Albuquerque Broadcasting Co. v. Bureau of Revenue of State of New Mexico, 5833

• Decision Date: 21 February 1955
• Docket Number: No. 5833,5833
• Citation: 1955 NMSC 16,59 N.M. 201,281 P.2d 654
• Parties: ALBUQUERQUE BROADCASTING COMPANY, a Corporation, Appellee, v. BUREAU OF REVENUE of the State of NEW MEXICO, Mike Gallegos, Commissioner of said Bureau, and J. B. Contreras, Director of the School Tax Division of said Bureau, Appellants.
• Court: New Mexico Supreme Court

Page 654

281 P.2d 654

59 N.M. 201

ALBUQUERQUE BROADCASTING COMPANY, a Corporation, Appellee, v. BUREAU OF REVENUE of the State of NEW MEXICO, Mike Gallegos Commissioner of said Bureau, and J. B. Contreras Director of the School Tax Division of said Bureau, Appellants.

No. 5833.

Supreme Court of New Mexico.

Feb. 21, 1955.

Rehearing Denied April 15, 1955.

Albert I. Cornell, Albuquerque, Chester A. Hunker, Santa Fe, for appellants.

Hannett & Hannett, A. T. Hannett, G. W. Hannett, W. S. Lindamood, Albuquerque, for appellee.

SADLER, Justice.

This appeal is an aftermath of several others which occupied the time and attention of the district court of Santa Fe County and the Supreme Court in the late forties and the early part of 1950. The history of the previous litigation with its train of opinions, either original or on motion for rehearing, may be found under the same title as borne by this appeal, namely, Albuquerque Broadcasting Co. v. Bureau of Revenue, 51 N.M. 332, 184 P.2d 416, 11 A.L.R.2d 966; opinion denying motion for rehearing, 51 N.M. 356, 184 P.2d 431; and on second appeal of same case, under like title, the opinion will be found at 54 N.M 133, 215 P.2d 819. The last appearance of the controversy between the parties, though involving the questioned tax paid under protest by plaintiff (appellee) for a different period of time, will be found reported at 54 N.M. 165, 216 P.2d 698.

The first three opinions, two original and one on denial of motion for rehearing on first appeal, involved the same cause of action seeking recovery of taxes paid under protest over the same period of time. The last appeal disposed of sought recovery of taxes paid under protest over a different period or periods of time and represented a different cause or causes of action from those involved on the two former appeals. Fundamentally, though, the issue in every appeal was identical and the very same, namely, could the plaintiff be made to pay the tax on what was designated local advertising broadcasts originating in local studios of K.O.B. at Albuquerque but heard in all sixteen states serviced by K.O.B.? The answer in each case was that it could.

Now, into this Court for the fourth successive time comes the same plaintiff and again complains of the same tax. This time, however, it comes as an appellee though a plaintiff below, and defends a judgment of the same court in which all the other appeals originated. The judgment is based on conclusions of law deduced from facts not substantially different, in material respects, from those present on the other appeals. Strangely, the decisive conclusion announced by the trial court in the present case is diametrically opposed to those announced by this Court on the first two of the former appeals and in no manner disapproved in our opinion on the third of said appeals, namely, that plaintiff (appellee) is subject to the tax on intrastate business.

Three important conclusions made by the trial court in the present case, with the first and second of which we agree, and disagree on the third, are as follows:

'4. That the business of the plaintiff originating in its local studio is partially interstate and partially intrastate.

'5. That to tax the interstate business of the plaintiff originating in its local studio is an interference by the State of New Mexico with the freedom of interstate commerce.

'6. That it is impossible to determine with any accuracy what business originating in plaintiff's local studio is interstate and which is intrastate.'

It is quite impossible to have a clear understanding of the conclusions reached by us in the group of decisions listed above without a continuous and uninterrupted reading of them in the order and sequence in which such opinions were filed. In the first of them, Albuquerque Broadcasting Co. v. Bureau of Revenue, 51 N.M. 332, 184 P.2d 416, 429, 11 A.L.R.2d 966, we drew certain pertinent conclusions on the facts found after an extended and exhaustive review of the applicable authorities, primarily, decisions of the Supreme Court of United States. Former Chief Justice Brice, speaking for the Court, said:

'We conclude from these decisions:

'(1) The states cannot lay a direct tax on interstate commerce or gross receipts therefrom. Fisher's Blend Station v. Tax Commission, supra [297 U.S. 650, 56 S.Ct. 608, 80 L.Ed. 956]; Puget Sound Stevedoring Co. v. State Tax Commission, supra [302 U.S. 90, 58 S.Ct. 72, 82 L.Ed. 68]; Gwin, White & Prince v. Henneford, supra [305 U.S. 434, 59 S.Ct. 325, 83 L.Ed. 272]; Freeman v. Hewit, supra [329 U.S. 249, 67 S.Ct. 274, 91 L.Ed. 265].

'(2) There are various means of taxing interstate commerce by indirection so that it will bear its just share of state taxation. Freeman v. Hewit, supra.

'(3) If an intrastate incident is sufficiently disjoined from interstate commerce though indirectly a burden thereon, it may be a 'taxable event,' open to state taxation, if it does not discriminate against interstate commerce. Western Live Stock v. Bureau of Revenue, supra [41 N.M. 141, 65 P.2d 863]; McGoldrick v. Berwind-White Coal Mining Co., supra [309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565]; Nelson v. Sears, Roebuck & Co., supra [312 U.S. 359, 61 S.Ct. 586, 85 L.Ed 888]; [State of] Wisconsin v. J. C. Penney Co., supra [311 U.S. 435, 61 S.Ct. 246, 85 L.Ed. 267]; General Trading Co. v. [State] Tax Commission, supra [322 U.S. 335, 64 S.Ct. 1028, 88 L.Ed. 1309]; International Harvester Co. v. Department of Treasury, supra [322 U.S. 340, 64 S.Ct. 1019, 88 L.Ed. 1313]; Department of Treasury v. Allied Mills, supra [318 U.S. 740, 63 S.Ct. 666, 87 L.Ed. 1120]; Southern Pacific Co. v. Gallagher, supra [306 U.S. 167, 59 S.Ct. 389, 83 L.Ed. 586].

'(4) A valid state tax may be levied upon intrastate communications though the facilities used are also used in interstate commerce. Ratterman v. Western Union Tel. Co., 127 U.S. 411, 8 S.Ct. 1127, 32 L.Ed. 229.

* * *

* * *

'The third class of broadcasts is described in the findings as 'Local advertising broadcasts which originate locally in the studio of KOB at Albuquerque but are heard in all sixteen states.' It is a matter of common knowledge that most, if not all of such broadcasts are local advertising of merchandise or other businesses that are of interest only to local people, notwithstanding such broadcasts may be heard by people in other states not interested in the advertising. Such also are broadcasts of local political parties and candidates, addressed to the state's electorate. It is only the fact that the range of radio, unlike communications by telegraph or telephone, is limited only by the power employed in broadcasting, that it may be heard by people to whom the message is of no interest. As a practical matter this business is intrastate.' (Emphasis added.)

Our first opinion following submission, closed with the following declarations:

'We are of the opinion that local advertising by radio for local business is subject to the tax, (1) because it is intrastate business, and (2) in any event the advertising of local business to secure local patronage is a 'taxable event' open to the states. Western Live Stock v. Bureau of Revenue, supra. The appellee should be permitted to retain the receipts collected from taxes laid on appellant's intrastate business, the amount of which can be determined at another trial. Ratterman v. Western Union Tel. Co., supra.

'The judgment is reversed and cause remanded with instructions to the district court to set aside its judgment, grant appellant a new trial, and proceed therein not inconsistent herewith.'

Disagreeing with the conclusions we reached, the plaintiff (appellant) moved for rehearing. In denying the motion for rehearing, our opinion filed among other things, said:

'Appellant brought this action to recover back from appellee approximately $25,000 paid by it under protest, on account of taxes levied against its gross income as a corporation engaged in the business of radio broadcasting. The burden was upon appellant to prove that it was entitled to the return of this money; and to that end must have secured findings of fact from the trial court that would support a judgment therefor. If it failed to establish that it was entitled to any portion of the funds claimed, then its case to that extent failed.

'The findings of the Court are very explicit regarding interstate broadcasting. The pleadings as well as the findings segregate the interstate business from the local business, except as to amount. It is admitted in the complaint, and found by the Court, that the appellant was engaged in 'local advertising broadcasts which originate locally in the studio of KOB.' There is nothing in the findings, or in the evidence for that matter to indicate that any of this local business is interstate. To that extent the appellant's case failed of proof, unless we must say that all broadcasting is interstate business, and to this we do not agree.

* * *

* * * 'The burden was on the appellant to show that the whole tax was void. It segregated the taxable from its nontaxable activities in its pleadings and briefs, and sufficiently presented the question, for our consideration. Under similar facts the Supreme Court of the United States reached the same conclusion. Ratterman v. Western Union Tel. Co., 127 U.S. 411, 8 S.Ct. 1127, 32 L.Ed. 229. We are of the opinion that appellant did not establish its right to the return of funds collected as taxes on local broadcasting.' (Emphasis added.)

Thus the matter stood, so far as the records in this Court disclosed, until the record in the case of Albuquerque Broadcasting Co. v. Bureau of Revenue, 54 N.M. 133, 215 P.2d 819, was filed in this Court. In our opinion on that appeal, we stated:

'This is the second appeal of this case. For the purpose and nature of this action see Albuquerque Broadcasting Co. v. Bureau of Revenue, 51 N.M. 332, 184 P.2d 416, 431 . The appellant and appellee in the...