Court Opinion

ID: 5584367
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:49:08.142816+00
Date Added: 2024-06-11T08:36:11.359481
License: Public Domain

Atkinson and Hill, JJ.,
dissenting. The tax in question is a specific tax levied upon occupations, and by the terms of paragraphs 40 and 41 in section 2 of the act the occupation of selling cigars is classified into two classes: (1) selling by wholesale; (2) selling by retail. The classes have common features to the extent that to each is applied a scale of taxation in the territory of towns or cities, graduated according to population of the towns or cities, and neither requires a tax for conducting similar businesses within the territory of the State outside of towns or cities. In these circumstances both classes will be treated as one, and the attacks on the constitutionality of paragraphs 40 and 41 will be considered together in so far as it is charged that those provisions of the law violate the uniformity clause of article 7, section 2, paragraph 1, of the constitution. This provision appears in the Civil Code, § 6553, exactly as follows: “ All taxation 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.” This statement of the clause both as to language and punctuation is an exact reproduction of the original manuscript of the constitution of 1877, of file in the office of the Secretary of State. The Journal of the Constitution of 1877, p. 205, shows that Mr. Toombs, chairman of the committee of final revision, submitted a report oh July 1st, recommending that all provisions for taxation .and public debt be grouped in one article in the constitution, and among others included the following: “ Sec. 2. All taxation shall be uniform upon the same class of subjects, and ad valorem on all property within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.” In the proceedings of August 7th, (p. 298) are the statements: “ Mr. Mynatt moved to amend the first paragraph of section two, as follows: by inserting the words:' subject to be taxed, between the words ‘ property’ and f within,’ in the second line. The motion prevailed.”
In Mayor etc. of Savannah v. Weed, 84 Ga. 683, the question was as to the validity of an ordinance requiring one rate of tax*244ation upon realty, another rate upon one kind of personalty, and still another rate on a different kind of personalty. The ordinance was held to be void as violative of the above provision of the constitution. The opinion was rendered by Justice Simmons, who was a former member of the constitutional convention of 1877. In the course of the opinion, while discussing the history and proper construction of the above clause, it was said: “ The constitution of Pennsylvania on this subject is as follows: ‘All taxes shall be uniform upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied ■ and collected under general laws.’ Our constitution upon this subject reads as follows: ‘All taxation 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.’ If our constitution were an exact copy of the Pennsylvania constitution upon this subject, we would most certainly agree with the learned counsel for the plaintiff in error, that property might be classified and different rates of taxation put upon it; but we think that when the framers of our constitution interjected into the clause the words ‘ and ad valorem on all property subject to be taxed,’ it was their intention that there should be no classification of property so that it might be taxed at different rates. Property is not the only subject of taxation-‘Everything to which the legislative power extends may be the subject of taxation, whether it be person or property, or possession, franchise or privilege, or occupation or right.’ Cooley, Taxation, p. 5. We think that this clause refers to subjects of taxation other than property, and means that if one kind of business, privilege, franchise, right, etc., is taxed, the tax shall be uniform upon all of that class. For instance, if liquor dealers are taxed, the tax as to all liquor dealers shall 'be uniform; if draymen are taxed for carrying on their business, the tax shall be uniform as to all of that class; or if butchers, lawyers, physicians, dentists, and photographers are taxed, the tax need not be the same upon all of these, but shall be uniform as to each one of these classes.” This decision construing the clause of the constitution in question holds two things: (1) property can not be classified so that it may be taxed at different rates; (2) occupations can be *245classified for such purpose, but the tax imposed upon each class must be the same upon every member of that class. What is meant by taxing every member of a class is explained by illustrations such as, “if liquor dealers are taxed, the tax as to all liquor dealers shall be uniform,” and so as to other specified occupations. Wbat is meant by “ all liquor dealers ? ” As uniformity is the requirement of the constitution and “liquor dealers” is the supposed class, it logically refers to “all” of that class engaged within the territorial limits of the authority levyr ing the tax. Application of the decision as thus interpreted, and as it was evidently intended, will avoid discrimination between members of the same class located in different sections of the taxing authority; whereas discrimination would result if different taxes should be imposed on members of the same class located in different sections of the “taxing authority,” or if a tax should be imposed on one member and no tax should be imposed on another.
Other decisions by this court will now be noticed, through each of which runs the thread of interpretation above indicated. The case of Weaver v. State, 89 Ga. 639, involved the validity of a statute authorizing the levy of a tax on the business of selling' sewing-machines. It was held that the tax was uniform upon all business of the same class, and “the statute'is not unconstitutional because it imposes a tax on that business without taxing other business and occupations, nor because it is not uniform with the method of returning and collecting taxes on property, nor because it prescribes a penalty for violation of its requirements.” In the course of the opinion it was said by Simmons J.: “ And it is not a valid objection that another business or occupation is not taxed, or is taxed a different amount. The requirement as to this kind of taxation is that it shall be uniform upon all business of the same class.” In McGhee v. State, 92 Ga. 21, 26, it was said: “It would not be expedient, necessary, or just to subject all occupations to the same amount of taxation, or to the same provisions as to enforcing payment. This will be obvious without entering into details. When, however, the legislature does make a distinct class, it must treat each member of it alike. . . When it makes a class of lawyers, physicians, liquor-dealers, dealers in ‘ futures/ or any other class, including *246one or more occupations, the same provisions must be made as to each member of the class.”
In Singer Manufacturing Co. v. Wright, 97 Ga. 114, 118-120 it was said: “It is within the constitutional power of the General Assembly of this State, in the imposition of specific taxes upon occupations, to classify the subjects of taxation, taxing some and omitting to tax others; and the principle of uniformity required by par. 1, sec. 2, art. 7 of the constitution is not violated so long as a given tax is made uniform upon all individuals belonging to the particular class on which it is imposed.” In the course of the opinion it was said: “The most serious question for determination as to the constitutionality of the law in hand, in view o'f the ‘ uniformity clause ’ above mentioned, is this: Is its language sufficiently comprehensive in meaning to embrace all manufacturers of sewing-machines who sell at retail? Unless it is, the law must fail; because, when once a class is established, every member properly belonging to that class must be taxed, or else the uniformity required is destroyed. . . The power of the legislature extends only to classifying business occupations into different branches, and laying upon each separate branch thus created such a tax as is deemed proper. The legislature has absolutely no power to classify persons, natural or artificial, engaged in precisely the same occupation, laying a tax upon some of them and exempting others, or imposing a tax not operating uniformly upon all.” The last clause of this decision seems to have had in view an interpretation of the constitution and the former decisions of this court, such as hereinbefore pointed out, and to have declared the limit beyond which classification of occupations for taxation could not go; such declaration inhibiting imposition .of “a tax not operating uniformly upon all” persons engaged in precisely the same occupation.
The foregoing deals with the subject of classifying occupations for taxation under the constitution of this State, which is more specific than some constitutions which have been held to prohibit classifications similar to that attempted in the present case. In North Carolina a statute required a State license for which $1000 should be paid to engage in the business of hiring laborers to be employed beyond the limits of the State, and it was made a crime to engage in such business without having obtained a license. The *247terms of the act excluded from its operation any of the counties of the State west of a specified line, except a'-few counties that were specially named. The constitution of the State authorized the legislature to tax “trades, professions, franchises,” etc., but did not expressly provide that such taxes should be uniform. It was held that the statute was .unconstitutional, because it imposed a State tax on an occupation when conducted in some counties in the State, while it did not impose such tax on the same kind of occupation when conducted in other counties in the State, and thereby violated the constitutional requirement of uniformity. State v. Moore, 113 N C. 697 (18 S. E. 342, 22 L. R. A. 472). The opinion contained quotations from a number of former decisions, including the decision of Puitt v. Gaston County Comrs., 94 N. C. 709 (55 Am. R. 638), where it was said: “‘The principle of uniformity pervades the fundamental law, and while not in the constitution applied in express terms to the tax on trades, professions, etc., necessarily-underlies the power of imposing such tax/ ” After the quotations referred to it was stated in the opinion : “ The act under consideration, if intended to impose a tax in the legal significance of the term, very plainly falls within the inhibition of the organic law as interpreted so often by this court; for it cannot, with the least show of reason, be contended that the ■principle of uniformity is not violated when the same occupation is heavily taxed in one county, while in an adjoining county it is entirely free and untrammeled. It is too plain for argument that if the legislature had passed an act imposing a tax upon merchants doing business in the counties of New Hanover, Pend-er, and Bladen, while like merchants in the counties of Brunswick, Eobeson, and Eiehmond were not required to pay such tax, the act would be void; and yet such a discrimination in taxation would be no greater than that which is attempted to be made under the statute in question.”
In Kentucky a statute provided: “Before engaging in any occupation, or selling any article named in this subdivision of article 12 of this act, the person desiring to do so shall procure a license and pay the tax thereon, as follows: . . On each real-estate agent in cities of the first, second, and third class, $25; same, in each city or town of the fourth, fifth, and sixth class, $10.” The constitution provided: “ § 171. . . ‘ the General Assem*248bly shall provide by law an annual tax, which, with other resources, shall be sufficient to defray the estimated expenses of the commonwealth for each fiscal year. Taxes shall be levied and collect for public purposes only. They shall be uniform upon all property subject to taxation within the territorial limits of the authority levying the tax; and all taxes shall be levied and collected by general laws.’ § 181. . . ' The General Assembly may, by general laws only, provide for the payment of license fees on franchises, stock used for breeding purposes, the various trades, occupations, and professions, or a special or excise tax; and may, by general laws, delegate the power to counties, towns, cities, and other municipal corporations to impose and collect license fees on stock used for breeding purposes, on franchises, trades, occupations, and professions.’” The act was held unconstitutional on the ground that it was discriminatory, and that the attempted classification was invalid. Hager v. Walker, 128 Ky. 1 (107 S. W. 254, 15 L. R. A. (N. S.) 195, 129 Am. St. R. 238). It was said in the opinion: “ The only remaining question, and the vital one in this case, is whether or not the license fees imposed must be uniform upon the particular trade, occupation, or profession that is singled out for taxation. And, confining our observations to general laws enacted for the purpose of bringing revenue into the state treasury, we mean 'uniform’ in the sense that precisely the same license fee must be exacted from every person within the state who is engaged in the trade, occupation, or profession that is taxed, without reference to whether he lives in a sixth-class town or a first-class city, or does business in the •country or in a city. We do not believe it was contemplated by this section that the General 'Assembly might impose a license fee for State purposes upon blacksmiths in one county and exempt blacksmiths in another, or exact a license fee from physicians practising in one city and exempt physicians practising in another, or to say that the auctioneer who lived in a sixth-class town should pay a license fee for carrying on his occupation and the auctioneer who lived outside the town limits should be exempt. The authority to impose these special taxes does not carry with it the right of discrimination and exemption in any class that is dealt with. . . A weighty reason, too, in favor of uniformity, is the further consideration that it is important that the rep*249resentatives of the people in the lawmaking department, of the government 'shall all be directly interested in behalf of their- constituents, in laws involving the subject of taxation. A member of the legislature might be willing to vote a tax upon trades, occupations, and professions in other districts than .his own, not having his attention specially called to its lack of equality or fairness; and so the mattér might be extended to embrace any number less than a majority of the members of the legislature. But, if the constituents of the member — the people to whom he is immediately responsible — are to bear their share of the burden imposed, they would all be interested in seeing that it was fairly and equally distributed, and their desires and interests would naturally have their weight. This restrictive influence is not to be underestimated -in dealing with questions of this character.
“We'believe that the fundamental idea of taxation is that the burdens shall be borne equally and alike by all persons, and that no one class shall be taxed for the benefit of another, or one class be discriminated against to the advantage of another, or an exemption allowed one that is not conceded to another." If the General Assembly has power to tax real-estate agents living in cities of the first, second, third, fourth, and fifth class, and towns of the sixth class, and to exempt all who do not live or do business in these cities and towns, it has the power to further’ select and classify by exempting those who live in towns of the sixth class; and it would be difficult to draw the line between its power to tax and exempt, or to tax in such an unequal manner, as that it would be equivalent to gross discrimination, if not exemption. . . In the constitution adopted in 1850, and that remained in effect until the adoption of the present constitution in 1891, the legislature was left free from constitutional restraint in the matter of taxation. There was no limitation whatever upon its power. Indeed, it is a curious fact that the word ‘taxation’ is not mentioned in the old constitution, nor does the word ‘ revenue ’ appear, except in the section requiring that ‘all bills for raising revenue shall originate in the House of Representatives.’ Yet in the early case of Lexington v. McQuillan, 9 Dana, 513, 35 Am. Dec. 159, decided in 1840, and under a constitution that was also silent upon this question, the court laid down the following principles that have been accepted without question as ■ sound from *250•that' day to this: ‘ When shall a tax be levied ? To what amount ? Shall it be a capitation or property tax? Direct or indirect? Ad valorem or specific? And what classes of 'property are the fittest subjects of taxation? — are all questions wisély confided by our-constitution to the discretion of the legislative department. . . But in some other respects, and so far as the power of taxation may be effectual without being thus limited, it is, in our judgment, limited by some of the-declared ends and principles of the fundamental law. Among these political ends and principles, equality, as far as practicable, and security of property against irresponsible power, are eminently conspicuous in our state constitution. An exact equalization of the burden of taxation is unattainable and Utopian. But still there are well-defined limits within which the practical equality of the constitution may be preserved, and which, therefore, should be deemed impassable barriers to legislative power. Taxation may not be universal; but it must be general and uniform. Thus, .if a capitation tax be laid, none of the class of persons thus taxed can'be constitutionally exémpt upon any other ground than that of public service; and if a tax be laid on land, no appropriated land within the limits - of the State can be constitutionally exempted, unless the owner be éntitled to such immunity in consequence of public service. The legislature, in the plenitude of its taxing power, cannot have constitutional authority to exact from one citizen, or even one county, the entire revenue for the whole commonwealth. . . And, although there may be a discrimination in the subjects of taxation, still persons in the same class and property of the same kind must generally be subjected alike to the same common burden. This alone is taxation, according to our notion of constitutional taxation in Kentucky/ ”
After quoting from a number of decisions relating to taxation for municipal purposes, the opinion proceeded. “The authorities we have cited arose in cases involving taxation for municipal purposes; but they illustrate the rule, that is firmly embodied in the principles of constitutional law that have always obtained in this State, that taxation must be'uniform and equal as nearly as it is practicable to make it so; and that although the legislature may single out certain species of ’property, classes of persons, and trades, occupations, and professions, dealing with each class *251separately, yet the burden upon every person in the class .thus selected -must be the same. If it is imposed upon the person, it must be equal and uniform; and so if it is graduated according to the amount of business done. The power to tax according to the volume of business done has been upheld by this court in Strater Bros. Tobacco Co. v. Com., 117 Ky. 604, 78 S. W. 871; and here again the principle of uniformity was applied, the court saying: ‘We do not think the tax is lacking in the quality of uniformity. It is the same on each person or corporation which manufactures the same quantity of tobacco. The legislature had the right to impose a graduated license tax. The larger manufacturer is required to pay more than the smaller one, based upon the value of the product manufactured/ And so in Brown-Foreman Co. v. Com., 125 Ky. 402, 30 Ky. L. Rep. 793, 101 S. W. 321, where the tax was levied upon the volume of business done.
“ In the case before us no account is taken of the amount of business done, nor is it pretended that the lack of uniformity and equality in the tax imposed was made to depend upon the quantity of business transacted by the real-estate agents taxed. The General Assembly, doubtless proceeding upon the idea that the real-estate agents in large cities transacted a larger business than those engaged in smaller cities, imposed a heavier tax upon them; but this tax was not fixed with reference, so far as the act shows, to the amount of business done. It may be, and probably is, true that some real-estate agents in large cities do a larger business than real-estate agents in smaller places; but it does not necessarily follow that there are not real-estate agents in fourth-class cities who do a larger business than real-estate agents in second, or third, or even first-class cities. It might also safely be said that there are many agents who do not live in, or have a place of business in, any city or town, who do a more profitable .business than many agents who have their places of business in cities or towns. The vice- in the law is, that, in undertaking to. single out for taxation the occupation of real-estate agents, it not only taxes them in unequal amounts, depending upon the place in the State where they do business, but also exempts entirely other real-estate agents, thus plainly discriminating against real-estate agents who live or have a place of business in a city - or town, in favor of those who do not live and have no place of busi-, ness in a city or town.
*252“It is insisted for the State that a license fee or tax imposed for State purposes may be graduated alone by the population of the city or county in which such business may be conducted, or by the fact that the person from whom the fee is exacted resides or does business- in one city or another, or in this county or that one; but, as we have endeavored to point out, classification cannot be made on these lines. The purpose of this opinion is not to limit or restrict in any respect the power of the legislature' given to it under the section of the constitution in question, or to deny to it the right to classify, divide, and select, in any reasonable manner it chooses, trades, occupations, or professions for taxation, or to prevent it from exempting entirely any one or more trades, occupations, or professions, but only to declare that when any trade, occupation, or profession is selected for taxation, the tax levied upon it, or the license fee exacted from persons engaged in it, must be equal and uniform thronghout the State, whether the tax be upon the individual or the business.”
In Texas a statute provided: “ In all counties, justices’ precincts, towns, cities, or other subdivisions of a county where qualified voters thereof have, by a majority vote, determined that the sale 'of intoxicating liquors shall be prohibited therein, there is hereby levied upon all firms, persons, associations of persons, and corporations, selling at retail non-intoxicating malt liqurs, such as c Uno,’ * Ino,’ * Frosty,’ (Tintop,’ and * Teetotle,’ and all other such liquors, an annual State tax of $2,000, and counties, also incorporated cities and towns, where such sales are made, may each levy an annual tax of not exceeding $1,000 upon all sueh persons, firms, or corporations.” The constitution provided: “All occupation taxes shall be equal and uniform upon the same class of subjects within the limits of the authority levying the tax.” Also: “All free men, when they form a social compact, have equal rights; and no man, or set of men, is entitled to exclusive separate public emoluments or privileges but in consideration of public services.” The statute was held unconstitutional (Ex parte Woods, 52 Tex. Crim. 575, 108 S. W. 1171, 16 L. R. A. (N. S.) 450, 124 Am. St. R. 1107), because, among other reasons assigned, the tax thereby imposed was not “an equal and uniform tax throughout the limits of the State.” The discriminative character of the statute was thus stated in the opin*253ion“ Under this law, a citizen living in the city of Dallas may sell Uno, Ino, etc., to all persons that are willing to buy, without let or hindrance; whereas in the neighboring town of Lancaster he will be subject, to a tax, for State purposes, of $2,000. Under this law, in the county of Johnson, if one desires to sell these articles, he must pay a tax of at least ’$2,000 per annum, and a tax that may be $4,000 per year; whereas in the neighboring county of Tarrant he may sell it without tax. Suppose we substitute in the law for the words ‘ Ino, Uno/ etc., the words ‘ lumber, shingles, and building materials/ We would then have a tax levied in prohibition territory, upon commerce on these useful articles in Johnson county, in the.sum of $4,000 a year; whereas in the adjoining county, among people wholly homogeneous, the merchants pay practically no tax at all.” On the general subject see also: State ex rel. Wyatt v. Ashbrook, 154 Mo. 375 (55 S. W. 627, 48 L. R. A. 265, 77 Am. St. R. 765); Bessette v. People, 193 Ill. 334 (62 N. E. 215, 56 L. R. A. 558).
Of course the decisions above stated from other jurisdictions are not precedents that are binding upon this court; but they state sound principles of law which are helpful in construing and applying the constitution of this State. In the light of all that has been said, the true meaning of the clause of the constitution applicable in this- case is that all taxation should 'be uniform upon the same class of subjects,, which implies uniformity throughout the territorial limits of the authority levying the tax; and that all taxation upon property should be at a uniform rate and ad valorem throughout the territorial limits .of the authority levying the tax.' Speaking more specifically, it may be stated that the clause permits classification of occupations for the purposes of taxation, permits different amounts to be prescribed for each class, or permits taxation upon some classes of business while other classes are omitted; but in every instance where a class of business is taxed, the tax must fall uniformly upon every member of that class throughout the territorial limits of the authority levying the tax, and if it fails to do so the tax becomes sectional and must fail for the want of uniformity. Where the taxing authority is the State and the State classifies an occupation as a subject for excise tax, the tax must operate uniformly upon every member of that class wherever found with-' *254in the territorial limits of the State; and a tax will fail for want of uniformity if it is made to apply only in cities and towns, thus leaving out those portions of the State not included in cities and towns. If the taxing authority is a city, or county, or any other subdivision of the State authorized to levy an occupation tax, the tax must be uniform throughout the territorial limits of such taxing authority.
The decision in Adams Motor Co. v. Cler, 149 Ga. 818, 820, had reference to section 12 of the general tax act of 1918, providing for the levy of taxes by the State for support of the government. The particular provision of the act in question was: “Upon every agent of, and upon every dealer in, and upon every person soliciting orders for the sale of automobiles, the sum set out below, viz.: In each county for each make of such vehicle only one such tax for such make for each agency to be taxed in any one county. Any agency having paid such tax to be allowed any number of employees within the county wherein such tax has been paid, free from such liabilities. Provided, that any person, firm, or corporation paying this tax shall be permitted to resell any automobile or other vehicle taken in exchange for automobiles, without the payment of additional tax.- In each county with a population of less than 20,000, $27.50.- In each county with a population of between 20,000 and 30,000, $55.00. In each county with a population of between 30,000 and 50,000, $82.50. In each county with a population of between 50,000 and 75,000, $110.00. In each county with a population of between 75,000 and 100,000, $165.00. In each county with a population of between 100,000 and 150,000, $220.00. In each county with a population exceeding 150,000, $275.00.” This provision of the act was alleged to be unconstitutional, because it was violative of (1) the due-process and equal-protection clauses of the 14th amendment to the constitution of the United States and the constitution of the State of Georgia, and (2) the uniformity-taxation clause of the constitution of the State of Georgia (art. 7, sec. 2, par. 1, Civil Code, § 6553). The grounds upon which it was alleged that the statute thus violated" the constitution were stated as follows: “ (a) It makes an arbitrary, discriminator, and unreasonable classification between dealers who deal in one make of automobiles and dealers who sell more than one make, without reference *255to the value of the automobiles sold, the number of automobiles sold, the gross or net profits received therefrom. (6) It makes an arbitrary, discriminatory, and unreasonable classification in favor of persons who take automobiles in exchange from others and resell them, (c) It makes an arbitrary, unreasonable; irregular, and ununiform classification, in providing a tax of only $27.50 in counties of a smaller population than 20,000 inhabitants, $55.00 in counties of a smaller population than 30,000, $82.50 in counties with a population of léss than 50,000, $110.00 in counties with a population less than 75,000 and $165.00 in counties of less than 100,000.” ' It was held: “ Subsection 12 of section 2 of the general tax act passed- by the General Assembly of Georgia in the year 1918 (Acts 1918, pp. 43-83), is not unconstitutional and invalid because the classification of the dealers in automobiles there made was arbitrary, discriminatory, or unreasonable.” In the course of the opinion it was said: “ The soundness of the criticisms upon this act depend upon .whether the section in question makes an arbitrary and unreasonable classification of dealers in automobiles subject to the tax imposed by this section. After careful consideration of the subject of this inquiry it does not seem to us that the legislature, in exercising its right to make a classification for the purpose of imposing a tax like that in question, has acted arbitrarily and unreasonably.” The rest of the opinion consisted in reasoning to support the proposition last quoted, and concluded with the statement: • “ The act in question not being invalid for any of the reasons set forth above, it follows that it is not in violation of the due-process clause of the State and Federal constitutions.” The opinion did not expressly mention or construe article 7, section. 2, paragraph 1, of the constitution. It is unfortunate that the Adams case was not projected more plainly upon a construction of the above-mentioned provision of the constitution. But the statute involved in that case was so different from the statute in this ease that the decision in that case does not require a decision in this case that the act under consideration is constitutional. That statute, while making classifications, based on population of different counties, that were held to be reasonable, nevertheless extended to every particle of territory in .the State; while the classification now. under discussion applies to territory only in towns and cities, *256and excludes from its operation the great body of the State’s territory outside of incorporate limits, without any basis for classification whatever except territory. That kind of classification is purely territorial, and amounts to no classification within the meaning of the constitution.