Opinion ID: 1121286
Heading Depth: 1
Heading Rank: 2

Heading: The Taxpayers' Proper Remedy Is a Writ of Mandamus to Compel the Director of Taxation to Do His Official Duty.

Text: We turn now to the circuit court's holding that the failure of the Director of Taxation to assess the Hawaii general excise tax upon that portion of the interstate and international carriers' income attributable to their ticket sales within the state of Hawaii violated the taxpayers' right to the equal protection of the laws and entitled them to a tax refund for the years in question. In so holding, the circuit court relied upon the following language from Hasegawa v. Maui Pineapple Co., Ltd., 52 Haw. 327, 330, 475 P.2d 679, 681 (1970) (footnote omitted): Thus, one who questions the constitutionality of a statute on equal protection grounds has the burden of showing, with convincing clarity, that the challenged classification does not rest upon some ground of difference having a fair and substantial relation to the object of the legislation. In ascertaining whether this burden has been met it is necessary for this court to follow a two-step procedure. First, we must ascertain the purpose or objective that the State sought to achieve in [taking the action questioned]... . Second, we must examine the means chosen to accomplish that purpose, to determine whether the means bears a reasonable relationship to the purpose. The circuit court further noted that under HRS § 26-10 the Director of Taxation has a duty to administer and enforce the tax revenue laws of the State and collect all taxes and other payments payable thereunder. On the basis of its finding that the taxpayers and the carriers were all substantially involved in the sale of interstate and international transportation, the court held that the Director's decision to collect the general excise tax from the taxpayers but not from the carriers lacked any rational relation to the purposes of HRS ch. 237 and HRS § 26-10. We need not pass upon the propriety of the circuit court's holding, because we believe that the taxpayers are not entitled to a tax refund, even assuming that the taxpayers have been denied the equal protection of the laws. Every taxpayer engaged in a service business assessed under HRS § 237-13(6) during the years in question is as similarly situated to the carriers as are the taxpayers in the instant appeal. To order a refund of all general excise tax revenues collected from taxpayers engaged in service businesses would, however, be intolerable as a matter of public policy. However labeled, the nub of the taxpayers' complaint is that the Director of Taxation has for some reason refrained from assessing all persons taxable under the service business classification of the general excise tax law. If the taxpayers believe that the Director has refused to assess the carriers in violation of his duty to do so, they may seek a writ of mandamus in the circuit court to compel the Director to act. [9] See Liggett Co. v. Lee, 288 U.S. 517, 540, 53 S.Ct. 481, 77 L.Ed. 929 (1933); County of Sacramento v. Hickman, 66 Cal.2d 841, 845, 59 Cal. Rptr. 609, 611-612, 428 P.2d 593, 595-596 (1967); People ex rel. Village of Park Forest v. Cullerton, 13 Ill.2d 575, 580, 150 N.E.2d 589, 592 (1958). The taxpayers do not dispute that they are engaged in the service business or calling within the meaning of HRS §§ 237-7 and 237-13. Failure to collect the tax from some whose occupations fall within the provisions of the act, cannot excuse the [taxpayers] from paying what they owe. And certainly the remedy afforded by state law [ i.e., mandamus] assures them equal treatment along with all others similarly situated. Liggett Co. v. Lee, supra, 288 U.S. at 540, 53 S.Ct. at 487. Reversed.