Court Opinion

ID: 9662134
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:00:13.52003+00
Date Added: 2024-06-11T18:14:37.129842
License: Public Domain

Mulroney, J.
(dissenting) — I join in the dissenting opinion of Justice Hays, but there is a further point in the ease about which' I would like to comment. The trial court held the defendants’ retail sales tax permit should not have been revoked. The majority' opinion states the appellees “do not argue that chapter 64 does not authorize the revocation of Jacobs’ retail sales permit.” It would seem to me the trial court should be úp-’ held if there be any sound reasons for his ruling.
However in the instant case I think appellees’ argument, construed perhaps a little leniently, succeeds in conveying the thought that chapter 64, rightly construed, would not authorize the revocation of Jacobs’ sales tax permit. Brief points 7 and 8 in appellees’ brief áre as follows:
“7. The issuance of a Sales Tax Permit is but an incident-of the taxation function of government, is not .an exercise of the police power and is not intended as a grant or privilege to transact business requiring regulation under the police powers.
*1402“8. Tb permit revocation of Sales Tax Permit under guise of police power violates Federal and State Constitutions.”
In the argument in the brief appellees concede in effect that the beer license, cigarette license, and pool hall license could be revoked under chapter 64 for they are licenses that are granted under the police powers of the state and municipality. But they argue the “Sales Tax Permit which the State Tax Commission sought to revoke is an entirely different matter.” Counsel quotes the definition statute (99A.1, paragraph 4, Code, 1954) defining “license” as including all permits “for the carrying on, or used in the carrying on, of any business * * He goes on to argue that the “Sales Tax Permit [is] but an incident of the taxation function of our government” and he states: “It is obvious that the Retail Sales Tax Permit was not intended to grant a privilege for the transaction of any business requiring regulation under the Police Powers.” He cites the article of Professor Tunks, appearing in 23 I. C. A. at page 103, where the professor stated the sales tax permit was largely for convenience in collection of the tax, and it was not a permit for the privilege of doing business.
Appellees’ counsel does not directly raise the constitutional questions but he does argue at several places in his brief that “if chapter 64 was intended to permit revocation of the Iowa Sales Tax Permit” then it would offend against various provisions of the State and Federal Constitutions. This is a familiar argument frequently made in support of a certain interpretation of a statute — one that will uphold its constitutionality. As applied to this case it is easily recognized as an argument that chapter 64 does not grant the power to revoke sales tax permits ■ — otherwise, so appellees contend, it would be unconstitutional.
On the merits of the argument I would hold for appellees. The licenses that can be revoked under the statute are those that are granted under the police power — permits for carrying on a business. The retail sales tax permit is, as appellees argue, not granted under the police powers, and it is not, as Professor Tunks states, a permit for the privilege of doing business.
The Retail Sales Tax Permit statute (section 422.53, Code, 1954) is still a tax revenue measure even though the permit fee is only fifty cents. It is part of a general tax revenue law or the *1403retail sales tax law. The retailers are made the collectors of that sales tax which is paid by consumers and the purpose of section 422.53 is to authorize the retailers to collect the tax and to make them subject to the tax commission’s regulations with respect to such collection and payment to the state.
A much similar license was required under the Arizona gross sales tax act and in Giragi v. Moore, 48 Ariz. 33, 58 P.2d 1249, and 49 Ariz. 74, 80, 64 P.2d 819, 821, 110 A. L. R. 314, 323, the question was whether there was a license or tax involved. In holding the license was in fact a part of the tax law the Supreme Court of Arizona stated:
“No condition except payment of a license fee is attached to the issuance of the license. All persons who pay the fee are entitled to receive a license and for whatever location it may be applied for. The amount of the fee is fixed and unvarying and is paid but once. The $1 is nothing more than a registration tax. It is the means of keeping the Tax Commission informed as to who are taxable and where their places of business are so that the commission may supply them with blank forms, and, too, it keeps those in the business alive to the necessity of keeping books and making monthly reports. It is said that, ‘where the fee is exacted solely or primarily for revenue purposes and payment of the fee gives the right to carry on the business or occupation without the performance of any further conditions, it is not a license fee but a tax imposed under the power of taxation, regardless of the name by which it may be called.’ 37 C. J. 170, §6. After this $1 license fee or tax is paid, the Tax Commission has no control over the business of the licensee. Its exaction is in no sense regulatory and in the exercise of the police power.”
To the same effect see City of Phoenix v. State ex rel. Conway, 53 Ariz. 28, 85 P.2d 56.
I would hold the retail sales tax permit granted to Jacobs was not a license subject to revocation under the provisions of the Act in question.
Bliss, J., joins in this dissent.