Court Opinion

ID: 5576868
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:26:57.540557+00
Date Added: 2024-06-11T08:35:57.772169
License: Public Domain

Evans, P. J.
(After stating the foregoing facts.)
1. The motion of the City of Atlanta (which is in the nature of a demurrer) called in question the applicability of the act of 1903 to the facts as alleged in the affidavit of illegality; the contention of the city being that under the terms of that act no deduction is allowed from taxes due on account of franchises except where the occupation tax or charge is paid to the city for the exclusive use of the franchise or privilege on which the franchise tax is assessed. The caption of the act of 1903 is as follows: “An act to provide for the deduction, on franchises due counties, cities, towns, and villages, of all amounts paid, or liable to be paid, under any agreement therefor, or otherwise, to such counties, cities, towns, and villages by the person, partnership, association, or corporation affected, except amounts due for ad valorem taxes on account of the physical property located therein, and for other purposes.” It indicates a legislative purpose to provide for a deduction, on franchise taxes due to cities, of amounts paid under agreement therefor, or otherwise, except amounts due for ad valorem taxes on physical property. The first section of the act makes plain that the *117General Assembly, among other things, provided that any occupation or privilege tax or charge, except money paid for ad valorem taxes on physical property, shall be deducted from the portion of the franchise tax due such city. ' The exception in terms of ad valorem taxes on tangible property, in section 1, and also charges for paving, bridge rentals, etc., in the second section of the act, indicates that other charges, such as business taxes, were not intended to be excluded from its provisions. The act of 1902 imposed a tax upon special franchises, and the act of 1903 undertook to allow a deduction of so much of the tax as might be paid the city for separate and distinct kinds of charges, including an occupation or privilege tax or charge. Construing the act of 1903 as a whole, and in connection with the act of 1902, of which it is complementary, it is clear that the occupation or privilege tax referred to in the act of 1903, which is to be credited as a pro tanto payment of the franchise tax, was not limited to such taxes as are paid as a consideration for the franchise. We therefore think that the occupation tax alleged to have been paid by the express company to the City of Atlanta is covered by the act of 1903, according to the allegations of the affidavit.
2. The City of Atlanta assails the constitutionality of the act of 1903 as applied to the case under consideration, as violative of article 7, section 2, paragraph 1, of the constitution (Civil Code, §5883), which provides that “All taxes shall be uniform upon the same class of subjects, and ad valorem on all property subject to be taxed within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.” It is not controverted that the acts of 1902 and 1903 are general laws; but the point is made that if a corporation is allowed to deduct from the tax on its franchise the amount paid on account of an occupation tax, this constitutional provision will be impinged upon. The constitutional requirement that taxes shall be ad valorem relates to taxes on property. If the act were so construed as to partially exempt persons or corporations who pay an occupation tax from taxes on their property, then the act would be open to this objection. Southern Express Co. v. Stewart, 109 Ga. 80 (35 S. E. 73). But if a construction can be given the act that the franchise tax is not to be disturbed — not to be lessened— but that the statute so operates as to limit the right of a munici*118pality to collect from persons or corporations liable for the franchise tax an occupation tax or other charge, which it has no power to exact except by permission of the legislature, then the constitutional provision as to uniform and ad valorem taxation would not be infracted. The power to tax is incident to the State because of its sovereignty. A municipal corporation does not possess this power to any extent unless conferred by the constitution or laws of the State; and when a municipality undertakes to exercise the power of taxation, it is only by reason of this delegated authority. Albany Bottling Co. v. Watson, 103 Ga. 503 (30 S. E. 270). Our constitution delegates no power of taxation to municipalities, and their authority to exact a tax must be obtained from the legislature. In creating a municipality the legislature may in its discretion withhold the power to exact an occupation tax, or it may limit the exercise of such power. If it can do so in the first instance, it may withdraw or limit such power theretofore granted. It is a principle universally recognized that it is legitimate, in directly imposing special taxes on a business, or in delegating such power to a municipality, that different businesses may for such purposes be classified by the legislature, and the only limitation is that the classification must not be arbitrary, but must rest upon some reasonable basis. In imposing the franchise tax the legislature evidently considered the nature of the tax and the subject-matter upon which it operated; that it was imposing a tax upon intangible property — a tax upon a subject-matter incidental to the tangible property and the right to use that tangible property under some lawfully authorized power. Probably this consideration induced the legislature to classify persons and corporations liable to the special franchise tax which it imposed, and to provide that when a municipality imposed an occupation or privilege tax, if the same was less than the franchise tax, it should go as a pro tanto payment upon the franchise tax. There is nothing in the act of 1903 which prohibits a municipality from imposing an occupation tax (provided it is reasonable) which exceeds the amount of the municipal tax assessed on the franchise.
3. No reason occurs to us why the legislature may not constitutionally enact that persons or corporations who paid taxes on account of a franchise should not be required to pay to the city an additional sum for a tax on the occupation or business. It would *119not create any difference in the rate at which the franchises were taxed, nor would it exempt any person or corporation liable for a franchise tax. All persons and corporations subject to -a franchise tax are treated alike in its provisions. The grouping of those engaged in a business liable to a franchise tax, and regulating the occupation tax which a city may require of such, is a reasonable classification. Such legislation does not offend the constitutional guaranty in the bill of rights (Civil Code, §5699) that protection to person and property shall be impartial and complete.
It was argued that the tax imposed by the City of Atlanta was a license, and not an occupation tax. The judgment under review is that rendered upon a demurrer which takes as true the allegations of the affidavit of illegality, the legal sufficiency of which is challenged. In its affidavit of illegality the express company avers that the $250 which it paid the City of Atlanta, and which it claims as a payment upon the franchise tax assessed against it, was an occupation tax or charge, and we have dealt with the case in that light.
We concur with the trial judge that the demurrer should have been overruled; but as the judgment excepted to not only overruled the demurrer but also sustained the illegality, it is affirmed with direction that so much thereof as sustained the illegality be stricken, so that, if the allegations of fact in the affidavit are traversed, an issue may be formed thereon and tided as in illegality cases.

Judgment affirmed, with direction.

All the Justices concur, except Lumpkin, J., disqualified.