Court Opinion

ID: 3530172
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:42:37.100707+00
Date Added: 2024-06-11T13:45:23.153487
License: Public Domain

ON MOTION FOR REHEARING.
A franchise tax is not one levied upon property, but one placed on the right to do business. It may be graduated according to the extent of the business done. The act before usFranchise  contemplates a tax upon the right to do business inTax.       accordance with the property actually used in the business.
Franchise taxes, to be fair, should be measured by the volume of business. The volume can best be measured by the property used in the business. To illustrate, one corporation has $1000 of its own, and starts a business with it as its capital stock. It keeps within its capital stock. The volume of its business necessity is small. On the other hand another corporation has $1000 of its own (in capital stock) and borrows $49,000, and with the $50,000 starts the same kind of business. It should do many times the business of the other and its tax upon the right to do business should be proportionately greater.
With this idea of a franchise tax, it is hardly fair to the Legislature to say that in the use of the word "surplus" it means the mere excess of assets over liabilities. To give it such a construction would not proportion the tax to the business done, as illustrated above by the two supposed corporations. With the *Page 235 
two supposed corporations, giving the term "surplus" the construction for which counsel contend, we would have both paying the same tax, and yet one doing a business many times larger than the other, because of the money actually used in the business. It would get the profits of an increased business, whilst paying only a nominal franchise tax for the right to do that business. So that, notwithstanding the great list of briefs filed by friends of the court upon the motion for rehearing, we are of the opinion that we properly construed the term "surplus" in the franchise tax measure.
II. We have also read with pleasure the briefs discussing the construction of Section 10 of the act given by the separate concurring opinion. It may be that the writer of the Missouri act (generally known not to have been the Legislature, or any member thereof) had in mind to borrow from the Arkansas law, but if he failed to borrow the law, we are left to give the best construction we can of what has been presented to the court for construction. We are fully satisfied with the construction that we there placed upon this Section 10 of the law before us.
The status of bank deposits is not discussed in the opinions heretofore written, and should not be discussed now. Whether they constitute the working assets of a bank or trust company should be left to a case where such is a live issue. We have troubles enough with the questions in the particular cases,Bank       without extending the inquiry to outside problems. TheDeposits.  motion for rehearing should be overruled. It is so ordered. All concur except Woodson, J., absent, andGoode, J., who dissents in opinion filed. *Page 236