# FILED
June 19, 1998 Cecil W. Crowson Appellate Cou rt Clerk 

### IN THE COURT OF APPEALS OF TENN ESSEE

AT NASHVILLE

EVERETT C. SIMMONS, M.D., ) ) Plaintiff/Appellant, ) ) Appeal No. ) 01-A-01-9709-CH-00495 VS. ) ) Davidson Chancery ) No. 96-767-II RUTH E. JOHNSON, ) COMMISSIONER OF REVEN UE, ) STATE OF TENNESSEE, ) ) Defendant/Appellee. )
APPEALED FROM THE CHAN CERY COUR T OF DAVIDSO N COUNTY AT NASHVILLE, TENNESSEE THE HONORABLE CAROL L. Mc COY, CHANCELLOR
EVERETT C. SIMMONS, M.D. P. O. Box 339 Grimesland, North Carol ina 27837 Pro Se/Plaintiff/Appellant JOHN KNOX WALKUP Attorney General & Repor ter STACY E. GIBSON Assistant Attorney Gener al 425 Fifth Avenue North Nashville, Tennessee 37243-0489 Attorney for Defendant/Appellee

AFFIRMED AND REMAN DED

BEN H. CANTRELL, JUDGE CONCUR: TODD, P.J., M.S. KOCH, J.- 2 - 

## O P I N I O N

A doctor who maintained medical licenses in both Tennes see and North Carolina received an assessmen t for paym ent of the Te nnessee prof essional privilege tax. He filed suit against th e Commissioner of Revenue, challenging the imposition of the tax on theground that he was not ac tively engaged i n the practice of medicine in Tennessee. The trial court granted summary judgment to the Commissioner. We affirm.

I.

Dr. Everett Simmons is a North Carolina phys ician. He has chosen to maintain a medical license in Tennessee as well as in North Carolina, though he does not practice in this stat

e. In order

to maintain his professional status in Tennessee, he has had to renew his T ennesse e medica l license e very two years, and to pay the required fee.

Since 1992, he has also had to comply with the requirements of Tenn. Code Ann. § 67-4-1701, et seq. That s tatute establishes an annual$200 occupational tax on the pri vilege of e ngaging in a ny of over t wenty p ro fessions that require licensur e or regist ration by t he state , includi ng medici ne, dent istry and la w.

In 19 92, the r emittance portion of the Professional Privilege Tax form containe d boxes that could be checked for active, inactive or retired status. Dr

. Simmo ns’ returnfo r that year, which is in the record, show s that he checked the inactive status bo x. At the bot tom of t he form , he print ed by hand , “I have not actively practiced medicine in the State of Tennessee but retain a license there,” and he initiale d the sta tement. Presumab ly, he did n ot pay the tax.- 3 - In 1993, the Tennessee Department of Revenue changed the tax form to eliminate the three boxes. On the new form, Dr. Sim mons hand- printed and initialed a statement identical to the one he had printed on the 1992 form. There is
no indication in th e record that he paid the occupational tax in 1993 or 1994. On December 31, 1995, the Department se nt Dr. Simmonsa Notice of Assessment for the 1995 tax year, requ esting remittance of the tax , as well as inter est a nd a $50 penalty, for a total assess ment of $267.28.

Dr. Simmons then brou ght this pr o se laws ui t against the Department in the Chancery Court of Davidson County, ar guing that he should not be l iable for the tax. The Department counter-claimed for payment of the assessment. Both par ties filed motions for summary judg ment. The trial court granted summary j udgment for the Department, and ordered Dr.Simmons to pay the assessment, as well as costs and attorney fees. This appeal foll owed.

II.

The primary issue the plaintiff raised in the trial court and in his appellate brief (he did not appear for oral ar gument) was whether the privilege tax

or occupational ta x described in Tenn. Code Ann. § 67-4-1701, et s eq. is a tax on the actual practice of medicine in the State of Tennesse e or a tax on the me re privilege of being allowed to pract ice medicine in this state.

While it is true that the languag e in the statuteis somewhat ambiguous
on this score, it appears t o us thatwhen its various sections are readin pari materia with the other statutes r eferenced by it, it is not difficult to arrive at its true meaning. Tenn. Code Ann. § 67-4-1701 reads:

Privilege tax established-- Collection.-- The engagin g i n any vocation, profession, business or occupation hereinafter named in this part is declared to be a privi lege taxable by the state alone. The privilege tax established in this part shall be- 4 - collected by the commissioner of rev enue and depos ited to the state general fund.

Tenn. Code Ann. § 67-4-1702 states that the tax is levied “on the privilege of engaging in the following vocat ions, professions, businesses or occupations,”and lis ts as those subject to the tax “(p)ersons licensed o r registered under title 63 as . . . physicians.”

Tenn. Code Ann. § 67-4-1708 reads i n relevant part: Applicability.-- (a) The privilege tax levied by this part upon the privilege of engag ing in certain occupat i ons requiring registration or a licens e do not apply to a person so re gistered or licensed, if the person i s inactive or ret ire d pursuantto the regulations of the appro priate licensing board

. [Acts 1992, ch. 529 § 17].

The affidavit of Jerry Kosten, an administrator for the Tennessee Board of Medical Examiners, s tates that “[i]n order to be classified as ‘inac ti ve’ or ‘retired,’
a licensee must co mplete a form requesting such sta tus and file it with the Bo ard.” Mr. Kosten a lso note

d that Dr. Simmons

had not a pplied f

o r suc h status, and is therefore not inactive or r etired in accordance with the Board’s regulati ons.

We observe that the regul ations of the Board ofMedical Examiners are to be found in the Rules and Regulati ons of the State of Tennessee, 0 880-1, et seq. Rule 0880-2-1 0(1 )(b) provides that one who files for inactiv

e status and meets the other requirements of the Board will receive “a license designated on its face in bold printas ‘inactive’,” and that an individual with an inactive license may not engage in the active pr

actice of me dicine in Tennessee. Ho wever, he may, upon f iling a reactivation applic ation a nd paying a fee, have his active license restor ed. Tenn. Rules and Regulations, 0880-2-10(3)(1997).- 5 - The provisi ons of Tenn. Code Ann. § 67-4-1701, et seq ., when read together with the medical licensing pr ovisions of Tenn. Code Ann. § 63-6-101, etseq. and the Rules and Regulations of the State of Ten nessee indicate that all those individuals in possession of an active Tennessee medical l icense are obligated to pay the privilege tax,and that h aving done so, payment of the tax confers upon the licenseholder

the privilege of

practicing medicine in Tennessee, whether he chooses to exercise the priv

ilege or not. If he is not interested in retaining the privilege, there is an orderly procedure to follow for obtaining an inactive license. Thus, the tax must b e const rued as a tax upon the priv ilege, not a tax upon the ac tual practice of medicine in Tennessee.

III.

Dr. Simmons has raise d some ot her issues, which mer it only brief consideration

. He claims that by imposing the tax on licenseholders, the state is indulging in a form of unfair double taxation: that is, a tax upon a tax. But the fee for renewing a medical lice nse is not the same as a tax. A license requirement is imposed for the purpose of regulating som e activity under the police power of the state, and a licensing fee is established to cover the cos t of such regulation. A tax is imposed primarily for the purpos e of raising revenue. Memphis Retail Liquor Dealers’ Association, Inc. v. City of Memphis, 547 S.W.2d 244, 246 (Tenn. 1977).

It follows that the collecti on of a licensing fee to regul ate a par ticula r profession does not preclude the State from impos ing a tax on the same profession. The legislative intention to do that very thi ng cannot be clearer. Tenn. C ode Ann. § 67-4-1705 reads “[t]he taxes lev ied by this part s hall not be construed to be a regulatoryfee,” while Tenn. Code Ann. § 67- 4-1706 reads “[t]he taxes levied by this part are in addition to all other taxes and fees levi ed by law.”- 6 - Dr. Simmons also argues that his equal p rotection rights hav e been violated by Tenn. Code Ann. § 67-1-1803( a) which provides

that legal challenges

to the imposition of taxes in Tennessee must be brought in Chance ry Cou rt, either in Dav idson Cou nty or in the county of the taxpayer’s domicile or the county of his principal place of business. The plaintiff notes that Tennessee does not mai ntain a chancery court in Greene County, North Carolina, where he lives, and concludes that he is thus placed at a disadv antage relative to li

tigants who li ve or do business in Tennessee counties.
Of course, Tennessee cannot maintai n courts in N orth Carolina, just as North Carolina cannot

maintain courts in Tennessee. We note that Dr. Simmons, who has voluntarily chos

en to live in one state and maintain a medical license in another, does not by virtue of that choice become a member of any protected class. And since Tennessee has provi ded a forum for h earing the claims of out-of-state taxpayers like Dr. Simmons, no fundamental rights are impli cated by the application of Tenn. Code Ann. § 67-1-1803(a) to his cl aim. Thus, even if we w ere to construe the statute as providing disparate tre atment to two different classes of citizens, the state is only required to demonstrate a ratio nal b asis for maintaining such a distinction. See Genesco Inc. v. Woods , 578 S.W.2d 639 (Te nn. 1979).

Such a basis

can clearly b e found in the impo

ssibil ity of extendi ng Tennessee courts beyond the borders o f this stat e, in the need to provide a Tennessee forum for out-of-statetaxpayers, and in the purpose of enabling in-state taxpayers to litigate their cl aims in the most convenient forum possible

. Dr. Simmons’ suggested remedy is that all Tennessee doctors be forc ed to pursue their litigation in Davidson County in order that they not enjoy

an advantage over him. This constitutes a disserv

ice to busy

professional s, and to thos e who rely

upon them.

III.- 7 - The j udgment of the trial court is affirmed. Remand this cause to th e ChanceryCourt of Davidson County for further proceedings consi stent with thi s opinion. Tax the costs on appeal to the appellant.

____________________________ BEN H. CANTRELL, JUDGE

CONCUR:

_______________________________ HENRY F. TODD, PRESI DING JUDGE MIDDLE SECTION

_____________________________ WILLIAM C. KOCH, JR., JUDGE