Court Opinion

ID: 8194790
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:17:59.400456+00
Date Added: 2024-06-11T16:40:43.914195
License: Public Domain

Vinje, C. J.
{dissenting). I concur in the contention of appellant as stated by the court in its opinion, that secured charges against customers do not constitute income until they have been reduced to cash. A promise to pay does not constitute income. I have nothing to say about the power of the Tax Commission to prescribe reasonable regulations for the collection of income taxes because that question is not in the case. The question is, What is income? Manifestly the Tax Commission cannot make that income which was not made so by the constitution. In popular conception a promise to pay in the future never was conceived of as income, as cash in hand or its equivalent. Indeed, it is not so conceived of by the court in this case, for it says: “Where profits of one year have been overestimated, deductions may be made in subsequent years to equalize.” This admits that promises to pay are not income, for if they were there would be nothing to equalize in subsequent years. There is no overestimating of profits if promises to pay are income, for the amount of such promises can be definitely and correctly ascertained at any time. Given the correct amount of net income and applying to it the statutory rate, there is nothing to equalize in the future because the correct tax has been levied and collected. The equalization the court speaks of becomes necessary only because some of the promises to pay were never paid and therefore never ripened into income. Such equalization shows that they were not income when the tax was assessed. The case does not present a question of bookkeeping, but of what is income within the meaning of the constitution. There is no inherent diffi*547culty in assessing future payments during the year they are made. Here appellant is compelled to pay an income tax on moneys not due and long before they are to become due. The interest on-such advance payments of an income tax for large business enterprises is of substantial importance and cannot be recouped even under the “future equalizations” of which the court speaks. My view is that a promise to pay is not income and that neither the legislature, the Tax Commission, bookkeeping, nor custom can make it so.
I am authorized to state that Mr. Justice Jones concurs in this dissent.
A motion for a rehearing was denied, without costs, on October 12, 1925.