Court Opinion

ID: 8192416
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:15:31.538329+00
Date Added: 2024-06-11T16:40:39.227684
License: Public Domain

KeewiN, J.
Dividends derived from stock in a corporation are “income” within the meaning of the law. Sec. 1087m — 2, Stats. The present case is ruled by Van Dyke v. Milwaukee, 159 Wis. 460, 150 N. W. 509, therefore little need be said here. In the Van Dyke Case it was held that ordinary dividends derived from stock are conclusively presumed as against stockholders to be earnings or profit, therefore income under the Wisconsin Income Tax Law. Van Dyke v. Milwaukee, supra; Klar Piquett M. Co. v. Platteville, 163 Wis. 215, 157 N. W. 763; Von Baumbach v. Sargent L. Co. 242 U. S. 503, 37 Sup. Ct. 201; State ex rel. Sallie F. Moon Co. v. Wis. Tax Comm., post, p. 287, 163 N. W. 639.
But it is argued that what was distributed in the instant case as dividends was not in fact income even though called dividends. This position is directly contrary to the statute, sub. 2 (b), sec. 1087m — 2. Van Dyke v. Milwaukee, supra; *51Stratton's Independence v. Howbert, 231 U. S. 399, 34 Sup. Ct. 136.
Tbe contention that the dividends in question were not ordinary dividends declared by a going corporation, hence not income, is without merit, as shown by the cases heretofore cited. There is no claim here that the dividends were declared in cancellation of stock liability or that any stock was in fact canceled, therefore we need not consider or decide such a ease.
It is also contended that the assessments in the instant casé violate the uniformity clause of sec. 1, art. VIII, of the constitution of the state of Wisconsin. No lack of uniformity is presented in the instant ease. All dividends of all stockholders of corporations are reached with the exception mentioned in the Van Dyke Gase. The classification is proper and violates no constitutional provision. Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627; Chicago & N. W. R. Co. v. State, 128 Wis. 553, 108 N. W. 557; Stanton v. Baltic M. Co. 240 U. S. 103, 36 Sup. Ct. 298.
Respondent relies upon State ex rel. Bundy v. Nygaard, 163 Wis. 307, 158 N. W. 87. That ease is distinguishable from the instant case as pointed out in the opinion.
Counsel for respondent also relies upon Von Baumbach v. Sargent L. Co. 207 Fed. 423, and Lynch v. Turrish, 236 Fed. 653. The Von Baumbach Case was overruled in Von Baumbach v. Sargent L. Co. 242 U. S. 503, 37 Sup. Ct. 201. In Lynch v. Turrish, supra, it will be seen that the learned judge who 'wrote the opinion failed to observe the difference between the law upon which that case was decided and the Wisconsin law, as pointed out by Justice Vinje in State ex rel. Sallie F. Moon Co. v. Wis. Tax Comm., post, p. 287, 163 N. W. 639.
We are convinced that the court below was in error and that the judgment below must be reversed.
*52By the Gourt. — The judgment is reversed, with costs, and the cause remanded with instructions to affirm the assessment of income made by the income tax board of review of Milwaukee county and confirmed by the Wisconsin tax commission.