Court Opinion

ID: 9865072
Source: CourtListenerOpinion
Date Created: 2023-09-25 16:22:32.609379+00
Date Added: 2024-06-11T12:37:04.234346
License: Public Domain

Mr. Justice Hilliard dissenting.
I am not in accord with the opinion of the court. I think the General Assembly did not intend to exempt “monies, notes and credits” from ad valorem tax for all or any part of the taxing year 1937, nor could it have done so. It is inconceivable that the representatives of the people should deliberately relieve the owners of intangible property in the City and County of Denver (in excess of twenty million dollars, and an unknown sum in other counties) from usual tax visitations, knowing that the loss of revenue thus would have to be made up by increased levies on real estate and tangible personal property, already bearing a discouraging tax burden. At least, I prefer to absolve the legislative branch of the government from any purpose so unfair to owners of tangible property. Furthermore, I am unable to deduce that result from the language of the income tax act, and regard the court’s view otherwise as strained—doing-violence to legislative good faith.
To the property involved in this proceeding, tax lien attached April 1, 1937. ’35 C. S. A., c. 142, §4. See People v. Denver, 85 Colo. 61, 273 Pac. 883; Milliken v. O’Meara, 74 Colo. 475, 222 Pac. 1116. It was not competent for the General Assembly to release such lien. Colorado Constitution, article V, §38. By article X *153(sections 3 and 5), of the Constitution, provision is made for exempting from taxation certain property of heads of families, and property used for religious, educational and charitable purposes; but by section 6 it is specifically provided that, “All laws exempting from taxation, property other than that hereinbefore mentioned, shall be void.” An act authorizing a property tax for road purposes, exempted “property included within the limits of incorporated towns or cities” from the levy. We held that the exemption was within the inhibition of section 6, article X, of the Constitution, hence void. Board of Commissioners v. Owen, 7 Colo. 467, 4 Pac. 795. An act requiring insurance companies to pay two per cent of the gross of their premiums and relieving them of all other taxation on personal property, we said was void because it exempted such corporations from paying taxes in the interest of taxing units, all in contravention of section 10, article X, of the Constitution. Imperial Fire Ins. Co. v. Denver, 51 Colo. 456, 118 Pac. 970. But, it is said, section 17 (the income tax constitutional provision), article X of the Constitution, which is the authority for imposition of an income tax, permits “exemption of tangible and intangible personal property.” Hence, as said, the exemption claimed by the taxpayer here is constitutional. The difficulty with that contention is that the General Assembly may exercise the power to exempt from taxation only “in the administration of an income tax law. ’ ’ Considering the administration feature of the income tax act of 1937 (the act sufficiently appears in the court opinion), no money will be available therefrom until not earlier than mid-October, 1938. To the extent, therefore, that property is exempted from ad valorem taxation for 1937, other property must bear an added impost. It is to be noted that section 17 does not in itself exempt intangibles, as does the act, nor give the General Assembly simple power to that end, but does authorize the enactment of an income tax “for the support of the state, or any political subdivision thereof, or *154for public schools,” aud “in the administration of an income tax law,” to exempt tangible and intangible personal property from ad valorem taxation.
The income tax, as the least advised knows, and which the court must notice, was intended to operate as a replacement—not to add property tax burdens presently or ever. In its administration the purpose can be effectuated; but if the owners of intangibles are to move at once into favorable position to shirk ad valorem taxes —already a lien and not releasable and which others may not avoid—then the owners of real estate, never to be exempted from income tax exactions on income from such property, and income from tangible personal property, not exempted by the law, must remain in the front trench and pay—not as they have always paid, but more ad valorem tax—-in order that the deficiency resulting from the exemptions enjoyed by the owners of “monies, notes and credits,” may be discharged. I submit that the General Assembly had no such injustice in mind.
Mr. Chiee Justice Burke concurs in this opinion.