Court Opinion

ID: 9864377
Source: CourtListenerOpinion
Date Created: 2023-09-25 12:55:13.63514+00
Date Added: 2024-06-11T12:11:03.184176
License: Public Domain

MoHaney, J. (concurring). I agree that the opinion of the majority holding that this action is barred by reason of the provisions of § 13899 of Pope’s Digest is correct. But I do not agree with the conclusion of the majority that the amounts paid by purchasers of annuity contracts are taxable under existing legislation. By act 220 of 1913, the legislature of this state for the first time imposed a tax on the ££ gross premium receipts” of life and other .related insurance companies, and it was therein provided that: £ £ The purpose of this law is to impose a tax of one and one-half per cent, on the gross receipts of every insurance company coming within the description herein above given, whether such-premium receipts be in cash or in the shape of notes or other evidences of credit.” At that time insurance companies doing business in this state were not authorized to write annuity contracts and were not so authorized until 1921, although the tax rate had been increased in the meantime. In that year, the legislature enacted act 193 and in § 1 provided: ‘ ‘ Corporations may be formed or enter this state to effect insurance for the following purposes: 3. Life Insurance—Upon the lives or health of persons and every assurance pertaining thereto, and to grant, purchase or dispose of annuities and endowments. ’ ’ This appears to me to be a very strong indication that the legislature did not consider annuity contracts as being* life insurance, else why, after authorizing life and health insurance of all kinds, was it deemed necessary to add the words ‘ ‘ and to grant, purchase and dispose of annuities and endowments.” If the legislature had thought annuity payments or premiums were taxable as insurance premiums, it would have been a very simple thing to have added that they were taxable as such. It did not do so and the taxing statute was not amended at that or any succeeding session of the legislature to include them. The only amendments to the taxing* statute that have ever been made since 1913 are to increase the rate. In 1935, the Commissioner of Insurance prepared and had introduced a bill which, among* other provisions, contained one that would have specifically taxed annuity receipts, but it was defeated. In the 1938 special session, the legislature, among* other, amendments to the insurance laws, amended .§ 7965 of Pope’s ■Digest, the section that levies a tax of 2y2 per cent, on the “gross premium receipts” of life, health and accident insurance companies, but it did not in terms impose such tax on annuity receipts. No insurance commissioner of this state has ever demanded of appellee the payment of the tax demanded in this action, for the reason that no insurance commissioner ever considered that the present statute authorized him to do so, for the reason that annuity receipts were not life insurance premiums within the meaning of the- taxing* statute. No doubt they so considered the matter because of two decisions, one by the Supreme Court of Pennsylvania in 1916 in the case of Commonwealth v. Metropolitan Life Ins. Co., 254 Pa. 510, 98 Atl. 1072, and the other in 1920, in New York, in the case of People ex rel. Metropolitan Life Ins. Co. v. Knapp, 193 App. Div. 413, 184 N. Y. S. 345, affirmed 231 N. Y. 630, 132 N. E. 345. In the Pennsylvania case, the statute of that state imposed a tax on “the entire amount of premiums of every character and description, ’ ’ and in disposing of the case pointed out the difference between “the ordinary insurance contract and the granting of an annuity,” and stated, in line with what I have pointed out above, that: “It is significant that neither the Legislature of Pennsylvania or New York appears to have supposed that the power to make every insurance appertaining to or connected with the lives of individuals, conferred authority also to grant or purchase annuities. This authority is expressly added in each.state.” In denying the right of the Commonwealth to collect the tax on annuity receipts, the court said: “For these reasons in our opinion the act of June 1, 1911 (P. L. 607), under which the commonwealth here claims, and which imposes tax only upon premiums received by every insurance company, does not impose the tax upon the consideration paid for the granting of annuities. We therefore have reached the following conclusions: “. . . The defendant company under the act of June 1, 1911 (P. L. 607), is not liable to tax upon the consideration money received by it for the granting of its annuities. “The defendant company has fully paid the tax imposed by the act of June 1,1911, upon the gross premiums received by it during the years 1911 and 1912, and is not now indebted to the commonwealth, in either of the cases stated in the caption hereto.” The New York court, in the case cited, reached the same conclusion. The New York statute imposed the tax on “the gross amount of premiums received during the preceding calendar year.” (193 App. Div. 413, 184 N. Y. S. 346). I can see no distinction between a tax on “the entire amount of premiums of every character and description,” as in Pennsylvania, “the gross amount of premiums received,” as in New York, and the “gross premium receipts,” as in the Arkansas statute. All mean the same thing. Other and more recent cases to the same effect are State of North Dakota v. Equitoble Life Assurance Society of the U. S., 68 N. Dak. 641, 282 N. W. 411; State ex rel. Equitable Life Assurance Society v. Hamm, Ins. Comm., 88 Pac. 2d (Wyo.) 484, decided March 21, 1939; Daniel v. Life Ins. Co. of Virginia, (Tex. Civ. App.) 102 S. W. 2d 256. It is my further opinion that before a tax can be levied on annuity receipts, the statute would have to be amended so as to clearly express the intention of the legislature so to do. I have no doubt that it could do so, but my insistence is that.it has not done so. In the recent so-called “use tax” case, Mann v. McCarroll, Commissioner of Revenues, ante p. 628, 130 S. W. 2d 721, we said: “The question raised here is whether a use tax has been levied or imposed upon the property. The law is, as we understand it, that the imposition or levying of. a. tax shall be direct and specific, and if there is any doubt about the fact of the .levy, such doubt must be resolved in favor of the taxpayer.” Citing cases. It must be conceded that the language of the statute is not “direct and specific.” No Insurance Commissioner has ever so considered it or attempted to collect the tax during- the eighteen years since insurance companies were authorized to issue annuity contracts. Although the legislature’s attention has been called to the failure of the statute to impose such tax, it has failed to amend the statute as to enable the Commissioner to collect it, and until it does, I am unwilling for this court to legislate for it. I, therefore, concur in the holding- of the majority that this action is barred, but dissent from the holding that the present statute authorizes the Commissioner to collect the tax on annuity receipts in the future. Mr. Justice 'Baker concurs in this opinion.