Court Opinion

ID: 6702477
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:12:43.123262+00
Date Added: 2024-06-11T16:01:26.282575
License: Public Domain

HIGGINS, Justice.
The appeal challenges the validity of the restraining order which prohibits the City of Winston-Salem from collecting city taxes on McLean Trucking Company’s equipment for each of *652the years 1965-66-67-68-69. All parties; concede the city is- entitled to collect (and apparently has -already collected) the taxes for the year 1970.
Our former decisions establish' these propositions óf law-: (1) The proper situs for the listing of.all McLean’s rolling-stock-is, and -has been at all times, Winston-Salem which is coterminous with -Winston Township, and ¡hot -in Broadbay Township, where the owner had made the listing; The city tax authorities attempted to list and collect taxes for the year 1969.. (2) This Court in Case No. 65 (decided May 10, 1972) held the bity’s attempt was ineffectual for two reasons assigned in the opinion..-
For the year 1970 the city authorities listed all of McLean’s equipment in Winston-Salem contending, that the equipment should have been at all times listed- in the city where -McLean’s' home office was located' and never at any time should have been, listed in Broadbay Township. The city’s tax authorities assessed-the taxes not only for the year 1970, but for the preceding fivé years, contending the equipment was - “discovered property” within the meaning of the tax laws', and-taxable for éach of the preceding five years during which the-property had escáped' taxation. G.S. 105-302 provided:'
“Place for listing tangible personal property.— (a) Except as otherwise provided in-this section, all tangible -personal property and polls shall be listed in the township -in-which the owner thereof has his’residence. . . .”
The law in effect.for the taxing years involved was G.S. 105-331 providing for discovery and assessment:
“ (a) ... It shall be the duty of''.' . . the list' takers to be constantly looking out for'-property and polls' which’ have not been listed for taxation. ., • • -,
“(b) Procedure upon Discdvery; — When property or polls are discovered they , shall be listed in the name of the taxpayer, ... . _..
“(c) Assessment for Previous Years; Penalties. — The county commissioners may assess any'such property oí list such poll for the preceding years during which. it, escaped taxation, not exceeding five, in addition to the current year. ... , .....
-When personal 'property -is discovered which should have been listed for the current year, it shall be ’presumed *653that such property should have been listed by the same taxpayer for the preceding five years, unless the taxpayer shall produce satisfactory evidence, that such property was not in existence, that it was actually listed for taxation or that it. was not his duty to list the same during said years; . '; .
“(d)-
“ (e) Application to Cities and Towns. — The provisions of this section shall extend to all cities, towns and other municipal corporations having power to tax property or polls. ...”
The taxpayer has contended that the listing of the rolling stock in Broadbay Township was a sufficient listing to prevent the application of the “discovered property” statute. G.S. 105-332. The contention is not sustained by the facts and the wording of the statute. The section specifies “All property and polls validly .listed for taxation. . . .” (Emphasis added.) The listing in’ Broadbay Township was not a valid listing. McLean was not authorized to list its property anywhere except the situs of its home office. In re Trucking Company, 281 N.C. 375.
From the foregoing we conclude: (1) McLean’s attempt to list its rolling stock in Broadbay Township was in contravention of the requirement that personal property shall be listed in the place of the owner’s residence, or if a corporation, at the place of. its home office. (2) The tax authorities of the City of Winston-Salem had power to list and collect McLean Trucking Company’s taxes on its tractors and trailers for the year 1970 as “discovered property.” (3) The city has the right to impose taxes for the preceding five years or for any of them in which the property escaped taxation.
This decision requires a re-examination of. the tax agent?s right to list “discovered property.” This Court in Case No. 65 (decided May 10, 1972) discussed the question. However, the Court only defined “discovered” and not the phrase “discovered property.” The Court adopted the dictionary’s definition of “discovered” — “newly found, not previously known.” The definition of “discovered’’ is unobjectionable, but the conclusion does not follow that' “discovered property” means property that was newly found or not previously known. The phrase “discovered property” means property which the tax authorities have ascertained should have been listed for tax purposes by the owner *654but which was not so listed, thus the property escaped taxation. This definition, we think, is inescapable when the legislative history of the phrase “discovered property” is taken into account.
The General Assembly in 1939, G.S. 105-331, states:
“Discovery and assessment of property not listed during the regular listing period.— (a) .... It shall be the duty of tiie members of the board of commissioners, the supervisor and the list takers to be constantly looking out for property and polls which have not been listed for taxation. . . .
“ (b) Procedure upon Discovery. — When property or polls are discovered they shall be listed in the name of the taxpayer ....
“(c) Assessment for Previous Years; Penalties — The county commissioners may assess any such property or list such poll for the preceding years during which it escaped taxation, not exceeding five, in addition to the current year. . . .
“(d) ....
“ (e) Application to Cities and Towns. — The provisions of this section shall extend to all cities, towns and other municipal corporations having power to tax property or polls, and the power conferred and the duties imposed . . . shall be exercised and performed by the governing body of the municipal corporation.”
Personal property, and polls as well, were objects of discovery if unlisted for tax purposes at the home of the owner. Formerly a poll tax was imposed upon all males between the ages of 21 and 55. Polls being included on the same terms as personal property, it cannot be said that each “poll” a male between 21 and 55 was “newly found, not previously known.”
The law in effect at the time pertinent to decision authorized the authorities to list and tax personal property which the owner had failed to list in the proper tax situs. McLean Trucking Company never listed for any of the years involved any of its rolling stock which the city now seeks to tax. This fact alone gave the authorities the right to place the property on the city’s tax records as “discovered property.”
*655The foregoing interpretation of “discovered property” as defined by the law in effect at the time of the listing, is supported and confirmed by the General Assembly’s recent dealing with the subject.
In 1969 the General Assembly by Resolution No. 92 created a commission for the study of local and ad valorem taxes in the State of North Carolina and to make recommendations to the Governor and to the 1971 General Assembly. The study commission recommended that the phrase “discovered property” shall include not only that which the owner failed to list, but should include also that which the owner substantially understated the value, quantity, or other measurement. The commission recommended that the substantial understatement of value or quantity provision should also be treated as “discovered property.”
The new Machinery Act, drawn in conformity with the commission’s recommendations and passed as Chapter 806, Session Laws of 1971, now G.S. 105-312 provides:
“(1) The phrase ‘discovered property’ shall include property that was not listed by the taxpayer or any other person during a regular listing period and also property that was listed but with regard to the value, quantity, or other measurement of which the taxpayer made a substantial understatement in listing.
“(2) ....
“(3) The phrase ‘to discover property’ shall refer to the determination that property has not been listed during a regular listing period and to the identification of the omitted item. For discoveries made after July 1, 1971, and in future years, the phrase shall also refer to the determination that listed property was returned by the taxpayer with a substantial understatement of value, quantity, or other measurement.”
Section 3 makes understatement of value or quantity “discovered property” after July 1, 1971. Property which the owner failed to list has been “discovered property” since 1939.
For the reasons above stated we find it necessary to reverse the restraining order entered by Judge Wood and remand the case to the end that the City of Winston-Salem may proceed to levy and collect taxes for any years prior to 1970, not in excess *656of five, in which McLean’s property escaped taxation, with this one exception: Taxes for the year 1969 were dealt with in our decision in Case No. 65 in which we denied the right of the city to tax the rolling stock for the year 1969. That decision is res judicata as to the year 1969 and is not subject to collateral attack. Therefore, in assessing the property for any of the taxation years preceding 1970, the year 1969 shall not be included. At most, the city can assess only for 1965 through 1968.
The restraining order entered by Judge Wood is vacated and the proceeding remanded for disposition as here directed.
Vacated and remanded.