Court Opinion

ID: 9597503
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:59:23.457953+00
Date Added: 2024-06-11T18:01:38.179862
License: Public Domain

MR. JUSTICE ANGSTMAN
(dissenting in part and concurring in part).
I disagree with the majority opinion so far as it holds that chapter 178, Laws of 1951, is an exemption and not a classification statute.
To be sure, our classification statute, section 84-301, R.C.M. 1947, in a certain sense'is also an exemption statute. To illustrate : Property in Class Two is assessed at twenty per cent of its true and full value. Section 84-302. Eighty per cent of the value is exempt from taxation.
Likewise, property in Class Three is taxed on the basis of thirty-three and one-third per cent of its value. In effect then sixty-six and two-thirds per cent is exempt from taxation. Yet this court in Hilger v. Moore, 56 Mont. 146, 182 Pac. 477, sustained the classification statute.
In my opinion a statute could be enacted to encourage new industries to enter Montana, which would have the effect of giving them a tax benefit for a three year period without violating sections 1, 2, 7, or 11 of Article XII, of our Constitution, and without violating the rule of the cases of Cruse v. Fischl, 55 Mont. 258, 175 Pac. 878, and Stoner v. Timmons, 59 Mont. 158, 196 Pac. 519, if there was not undue discrimination against a going concern engaged in the same business in the same locality.
Such a statute would be a classification and not an exemption statute. It would place the property in a different class for the first three years of its operation.
As pointed out in the majority opinion, where the Constitution does not prohibit the granting of exemptions it has been held that the legislative power to exempt industrial plants from taxation for a limited period as an inducement to the location of the same in the state cannot be questioned, and “Whether the benefits to accrue warrant such exemption is a matter of *323legislative policy.” Crow v. General Cable Corporation, 223 Ala. 611, 137 So. 657, 658. It is better if the legislature so determines to grant special tax consideration for a limited period than not to have the industry in the state at all.
The purpose of such exemption statutes is to encourage the location of industries in the state, thereby affording labor to more people, distributing payrolls in the community and increasing the value of property generally in the community, due to the necessity of providing homes for more people and the general circulation of more money in the community. Illinois Central Railway Co. v. City of Paducah, 228 Ky. 65, 14 S.W. (2d) 172, County Commissioners of Carroll County v. B. F. Shriver Co., 146 Md. 412, 126 A. 71.
The legislature of this state has power to classify property for the purpose of taxation. Hilger v. Moore, supra.
“The use to which the property is devoted and its productivity is the measuring stick in determining its proper classification under the act for the purposes of fixing the tax. Although such machinery may be used in manufacture, yet we are of opinion that the use to which it is actually devoted is controlling for purposes of taxation. Barnard Realty Co. v. City of Butte, 50 Mont. 159, 145 Pac. 946.” Chicago, Milwaukee & St. Paul Railway Co. v. Powell County, 76 Mont. 596, 247 Pac. 1096, 1097.
To the same effect is Bank of Miles City v. Custer County, 93 Mont. 291, 19 Pac. (2d) 885; Chicago, Milwaukee, St. Paul & Pacific Railway Co. v. Custer County, 96 Mont. 566, 32 Pac. (2d) 8; Wheir v. Dye, 105 Mont. 347, 73 Pac. (2d) 209.
Whether or not a particular classification may stand depends upon whether it precludes the assumption that it was made in the exercise of legislative judgment and discretion. Bank of Miles v. Custer County, supra; Montana Beer Retailers’ Protective Association v. State Board of Equalization, 95 Mont. 30, 25 Pac. (2d) 128.
A distinction or classification made by the legislature is not arbitrary if any state of facts reasonably can be conceived *324that would sustain it. Rast v. Van Deman & Lewis Co., 240 U.S. 342, 36 S. Ct. 370, 60 L.Ed. 679, L.R.A. 1917A, 421, Ann. Cas. 1917B, 455; Borden’s Farm Products Co. v. Baldwin, 293 U.S. 194, 55 S. Ct. 187, 79 L.Ed. 281; Metropolitan Casualty Ins. Co. of New York v. Brownell, 294 U.S. 580, 55 S. Ct. 538, 79 L.Ed. 1070.
As above pointed out there are many things which the legislature might reasonably have regarded as beneficial to the state and its people and as sufficient cause to encourage the bringing in of new industries into the state by thus classifying their property for taxation purposes for a period of three years.
There is general language, by way of dictum, in the case of State v. North American Car Corporation, 118 Mont. 183, 164 Pac. (2d) 161; which it is contended is at variance with the views herein stated.- However, upon close analysis it will be seen that there is in fact a difference, if we assume the allegations of the complaint are true, which on demurrer we must.
Here there are allegations that there is a difference between an industrial plant which has been in operation for three years or more and one that is just beginning its operation. According to these allegations the classification here is based upon substantial distinctions which make one class really different from another within the rule of Northwestern Mutual Life Insurance Co. v. State of Wisconsin, 247 U.S. 132, 38 S. Ct. 444, 62 L.Ed. 1025, and Northern Pacific Railway Co. v. Sanders County, 66 Mont. 608, 214 Pac. 596.
I concur in the conclusion reached in the majority opinion because the statute here considered is so indefinite in its wording that it does not actually encourage new industries in the state, if that is its purpose. Under the statute any new piece of industrial machinery takes the lesser rate of taxation for the three year period from the time it is first assessed and this without reference to the length of time that the industry as such has been operating.
*325MR. JUSTICE ANDERSON:
Tbe majority opinion reaches out beyond tbat which is necessary to a decision and for tbat reason I do not subscribe to it. I agree with tbe result reached.