Opinion ID: 853052
Heading Depth: 2
Heading Rank: 2

Heading: Taxation is Specially Legislative and Deference is Substantial

Text: Every statute stands clothed with the presumption of constitutionality until clearly overcome by a contrary showing. Boehm v. Town of St. John, 675 N.E.2d 318, 321 (Ind.1996). The party challenging the constitutionality of the statute bears the burden of proof, and all doubts are resolved against that party. Id. at 321. If there are two reasonable interpretations of a statute, one of which is constitutional and the other not, we will choose that path which permits upholding the statute. Id. Taxation is a power purely within the province of the legislature. Board v. Holliday, 150 Ind. 216, 49 N.E. 14 (1898); Board of Comm'rs v. Adler, 77 Ind.App. 296, 133 N.E. 602 (1922). As the Department notes, the legislature has wide discretion in taxing for the general welfare. See Yarger v. Raver, 237 Ind. 88, 143 N.E.2d 662 (1957); Morgan County v. Seaton, 122 Ind. 521, 24 N.E. 213 (1890). The power of the legislature regarding matters of taxation is unlimited, except as restricted by the Constitution. Brown v. Baltimore, 186 Ind. 81, 115 N.E. 86 (1917). One constitutional restriction on this legislative power is Article 10, § 1, which provides, The General Assembly shall provide, by law, for a uniform and equal rate of property assessment and taxation and shall prescribe regulations to secure a just valuation for taxation of all property, both real and personal. (Emphasis added.) These provisions seek to distribute the burden of taxation upon the principles of uniformity, equality, and justice. Davis v. Sexton, 210 Ind. 138, 200 N.E. 233 (1936). Uniformity in rate, as required by the Constitution, means that the same rate shall apply alike to all in any given taxing district. Henderson v. London & Lancashire Ins. Co., 135 Ind. 23, 34 N.E. 565, 568 (1893). This means that as a general proposition, Article 10 requires that a tax for a state purpose must be uniform and equal throughout the state, a tax for a county purpose must be uniform and equal throughout the county, and so forth. Board of Comm'rs of Jackson County v. State, 155 Ind. 604, 58 N.E. 1037, 1039 (1900); Bright v. McCullough, 27 Ind. 223, 230 (1866). What shall constitute a taxing district, and whether it may be confined to, or disregard, boundary lines of counties, townships, or municipalities, is a matter wholly within the discretion of the General Assembly. Brown, 115 N.E. at 86. The subjects and methods of taxation are legislative matters, and cannot be disturbed so long as the method prescribed is applicable alike to all within the prescribed class. Davis, 200 N.E. at 241. What is important is that there be uniformity and equality of rate as to those of the same class. Id. Article 10 has been largely aimed at assessments. The history surrounding the drafting and ratification of the Constitution suggests that while Article 10 applies to assessments and taxation, assessment was the central concern of its proponents. Delegate Daniel Read of Monroe County, in proposing Section 1, stated: It appears to me, that no provisions are more proper for a Constitution, than those requiring equality of assessment for purposes of taxation. The duty of the Legislature to devise a system which will secure such equality and which will cause all the property of the State to be brought under taxation, should be held forth in the Constitution. Comments of Delegate Read (Dec. 3, 1850), Debates in Indiana Convention, 1850, Vol. 1, p. 941 (emphasis added). Including the requirements of uniformity and equality in assessments and taxation elevated and preserved their importance as fundamental principles. Id.; see also, Boehm, 675 N.E.2d at 323. We reiterated the thrust of Article 10 in Kerr v. Perry School Twp., 162 Ind. 310, 70 N.E. 246, 247 (1904): This provision of our fundamental law clearly applies to assessments and taxation, and does not profess to control the expenditure of money arising out of any assessment or taxation of property. It deals with the uniformity and equal rate of assessment and taxation of property within the taxing district or locality in which the particular tax is levied. Thus, when the rate of property assessment is uniform throughout a taxing district, the constitutional mandate of uniform and equal taxation has been fulfilled. South Bend Public Transportation Corp. v. City of South Bend, 428 N.E.2d 217, 223-24 (Ind.1981). Delegate Read stated: There is hardly a subject connected with our State government, which has attracted more general attention among the people, than the existing inequality in the assessment and taxation of property. Id. In proposing the inclusion of Article 10, § 1 in our Constitution, Delegate Read sought to rectify the manifest injustice that results in permitting property, in the hands of the wealthy, which ought to be taxed as other property, to escape taxation altogether, or to be taxed only on a very small part of its value. Id. at 946. Such comments illustrate that the mischief being addressed was chiefly unequal assessment of properties, not the rates between counties or governmental units once the assessment was done. See e.g., Boehm, 675 N.E.2d at 322-23 (quoting comments of Delegate Borden (Dec. 4, 1850), Debates in Indiana Convention, 1850, Vol. 1, p. 946, 950). In the end, of course, the Convention chose language covering both assessment and taxation. Legislative history suggests intent to apply a more muscular restraint on assessment.