Court Opinion

ID: 3277166
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:45:55.372304+00
Date Added: 2024-06-11T14:24:47.445395
License: Public Domain

In the Denison case gasoline purchased in Tennessee was transported into this State for the purpose of supplying motive power for stationary engines and for trucks and tractors used in the performance of a contract with the United States Government to move earth from borrow pits adjacent to the St. Francis Levee and place it on the levee, and no part of the gasoline was used in the operation of a vehicle, movable engine or machine operated or propelled or used on the public highways and roads of the State. Such is the allegation of the complaint in that case, the truth of which is admitted by the demurrer, which was sustained by the court. *Page 200 
In the case of the Missouri Pacific Railroad it was alleged that the Commissioner of Revenue was attempting to collect the tax of 6 1/2 cents per gallon on 31,731 gallons of gasoline used by the Railroad Company in the month of February, 1934, in the operation of motor cars and locomotives wholly on the rails of the Railroad Company, no part of which had been used for operating vehicles of any character on any of the highways of the State. This tax, amounting to $2,062.51, for the shortest month in the year, does not appear to be de minimis and of inconsequential importance.
The complaints of the Frisco and Rock Island railroads contain similar allegations, the truth of which is, of course, admitted by the demurrers filed and sustained to those complaints.
The effect of the majority of opinion appears to be, not that the gasoline thus used could be taxed if the gasoline was used for no other purpose, but rather that the amount thus used in comparison with all gasoline used is too small to be of importance, and that it is necessary to tax all gasoline used for any purpose whatsoever to prevent fraud being perpetrated in the collection of the tax which may lawfully be imposed. In other words, a tax not authorized by the Constitution may be collected to facilitate the collection of a tax which the Constitution does authorize. I submit that this is an innovation in taxation which finds no support in any of the cases cited in the majority opinion.
It is said that gasoline taxes refunded in the year 1933 amounted to $553,596.38, of which from 50 to 90 per cent. was fraudulently refunded. This is a very serious indictment of the efficiency of the State officials charged with this duty. The statement appears to be dehors the record, but, even though true, I submit that this inefficient administration of the law affords no justification for the collection of a tax contrary to the provisions of the Constitution. A more appropriate remedy would be to administer the law efficiently.
The question here presented is of vast importance, but the legal principles which should control the decision are simple and have been often stated, and have been *Page 201 
applied under various circumstances, beginning with the early case of Stevens v. State, 2 Ark. 291, and continuing down to the late case of Hixon v. School District of Marion, 187 Ark. 554, 60 S.W.2d 7027. Many of these cases were cited and reviewed in the case of Sims v. Ahrens, 167 Ark. 557, 271 S.W. 720, where the right of the State to levy and collect a tax on net incomes was upheld. The opinion of Justice Wood on the rehearing granted in that case became and is the law, and it would be a work of supererogation to again review the various cases there cited and reviewed in the original majority opinion and in the opinion of Judge Wood which superseded it and became the majority opinion. The controlling point in that case is reflected in the second headnote, which reads as follows: "An income tax is neither a property tax nor an occupation tax, within the provisions of art. 16, 5, of the Constitution." It was apparently the opinion of all the judges that the tax would be void if it were either. Without reviewing that case, it will suffice to say that the State's authority to tax and the sources from which that authority is derived were given the most extensive and deliberate consideration, as is reflected by the several opinions of the judges. The one point upon which there appeared to be entire accord was that section 5 of article 16, of the Constitution should be construed to mean what it plainly says, that: "All property subject to taxation shall be taxed according to its value — that value to be ascertained in such manner as the General Assembly shall direct, making the same equal and uniform throughout the State," and that: "No one species of property from which a tax may be collected shall be taxed higher than another species of property of equal value," provided that certain named occupations and privileges might be taxed as such, and certain named property should be exempt from taxation. It is unnecessary to consider these exceptions from the rule of uniformity, as they have no application to the facts of this case.
The tax sought to be collected from the levee contractor and the railroads appears to be void, I think, from the unanimous opinion of the court in the case of *Page 202 
Standard Oil Co. of La. v. Brodie, 153 Ark. 114,239 S.W. 753, as being unauthorized and violative of our Constitution. That case construed our first legislation providing for the collection of a tax upon the sale of "gasoline, kerosene or other products to be used by the purchaser thereof in the propelling of motor vehicles using combustible type engines over the highways." Acts 1921, p. 685.
It was there very earnestly insisted that the legislation was void as imposing a tax upon gasoline as property, and upon that question we there said: "It is conceded in all quarters that, if the imposition is, in effect, a property tax, it is void." The legislation was upheld, not because the right to tax the sale or use of gasoline as property existed under the act, but because it had not been taxed as such. We said: "If it had been intended to tax the gasoline or its use, it would have been wholly unnecessary to describe the character of the use or the place where it was to be used, and the fact that the lawmakers incorporated these elements in laying the bases of the taxation shows unmistakably that it was intended to impose a tax upon the use of the public highways by the method described. It is clear that the tax is not imposed on the seller nor upon the gasoline while in his hands, and this of itself makes it manifest that there was no intention to levy a tax upon the sale of gasoline nor upon the gasoline itself." And, to make it perfectly clear that the gasoline could not be and was not taxed as property, it was said: "In the final analysis of this language (of the act) it comes down to the point that the thing which is really taxed is the use of the vehicle of the character described upon the public highway, and the extent of the use is measured by the quantity of fuel consumed, and the tax is imposed according to the extent of the use as thus measured." Nothing could make plainer what was then thought to be the constitutional limitation on the right to tax gasoline.
It was said by the Supreme Court of the United States in the case of Dawson v. Kentucky Distilleries Co.,255 U.S. 288, 41 S. Ct. 272, that the name by which a tax *Page 203 
is designated in a statute is immaterial, and that its character must be determined by its incidents.
Here it is not even contended that the gasoline sought to be taxed in the case of the levee contractor and the railroads had any relation to the privilege of propelling vehicles or machines of any character on the highways of the State. The facts admitted by the demurrers negative that idea. It is sought to tax this gasoline used for other and different purposes because not to do so might enable gasoline which should be taxed to escape taxation.
The right of the contractor to use gasoline as a fuel to place earth upon the levee, or of the railroads to use it as a fuel to propel their cars, is no more a privilege than would be the right to use wood or coal for the same purposes, and it could not be contended that the right existed to tax the use of wood or coal not used on public highways. A common right cannot be made a privilege by merely designating it as such either by the General Assembly or by this court.
The 1933 session of the General Assembly sought to levy a tax of one percent of the face value of all State and county warrants, to be deducted by the State treasurer in one cases and by county treasurers in the other, to provide a fund for old age pensions. This legislation was held to be violative of 5 of article 16 of the Constitution, above quoted. The taxation of the warrants was held to be a taxation of property, and not a privilege tax, although it was so called. In that connection, it was said that no definition of property could be framed which did not include the right of ownership, and that the essential attributes of ownership are the rights of dominion, possession, enjoyment and disposition, and that these rights are included within the protective provisions of the Constitution to the same extent as the physical things to which they pertain.
I conclude, therefore, that the tax sought to be collected from the contractor and the railroads is not a privilege tax, but is in fact a property tax, and is unauthorized for that reason. For the same reason I am of the opinion that so much of the act as attempts to tax *Page 204 
gasoline used exclusively for agricultural or industrial purposes is void.
The unconstitutionality of so much of the act as authorizes the collection of the tax against the contractor and the railroads, under the facts herein existing, does not affect the remainder of the act, as it provides that, "if, for any reason, any sentence or provision of this act shall be held to be unconstitutional, it shall not affect the remainder of this act, but this act, in so far as it is not in conflict with the Constitution of this State or the Constitution of the United States, shall be permitted to stand, and the various provisions of the act are hereby declared to be severable for that purpose."
Finding no valid objection to any other portion of the act, I dissent only from so much of the majority opinion as is herein indicated.
I am authorized to say that Mr. Justice BUTLER concurs in the views herein expressed.