Case Name: COLUMBIA NATIONAL BANK OF WASHINGTON v. DISTRICT OF COLUMBIA
Court: United States Court of Appeals for the District of Columbia Circuit
Jurisdiction: United States
Decision Date: 1951-06-28
Citations: 195 F.2d 942
Docket Number: Nos. 10844 and 10854
Parties: COLUMBIA NATIONAL BANK OF WASHINGTON v. DISTRICT OF COLUMBIA.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 195
Pages: 942–946

Head Matter:
COLUMBIA NATIONAL BANK OF WASHINGTON v. DISTRICT OF COLUMBIA.
Nos. 10844 and 10854.
United States Court of Appeals District of Columbia Circuit.
Argued Before Court of Three Judges April 25, 1951.
Decided by Court of Three Judges June 28, 1951.
Argued on Rehearing in Banc in No. 10854 Jan. 7, 1952.
Decided on Rehearing in Banc in No. 10854 March 28, 1952.
Mr. Louis H. Mann, Washington, D. C. with whom Mr. Walter B. Guy, Washington, D. C. was on the brief, for petitioner.
Mr. Harry L. Walker, Asst. Corporation Counsel for the District of Columbia, with whom Messrs. Vernon E. West, Corporation Counsel, Chester H. Gray, Principal Asst. Corporation Counsel, and George C., Updegraff, Asst. Corporation Counsel, were on the brief, for respondent.
Before EDGERTON, PRETTYMAN, and WASHINGTON, Circuit Judges.

Opinion:
EDGERTON, Circuit Judge.
On November 30, 1946 petitioner sold its assets, ceased business, and went into voluntary liquidation. It afterwards paid, under protest, taxes measured by its gross earnings for years ending June 30, 1946 and June 30, 1947. It contends it is taxable on only 5/12 of its earnings for the first of those years and not taxable at all on its earnings for the second. But the statute provides without qualification: "Incorporated savings banks paying interest to their depositors shall, through their president or cashier, make report under oath to the board of personal-tax appraisers on or before the 1st day of August in each year as to the amount of their gross earnings, less the amount paid as interest to their depositors for the preceding year ending June 30th, and shall pay thereon to the collector of taxes of the District of Columbia four per centum per annum." 32 Stat. 619, as amended, 33 Stat. 564, D.C.Code (1940) § 47-1703. (Emphasis supplied.) It is undisputed that petitioner was an "incorporated savings bank" paying interest to its depositors. Hamilton National Bank of Washington v. District of Columbia, 85 U.S.App.D.C. 109, 176 F.2d 624.
Petitioner contends in effect that we should read into the statute, at the end of the sentence we have quoted, the following proviso: "Provided, however, that if a bank is in business during only part of a year it shall pay a tax on only a corresponding part of its gross earnings for the preceding year, and if it is not in business at all during a year it shall pay no tax on its earnings for the preceding year." We agree with the Board of Tax Appeals that the statute must be enforced as it is written. The point was involved though not discussed in Hazen v. Hardee, 64 App.D.C. 346, 78 F.2d 230.
We find no decision to the contrary. American Security & Trust Co. v. District of Columbia, 29 App.D.C. 265, on which petitioner relies, did not involve the point. That case dealt with a going concern and enforced the statute according to its terms by requiring payment at an increased rate which the statute established. The case followed District of Columbia v. Glass, 27 App.D.C. 576, which gave the taxpayer the benefit of a decreased rate established by a similar statute. In each case the court gave effect to the literal terms of the statute. In the American Security case the court expressly rejected a construction that would have led to a tax-free period. 29 App.D.C. at 268-269.
The gross-earnings tax has been declared to be a franchise tax on the privilege of doing business. We think this immaterial here, for petitioner was exercising that privilege when the taxed earnings were •realized. It is urged that tax officials and judges have referred to the tax as "for" the years in which it is assessed and collected ; that the words "franchise tax" and "for" have technical connotations in tax law; and that according to these connotations, the tax is to be paid only if business is done in the year in which it is to be assessed and collected. A sufficient answer to this argument is that Congress did not use the words on which petitioner relies. If Congress had used them the question would arise whether Congress intended them to cut down the meaning of the words "shall report the amount of their gross earnings for the preceding year and shall pay thereon four per centum ". Since Congress did not use them we see no problem.
Affirmed.
. Neild v. District of Columbia, 71 App. D.C. 306, 110 F.2d 246, is irrelevant because in the statute there involved Congress said the tax was "for" a specified year: "For the privilege of engaging in business in the District of Columbia, each person so engaged shall pay to the collector of taxes of the District of Columbia for the fiscal year 1937-1938 a tax equal to two-fifths of 1 per centum of the gross receipts in excess of 82,000 derived from such business for the calendar year 1936 50 :Stat. 690, § 5.