Court Opinion

ID: 9659033
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:27:44.901069+00
Date Added: 2024-06-11T18:14:03.326478
License: Public Domain

On Petition for Rehearing.
STRUTZ, Judge.
A petition for rehearing has been filed by the City of Bismarck. The City contends that this court erred in holding that the provisions of Chapter 412 of the 1965 Session Laws, changing the method of distribution of estate taxes, does not apply to the tax in any estate of a decedent who died prior to the effective date of the amendment. It argues that estate taxes are levied for no particular purpose, and that the object of the tax is to tax the transfer of the estates of decedents, and that the distribution was for general State purposes.
We concede that Section 175 of the North Dakota Constitution does not require *336that the purpose for which a tax is to be used be itemized in the law. But where the law at the time the tax is imposed on the transfer of the estate of a decedent, at the date of his death, provided that such tax be distributed to the State and the County, the purpose for which the tax is imposed is fixed, and the Legislature cannot thereafter provide for the distribution of a part of such tax, already imposed, to the cities.
The City strenuously contends that the situation is no different than if the law provided that all estate taxes be paid into the State general fund and the Legislature thereafter appropriated taxes so collected to the municipal subdivisions. We agree that the Legislature could use the money derived from the estate tax for any State purpose. But we point out that, at the time a decedent died, prior to July 1, 1965, the purpose for which the estate tax was imposed was a State purpose. Counties are not municipal corporations, but are creatures of the Constitution itself. N.D.Constitution, Secs. 130, 166-173, 175; Hart v. Bye (N.D.), 76 N.W.2d 139.
Section 175 of the North Dakota Constitution applies to taxes imposed by law for general State purposes. Thus the estate tax in estates where the deceased died before the effective date of Chapter 412 of the 1965 Session Laws, amending Section 57-37-24, North Dakota Century Code, was imposed for State purposes. Such tax cannot, under Section 175 of the North Dakota Constitution, be applied to any purpose other than a State purpose, which includes the counties. Any attempt to distribute a portion of such tax to municipal corporations must be limited to taxes imposed after the effective date of the Act, and thus the provisions of the Act distributing a part of the estate taxes to cities must be limited to estates in which the deceased died after July 1, 1965, when the new law became effective. In other words, the Legislature does have the right to change the distribution of the estate tax, but, under the Constitution, must limit that change in distribution to taxes imposed on estates at the death of decedent following the effective date of the Act.
The petition for rehearing is denied.
TEIGEN, C. J., and ERICKSTAD, KNUDSON and MURRAY, JJ., concur.