Case Name: City of Lincoln, appellee, v. Lincoln Gas & Electric Light Company, appellant
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1916-07-01
Citations: 100 Neb. 182
Docket Number: No. 18405
Parties: City of Lincoln, appellee, v. Lincoln Gas & Electric Light Company, appellant.
Judges: Rose, J., not participating.
Reporter: Nebraska Reports
Volume: 100
Pages: 182–188

Head Matter:
City of Lincoln, appellee, v. Lincoln Gas & Electric Light Company, appellant.
Filed July 1, 1916.
No. 18405.
Taxation: Occupation Tax: Discrimination. When, there are several public service corporations engaged in furnishing heat, light and power to the people of a city and occupying the streets, alleys and public places of the city, with their apparatus for that purpose, under franchise granted by the city, the fact that one furnishes heat, light and power by electric current conveyed by wires and the other by gas conveyed by underground mains does not furnish a sufficient basis for classification to justify, levying an occupation tax upon one of such companies and not upon the other. A tax so levied is void for unjust discrimination.
Appeal from the district court for Lancaster county: Albert J. Cornish, Judge.
Reversed and dismissed.
Strode & Beghtol, for appellant.
G. Petrus Peterson, contra.

Opinion:
Sedgwick, J. •
In November, 1906, the city of Lincoln by ordinance No. 432 provided that no gas company should "charge, exact, demand or collect more than the sum of one dollar net per 1,000 cubic feet," and in December of that year the defendant city by ordinance No. 439 imposed an occupation tax on all gas companies of 2% per cent, of the gross receipts of the company. Afterwards, on the 27th day of December of that year, this defendant began an action in the circuit court of the United States, district of Nebraska, alleging that both ordinances of the city were invalid, and asking for an injunction against their enforcement. In May, 1908, the city of Lincoln began this action in the district court for Lancaster county to recover the occupation tax provided for in the aforesaid ordinance. This action was not finally determined in the district court until in July, 1913, when that court entered a judgment against the defendant.
One of the objections to the ordinance imposing this tax is that it "denies to defendant the equal protection of the laws, and is unjust and discriminatory in its classification." The ordinance imposes a tax of 2£ per cént. on "all gas companies manufacturing and furnishing gas to the inhabitants of the city of Lincoln." The defendant furnishes gas for heat, light and power purposes, and there is at least one other company whch has a franchise from the city, occupying streets and public places in the city as the defendant does, and furnishes heat, light and power by electric current as a public service corporation. There is no just basis of classification which will allow the imposition of an occupation tax upon one of two companies so organized with such privileges and not upon the other, when both companies are engaged, and competing as public service corporations, in furnishing the public generally with heat, light and power. The fact that the companies use different modes of conveying their product and supplying the de sired accommodations is not a sufficient basis for discriminating in exacting an occupation tax. In the action brought in the circuit court of the United States for this district by this defendant to restrain the enforcement of the so-called "dollar gas" ordinance, that' court considered that it was necessary to determine the validity of the ordinance involved in this case, and in its opinion said: "The occupation tax of 2£ per cent, for the year 1907 would- have amounted to $4,484.15. This occupation tax I think invalid, as violating the Constitution of the state of Nebraska, requiring it to be uniform upon persons and property. In my judgment, an electric plant, which furnishes to the public light, heat, and" power, should be classed the same as a gas plant, which furnishes to the public light, heat, and power. The fact that one furnishes the light, heat, and power by means of an electric current — the other by a current of gas — does not, in my judgment, justify a difference in -classification. So far as the patrons are concerned, it is results that are sought for, and it is results which the respective parties furnish the public." The opinion was filed March 20, 1909. That court then enjoined the enforcement of this ordinance. TAncoln Gas & Electric Light Go. v. City of Lincoln, 182 Fed. 926. An ordinance passed in March, 1906, levied an occupation tax of 2 per cent, on the business of manufacturing electric current. In December, 1909, after the said decision in the "dollar gas" case, an ordinance was enacted repealing both of the former ordinances and levying an occupation tax of 3 per cent, on the manufacture and sale of gas and electric current. We think the federal court was right in holding the first ordinance invalid, and it follows that the plaintiff can have no right of action thereunder. The judgment of the district court is reversed and the action dismissed.
Reversed and dismissed.