Court Opinion

ID: 9578022
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:40:42.816949+00
Date Added: 2024-06-11T13:22:22.871680
License: Public Domain

SUPPLEMENTAL OPINION ON REHEARING
LAVENDER, Justice:
In their Petition for Rehearing, Protestants first urge error in that the opinion rendered by this Court on February 5,1982:
I.
“By ruling that the county option vote, and not the Initiative Petition, will impose or levy a tax, this Honorable Court has ruled that voters in a county can impose a State tax, that being the one-third of the 12% to 18% charged on wagers made, to be paid to the State of Oklahoma as provided in § 7B of the Petition.” (Emphasis supplied.)
In support, Protestants allege violation of the Oklahoma Constitution, Art. 10, §§ 7, 9, 10, 20, 26, 35.
The arguments of Protestants are based upon a misconstruction and misapplication of these Constitutional provisions, prompted by the use therein of the generic term “taxes” and assuming that as therein used, the Constitutional provisions relate to the Initiative Petition before us. Such is not the case.
The demarcation between a “license tax,” “occupation tax,” or “privilege tax,” on the one hand, and “property tax” on the other hand, is set forth in detail in In re Skelton L. & Z. Co.’s Gross Production Tax for 1919,1 in the following language:
“There is no excuse for a confusion of the two kinds of taxes, occupation taxes and property taxes. They are separate and distinct species of taxes, as distinct from each other in their kind and in their mission as tort and assault. A tax is an ‘occupation tax’ or a ‘property tax’ according to what it actually is, the same as a lens is concave or convex, or a coin is silver or gold. They are essentially different, in both their character and their mission; the sole mission or function of a property tax being to raise revenue, and when the revenue is collected its mission is fulfilled. It never imposes any conditions nor places any restrictions upon the use of property nor the exercise of a privilege. The mission of a ‘license tax,’ ‘occupation tax,’ or ‘privilege tax,’ or by whatever name this species of tax may be called, is always to regulate a given business, or control the right to engage in a given occupation. It is imposed as a condition or as an element of the conditions upon the right to exercise a given privilege, its primary mission being to regulate and control, and while the tax itself may not always be the sole condition, yet its payment is invariably made a part or a factor in the conditions upon which a business may be conducted by the statute under which such tax is levied. In other words, the primary object and purpose of every statute which levies an occupation tax is to regulate the conduct of the business affected.
“The kind of a tax or the species to which it belongs is not made by giving it a name, nor its species changed by changing its name, either by legislative enactment or by judicial decree. It is a property tax or an occupation tax according to the mission given it by the law under which it is levied.
“The power to levy the two taxes is derived from different sources of government — the occupation tax from the police power to regulate, while the property tax is from the power to raise revenue. The validity of the two taxes is tested and determined under different principles of law. The validity of an occupation tax is determined by the question whether a state has the power at all to levy such a tax — whether it is at all within the police *558power of a state to impose such a tax, with its attendant regulatory conditions. The validity of a property tax is not determined by whether a state has power to levy such a tax because such power is inherent, the power to raise the necessary revenue for government being inherent in the very fact of government itself, and the validity of such a tax is determined by the law governing its rate, its uniformity, its reasonableness or excessiveness, or whether it is discriminatory or confiscatory, or whether the manner of its assessment and collection is regular or irregular or constitutes ‘taking without due process of law,’ or amounts to ‘denial of equal protection under the law.’ The basis of an occupation tax lies in the police power to regulate, but the basis of a property tax is ‘inherent’ in the very fact of governmental protection of property. The fact that the proceeds of an occupation tax may constitute a portion or the sole source of revenue does not change its mission, nor make it any the less an occupation tax. Nor does the fact that an occupation tax is levied upon an ad valorem basis render it any the less an occupation tax. This method is quite frequently adopted, and in some cases might be the most just and reasonable measure for such a tax. Both kinds of taxes may be levied upon the same property, and both be levied upon an ad valorem basis, and both be valid. Or both may be invalid; the property tax because it is excessive or discriminatory, and the occupation tax because the state has no power to levy it. Neither does the fact alone that a given tax may be a burden upon a given business constitute a test as to what kind of a tax it is, nor does the amount or weight of such burden alone constitute a test as to its validity. A tax may be a very onerous burden, and still be perfectly valid, or it may be so very slight as to constitute no perceptible burden, and yet be wholly invalid; nor does the fact alone that the weight of such burden be indirectly upon a federal agency either change the character of a tax or constitute an exclusive test as to its validity. See Wiggins Ferry Co. v. East St. Louis, 107 U.S. [365], 374, 2 Sup.Ct. 257, [264], 27 L.Ed. 419; Western Union Tel. Co. v. Atty. Gen. of Mass., 125 U.S. [530], 550, 551, 8 Sup.Ct. 961, [964, 965], 31 L.Ed. 790. For further illustration: In Thomas v. Gay, 169 U.S. 264, 18 Sup.Ct. 340, 42 L.Ed. 740, a tax of 24 mills on the dollar levied by Oklahoma Territory upon cattle grazed upon an Indian reservation under a federal lease was held to be a valid tax because it was a property tax within the proper scope of the power to raise revenue, and yet, if the territory had sought to impose a tax of one-tenth of one mill upon the mere right to graze cattle upon such reservation, the payment of such tax being made a condition upon the mere right to exercise such federal agency, such tax would at once have been declared invalid, yet the burden of such tax upon such federal instrumentality would have been only 1/240 part as heavy as the tax which the court held to be valid; the reason being that the lighter tax was one which in the very nature of our dual form of government a state has no power to levy, it being an occupation tax, while the other tax, the property tax, though 240 times as great, was held to be valid, being upon the lessees’ private property having a taxable situs within the territory. The same questions were involved, and same decision rendered in Wagoner v. Evans, 170 U.S. 588, 18 Sup.Ct. 730, 42 L.Ed. 1154.
“Upon the same principle the ‘net proceeds tax’ of Nevada was held to be valid in Forbes v. Gracey, 94 U.S. 762, 24 L.Ed. 313.
“And the Colorado ‘gross products tax’ upon mining claims from the government was upheld in Eider v. Wood, 208 U.S. 226, 227, 28 Sup.Ct. 263, 52 L.Ed. 464.
“Upon the same principle the ‘gross receipts tax’ of Minnesota was upheld in U.S. Express Co. v. Minnesota, 223 U.S. 335, 32 Sup.Ct. 211, 56 L.Ed. 459.
“And in Gromer v. Standard Dredging Co., 224 U.S. 362, 32 Sup.Ct. 499, 56 L.Ed. 801, the Porto Rican tax was held to be valid.
*559“Therefore the weight of a tax, or its effect in dollars and cents, is not of itself a test of its validity, nor of its kind.
“A property tax constitutes a burden upon a given business only to the extent of the amount of the tax, but an occupation tax with its ancillary conditions, if not paid, may stop the business altogether. .. .”
While Skelton was overruled in the conclusion therein drawn by the Court in Apache Gas Products Corp. v. Oklahoma Tax Com’n2 wherein this Court held that “gross production tax” is not a property tax but an occupation or license tax upon the occupation of producing natural gas (see Syll. 2), the distinctions between the two types of “taxes” as herein quoted are as valid today as they were then.
Whether the “tax” imposed by the terms of the Initiative Petition are given the cognomen of a “license tax,” “occupation tax,” or “privilege tax,” its operational effect clearly distinguishes it from a “property tax” contemplated by the Constitutional provisions referred to, and those provisions do not apply here.3 Thus we have held that the statute imposing a “franchise or excise tax” against every corporation or other business organization of $1.25 for each $1,000 of capital used and declaring that the “tax” imposed for the right granted by state law to exist, is an “excise tax” and not a “property tax”;4 that a tax upon municipal swimming pool receipts is an “excise tax” and not a “property tax”;5 and that “special assessments” levied against particular property to enforce payment for benefits thereon are not “general taxes”;6 and because of the nature and operational effect of such levies, are removed from the restrictions and limitations of Constitutional provisions such as are cited by Protestants.
In Thurston v. Caldwell,7 we held that Art. 10, Sec. 20 of the Oklahoma Constitution did not preclude the state from imposing taxes for municipal purposes insofar as such acts relate to counties, cities, and townships.
In Missouri, K. & T. R. Co. v. Meyer,8 the Court held that Art. 10, § 19 did not apply to the gross receipts tax imposed upon the production of coal, oil, gas, or other ores.
In Ex Parte Marler,9 we upheld a law permitting cities and towns to assess an occupational or license tax on building contractors for revenue purposes.
License charges may be imposed for regulation, or for revenue, or for both. The power to thus regulate, control, or to produce revenue and to thereby control the exercise of the occupation involved rests in the sound discretion of the legislature,10 or, as here, in the sound discretion of the people speaking through the initiative process.
II.
Protestants next allege that the amendment to the ballot title promulgated by this Court makes the Initiative Petition which was circulated for signatures materially different from the ballot title that is to be presented to the voters.
Suffice it to say, the modifications made in the ballot title by the Court were merely for further clarification and did not in any way effect the substance or the form of the circulated ballot title, and therefore do not constitute grounds for declaring the Initiative Petition void.11
*560III.
Protestants’ final ground asserted in the Petition for Rehearing is:
“The 8% to 12% ‘fee,’ as interpreted by this Honorable Court, when considered with other provisions of the Initiative Petition which allows licensees to charge for their services, is excessive; and its effect is to promote wagering, which is not a valid exercise of the State’s police power.”
As we heretofore said in In Re Skelton L. & Z. Co.’s Gross Production Tax for 1919, supra: “The validity of an occupation tax is determined by the question whether a state has the power at all to levy such a tax— whether it is at all within the police power of a state to impose such a tax, with its attendant regulatory conditions.” (Emphasis added.)
In Jack Lincoln Shops v. State Dry Cleaners’ Board12 we held (Syllabus 1 by the Court):
“The Legislature is primarily the judge of whether facts and conditions exist that make it advisable that any certain business be regulated for the public good, under the police power, and as to what means are best adapted to regulate it, and every possible presumption is to be indulged in favor of the correctness of such finding, and although the courts may hold views inconsistent with the wisdom of such legislation, they may not annul it as being in violation of substantive due process unless it is clearly irrelevant to the policy the Legislature may adopt or is arbitrary, unreasonable or discriminatory.”
What we said in Jack Lincoln Shops applies equally to legislation by Initiative Petition.
We did not in our opinion of February 5, 1982, hold, as Protestants allege, “that the police power of the state extends to the promotion of gaming or gambling.” What we said was: “The legislative power extends to imposing a charge or fee for distribution as purses as part of the regulation and promotion of pari-mutu-el horse racing.” In other words, it is within the police power to legislatively regulate and control pari-mutuel horse racing. The means by which it is regulated is primarily a legislative matter unless patently unreasonable, arbitrary, or discriminatory. We cannot say the regulatory means employed in the Initiative Petition are so unreasonable, arbitrary, or discriminatory as to be struck down as a matter of law.
The Petition for Rehearing filed herein by Protestants is overruled.
IRWIN, C. J., BARNES, V. C. J., and HODGES, SIMMS, DOOLIN, HARGRAVE and WILSON, JJ., concur.
OPALA, J., abstains for reasons stated in his opinion herein.

. 81 Okl. 134, 197 P. 495 (1919).

. Okl., 509 P.2d 109 (1973).

. 103 A.L.R. 18.

. Scott-Rice Company v. Oklahoma Tax Commission, Okl., 503 P.2d 208 (1972).

. In Re City of Enid, 195 Okl. 365, 158 P.2d 348 (1945), 159 A.L.R. 358.

. City of Idabel v. School Dist. No. Five (5), McCurtain Co., Okl., 434 P.2d 285 (1967).

. 40 Okl. 206, 137 P. 683 (1914).

. 204 F. 140, (Okl.D.C.1913).

. 140 Okl. 194, 282 P. 353 (1929).

. 51 Am.Jur.2d Licenses and Permits § 4.

. Cress v. Estes, 43 Okl. 213, 142 P. 411 (1914); 34 O.S.1971, § 24.

. 192 Okl. 251, 135 P.2d 332 (1943), appeal dismissed 320 U.S. 208, 63 S.Ct. 1448, 87 L.Ed. 1847.