Court Opinion

ID: 3985387
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:41:38.014642+00
Date Added: 2024-06-11T14:18:15.895197
License: Public Domain

I dissent. In this proceeding appellant concedes that the state Legislature has the right to impose an excise tax upon motor vehicle fuels imported into the state by a county for its own use. The question to be determined upon this appeal is whether or not Laws Utah 1923, c. 39, and Laws Utah 1925, c. 40, in fact impose an excise tax upon motor vehicle fuels imported into the state by the county and used by it in carrying on its governmental functions. Laws providing for taxation and exemptions from taxation are, as a general rule, to be construed, where possible, so as to make the burden or liability uniform. Sutherland, Stat. Const. §§ 362 and 364. The reasons for the rule, however, do not apply when considering municipal corporations in contrast with other corporations. Municipal corporations, such as counties, are created to spend money, whereas ordinary private corporations are usually created for profit. Under the laws of this state, counties secure practically all of their revenues from taxation in much the same manner as the state secures its revenues. If counties are compelled to pay to the state any tax, the counties in turn must secure the revenue from a source of taxation which is equally open to the state. For this reason it is quite generally held that the property of a state and its political subdivisions are immune from taxation unless there is a clear legislative intent showing the contrary. The following authorities cited by counsel for appellant support this view: Trustees of *Page 348 Public Schools v. Trenton, 30 N.J. Eq. 681; 1 Cooley on Taxation (3. Ed.) p. 263; Attorney General v. Morris, 2 M.  W. 159; Mersy Docks v. Cameron, 11 H. of L. Cas. 443;Inhabitants, etc., v. County Commissioners, 4 Gray (Mass.) 500; Worcester County v. Worcester, 116 Mass. 193, 17 Am.Rep. 159; State v. Gaffney, 34 N.J.L. 131; 26 R.C.L. 331;Notes to Board of Commissioners v. Ottawa, 33 Am. St. Rep. 400, 405; Foster v. Duluth, 120 Minn. 484, 140 N.W. 129, 48 L.R.A. (N.S.) 707; Penick v. Foster, 129 Ga. 217,58 S.E. 773, 12 L.R.A. (N.S.) 1159, 12 Ann. Cas. 346; Drall v. FurnasCounty, 108 Neb. 85, 187 N.W. 876, 26 A.L.R. 543; NationalSurety Co. v. Starkey, 41 S.D. 356, 170 N.W. 582; Henson v.Monday, 143 Tenn. 418, 224 S.W. 1043; Re Estate of AndrewMacky, 46 Colo. 79, 102 P. 1075, 23 L.R.A. (N.S.) 1217;Dispensary Comm'rs of Terrill County v. Thornton,106 Ga. 106, 31 S.E. 733; Balthasar v. Pacific Elec. Ry. Co.,187 Cal. 302, 202 P. 37, 19 A.L.R. 452; Marin Municipal Water Dist.
v. Chenu, 188 Cal. 734, 207 P. 251. The policy of this state as expressed in our state Constitution, art. 13, § 3, has been and still is that property belonging to a county may not be taxed. Counsel for all the parties to this proceeding concede that there is a distinction between a property tax and an excise tax, and of course if this were not so the Legislature is clearly without power to levy an excise tax on gasoline used by the county. The fundamental reasons, however, justifying exemption of property belonging to counties from taxation are applicable to exempt counties from the payment of an excise tax upon gasoline used by counties in performing their governmental functions. The reason for the rule exempting property belonging to municipal corporations from taxation is stated in 2 Cooley on Taxation (4th Ed.) § 621, p. 1312, in the following language:
"Some things are always presumptively exempted from the operation of general tax laws, because it is reasonable to suppose they were not within the intent of the Legislature in adopting them. Such is the case with property belonging to the state and its municipalities, and *Page 349 
which is held by them for public purposes. All such property is taxable, if the state shall see fit to tax it; but to levy a tax upon it would render necessary new taxes to meet the demand of this tax, and thus the public would be taxing itself in order to raise money to pay over to itself, and no one would be benefited but the officers employed, whose compensation would go to increase the useless levy. It cannot be supposed that the Legislature would ever purposely lay such a burden upon public property, and it is therefore a reasonable conclusion that, however general may be the enumeration of property for taxation, the property held by the state and by all its municipalities for public purposes was intended to be excluded, and the law will be administered as excluding it in fact, unless it is unmistakably included in the taxable property by the Constitution or a statute."
Counties are created by our state Constitution, and perform a very important part of our system of state government. To properly perform their functions in this age of rapid transportation, the counties have as urgent a need for the use of motor vehicle fuels as for any of their property. If counties are required to pay an excise tax to the state upon gasoline consumed, such tax must be paid from funds derived from the same source as would the money for the payment of a property tax. In construing the law involved in this proceeding, the presumption should be indulged at the outset that counties are not intended to be required to pay an excise tax on gasoline imported and used by them in the performance of governmental functions. The presumption, however, may not offend against the express provisions of the law.
Comp. Laws Utah 1917, § 1360, defines counties as "bodies corporate and politic." Comp. Laws Utah 1917, § 5848 provides:
"In the construction of the statutes, the following rules shall be observed, unless such construction would be inconsistent with the manifest intent of the Legislature or repugnant to the context of the statute:
                           *   *   *   *   *   *   *   *   *   *
"5. The word `person' includes bodies politic and corporate, partnerships, associations, and companies." *Page 350
The word "corporation," as well as the word "person," may or may not embrace a municipal corporation, depending upon the legislative intent as indicated by a consideration of the particular law in which the word is used. 1 McQuillin, Municipal Corporations, § 108, pp. 264, 265, and cases cited in the footnote.
The plaintiff claims authority to collect an excise tax from the defendant Salt Lake county by reason of the provisions of Laws Utah 1923, c. 39, and the amendments thereto contained in Laws Utah 1925, c. 40. Subdivisions (c) and (d) of section 1, c. 39, Laws Utah 1923, are:
"(c) The term `distributor' is hereby defined as any person, firm or corporation who imports or causes to be imported, motor vehicle fuels, as herein defined, for use, distribution or sale, in quantities other than the original packages in which the same was imported, and after the same reaches the state of Utah; and also any person, firm or corporation who produces, refines, manufactures or compounds such fuel in the state of Utah for use, distribution or sale in this state.
"(d) The term `retail dealer' is hereby defined as any person, firm or corporation who purchases from a distributor within the state, any motor vehicle fuels in the original packages in which the same was imported, for use, distribution or sale within the state in quantities other than in the original packages; or who imports into the state, motor vehicle fuels in the original packages for use of such person, firm or corporation."
In section 2, it is provided:
"Every retail dealer in motor vehicle fuel shall pay a license tax of one dollar for each place of business or agency for a period of three months or fraction thereof."
In section 3, it is provided:
"After this act takes effect it shall be unlawful for any person to distribute, sell or use motor vehicle fuels, the sale or use of which is taxable under this act, without having paid the said license tax and without having at all times conspicuously displayed at his place of business or agency a license certificate evidencing the payment of such license tax for the then quarter year or fraction thereof." *Page 351 
None of the law above quoted is materially amended by Laws Utah 1925, c. 40.
It will be observed that, if Salt Lake county comes under the provisions of the law as it was in both Laws Utah 1923 and Laws Utah 1925, such county was required to take out a license before it could lawfully use its own gasoline imported by it from the state of California. "To license means to confer on a person the right to do something which otherwise he would not have the right to do." 17 R.C.L. § 2, p. 474, and cases cited in the footnote. The County Commissioners of the defendant Salt Lake county are granted power "to manage and dispose of its [the county's] property as the interests of its inhabitants may require." Comp. Laws Utah 1917, § 1363. It is obvious that, when Salt Lake county acquired title to the gasoline shipped from California, the interest of the inhabitants of Salt Lake county required that such gasoline be used, because otherwise it served no useful purpose. If the law in question was intended to apply to counties, it would be, to say the least, a very unusual requirement that such counties as used gasoline shipped to them from other states must take out a license to use the property or to display a license certificate evidencing the payment of the license tax. Yet the law provides that it shall be unlawful to use motor vehicle fuels without complying with such provisions. Laws Utah 1923, c. 39, § 5, requires that distributors and retail dealers shall render to the secretary of state monthly sworn statements of the number of gallons of motor vehicle fuels sold during the preceding month. By amendment in Laws Utah 1925, c. 40, § 5, the sworn monthly statement must contain not only the motor vehicle fuels sold but also motor vehicle fuels used. Section 6 of both the 1923 and 1925 acts provides that distributors and retail dealers shall, on or before the 15th day of each month, pay to the secretary of state the excise tax on all sales made during the preceding month. Neither the law of 1923 nor that of 1925 fixes any definite date when the tax shall be paid by a user who brings motor *Page 352 
vehicle fuels into the state for use and not for sale as was done by the defendant county. Provision is made by law of the definite and specific duties of each county officer, but nowhere in either the law of 1923 or that of 1925 is any mention made of the person whose duty it is to make the monthly statements provided for in the acts. The money of counties may not be disposed of except as provided by law. Comp. Laws Utah 1917, § 1427, provides for the form of claims against a county, and directs that the county commissioners shall not hear or consider any claim unless the same is as provided by law. Both the law of 1923 and the law of 1925 are silent as to the manner in which the excise tax levied against the county can lawfully be paid. The act of 1923 (section 7) provides:
"If any distributor or retail dealer shall fail or refuse to pay any tax when the same becomes due, the same shall be delinquent on the first day of the next succeeding month. If not paid before such date there shall be imposed a penalty of twenty-five per cent of the amount of the tax. The amount of such tax with the penalty shall bear interest at the rate of twelve per cent per annum from the date of delinquency until the same is paid."
This section was not amended by Laws Utah 1925. It should be kept in mind that a county within this state is a creature of our state Constitution the same as the Legislature itself. While it is not argued, but seemingly conceded by appellant, that the Legislature has the power to impose a penalty upon a county I entertain very grave doubt that the Legislature is so empowered. The Legislature may of course provide for penalizing a county officer for a failure to perform a duty imposed upon him by law. An entirely different situation is presented, however, if the Legislature should attempt to penalize a county to the advantage of the state because an officer of that county fails to perform a duty imposed upon him by law. The power to penalize is based upon the power to destroy, and clearly the Legislature may not destroy a county. It is, however, not necessary, nor even advisable, to decide this question here. Suffice *Page 353 
it to say that it is improbable that the Legislature should intentionally attempt to impose a penalty upon a county to the advantage of the state without any definite provision authorizing or directing any county officer how he may lawfully proceed to avoid the payment of such penalty.
Section 13 of the 1923 act provides:
"Any distributor, retail dealer, associations of persons, firm or corporation violating any of the provisions of this act, shall be deemed guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not more than $1,000.00, or by imprisonment in the county jail of not more than six months, or by both such fine and imprisonment."
This section was not amended by the act of 1925. It will be observed that, if the defendant county is included within the provisions of the act it is guilty of a misdemeanor if it fails to comply with the provisions of the act. It would be interesting to know just how Salt Lake county is to be prosecuted for committing a misdemeanor. I am unable to conceive that the Legislature intended to make a criminal out of one of the arms of the state government if perchance some officer of the county failed to have the county take out a license to use its own property or otherwise failed to comply with the provisions of the act. If the Legislature did not so intend to make counties failing to comply with the act guilty of the crime of a misdeameanor, the only permissible alternative is that the Legislature did not intend to have the act apply to the defendant Salt Lake county. I am therefore of the opinion that a construction of the act of 1923, as well as that of 1925, which would include counties within the act, is inconsistent with the context of both acts.
Counsel for the intervener Utah Oil Refining Company contend that, if the act of 1923 as amended in 1925 does not include the defendant Salt Lake county, then the act is unconstitutional. The Utah Oil Refining Company is, and for a number of years has been a domestic corporation of *Page 354 
Utah, and extensively engaged in importing, refining, and selling motor vehicle fuels in this state. It is argued that, if Salt Lake county may import gasoline into the state and use the same without the payment of an excise tax, then the Utah Oil Refining Company cannot compete with the foreign dealer, because, if the Utah Oil Refining Company sells gasoline to the defendant county, the tax must be paid, which results in a discrimination against the intervener Utah Oil Refining Company. The act of 1923, as amended in 1925, has been so amended in 1927 (Laws 1927, c. 41) that the contentions made have no application to the present law. This court is unable to grant the Utah Oil Refining Company any relief. Nor does it ask any relief because it did not sell motor vehicle fuels to the defendant county because of the act of 1923 and the amendments thereto in 1925. Nowhere is it made to appear that a determination of the question raised as to the constitutionality of the act of 1923 or the amendments thereto in 1925 can in the slightest degree affect any rights of the parties here, even though it be held that defendant county is not liable for the payment of the tax involved in this proceeding. It is neither profitable nor proper for courts to pass upon whether or not a law, admittedly dead by an act of the Legislature, was or was not constitutional during the time it purported to be a law, where, as here, no rights will be affected by such a determination.
I am of the opinion that the judgment should be reversed and the appellant awarded costs.