Court Opinion

ID: 8657253
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:17:13.099508+00
Date Added: 2024-06-11T16:56:47.219951
License: Public Domain

THURMAN, J.
I concur in the opinion of Mr. Justice FRICK. I am satisfied with his analysis of the cases relied on by both appellants and respondent, and see no escape from the conclusion reached by him that the $10,000,000 assess*523ment was without authority of law, and is therefore null and void. I agree with him also on the proposition that the only possible method under existing laws by which intangible property can be assessed is to assess the physical property at its value as the same is enhanced by the intangible value arising therefrom. The difficulty, however, in making such an assessment, even if valid under the law as it exists to-day, is practically insuperable. The cases are so numerous in which our present law would prove totally inadequate that it renders the law itself palpably discriminatory and violative of the uniformity clause of the Constitution. In a brief dissenting opinion filed by me when the former opinion was rendered I made the following observations, which are as pertinent now as they were at that time:
“The Constitution requires uniformity in taxation and abhors discrimination, whether the taxpayer he an individual or a corporation. If A. and B., private persons, own property of the same kind and value in the same taxing district, and are engaged in the same kind of business we naturally expect the amount of their property tax will be the same, notwithstanding B.’s income or profits from its business may double or treble that of A. We not only expect their taxes will be the same, but, as matter of common knowledge, we know that such is the usual and ordinary result. If, however, B. should dispose of his property and business to C. and C. should form a corporation which handles his property and conducts the business with the same skill and prudence as did B., whereby it earns the same income and no more, there is no reason why the property and business should be subjected to a greater tax than it would have been if B had continued to be the owner. Assuming that the par value of the shares of the corporation represents the actual value of the tangible property, and. each share, through prudent management, has, increased in value 25 per cent., the scheme is to assess the corporation for this additional value under the head of intangible property. In my opinion, it is neither more nor less in effect than a tax based upon income, and as a property tax is by implication excluded by the provision of the state Constitution (article 13, § 12) which reads as follows: ‘Nothing in this Constitution shall be construed to prevent the Legislature from providing a stamp tax, or a tax based on income, occupation, licenses or franchise.’
“From the section just quoted nothing can be clearer than that the constitutional convention regarded a property tax as one thing and a tax based upon income as another. The tax on property was *524provided for in the preceding sections of the article, while a tax based upon income was provided for as- a separate and distinct subject of taxation in the section quoted. With this provision of the Constitution staring him in the face, what right or power had the assessor of Salt Lake county to assume that the income or earnings from the management of physical property not reduced to tangible form could be assessed as property the same as physical property may he assessed? It is not only vicious in its manifest discrimination, as the same is administered by the assessor, but as a tax based on income it is without the sanction of legislative authority. The Legislature has never yet, directly or indirectly, determined that an income tax in any form should be adopted as the policy of the state. The writer has no antipathy towards such a tax when adopted by legislative authority, with suitable agencies to make the assessment uniform and effectual. Uniformity in the matter of taxation is just as mandatory under the Constitution as is the requirement that all property be taxed according to its value. I am aware of the fact that the assessor in the instant case made a pretense of assessing the intangible property of a few other corporations and individuals in the country, as well as that of the plaintiff company, but such assessments were so manifestly few and insignificant by comparison as to render more apparent a deliberate and intentional discrimination.”
It is suggested by my associate Mr. Justice GIDEON in a separate opinion filed herewith that the management of a business is one of the factors of its intangible value. The proposition is uncontrovertible as shown in the illustration heretofore made concerning the operations of A, B, and C. But, as there suggested, under the method adopted by the assessor in the instant case, the intangible value resulting from the good management of B. was not assessable so long as he continued to be the owner of the property. It became assessable only when transferred to a corporation, and that too in a state where confessedly a franchise ,to be a corporation is not assessable under the laws relating to taxation.
The method adopted by the assessor, as far as the $10,000,-000 assessment is concerned, is illegal, incongruous discriminatory, and unjust, and in my opinion contravenes both the Constitution and laws of the state.
I concur in the opinion affirming the judgment of the court below.