Adams v. Mississippi Lumber Co.

• Decision Date: 07 March 1904
• Citation: 84 Miss. 23,36 So. 68
• Court: Mississippi Supreme Court
• Parties: WIRT ADAMS, STATE REVENUE AGENT, v. MISSISSIPPI LUMBER COMPANY

36 So. 68

84 Miss. 23

WIRT ADAMS, STATE REVENUE AGENT, v. MISSISSIPPI LUMBER COMPANY

Supreme Court of Mississippi

March 7, 1904

FROM the circuit court of Clarke county. HON. JAMES H. NEVILLE Judge.

Adams state revenue agent, appellant, an officer of the state authorized (Laws 1894, p. 29), to sue for and recover delinquent taxes of past years, was the plaintiff, and the Lumber Company, appellee, was defendant in the court below. From a judgment in defendant's favor, the plaintiff appealed to the supreme court. The facts are stated in the opinion of the court.

Affirmed.

J. M Jayne, Jr., and Arthur Fridge, for appellant.

"The subjects of taxation may be classified at the discretion of the legislature, and if all of the same class are liable alike there is no violation of the equality and uniformity required by the constitution." Vicksburg Bank v. Worrell, 67 Miss. 47. It is well settled that, if provisions of this character apply at all to privilege taxes imposed upon business pursuits and professions, all that is necessary in levying them is that all persons pursuing the same occupation shall be taxed the same amount, or in the same ratio. Holberg v. Macon, 55 Miss. 112.

Is a tax on property that may be shipped out of the state for sale an attempt at interference with interstate commerce? This question was definitely presented to the supreme court of the United States in Nathan v. Louisiana, 8 How. (U. S.), 73. It was there held that a privilege tax imposed on a dealer in foreign exchange was no attempt at regulation of interstate commerce.

The case of Rothemek v. Mayerle, 9 L. R. A., 366, involved the construction of a state stautute of almost the same nature as the one in the case at bar. In that case the court, basing its opinion on such adjudications of the United States supreme court as Brown v. Houston, 8 Wall., 123; Welton v. Missouri, 91 U.S. 275; Brown v. Maryland, 12 Wheat., 425; The Daniel Ball, 77 U.S. 557, in no uncertain words held that a tax on goods while remaining a part of the general mass of state property (whether they were to be shipped out of the state or not) in no way involved an attempt at regulating interstate commerce.

Samuel H. Terral, for appellee.

Section 3, ch. 43, Laws 1900, is repugnant to sec. 112 of the constitution of the state of Mississippi, which provides that "taxation shall be uniform and equal throughout the state," and is therefore void. Bouvier defines taxation as "the process of taxing or imposing a tax;" as "a pecuniary burden for the support of the government." This definition clearly includes a privilege tax where it is imposed for the purposes of revenue. Is the tax in question a revenue tax or a police regulation? As there is nothing inherently dangerous or pernicious in the occupation taxed, as it requires no police regulation--save that incident to all occupations--and as no inquiry whatever is made into the moral fitness or qualifications of those applying for the privilege, but the license is sold to all applying indiscriminately, clearly it is not a police regulation. It is, however, imposed for the purpose of raising revenue, and some of the most law-abiding citizens in the state are engaged in the business sought to be taxed. It is then a revenue tax. In Mississippi Mills v. Cook, 56 Miss. 40, it was held that "there is to be no discrimination between property of the same class, and it shall not be competent to levy one rate upon country lands and another upon city lands, or one rate upon horses of one breed and another upon horses of a different breed." In Adams v. Bank, 75 Miss. 701, this doctrine of uniformity and equality was held to include all forms of ad valorem taxation, whether state, county or municipal. Why, then, discriminate in occupation taxes of the same class? Why not carry the doctrine a step further, and to its logical conclusion, and make the taxation of privileges uniform and equal? The act in question is not uniform and equal in that it does not apply to all of the same class of sawmill operators, discriminating arbitrarily against those who buy timber without buying the land, and who ship the timber or lumber out of the state and favoring those who buy timber without buying the land, and who do not ship timber or lumber out of the state, even though the sawmill operators have equal capital employed in the business, and have mills of the same capacity. Not being uniform and equal, the act is void. Cooley on Taxation, 3d ed., pp. 259, 260, 1100; Judson on Taxation, secs. 456, 459; North Carolina v. Moore, 22 L. R. A., 472; New Hampshire v. Pennoyer, 5 L. R. A., 709; Bank v. Worrell, 67 Miss. 47.

Whatever the intent, the practical effect of the act in question is to impose a tax of five cents per acre on timber bought without buying the land, and which is shipped out of the state. It is therefore a discrimination against nonresidents requiring them to pay more for lumber or timber coming from this state than is required of residents, as the sawmill operator will inevitably make the "consumer pay the tax." Such an act invites retaliation, and it would be just as permissible for Alabama or Pennsylvania to impose a tax on shippers of coal or iron, the shippers buying the coal or iron without buying the land, and shipping it out of the state as it is for Mississippi to impose the tax in question. Almost every state has an abundance of some article of commerce not found in all states alike, one of Mississippi's being lumber and if each were permitted to enact laws like the one in question, great confusion, prejudice and ill-will would result, and interstate commerce would soon become restricted, if not altogether prohibited. Each state would indeed be a law unto itself, in so far as articles shipped from the state are concerned. As the tax is not due until the business begins, the business of buying the timber without buying the land and shipping it out of the state, and as the moment the timber or lumber leaves the state, or the moment that it is placed aboard the cars for its final destination out of the state, it become interstate commerce, it follows that it is a tax, an occupation tax, if you will, upon interstate commerce. The right to tax carries the right to confiscate or prohibit, and if five cents per acre can be thus imposed, then so can $ 100 per acre, or any amount within the discretion of the legislature, or the business can be prohibited altogether. If the legislature cannot tax articles that are to be brought within the state, or the occupation of bringing goods within the state, neither can it tax articles that are shipped out of the state, nor the occupation, of shipping goods out of the state. One is the corollary of the other, and both are a tax on interstate, commerce. Hence, the act in question violates article 1, sec. 8, clause 3 of the constitution of the United States, which provides that "congress shall have power to regulate commerce . . . among the several states," and is therefore void. Crutcher v. Kentucky, 141 U.S. 47 (35 L.Ed. 649); Lying v. Michigan, 135 U.S. 161 (L. Ed. 151); Leloup v. Mobile., 127 U.S. 640 (L. Ed. 311); Walling v. Michigan, 116 U.S. 446; Brennan v. Titusville, 153 U.S. 287 (L. Ed. 719); Idaho v. Evans, 7 L. R. A., 288; Ames v. People, 55 P. 725; Startford v. Council, 20 So. 127; Mfg. Gas Co. v. Nat. Gas Co., 53 L. R. A., 134; Colley Con. Lim.,...