review of the case presented to the trial court. We think it proper to first set out some of the general principles in the light of which we must approach the specific problems here presented. As was stated by this court in State of ex rel. Botkin v. Welsh, 61 S.D. 593, 251 N.W. 189: As is made clear in the above quoted statements the power to tax is essentially a legislative function. However, there are circumstances under which there may be delegated to an administrative officer, board or tribunal, some aspects of the taxing process, if, in making such delegation, the legislature retains sufficient and proper control over those aspects which are not delegable, and if a sufficient guide or standard is laid down by the legislature for the guidance of the administrative officials. 51 Am.Jur., Taxation, § 144 and § 148; 84 C.J.S. Taxation § 8. By SDC 57.0101(16) it was made the duty of the Secretary of Finance and he was given power: In SDC 1960 Supp. 57.01A05 these duties and powers were transferred to the Commissioner of Revenue. In accordance with the general rule we have often held that the legislature may delegate to an administrative body or officer the duties of carrying out its enactments if it adopts a clearly declared legislative policy and lays down understandable standards to guide the administrative action. Affiliated Distillers Brands Corp. v. Gillis, S.D., 130 N.W.2d 597. The petitioner apparently does not claim that the act does not contain a clearly declared legislative policy, but he does urge that section 1 of the act does not contain sufficient standards as to the gross receipts which are taxable nor as to those that are exempt. From this he proceeds to argue that the Commissioner in carrying out the act would be legislating. We do not agree. As is so common in many areas of the law the rule as to understandable guidelines is easy of statement, but more difficult in its application. In the fairly recent past we have held rather generalized and imprecise statements to be sufficiently definite standards for the administrative action authorized. The following are indicative of our attitude in applying the rule: Relieving an employer of requirements of the Workmen's Compensation Law on proof of his solvency and financial ability to pay the compensation required by the act, Utah Idaho Sugar Co. v. Temmey, 68 S.D. 623, 5 N.W.2d 486; disapproving articles of incorporation of a bank if public convenience and necessity do not justify its organization, Wall v. Fenner, 76 S.D. 252, 76 N.W. 722; permitting the issuance of revenue bonds by the Board of Regents for the construction of dormitory or apartment housing where the same are necessary and feasible. Boe v. Foss, 76 S.D. 295, 77 N.W.2d 1. In Affiliated Distillers Brands Corp. v. Gillis, supra, relied on by petitioner, we struck down the Commissioner's administrative action not because of the insufficiency of standards, but because of the absence of any standards. Section 1 of the act imposes the tax upon "the gross receipts of any person from the engaging or continuing in the practice of any profession or of any business in which the service rendered is of a professional, technical or scientific nature and is paid for on a fee basis, or by a consideration in the nature of a retainer * * *". It further provides that the tax shall not apply "to those persons engaged in the practice of the healing arts and veterinarians as the same are defined in SDC 1960 Supp. 27.0401 and SDC 40.0201, and who are licensed by an examining board under the laws of the state of South *637 Dakota." We think this language sufficiently definite so as to afford the Commissioner practical standards for applying the act without exercising legislative power. Petitioner is critical of the act because it is not more explicit in stating who are subject to the act and who are exempt. He poses many hypothetical situations in the future operation of the act and suggests that the Commissioner in resolving them would be exercising the legislative function. Obviously the law would be easier of administration if it were more precise, but with the complexities of present day social and economic problems this is not always possible or practical. "Occupation and privilege tax statutes are frequently lacking in any extended definition of the precise occupation or privilege subject to taxation, and it consequently devolves upon the courts to find a practical definition." 51 Am.Jur., Taxation, § 320. Although the Commissioner may be required to make such determinations in the first instance, they must remain undecided until presented as an issue before the courts. Great Northern Ry. Co. v. Graff, 71 S.D. 595, 28 N.W.2d 77. See also In re Ebeling's Estate, 169 Wis. 432, 172 N.W. 734, 4 A.L.R. 1519. The Commissioner's interpretation and construction of the terms of the statute are only an administrative guess at a judicial question. Utah Hotel Co. v. Industrial Commission, 107 Utah 24, 151 P.2d 467, 153 A.L.R. 1176. Consequently, we think it clear that when the Commissioner interprets the statute he is not legislating. Mere difficulty in ascertaining the meaning of a statute, or the fact that it is susceptible of different interpretations will not render it void. An act, although somewhat vague and uncertain, or not as clear as it might be, may nevertheless be valid, unless it is so imperfect as to render it impossible to execute it or to ascertain the legislative intent. 82 C.J.S. Statutes § 68. In People ex rel. Christensen v. Board of Education of School Dist. No. 99, 393 Ill. 345, 65 N.E.2d 825, the rule is stated thus: "It is only when the legislative act is so indefinite and uncertain that the courts are unable, by accepted rules of construction, to determine with any reasonable degree of certainty what the legislature intended, or when it is so incomplete and inconsistent that it cannot be executed, that constitutes such indefiniteness and uncertainty that will invalidate the law." Many cases supporting this statement are noted under Statutes, 47 and 49 in the American Digest System. Viewing the act in the light of these rules we are unwilling to hold that it is so vague as to be invalid. In support of his contention that the act is fatally defective because of vagueness, petitioner relies heavily on State v. Dove, 75 S.D. 460, 67 N.W.2d 917. In that case the defendant was under sentence of death on his conviction of the crime of first degree kidnapping. It is apparent from the opinion that the court in holding the statute invalid because of the uncertainty of its language was concerned with the punishment involved. In the case at bar the trial judge stated in his memorandum opinion that in the face of the principles of construction above quoted from the Botkin v. Welsh case he "would not apply the rule stated in State v. Dove". We concur. Moreover, in State ex rel. Dunker v. Spink Hutterian Brethren, 77 S.D. 215, 90 N.W.2d 365, we avoided applying that rule with the comment that because of the penalty involved in the Dove case "A very strict application of the rule of definiteness and clarity was properly required." After stating that the rule quoted above from People ex rel. Christensen v. Board of Education, is undoubtedly applicable to tax statutes, 51 Am. Jur., Taxation, § 303, goes on to observe "When, however, it comes actually to holding a particular tax statute invalid on the ground of its uncertainty, *638 vagueness, or inconsistency, the courts exhibit some reluctance in doing so". This brings us to petitioner's remaining contentions which were dealt with by the trial judge in his memorandum opinion as follows: We share these views and adopt them as our own. Affirmed. All the Judges concur.