Title: State v. Ashby

State: new-mexico

Issuer: New Mexico Supreme Court

Document:

387 P.2d 588 (1963) 73 N.M. 267 STATE of New Mexico ex rel. Frank E. McCULLOCH, Director Income Tax Division, Bureau of Revenue, Petitioner-Appellee, v. Willie R. ASHBY, Respondent-Appellant. No. 7088. Supreme Court of New Mexico. December 16, 1963. Hubert T. Faulk, El Paso, Tex., Thos. B. Rapkoch, Las Cruces, for appellant. John W. Chapman, Albert I. Cornell, Sp. Asst. Attys. Gen., Santa Fe, for appellee. ZIMMERMAN, District Judge. The question presented in this case is whether the State of New Mexico had jurisdiction in 1958 and 1959 over the White Sands Missile Range, a military installation located in New Mexico, to levy, assess and collect an income tax on non-residents employed within this military installation. The cause was tried on stipulation of facts submitted to the district court of Santa Fe County. The appellant, Willie R. Ashby, during calendar years 1958 and 1959, was married and living with his wife in El Paso, Texas, and not a resident of nor domiciled in New Mexico. The appellant did not own any revenue producing property in New Mexico but was employed on the military reservation known as White Sands Missile Range situate within the external boundaries of New Mexico. The appellant had income for each of these years in excess of five thousand dollars from his salary as an employee of the United States government at the military installation. The appellant did not file income tax returns with the Bureau of Revenue of New Mexico for calendar years 1958 and 1959 and refrained from filing the non-resident income tax returns after notice from the Income Tax Division to file the returns and pay the income tax due thereon. *589 On April 7, 1961, the State of New Mexico filed suit in the district court of Santa Fe County petitioning the district court to enter its order requiring the appellant to make such returns pursuant to the Income Tax Act of the State of New Mexico and regulations promulgated thereto. Section 72-15-27, N.M.S.A. 1953. The appellant answered denying the tax liability and setting up numerous defenses, which are stated as points relied on for reversal, and only one of which do we consider necessary to discuss, it being determinative of the appeal. Motion to dismiss based on the fact that § 72-15-27, N.M.S.A. 1953, was repealed on June 29, 1961, by the New Mexico Legislature was denied. The relief requested by the State of New Mexico against the appellant was ordered on October 9, 1961, by the district court and this appeal followed as of December 14, 1961. Appellant's primary and convincing argument is that the applicable statutory law violates § 2 of art. IV of the Constitution of the United States and § 1 of the Fourteenth Amendment to the Constitution of the United States in that the law provides in § 72-15-23, N.M.S.A. 1953, as amended, that residents of New Mexico required to file income tax returns shall have personal exemptions ranging from $1,500.00 to $2,500.00, depending upon their marital status, and does not provide the same exemptions in the statutory law for non-residents. Appellant claims that this difference thereby would deprive the non-residents of the equal protection of the law. Section 2 of art. IV of the Constitution of the United States declares: The pertinent provisions of § 1 of the Fourteenth Amendment to the Constitution of the United States provides: Section 72-15-23, N.M.S.A. 1953, as amended, provides: Regulation 22(a) promulgated by the New Mexico Bureau of Revenue on January 1, 1948, providing for personal exemptions of non-residents states: In Travis v. Yale & Towne Manufacturing Company, 1920, 252 U.S. 60, 40 S. Ct. 228, 64 L. Ed. 460, Justice Pitney, speaking for the court, upheld the action of the Federal District Court which held that the income tax law of New York of 1919 violated the provision of § 2 of art. IV of the Federal Constitution. The fundamental impact of the constitutional provision for privileges and immunities provided for citizens of each state in relation to the privileges and immunities of *590 citizens in the several states was well stated by Justice Pitney in quoting Justice Clifford from Ward v. Maryland, 1870, 12 Wall. 418, 20 L. Ed. 449, which held a discriminatory state tax upon non-resident traders to be void: The Travis case held that the denial of exemptions to the non-resident taxpayers of New York while granting exemptions to resident taxpayers was a crucial discrimination and was not a case of occasional or accidental inequality due to circumstances personal to the taxpayer. We see no way to avoid a conclusion under the doctrine of the Travis case, relied on by appellant, that having imposed the tax upon "every resident and non-resident" (§ 72-15-21, N.M.S.A. 1953), the failure to extend exemptions granted residents under § 72-15-23, N.M.S.A. 1953, to non-resident taxpayers brings the New Mexico act into conflict with art. IV, § 2, of the Constitution of the United States. The argument of the State of New Mexico to the effect that any difficulty in this regard is overcome by regulation 22(a) of the Bureau of Revenue cannot be supported. A regulation adopted by an administrative agency creating an exemption not contemplated by the act or included within the exemption specified therein is void. American Distilling Co. v. State Board of Equalization, 1943, 55 Cal. App. 2d 799, 131 P.2d 609; Welch v. Kerckhoff (9th Cir.1936), 84 F.2d 295, 106 A.L.R. 1434. It is well established that the legislature may not delegate authority to a board or commission to adopt rules or regulations which abridge, enlarge, extend or modify the statute creating the right or imposing the duty. Campbell v. Galeno Chemical Co., 1930, 281 U.S. 599, 50 S. Ct. 412, 74 L. Ed. 1063, 1069. The judgment below must be reversed and the cause remanded for further proceedings in conformity with this opinion. It is so ordered. COMPTON, C. J., and CHAVEZ, NOBLE and MOISE, JJ., concur.