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IN THE SUPREME COURT OF THE STATE OF KANSAS

No. 111,521

HEARTLAND APARTMENT ASSOCIATION, INC., et al.,

Appellants/Cross-appellees,

v.

CITY OF MISSION, KANSAS,

Appellee/Cross-appellant.

SYLLABUS BY THE COURT

1.

A tax is a forced contribution to pay for the government's general services, that is, 

services that benefit the members of the public at large, regardless of whether any 

particular person has paid the tax. A fee, on the other hand, is not a revenue measure. It is 

assessed against those who gain the exclusive benefit of the service or, if a regulatory fee, 

those who are the subject of the regulation.

2. 

An excise tax is a tax imposed on performance of an act, engagement in an 

occupation, or enjoyment of a privilege. The Transportation User Fee, or TUF, adopted 

by the City of Mission is a tax on real property owners based on the use of their property, 

rather than a tax on the property itself. As such, it is a tax on the enjoyment of a privilege, 

and it qualifies as a prohibited excise tax under K.S.A. 2016 Supp. 12-194.

Review of the judgment of the Court of Appeals in 51 Kan. App. 2d 699, 352 P.3d 1073 (2015).

Appeal from Johnson District Court; JAMES F. VANO, judge. Opinion filed April 7, 2017. Judgment of the 
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Court of Appeals reversing and remanding to the district court is affirmed. Judgment of the district court 

is reversed and remanded with directions. 

Mary Jo Shaney, of White Goss, a Professional Corporation, of Kansas City, Missouri, argued the 

cause, and James C. Bowers, Jr., Daniel P. Goldberg, and Bryant E. Parker, of the same firm, were with 

her on the briefs for appellants/cross-appellees. 

Thomas V. Murray, of Lathrop & Gage LLP, of Overland Park, argued the cause, and Mark A. 

Samsel, of the same firm, was with him on the briefs for appellee/cross-appellant. 

Athena E. Andaya, deputy attorney general, for amicus curiae Office of Kansas Attorney General.

John A. Donley, of Devine and Donley, LLC, of Topeka, for amicus curiae National Federation 

of Independent Business Small Business Legal Center. 

Lucas Bell, of Topeka, for amicus curiae Kansas Association of Realtors. 

The opinion of the court was delivered by

BEIER, J.: In 2010, the City of Mission passed a Transportation User Fee (TUF). 

The TUF is assessed on all developed real property based on a formula that attempts to 

estimate the number of vehicle "trips" a particular property generates. The revenue raised 

by the TUF, according to the enacting ordinance, is used for maintenance and upkeep of

Mission's streets. 

Plaintiffs Heartland Apartment Association, Inc., an association whose members 

own or operate multifamily retail housing; Building Owners and Managers Association 

of Metropolitan Kansas City, an association whose members own commercial buildings;

and several individual owners of developed property challenged the TUF as an 

impermissible excise tax levied by Mission in violation of K.S.A. 2016 Supp. 12-194. 
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The district court judge granted summary judgment to Mission. On appeal, a panel 

of the Court of Appeals reversed, holding that the TUF is an impermissible excise tax 

under K.S.A. 2016 Supp. 12-194. We granted Mission's petition for review. 

For the reasons outlined below, we affirm the decision of the Court of Appeals and 

reverse the judgment of the district court. 

FACTUAL AND PROCEDURAL BACKGROUND

In August 2010, Mission's City Council adopted Ordinance No. 1332, which

established the TUF and created a "transportation utility" "for the purpose of maintenance 

of City streets." Mission City Code §145.030. The ordinance "imposed and levied" the 

TUF on "the owners of all developed property within the City of [Mission]." Mission 

City Code §145.070. The ordinance does not cover real property exempt from taxation 

under K.S.A. 79-201 (exempting religious, educational, similar property from all 

property, ad valorem taxes). Mission City Code §145.071. 

The TUF is based on the "direct and indirect use of or benefit derived from the use 

of public streets, bicycle lanes and sidewalks generated by the developed property." 

Mission City Code §145.070. It identifies three basic factors to be used in determining

the amount of the fee:

"1. The developed use of the property which includes the amount of vehicular traffic 

generated by the property, as determined by [Mission's] City Administrator.

"2. For non-residential uses the developed square footage on the property or parcel.
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"3. The traffic generation factor for each use category of developed property." Mission 

City Code §145.080A. 

To calculate the fee, the ordinance requires the use of "Trip Generation, 8th Edition, 

published by the Institute of Transportation Administrators ('ITE Manual')," Mission City

Code §145.020D, and outlines the following procedure:

"[Mission's] City Administrator shall determine the category of use from the ITE 

Manual that shall apply to each developed lot or parcel within the City [of Mission]. In 

the absence of a specific use category from within the ITE Manual for a particular 

developed use, [Mission's] City Administrator shall determine the appropriate category 

by interpreting the ITE Manual and assigning the category which most accurately reflects 

the traffic generated by the particular developed use. After determining the appropriate 

use category for a developed parcel, [Mission's] City Administrator shall use the 

estimated vehicle trip generation figures for the assigned use category from the ITE 

Manual to compute an estimate of annual trips related to the parcel and assign the parcel 

to a group of similarly used properties ('customer group')." Mission City Code 

§145.080B.

The three customer groups are: single-family residential, multi-family residential, and 

non-residential use. Mission City Code §145.080B. 

The ordinance does not set out the charge to be assessed, instead leaving that to 

"be as fixed from time to time in [Mission's] annual budget." Mission City Code 

§145.080D. The billing and collection of the fee is accomplished in conjunction "with ad 

valorem real estate taxes annually." Mission City Code §145.090. 

Mission's TUF Administrative Manual provides further details about the 

calculation of the fee. The 2012 manual is included in the record on appeal. According to 

this version of the manual, the TUF that is actually assessed depends on five factors:
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"1. That property's estimated trip generation over a period of time.

"2. A split trip rate that includes a 1-cent base charge and a differentiated commercial and 

residential property component. The residential per trip rate is 2.076 cents and the 

commercial per trip rate is 1.490 cents.

"3. Special consideration is given for specific trip generation data that better refines or 

defines the trips a particular land use generates.

"4. The jurisdiction's total annual transportation funding requirement.

"5. The share of that budget to be generated through the TUF system versus other 

sources." 

The manual also contains Land Use classification data from the ITE Manual for all 

property in Mission. The data is broken down into various categories, such as "Animal 

Hospital/Vet Clinic," "Fast-Food Restaurant (w/Drive-through Window)," 

"Gasoline/Service Station with Convenience Market and Car Wash," and 

"Gasoline/Service Station with Convenience Market." Each classification includes data 

such as the average trips generated each day of the week and the total weekly trips for a 

particular usage. The per-day and per-week trips are based on a unit that varies,

depending on the use. For example, an animal clinic's trip generation is based on 1000 

square feet gross floor area, a hotel on its number of rooms, and a gas station on "vehicle 

fueling positions." 

In March 2012, plaintiffs filed suit against Mission, seeking a declaratory 

judgment and preliminary and permanent injunctions. Plaintiffs had paid the TUF in 2010 

in amounts ranging from $72.00 to $16,159.87. 
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Specifically, plaintiffs asserted five claims in district court. In Claim I, the two 

associations asked for a declaratory judgment that the TUF was an impermissible excise 

tax violating K.S.A. 2016 Supp. 12-194 and that Mission must stop "assessing, billing, 

and collecting the TUF"; return fees "collected illegally with pre- and post-judgment 

interest"; and pay the associations' reasonable attorney fees and costs. In Claim II, the 

individual plaintiffs sought the same relief as the associations had sought in Claim I. In 

Claim III, plaintiffs asked for both a preliminary and a permanent injunction to prevent 

Mission from enforcing the TUF and for an order requiring Mission to reimburse 

plaintiffs for TUF amounts they had already paid, to pay pre- and post-judgment interest,

and to pay plaintiffs' reasonable attorney fees and costs. In Claim IV, the individual 

plaintiffs asked the district court to order Mission to reimburse each individual plaintiff 

for the TUF amount each had paid in 2010 and 2011, including interest, attorney fees,

and costs. In Claim V, plaintiffs alleged due process and equal protection violations 

because Mission "has enacted an illegal and discriminatory tax, has treated similarly 

situated persons and entities differently without a rational basis, and has infringed on the 

political power and privileges of property owners in the City of Mission, Kansas."

The individual plaintiffs and Heartland filed a motion for summary judgment on 

Claims I, II, and III. Mission filed its own motion for summary judgment against all 

plaintiffs on all claims. 

After reviewing the motions and supporting memoranda, the district judge issued 

his memorandum decision granting summary judgment to Mission and denying summary 

judgment to plaintiffs. 

The judge began his analysis with acknowledgment of Mission's constitutional 

"home rule" power to determine its local affairs, including "'the levying of taxes[,] 

excises, fees, charges and other exactions except when . . . limited or prohibited by 
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enactment of the legislature applicable uniformly to all cities of the same class.'" He then 

noted that under K.S.A. 2016 Supp. 12-194, "'no city or county shall levy or impose an 

excise tax or a tax in the nature of an excise'" and that the "substance of both Motions is 

whether the TUF is an unlawful excise tax." 

The judge next addressed whether the TUF qualified as a fee or a tax, concluding 

that it is a tax, based on the definitions used in Kansas. 

"The TUF is not voluntary—all property owners generally must pay it. The citizens who 

pay the TUF do not receive any special benefit for it. There is no aspect of contract or 

consent in payment of the fee. The money raised from the TUF is used to pay for street 

improvements, which are used by all. And the TUF is not a way to compensate the 

government for regulating a specific service, benefit, or privilege." 

The judge then turned to the question of whether the TUF further qualified as an 

excise tax. Relying on Kansas caselaw that had defined an "excise tax" as one "'imposed 

on the performance of an act, the engaging in an occupation or the enjoyment of a 

privilege,'" the district judge concluded that the TUF is not an excise tax. According to 

the judge, "Mission determines the charge for the tax based on the estimated number of 

trips a property generates. Clearly, residents of Mission are not charged based on the 

actual performance of any act, engaging in an occupation, or the enjoyment of a 

particular privilege."

The judge concluded that the "TUF, as it was enacted, was within City of 

Mission's home rule authority and does not offend the legislative limitation upon that 

power." Based on his determination that the TUF is not an illegal excise, the district 

judge deemed plaintiffs' due process claim irrelevant and its equal protection claim 

without merit. Plaintiffs moved to amend the district judge's memorandum decision, and 

the judge denied the motion. 
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Plaintiffs then appealed, raising four issues: (1) whether the TUF is an 

impermissible excise tax; (2) whether Mission exceeded its powers by passing the TUF 

through enactment of an ordinary ordinance; (3) whether the district judge erred by 

granting summary judgment on plaintiffs' due process, equal protection, and 

reimbursement claims on controverted or unconsidered facts; and (4) whether the district 

judge abused his discretion in denying Plaintiffs' Motion to Amend. Mission filed a 

cross-appeal, raising one issue: whether the TUF is a special fee rather than a tax, under 

Kansas law. 

The reviewing Court of Appeals panel analyzed two issues. First, the panel 

addressed whether the TUF is a tax. The panel dismissed decisions from other 

jurisdictions that had analyzed municipal exactions similar to the TUF as shedding "little 

light on this dispute." Heartland Apartment Ass'n v. City of Mission, 51 Kan. App. 2d 

699, 707, 352 P.3d 1073 (2015), rev. granted 303 Kan. 1077 (2016). Relying primarily 

on this court's decision in Executive Aircraft Consulting, Inc. v City of Newton, 252 Kan. 

421, 845 P.2d 57 (1993), the panel concluded that the TUF is a tax because it "is an 

annual forced contribution from all improved real estate owners that is used for the 

maintenance of a government service available to the general public." 51 Kan. App. 2d at 

708.

The panel then turned to the question of whether the TUF is an impermissible 

excise tax under K.S.A. 2016 Supp. 12-194. Through a 2006 amendment to the statute, 

the panel said "the legislature has enlarged what taxes are prohibited to such an extent 

that [the TUF] can be no other tax than an excise tax and is thus prohibited by law," and 

it "is clearly assessed, in part, on how property owners decide to use their property." 51 

Kan. App. 2d at 713, 717. Because it is an excise tax and does not fit any of the 
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exceptions listed in K.S.A. 2016 Supp. 12-194, the panel ruled, Mission exceeded its 

home rule authority in enacting the TUF. 51 Kan. App. at 717-18.

The panel declined to address plaintiffs' due process and equal protection 

arguments. 51 Kan. App. 2d at 718. It also declined to address plaintiffs' arguments 

raised after the district judge had ruled on the motions for summary judgment. 51 Kan. 

App. 2d at 718. 

Mission petitioned this court for review of three aspects of the panel's opinion: 1) 

the TUF's categorization as an impermissible excise tax; 2) determination of the correct 

standard of review for challenges to a City's tax measure enacted under its home rule 

authority; and 3) the advisability of Kansas recognition of a "special fee." We granted 

review.

DISCUSSION

To resolve this appeal, we must answer only two questions: Is the TUF a tax? 

And, if so, is it a prohibited excise tax under K.S.A. 2016 Supp. 12-194? Because we 

ultimately answer both questions yes, no other issues need be examined. Plaintiffs' should 

have prevailed as a matter of law on their motion for summary judgment. 

Standard of Review

An appellate court's standard of review on summary judgment is well known:

"'Summary judgment is appropriate when the pleadings, depositions, answers to 

interrogatories, and admissions on file, together with the affidavits, show that there is no 

genuine issue as to any material fact and that the moving party is entitled to judgment as 

a matter of law. The trial court is required to resolve all facts and inferences which may 

reasonably be drawn from the evidence in favor of the party against whom the ruling is 
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sought. When opposing a motion for summary judgment, an adverse party must come 

forward with evidence to establish a dispute as to a material fact. In order to preclude 

summary judgment, the facts subject to the dispute must be material to the conclusive 

issues in the case. On appeal, we apply the same rules and where we find reasonable 

minds could differ as to the conclusions drawn from the evidence, summary judgment 

must be denied. [Citations omitted.]' Shamberg, Johnson & Bergman, Chtd. v. Oliver,

289 Kan. 891, 900, 220 P.3d 333 (2009)." Fawcett v. Oil Producers, Inc. of Kansas, 302 

Kan. 350, 358-59, 352 P.3d 1032 (2015).

The parties agree that there are no factual disputes, and our review is unlimited. 

David v. Hett, 293 Kan. 679, 682, 270 P.3d 1102 (2011). And, to the extent this court is 

required to interpret or construe the language of K.S.A. 2016 Supp. 12-194, such issues 

raise questions of law subject to unlimited review. O'Brien v. Leegin Creative Leather 

Products, Inc., 294 Kan. 318, 331, 277 P.3d 1062 (2012). When a statute is plain and 

unambiguous, the court does not speculate about legislative intent. City of Dodge City v. 

Webb, 305 Kan. 351, 356, 381 P.3d 464 (2016). Only where a statute's language is 

unclear or unambiguous does the court rely on canons of construction or other tools to 

construe the legislature's intent. City of Dodge City, 305 Kan. at 356. 

Two other considerations are worth noting. 

First, Article 12, § 5 of the Kansas Constitution, commonly referred to as the 

Home Rule Amendment, grants cities the power of home rule "to determine their local 

affairs and government." Moreover, the "[p]owers and authority granted cities pursuant to 

this section shall be liberally construed for the purpose of giving to cities the largest 

measure of self-government." Kan. Const. art. 12, §5(d). Because of this, a city's 

ordinance is "entitled to a presumption of validity and should not be stricken unless its 

infringement upon a statute is clear beyond substantial doubt." Executive Aircraft, 252 

Kan. at 424. 
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"This provision simply means that the home rule power of cities is favored and should be 

upheld unless there is a sound reason to deny it. Where the legislature has acted in some 

area[,] a city's power to act in the same area should be upheld unless the legislature has 

clearly preempted the field so as to preclude city action. Unless there is actual conflict 

between a municipal ordinance and a statute, the city ordinance should be permitted to 

stand." Claflin v. Walsh, 212 Kan. 1, 7, 509 P.2d 1130 (1973). 

Second, tax statutes must be strictly construed, and if there is reasonable doubt as 

to the statute's meaning, it must be construed in favor of the taxpayer. Executive Aircraft, 

252 Kan. at 425.

In Executive Aircraft, this court was faced with similar interplay between the 

deference given to municipal ordinances and strict construction of tax enactments. The 

court ultimately concluded that "[a]ny reasonable doubt concerning the meaning of these 

tax statutes must be construed in favor of the taxpayer, not the municipality." 252 Kan. at 

425.

Is the TUF a Tax? 

The Home Rule Amendment provides:

"Cities are hereby empowered to determine their local affairs and government 

including the levying of taxes, excises, fees, charges and other exactions except when and 

as the levying of any tax, excise, fee, charge or other exaction is limited or prohibited by 

enactment of the legislature applicable uniformly to all cities of the same class." Kan.

Const. art. 12, § 5(b). 

Under the Home Rule Amendment, if the legislature "has spoken through a statute 

with statewide effect," a city may opt out of the enactment by charter ordinance, "which 
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is subject to more rigorous notice requirements and public challenge not applicable to 

ordinary ordinances." Farha v. City of Wichita, 284 Kan. 507, Syl. ¶ 3, 161 P.3d 717 

(2007). But there are four types of statutes that a city may not opt out of: "(1) enactments 

of statewide concern uniformly applicable to all cities; (2) other enactments uniformly 

applicable to all cities; (3) enactments uniformly applicable to all cities of the same class 

that prohibit or limit the levying of any tax, excise, fee, charge, or other exaction; and (4) 

enactments prescribing limits of indebtedness." (Emphasis added.) 284 Kan. 507, Syl. 

¶ 4. 

The legislature has enacted several limitations on a city's ability to levy taxes. See, 

e.g., K.S.A. 12-140 (cities generally prohibited from levying, collecting income tax). In 

addition to these statutory prohibitions, the "uniform and equal basis of valuation" clause 

of Article 11, § 1(b) of the Kansas Constitution limits the manner in which property taxes 

can be levied and assessed. This provision "requires the legislature to provide for 

uniformity in the basis of assessment as well as in the rate of taxation. Uniformity in 

taxing implies equality in the burden of taxation." State ex rel. Stephan v. Martin, 227 

Kan. 456, 461, 608 P.2d 880 (1980). 

Of dispositive importance to this case is K.SA. 2016 Supp. 12-194(a), which states 

that 

"no city or county shall levy or impose an excise tax or a tax in the nature of an excise, 

other than a retailers' sales tax and a compensating use tax." (Emphasis added.)

The statute also lists five specific exceptions, such as contracts with a utility for a fixed 

charge, none of which is relevant to this case. 
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Given the language of the statute, the threshold question on whether K.S.A. 2016 

Supp. 12-194 applies is therefore whether the TUF is a tax at all. We thus turn to the way 

the word "tax" is understood and employed. 

Black's Law Dictionary defines "tax" as:

"A charge, usu. monetary, imposed by the government on persons, entities, 

transactions, or property to yield public revenue. Most broadly, the term embraces all 

governmental impositions on the person, property, privileges, occupations, and 

enjoyment of the people, and includes duties, imposts, and excises. Although a tax is 

often thought of as being pecuniary in nature, it is not necessarily payable in money." 

Black's Law Dictionary 1685 (10th ed. 2014).

This court has recognized that a "tax is a forced contribution to raise revenue for 

the maintenance of government services offered to the general public." Citizens' Utility

Ratepayer Bd. v. Kansas Corporation Comm'n, 264 Kan. 363, Syl. ¶ 5, 956 P.2d 685 

(1998). 

In addition, the distinction between a tax and a fee was discussed at length in 

Executive Aircraft, including a survey of the caselaw of many jurisdictions. In that case, 

Executive Aircraft Consulting filed a declaratory judgment action against the City of 

Newton and Harvey County, challenging the legality of a "fuel flowage fee." 252 Kan. at 

422. In holding in favor of Executive Aircraft, the Executive Aircraft court noted that the 

United States Supreme Court had defined a tax as an "'enforced contribution to provide 

for the support of government.'" 252 Kan. at 426 (quoting United States v. Mississippi 

Tax Comm'n, 421 U.S. 599, 606, 95 S. Ct. 1872, 44 L. Ed. 2d 404 [1975]). In contrast, a 

"'fee . . . is incident to a voluntary act . . . which, presumably, bestows a benefit on the 

applicant, not shared by other members of society.'" Executive Aircraft, 252 Kan. at 426 

(quoting National Cable Television Assn. v. United States, 415 U.S. 336, 340-41, 94 S. 
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Ct. 1146, 39 L. Ed. 2d 370 [1974]). According to the District of Columbia Court of 

Appeals: "'A "fee" is a payment for a special privilege or service rendered, and not a 

revenue measure. If the "fee" unreasonably exceeds the value of the specific services for 

which it is charged[,] it will be held invalid.'" Executive Aircraft, 252 Kan. at 426 

(quoting National Cable Television Ass'n, Inc. v. F.C.C., 554 F.2d 1094, 1106 [D.C. Cir. 

1976]). In Kentucky "'"any payment exacted by the state or its municipal subdivisions as 

a contribution toward the cost of maintaining governmental functions, where the special 

benefits derived from their performance is merged in the general benefit, is a tax." On the 

other hand, a fee is generally regarded as a charge for some particular service.'" Executive 

Aircraft, 252 Kan. at 427 (quoting Dickson, Sheriff v. Jeff. Co. Bd. of Education, 311 Ky. 

781, 786, 225 S.W.2d 672 [1949]). 

Based on these definitions and others the court concluded:

"Thus, a tax is a forced contribution to raise revenue for the maintenance of 

governmental services offered to the general public. In contrast, a fee is paid in exchange 

for a special service, benefit, or privilege not automatically conferred upon the general 

public. A fee is not a revenue measure, but a means of compensating the government for 

the cost of offering and regulating the special service, benefit, or privilege. Payment of a 

fee is voluntary—an individual can avoid the charge by choosing not to take advantage of 

the service, benefit, or privilege offered." 252 Kan. at 427.

Kansas law further recognizes a subset of taxes called special assessments or, as 

sometimes referred to, special taxes. We have noted that 

"'[a] distinction exists between general taxes and assessments for special or local 

improvements. The former are exactions placed upon the citizens by the taxing 

authorities for the support of the government while the latter are imposed upon property 

within a limited area for payment of special or local improvements.' [Citation omitted.]
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. . . .

"'The foundation of the power to make a special assessment for a local 

improvement of any character, including the construction of a sanitary sewer system, is 

that the property against which the assessment is levied derives some special benefit from 

the improvement.' [Citation omitted.]" (Emphasis added.) In re Tax Appeal of Boeing Co., 

261 Kan. 508, 516, 930 P.2d 1366 (1997).

See also Black's Law Dictionary 140 (10th ed. 2014) ("special assessment" defined as 

assessment of tax on property that benefits in some important way from public 

improvement).

In Mount Hope Cemetery Co. v. City of Topeka, 190 Kan. 702, 707, 378 P.2d 30 

(1963), this court relied on the United States Supreme Court's decision in Illinois Central

Railroad Co. v. Decatur, 147 U.S. 190, 13 S. Ct. 293, 37 L. Ed. 132 (1893), to 

distinguish between general taxes and special assessments. The Supreme Court noted that 

"special assessments or special taxes proceed upon the theory that when a local 

improvement enhances the value of neighboring property that property should pay for the 

improvement." (Emphasis added.) 147 U.S. at 198. Moreover, 

"[s]pecial assessments, on the other hand, are made upon the assumption that a portion of 

the community is to be specially and peculiarly benefited, in the enhancement of the 

value of property peculiarly situated as regards a contemplated expenditure of public 

funds; and, in addition to the general levy, they demand that special contributions, in 

consideration of the special benefit, shall be made by the persons receiving it. The justice 

of demanding the special contribution is supposed to be evident in the fact that the 

persons who are to make it, while they are made to bear the cost of a public work, are at 

the same time to suffer no pecuniary loss thereby, their property being increased in value 

by the expenditure to an amount at least equal to the sum they are required to pay." 147 

U.S. at 199.
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This court has also discussed the distinction between taxes and fees, at least 

tangentially, in relation to regulatory fees demanded by administrative agencies. 

In Panhandle Eastern Pipe Line Co. v. Fadely, 183 Kan. 803, 804, 332 P.2d 568 

(1958), this court discussed legislation ordering the State treasurer to transfer $100,000 

from the "natural gas conservation fund of the state corporation commission to the state 

general revenue fund." The state corporation commission had been authorized to levy 

assessments to "pay the conservation division expenses and other costs in connection 

with the administration of the gas conversation laws," and the plaintiff argued that the 

transfer was "an attempt to raise revenue under the guise of the police power," which, 

among other things, violated Article 11, §§ 1 and 5 of the Kansas Constitution. 183 Kan. 

at 805-06.

The court said that it was "clear that under its police power the state may 

reimburse itself for the costs of otherwise valid regulation and supervision by charging 

the necessary expenses to the businesses or persons regulated." 183 Kan. at 806. But, if a 

statute "shows on its face that some part of the exaction is to be used for a purpose other 

than the legitimate one of supervision and regulation . . . or if more than adequate 

remuneration is secured," it is void. 183 Kan. at 806-07. The court ruled that such a 

transfer might be justified if it reimbursed other departments or state agencies for indirect 

aid given to the regulating agency, but the legislation in question had no such purpose 

and transferred the funds to the general fund of the state without any limitation. 183 Kan. 

at 807-08. It was therefore void. 183 Kan. at 808. 

"When a regulatory measure openly becomes a revenue enactment, that portion 

thereof which exacts revenue fails as a valid exercise of the police power. We are of the 

opinion [that the legislation in question] amount[s] to a tax and a revenue measure levied 
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under the guise of a regulatory fee, and violate[s] article 11, section 1 of our state 

constitution, the commerce clause and the Fourteenth Amendment of the Federal 

constitution." (Emphasis added.) 183 Kan. at 808. 

Against this backdrop, the distinction between a tax and fee comes into sharp 

relief. In determining whether an exaction is a tax or fee, the primary considerations are: 

Who is paying? Who is benefiting? and What will the revenue be used for? 

A tax is a forced contribution to pay for the government's general services, that is,

services that benefit the members of the public at large, regardless of whether any 

particular person has paid the tax. A tax is a "general tax" or a "special tax" (or "special 

assessment") depending on whether those paying the tax receive a special benefit in 

addition to the general benefit available to everyone. A general tax bestows no special 

benefit to anyone. In contrast, a special tax is premised and justified on the assumption 

that the taxpayer will realize a specific and cognizable benefit—typically, an increase in 

property value—beyond that realized by members of the general population. Because a 

special tax requires such a benefit, its revenues will be allocated to a very specific 

purpose. In fact, the purpose will likely be for "special or local improvements." See 

Mount Hope Cemetery, 190 Kan. at 708. For example, a special assessment may be 

exacted against the owners of property to pay for paving an abutting street. See, e.g., 190 

Kan. at 708 (cemetery abutting street undergoing paving improvement, including curbing 

and guttering, requires payment of special assessment). The general public often will be a 

secondary beneficiary of a special assessment, as in the case of road paving. 

A fee, on the other hand, is not a revenue measure. It is assessed against those who

gain the exclusive benefit of the service or, if a regulatory fee, those who are the subject 

of the regulation. In other words, an exaction is a fee when the benefits are not enjoyed 
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by the public at large. As noted in Executive Aircraft, fees are voluntary in nature in that 

a person can decline to take advantage of the service or benefit. 

Applying the law reviewed above, we have no hesitation in classifying the TUF as

a tax. It is levied against the owners of all developed property in Mission. Although the 

revenue generated from the tax is earmarked for maintenance of city streets, the TUF is 

still a general revenue measure, i.e., it is not for specific improvements nor does it 

compensate Mission for the costs of administering a special service. To the extent that 

those who pay the TUF benefit from the governmental service the TUF funds, the benefit 

is of a general nature and shared with the public at large. Finally, the TUF is not 

voluntary, which is a requirement for a fee under Executive Aircraft. 252 Kan. at 427. 

Rather, the TUF "is a forced contribution to raise revenue for the maintenance of 

governmental services offered to the general public." 252 Kan. at 427.

Throughout this case, Mission has argued that the TUF is most comparable to 

stormwater or sewer utility fees. But this comparison fails, as those fees are for services 

actually rendered. See Jennings v. Walsh, 214 Kan. 398, 401, 521 P.2d 311 (1974) 

("Generally speaking, sewer charges by a municipality must be [tied] to the use of the 

services and the fee imposed, under most authorities is not a tax, but a charge for services 

rendered."); see also Regency Park v. City of Topeka, 267 Kan. 465, 472, 981 P.2d 256 

(1999) (recognizing difference in handling of stormwater, sewage; payment for handling 

of either not characterized as tax; both in nature of "tolls or rents" paid for services 

actually furnished). Because both charges are for services rendered, they satisfy the 

Executive Aircraft definition of a fee.

To the extent Mission may argue that the TUF is akin to stormwater or sewer 

utility fees because it is based on "services rendered" in the form of provision of roads for 

car trips, such an argument also fails. Although the TUF is assessed based on the number 
19

of trips a property generates, it is not assessed against those that are actually using the 

road. It is not a payment from motorists, which could properly be characterized as a fee.

We also note that use of a toll road is voluntary; a motorist can choose an alternative 

route or even an alternative mode of transportation, such as walking. In contrast, the TUF 

cannot be avoided by the owner of developed property. 

Mission's fallback argument is that the court should consider adopting another

category of exaction: a special fee. A "special fee" would share characteristics of both a 

tax and a fee and would presumably not violate the prohibition on excise taxes. Mission 

"suggests that the Executive Aircraft test should be reevaluated to incorporate more 

recent developments in the law, such as the TUF, special fees, service fees, stormwater 

fees, or solid waste fees, none of which Executive Aircraft addressed." 

Mission relies on Bloom v. City of Fort Collins, 784 P.2d 304 (Colo. 1989), to 

support the adoption of this new category. In Bloom the Colorado Supreme Court 

addressed the validity of Fort Collins' "'transportation utility fee'" in light of a challenge 

that it violated the Colorado Constitution's requirement of property tax uniformity. 784 

P.2d at 304. If the Fort Collins TUF was held to be a property tax, it would be struck 

down as unconstitutional. 784 P.2d at 305.

At the outset of its analysis, the Colorado Supreme Court identified four types of 

revenue-generating measures available to Colorado municipalities that might cover the 

Fort Collins TUF: an ad valorem tax, an excise tax, a special assessment, and a special 

fee. The court then outlined the general properties of each under Colorado law. See 784 

P.2d at 307-10. With that framework in mind, the court discussed the TUF and attempted 

to categorize it.
20

First, the court rejected the notion the Fort Collins TUF was an ad valorem

property tax because such a tax must be assessed on the value of the property being 

taxed. Second, the court determined that the TUF was not an excise tax either, because, to 

be an excise tax, the "tax itself [must be] made a condition precedent to [an] act, event, or 

occurrence." 784 P.2d at 310. Third, the court eliminated the possibility that the TUF 

qualified as a special assessment, because the ordinance did not require revenue raised by 

the TUF to be used to pay for improvements benefitting a particular property. Fourth, the 

court defined a special fee as "a charge imposed on persons or property and reasonably 

designed to meet the overall cost of the service for which the fee is imposed." 784 P.2d at 

310. 

As to the TUF before it, the court noted that the "owners and occupants of 

developed lots subject to the fee receive the benefit of a program of city maintenance 

calculated to provide effective access to and from residences, buildings, and other areas 

within the city." 784 P.2d at 310. Although another method for raising the funds could 

have been chosen and the class of persons liable for the fee could have been broader, the 

availability of such options did not invalidate the ordinance, and the TUF was a valid 

special fee. 784 P.2d at 310. Although the court acknowledged that "the transportation 

utility fee is not conditioned on the voluntary choice of owners or occupants of developed 

lots," it had never held "that a service fee must be voluntary. 784 P.2d at 310. 

We reject Mission's invitation to adopt a new category of a special fee based on 

Bloom's example. On close examination, we are convinced that most assessments 

Colorado refers to as "special fees" would already be considered "fees" in Kansas' current 

framework. 

The Bloom court distinguished special fees from taxes because "a special fee is not 

designed to raise revenues to defray the general expenses of government, but rather is a 
21

charge imposed upon persons or property for the purpose of defraying the cost of a 

particular governmental service. . . . The amount of a special fee must be reasonably 

related to the overall cost of the service." 784 P.2d at 308. In Colorado, a special fee 

generally will be upheld if "the ordinance is reasonably designed to defray the cost of the 

particular service rendered by the municipality." 784 P.2d at 308 (citing cases upholding 

sewage service fee, annual emergency medical services fee, fee assessed on rental 

property to defray costs of administering hearings to resolve rental disputes, storm 

drainage service charge, building permit fees.) A special fee may be invalidated "when 

the principal purpose of the fee is to raise revenues for general municipal purposes rather 

than to defray the expenses of the particular service for which the fee is imposed." 784 

P.2d at 308.

We also reject Mission's invitation to mimic Bloom because in its discussion of 

special fees, use for a governmental "service" seems to distinguish only between revenue 

allocated to a general fund and revenue allocated to a specific fund, such as road 

maintenance. Taken to its logical extreme, any revenue measure might be a "special fee" 

in Colorado if it is earmarked to pay for a specific governmental function. This is much 

broader than what has been contemplated under Kansas law, and we do not wish to 

expand the Kansas concept of fee today. 

Finally, we observe that our conclusion that the TUF is a tax is consistent with the 

results of several other jurisdictions that have addressed TUF-like exactions. See State v. 

City of Port Orange, 650 So. 2d 1 (Fla. 1994) (considering transportation utility fee as 

tax); Brewster v. City of Pocatello, 115 Idaho 502, 768 P.2d 765 (1988) ("street 

restoration and maintenance fee" assessed against all owners and occupants of property 

within city qualifies as tax); Covell v. City of Seattle, 127 Wash. 2d 874, 905 P.2d 324 

(1995) (classifying monthly "street utility" fee as tax). These decisions reinforce our 

decision. 
22

Is the TUF an Excise Tax? 

As noted above, K.S.A. 2016 Supp. 12-194(a) prohibits all excise taxes with 

certain exceptions. The exceptions for retailers' sales taxes and compensating use taxes 

are broad while five enumerated exceptions are more narrow and detailed. The parties 

agree that the TUF is not a retailers' sales tax or compensating use tax and does not meet 

one of the enumerated exceptions. Simply, if Mission's TUF is an excise tax, it is 

prohibited by K.S.A. 2016 Supp. 12-194. 

"Excise tax" is not an expressly defined statutory term, and its meaning is not so 

plain that construction is unnecessary. See City of Dodge City v. Webb, 305 Kan. 351,

356, 381 P.3d 464 (2016). We thus turn to other sources to discern its meaning. 

In Callaway v. City of Overland Park, 211 Kan. 646, 508 P.2d 902 (1973), this 

court interpreted a previous version of K.S.A. 12-194 (then K.S.A. 1971 Supp. 79-4424). 

And the parties and the Court of Appeals panel have relied heavily on Callaway in 

interpreting the current version of the statute. To put current statutory language and 

Callaway into context, we must discuss the history of K.S.A. 12-194 and related statutes. 

The Home Rule Amendment was adopted by vote of the people and became 

effective on July 1, 1961. 211 Kan. at 648. That amendment gave cities broad powers in 

levying taxes and fees, among other things. Those powers, however, could be limited by 

legislative enactment. The legislature immediately exercised its power of limitation by 

enacting G.S. 1961 Supp. 12-139, 12-140, and 12-141.

G.S. 1961 Supp. 12-139 provided: "No city shall impose an excise tax, or tax in 

the nature of an excise, upon a sale or transfer of personal or real property, or the use 
23

thereof, or the rendering or furnishing of a service." G.S. 1961 Supp. 12-140 prohibited 

cities from levying taxes on income. G.S. 1961 Supp. 12-141 listed two exceptions to the 

prohibited taxes. The first exception allowed contracting with a utility for a fixed charge, 

and the second exception allowed license fees on the privilege of doing business. The 

legislature also outlined procedures for a city to exercise its home rule taxing powers in 

G.S. 1961 Supp. 12-137. 

K.S.A. 12-194's 1961 predecessor thus prohibited only a subset of excise taxes: 

those "upon a sale or transfer of personal or real property, or the use thereof, or the 

rendering or furnishing of a service." G.S. 1961 Supp. 12-139. Notably, this narrow 

statute appears to have prohibited the type of excise tax now explicitly allowed, i.e., sales 

taxes. See Callaway, 211 Kan. at 650-51. 

In 1970, the legislature enacted what was known as "the tax lid law," which 

suspended K.S.A. 12-139, 12-140, and 12-142. See K.S.A. 1971 Supp. 79-4414 

(suspending K.S.A. 12-139, 12-140, and 12-142 until December 31, 1972); see also 

K.S.A. 1972 Supp. 12-169 (suspending K.S.A. 12-139, 12-140, and 12-142 until

December 31, 1973). In place of those statutes, the legislature enacted K.S.A 1971 Supp. 

79-4424, 79-4425, and 79-4426. Of particular relevance, K.S.A. 1971 Supp. 79-4424 

then provided:

"(a) No city shall impose an excise tax or tax in the nature of an excise, upon a 

sale or transfer of personal or real property, or the use thereof, or the rendering of a 

service without the governing body of such city having first submitted such proposition 

to and having received the approval of a majority of the electors voting thereon at any 

election authorized for such city by K.S.A. 1970 Supp. 79-4409, as amended, and the 

only such tax which may be enacted by a city is a retailers' sales tax which conforms to 

the requirements of this act." 
24

This section has two primary parts. The first part is a general requirement that 

such taxes must be adopted with the approval of a majority of a city's electors. The 

second part—"the only such tax which may be enacted by a city is a retailers' sales tax 

which conforms to the requirements of this act"—is a limitation on the type of permitted 

taxes to sales only. What had been prohibited under the previous law—a sales tax—was 

now permitted, at least in the form of a retailers' sales tax. The previous prohibition "upon 

a sale or transfer of personal or real property, or the use thereof, or the rendering of a 

service" remained in place.

Meanwhile, K.S.A. 12-141's exceptions for contracting with a utility and licensing 

fees remained in effect. See K.S.A. 1971 Supp. 79-4414; K.S.A. 12-141.

In 1972 the legislature continued the 1970 suspension of statutes under the tax lid 

law and replaced K.S.A. 1971 Supp. 79-4424 with the following language: 

"No city shall levy or impose an excise tax or a tax in the nature of an excise,

other than a retailers' sales tax levied under and subject to the restrictions and provisions 

of this act, upon the sale or transfer of personal or real property, or the use thereof, or the 

rendering of a service." K.S.A. 1972 Supp. 12-165. 

The statute also contained three enumerated exceptions, two of which were identical to 

those in G.S. 1961 Supp. 12-141.

The practical effects of K.S.A. 1972 Supp. 12-165 were (1) to continue the general 

prohibition on excise taxes that had originated with G.S. 1961 Supp. 12-139, (2) 

incorporate the exceptions of G.S. 1961 Supp. 12-141, and (3) continue the permission

for a retailers' sales tax that had originated with K.S.A. 1971 Supp. 79-4424. The 1972 
25

provisions were designed to sunset on December 31, 1973. See K.S.A. 1972 Supp. 12-

168.

In 1973, the legislature gave the basic framework of the 1972 legislation 

permanent effect. The new excise tax provision—K.S.A. 12-180 (Weeks)—was identical 

to K.S.A. 1972 Supp. 12-165. 

In 1978, the legislature again addressed excise taxes. It repealed K.S.A. 12-180 

(Weeks), see L. 1978, ch. 56, sec. 20, and adopted a new statute, which would become 

K.S.A. 12-194. See L. 1978, ch. 56, sec. 8. The only substantive change from K.S.A. 12-

180 (Weeks) was extension of the prohibition to include counties as well as cities. 

In 1982, the legislature amended K.S.A. 12-194 to add "a compensating use tax" 

to retailers' sales tax as explicitly permissible taxes. See L. 1982, ch. 66, sec. 2. 

In 2002, the legislature added another exception to the enumerated list, see L. 

2002, ch. 105, sec. 11, but that exception was short lived. The legislature deleted it from 

K.S.A. 12-194 in 2003. See L. 2003, ch. 120, sec. 14. 

In 2006, K.S.A. 12-194 was amended to its present form. The legislature also 

restructured the statute slightly and added two new enumerated exceptions. See L. 2006, 

ch. 204, sec. 3.

Most important for today's case, the 2006 legislature deleted "upon the sale or 

transfer of personal or real property, or the use thereof, or the rendering of a service." See 

L. 2006, ch. 204, sec. 3. Before this amendment, the statute applied to "an excise tax or a 

tax in the nature of an excise . . . upon the sale or transfer of personal or real property, or 

the use thereof, or the rendering of a service." (Emphasis added.) K.S.A. 2005 Supp. 12-
26

194. After the amendment, the statute applied to "an excise tax or a tax in the nature of an 

excise." K.S.A. 2016 Supp. 12-194. 

The parties and the panel each relied on Callaway in defining "excise tax." 

According to Mission, "'Kansas courts have defined an "excise tax" as one "imposed on 

the performance of an act, the engaging in an occupation or the enjoyment of a 

privilege."'" Based on this definition, Mission concludes that an excise tax is a "charge 

that is imposed on a transactional basis." For their part, Plaintiffs also quote the same 

passage from Callaway, but they focus on another statement from that decision: "The 

term 'excise tax' has come to mean and include practically any tax which is not an ad 

valorem tax." Callaway, 211 Kan. at 651.

Callaway concerned an Overland Park ordinance that imposed an occupational tax 

of $.0035 per square foot of living space leased or subject to being leased on "'[p]ersons, 

firms, partnerships or corporations engaged in the business of owning and leasing or of 

leasing apartments, duplexes and all other rental properties'" within certain zoning 

classifications. 211 Kan. at 647. 

The Callaway parties agreed the ordinance in question "was not submitted to the 

electors for their approval, was not a retailers' sales tax and if the general prohibition in 

the statute as to excise taxes covers the tax imposed by the ordinance it should be held 

invalid." 211 Kan. at 650. The court was concerned with possible conflict between the 

ordinance and K.S.A. 1971 Supp. 79-4424(a), stating, "'No city shall impose an excise 

tax or tax in the nature of an excise, upon a sale or transfer of personal or real property, or 

the use thereof, or the rendering of a service . . . ." 211 Kan. at 651. If the tax imposed by 

the ordinance fell within this class of taxes, it would be invalid, because it did not qualify 

as a sales tax and was not passed in the prescribed manner. 211 Kan. at 650. 
27

The court began its analysis by noting that "[t]he term 'excise tax' has come to 

mean and include practically any tax which is not an ad valorem tax." 211 Kan. at 651. 

An "ad valorem tax is a tax imposed on the basis of the value of the article or thing 

taxed," while an "excise tax is a tax imposed on the performance of an act, the engaging 

in an occupation or the enjoyment of a privilege." 211 Kan. at 651. In Kansas, "excise 

tax" had been used in caselaw to refer to occupation taxes, franchise or privilege taxes, 

and license fees. 211 Kan. at 651. The court said that, because "'excise tax" is but a 

general term covering the entire field,'" the limitations of the statute at issue could not be 

discerned from the legislature's use of that term alone. 211 Kan. at 651. The court thus 

turned to the more specific language—"upon a sale or transfer of personal or real 

property, or the use thereof, or the rendering of a service" to determine whether the 

statute's prohibition would reach Overland Park's occupational tax. 211 Kan. at 651.

The court noted that 

"[t]he tax imposed by the Overland Park ordinance is upon engaging in a particular 

business, in this case leasing rental properties. The tax imposed, .0035 dollars per square 

foot of living space subject to being rented or leased, is an annual governmental exaction. 

It is not due on a transactional basis for it is paid only once a year whether the properties 

are rented or vacant and whether the same property is rented one or more times during a 

year." [Emphasis added.] 211 Kan. at 651.

This appears to be the portion of the Callaway opinion that Mission relies on for its 

argument that a tax qualifies as an excise tax only when it has a transactional tie. But the 

Callaway court was not using this language to define "excise tax." It was instead 

addressing the language of the statute that narrowed the group of excise taxes that would 

be prohibited. 

The Callaway court then turned to case precedent for guidance. 
28

In Hampton v. City of Wichita, 192 Kan. 534, 389 P.2d 757 (1964), the court had 

upheld an occupational tax imposed by Wichita when it faced a similar challenge. The 

controlling version of the statute was G.S. 1961 Supp. 12-139, which contained 

prohibition-restricting language identical to that in 79-4424—"upon a sale or transfer of 

personal or real property, or the use thereof, or the rendering of a service." The 

occupational tax in Hampton also was imposed on an annual basis. Callaway, 211 Kan. at 

651-52. Although the tax was related to property, the ordinance at issue "'create[d] no 

property tax nor attempt[ed] to impose a tax on the sale or transfer of real or personal 

property or the use thereof, nor [did the] ordinance make the tax a charge upon any 

specific property; it is solely an occupational tax on the business conducted.'" Callaway, 

211 Kan. at 652 (quoting Hampton, 192 Kan. at 536). The Callaway court applied 

Hampton's reasoning and ruled that the Overland Park ordinance did not violate K.S.A. 

1971 Supp. 79-4424(a). 

In arriving at this conclusion, the Callaway court also rejected an argument that 

the ordinance's basis on square footage of living area rented and its imposition on the 

business of owning and leasing made the exaction an impermissible tax on the property 

or the inventory of a business. "'In determining the amount of a business or occupation 

tax, the city may use property as a measure, without imposing a tax on the property 

itself.'" 211 Kan. at 653 (quoting Wichita Produce Co. v. City of Wichita, 112 Kan. 28, 

29, 209 P. 667 [1922]). Ultimately, 

"the tax is imposed on an annual basis for engaging in a business and not on a 

transactional basis as prohibited in 79-4424(a), supra. Square footage of living area is 

used only to measure the amount of the occupation tax. There can be little question that 

the present tax is neither an ad valorem tax nor a sales, use or earnings tax." Callaway, 

211 Kan. at 654.
29

The court concluded its analysis of whether the occupation tax was permissible by 

stating: 

"We are, however, of the opinion that the limitation upon the home rule power of 

a city to impose excise taxes (K.S.A. 1971 Supp. 79-4424) prohibits a city from imposing 

such taxes upon a transactional basis, i.e., upon each sale, transfer or use of personal or 

real property or upon each rendition of service by a licensee or taxpayer." 211 Kan. at 

655.

Again, this passage of the Callaway opinion does not define "excise tax" to require a 

transactional basis. Instead, the court was stating that the subset of excise taxes prohibited 

by the then-controlling version of the statute were those assessed on a transactional basis. 

Implicit in this pattern of analysis is the notion that there are other excise taxes assessed 

on a nontransactional basis. 

In the case before us today, the Court of Appeals panel did not appear to recognize 

the essential distinction between defining "excise tax" generally and setting of the 

boundaries of the subset of statutorily prohibited excise taxes. 

"Both the Callaway and Home Builders [Ass'n v. City of Overland Park, 22 Kan. 

App. 2d 649, 921 P.2d 234 (1996)] courts permitted the questioned taxes because they 

were not taxing transactions. These interpretations were based on the working definitions 

adopted by the Callaway court for excise and ad valorem property taxes:

"'The term "excise tax" has come to mean and include practically 

any tax which is not an ad valorem tax. An ad valorem tax is a tax 

imposed on the basis of the value of the article or thing taxed. An excise

tax is a tax imposed on the performance of an act, the engaging in an 

occupation or the enjoyment of a privilege.' Callaway, 211 Kan. at 651." 

Heartland Apartment, 51 Kan. App. 2d at 714.
30

This statement misdirects. A tax on engaging in an occupation, for example, is not 

necessarily transactional. But, under the governing statute as worded before the 2006 

amendment, a tax on engaging in an occupation would be prohibited if it were imposed

on a transactional basis. 

Despite this miscue, the panel ultimately reached the correct conclusion when it 

acknowledged that the 2006 amendment had removed all transactional bases as a way of 

determining if a tax is prohibited by law. The panel could have used more precise 

language, however. It said: "Simply put, the legislature removed all transactional bases 

as a way to decide if a tax is an excise tax prohibited by law." 51 Kan. App. 2d at 715. A 

more accurate synthesis of Callaway and the 2006 amendment would read: The 

legislature removed all transactional bases as a way to decide if an excise tax is 

prohibited by law; as a general rule, unless explicitly permitted, all excise taxes are now 

prohibited. 

Mission relies on the panel's miscue to argue that the panel incorrectly enlarged 

the definition of excise tax. In its view, the definition of excise tax from Callaway still

should be good law. Strictly speaking, Mission is correct. But this point does not lead 

where Mission would like us to go. The 2006 amendment did nothing to alter what 

Callaway described as excise taxes. Yet, because the statute in effect when Callaway was 

decided did not prohibit all excise taxes, the Callaway court was concerned only with 

discerning which excise taxes were prohibited. The panel correctly concluded that the 

2006 amendment altered the breadth of the statutory prohibition. As the panel said, 

"What was once permitted is now prohibited." Heartland Apartment, 51 Kan. App. 2d at 

716. The 2006 amendment did remove all transactional bases, but that affected the basis 

for prohibition rather than the general definition of "excise tax."
31

This brings us back to the question we must face: Is the TUF an excise tax? 

Callaway did not address whether the ordinance at issue in that case levied an excise tax; 

it merely held that it did not levy a prohibited excise tax. But two statements from 

Callaway are nevertheless instructive for us here: "The term 'excise tax' has come to 

mean and include practically any tax which is not an ad valorem tax." Callaway, 211 

Kan. at 651. And "[a]n excise tax is a tax imposed on the performance of an act, the 

engaging in an occupation or the enjoyment of a privilege." 211 Kan. at 651. 

These observations from Callaway are in general accord with that from other 

jurisdictions and legal authorities. See United States v. Wells Fargo Bank, 485 U.S. 351, 

355, 108 S. Ct. 1179, 99 L. Ed. 2d 368 (1988) (estate tax a form of excise tax; 

"Underlying this doctrine is the distinction between an excise tax, which is levied upon 

the use or transfer of property even though it might be measured by the property's value, 

and a tax levied upon the property itself."); Board of County Comm'rs of Kay County, 

Okla. v. Federal Housing Finance Agency, 754 F.3d 1025, 1030 (D.C. Cir. 2014)

("excise taxes may be measured by the property's value, but they are levied upon its use 

or transfer and not upon its existence"); Black's Law Dictionary 684 (10th ed. 2014)

(excise "tax imposed on the manufacture, sale, or use of goods [such as a cigarette tax] or 

on an occupation or activity [such as a license tax or an attorney occupation fee]").

Still other jurisdictions focus more on the taxing of an "act," when compared with 

Callaway. For example, in Steven Banks v. Heineman, 286 Neb. 390, 396-97, 837 

N.W.2d 70 (2013), the Nebraska Supreme Court noted:

"An excise tax is a tax imposed on the manufacture, sale, or use of goods or on 

an occupation or activity, and is measured by the extent to which a privilege is exercised 

by the taxpayer, without regard to the nature or value of the taxpayer's assets. An excise 

tax is imposed upon the performance of an act. We have also stated that an excise tax 

includes taxes sometimes designated by statute or referred to as 'privilege taxes,' 'license 
32

taxes,' 'occupation taxes,' and 'business taxes.' In contrast, a property tax is levied on real 

or personal property, with the amount of the tax usually dependent upon the value of the 

property." (Emphasis added.)

Although the Nebraska definition states that an excise tax is imposed on the performance 

of an act, this does not necessarily make it a transaction-based tax. Rather it appears that 

the Steven Banks court used "act" in a broader sense, to include things such as a tax on 

the privilege of the "act" of engaging in an occupation. 

As the authorities cited above also illustrate, courts often are called upon to 

contrast excise taxes with property taxes. In Wells Fargo, the United State Supreme 

Court addressed a provision that exempted certain public housing entities from "all 

taxation." The Court began by noting that generally "an exemption of property from all 

taxation had an understood meaning: the property was exempt from direct taxation, but 

certain privileges of ownership, such as the right to transfer the property, could be taxed." 

Wells Fargo, 485 U.S. at 355. A "direct tax" is a "tax that is imposed on property, as 

distinguished from a tax on a right or privilege. A direct tax is presumed to be borne by 

the person on whom it is assessed, and not 'passed on' to some other person. Ad valorem 

and property taxes are direct taxes." Black's Law Dictionary 1685 (10th ed. 2014); cf. 

Black's Law Dictionary 1686 (10th ed. 2014) (indirect tax a "tax on a right or privilege, 

such as an occupation tax or franchise tax"). Underlying the doctrine of limiting an 

exemption for "all taxes" to direct taxes was the distinction "between an excise tax, which 

is levied upon the use or transfer of property even though it might be measured by the 

property's value, and a [direct] tax levied upon the property itself." (Emphases added.) 

485 U.S. at 355. 

The Callaway court implicitly acknowledged this distinction between property 

taxes and excise taxes when it noted that excise taxes include practically all taxes except 
33

ad valorem taxes. At the time of Callaway, the overwhelming majority of property taxes 

were ad valorem taxes, but our court would be called upon later to address a non-ad 

valorem property tax.

In Von Ruden v. Miller, 231 Kan. 1, 6, 642 P.2d 91 (1982), the court considered an 

intangibles tax that required payment of 3 percent of gross earnings from intangible 

property such as "money, notes, and other evidences of debt." The plaintiff argued that 

this tax violated Article 11, section 1's uniform and equal clause. In contrast, the 

defendant, the Reno County treasurer, argued it was a permissible excise tax. At the 

outset of its analysis, the court noted that "[a]lthough Callaway noted, as a practical

matter, that an excise tax includes practically any tax which is not an ad valorem tax, this 

is not invariably true." 231 Kan. at 8. "The Kansas intangibles tax fits neither the 

definition of an ad valorem tax nor an excise tax, which includes income taxes, defined in 

article 11, § 11, and K.S.A. 79-3201 et seq., as a tax on net income." 231 Kan. at 8. 

Ultimately, the court decided the intangibles tax was a type of property tax. 231 Kan. at 

8. 

Mission relies on Von Ruden in an attempt to undercut the assertion in Callaway

that excise taxes include virtually all taxes other than an ad valorem tax. Again, strictly 

speaking, Mission's assertion has some validity. As Von Ruden illustrates, there are taxes 

other than ad valorem and excise. But, also again, Mission's point does not lead where 

Mission would like us to go. Von Ruden actually undercuts the Callaway court's use of 

"ad valorem tax" rather than the more accurate "property tax." The grouping of taxes into 

two general types, as implied by Callaway, appears to remain valid. But the more precise 

names for the two groupings are property taxes and excise taxes, rather than ad valorem 

taxes and excise taxes.
34

Mission also tries to persuade us that the TUF is not an excise tax without 

identifying what the TUF is, if not an excise tax. Without calling the TUF a property tax, 

Mission highlights the fact that both "the Attorney General and Plaintiffs contend that 'the 

TUF is assessed and levied based upon ownership of property.'" Mission notes that 

"ownership of property does not fall within any definition of 'excise tax' advanced by 

anyone in this litigation, much less within any Kansas precedents involving an excise tax. 

Specifically, ownership of property is not the performance of any act. Nor is it engaging 

in any occupation. Nor is it enjoyment of any 'privilege.' Indeed, the TUF is assessed on 

all developed property regardless of whether the property is used or enjoyed at all." 

This argument ignores the distinction between a tax levied on the property itself 

and a tax "levied upon the use or transfer of property." See Wells Fargo, 485 U.S. at 355. 

This court acknowledged this distinction in Callaway when addressing the plaintiffs'

argument that taxation based on the square footage of living area meant the tax inevitably 

qualified as property tax. 211 Kan. at 653. The court noted that "[t]he use of square 

footage of living area rented is merely a means of measuring the amount of the 

occupational tax to be collected annually," rather than making the tax one on the property 

itself. 211 Kan. at 653; see also Wichita Produce Co., 112 Kan. at 29 ("'In determining 

the amount of a business or occupation tax, the city may use property as a measure, 

without imposing a tax on the property itself.'"). 

With all of the foregoing discussion in mind, and applying Callaway's definition 

that an "excise tax is a tax imposed on the performance of an act, the engaging in an 

occupation or the enjoyment of a privilege," we conclude that the TUF is an excise tax. 

The TUF is a tax on real property owners based on the use of their property, rather than a 

tax on the property itself. See Mission City Code §145.070 (TUF based on "direct and 

indirect use of or benefit derived from the use of public streets, bicycle lanes and 

sidewalks generated by the developed property"); cf. Wells Fargo, 485 U.S. at 355 
35

(excise tax levied on use or transfer of property). Black's defines "enjoyment" as the 

"[p]ossession and use, esp. of rights or property." Black's Law Dictionary 647 (10th ed. 

2014). Based on this definition, a tax based on how a property is used and developed, as 

the TUF is, falls within Callaway's definition of an excise tax because it is a tax on "the 

enjoyment of a privilege." The privilege in this case being the benefits of property 

ownership beyond the ownership itself. 

Mission's TUF is an excise tax that does not meet any of the exceptions in K.S.A. 

12-194. Mission is thus prohibited from levying the TUF. 

CONCLUSION

The decision of the Court of Appeals is affirmed. The district court's summary 

judgment in favor of the City of Mission is reversed, and this case is remanded to the 

district court for the entry of summary judgment in favor of the moving plaintiffs on the 

issue of whether the TUF is a prohibited excise tax and for any other proceedings the 

district judge deems necessary to full resolution of the parties' claims. See Shamberg, 

Johnson & Bergman, Chtd. v. Oliver, 289 Kan. 891, 910, 220 P.3d 333 (2009).