Opinion ID: 1835354
Heading Depth: 1
Heading Rank: 5

Heading: what is the proper assessment ratio for use in taxation of branch banks?

Text: The assessment ratio is that percentage of true value upon which tax is imposed. Miss. Const. § 112, as amended. Appellant attempted to employ an assessment ratio of 100% in computing the tax liability of appellee's Calhoun County branches. The trial court held this assessment to be unconstitutional and, for reasons discussed infra, substituted an assessment ratio of 22.269%. Section 112 of the Constitution states that the legislature may provide for a special mode of valuation and assessment for railroads, and railroad and other corporate property... . Section 181 provides in pertinent part: The property of all private corporations for pecuniary gain shall be taxed in the same way and to the same extent as the property of individuals, but the legislature may provide for the taxation of banks and banking capital, by taxing the shares according to the value thereof (augmented by the accumulations, surplus, and unpaid dividends), exclusive of real estate, which shall be taxed as other real estate. Obviously, the intangible assets of a branch bank are personal property. Therefore, unless the legislature has provided otherwise, § 181 requires that a bank's personalty be taxed in the same way and to the same extent as the property of individuals. Appellant cites no statute, and we have found none, which provides that the property of banks or corporations in general shall be assessed at a ratio greater than that of other property. Accordingly, § 181 of the Constitution requires that the intangible property of appellee's Calhoun County branches be assessed at the same ratio employed for all other personal property taxed in Calhoun County. The trial court's assessment ratio of 22.269% was determined by application of a formula endorsed by this Court in Washington County Board of Supervisors v. Greenville Mill, 437 So.2d 401 (Miss. 1983). There, the county had imposed separate and different assessment ratios for personal and real property. This Court held that practice to be violative of Miss. Const. § 112. To arrive at a substitute ratio, the Court divided the assessed value [7] of all taxable property in the county by the true value of all the taxable property. This formula was followed by the trial court in the case at bar. The assessed value of all taxable property in Calhoun County was $27,779,183, and the true value of the same property was $124,172,842. When the former is divided by the latter, the resulting percentage is 22.269%. Appellant bases much of its argument under this assignment upon Magnolia Bank v. Board of Supervisors of Pike County, 111 Miss. 857, 72 So. 697 (1916). That case states precisely the opposite of our holding here and sanctions the assessment of banks at a ratio of 100% while all other property is assessed at a lesser ratio. The rationale of the decision appears to be that where the Constitution contemplates assessment at true value and some property in the district is assessed at less than true value, he whose property is assessed at true value cannot complain that his property too should have been illegally assessed at a lower rate. See, e.g., Southern Railway Co. v. Commissioner, 211 Va. 210, 176 S.E.2d 578 (1970). This rationale has been rejected by several jurisdictions. See 3 A.L.R. 1370, 28 A.L.R. 983, 55 A.L.R. 503 and cases collected therein; Merlino v. Tax Assessors for Town of North Providence, 114 R.I. 630, 337 A.2d 796 (1975); Anderson's Red & White Store v. Kootenai County, 70 Idaho 260, 215 P.2d 815 (1950). The overriding Constitutional consideration is not that property be assessed at true value, but rather that taxation be equal and uniform throughout the state. Absent a legislatively-created special mode of assessment for banks providing otherwise, we interpret the guarantees of equal and uniform assessment conferred by §§ 112 and 181 to extend to banks just as to all other taxpayers. The result reached in Magnolia Bank is at odds with these guarantees. As there is no statute authorizing the assessment of bank intangibles at a rate greater than other personal property in general, §§ 112 and 181 protect such bank property from disproportionate assessment. We therefore find appellant's reliance upon Magnolia Bank v. Board of Supervisors of Pike County, supra, unpersuasive. The trial court correctly held that the proper assessment ratio was 22.269%. [8]