City of Greenville v. Query

• Court: South Carolina Supreme Court
• Writing for the Court: JOHN I. COSGROVE, A. A. J.
• Citation: City of Greenville v. Query, 166 S.C. 281, 164 S.E. 844 (S.C. 1931)
• Decision Date: 13 April 1931
• Docket Number: 13117.
• Parties: CITY OF GREENVILLE et al. v. QUERY et al.

164 S.E. 844

166 S.C. 281

CITY OF GREENVILLE et al. v. QUERY et al.

No. 13117.

Supreme Court of South Carolina

April 13, 1931

Original action by the City of Greenville and others, against W. G Query and others, constituting the State Tax Commission, for an injunction.

Temporary injunction dissolved, permanent injunction denied, and complaint and intervening petition dismissed.

Affirmed in 52 S.Ct. 631, 76 L.Ed. --.

James M. Lynch, of Florence, Shepard K. Nash, of Sumter, and B. A Morgan, of Greenville, for appellants.

J Fraser Lyon, of Columbia, for respondents.

JOHN I COSGROVE, A. A. J.

By this action in the original jurisdiction of the court, the cities of Greenville, Sumter, and Florence (the county of Sumter later intervening) seek to enjoin the enforcement of the act of the General Assembly (Act No. 833, p. 1390), approved April 4, 1930, popularly termed the Gasoline Tax Act of 1930 praying that said act "in so far as it applies to municipalities, counties, or political subdivisions of the State of South Carolina, be declared unconstitutional, null and void."

The complaint alleges, in substance, that plaintiffs and others in like plight for some time prior to the passage of this act purchased gasoline and motor fuels without the state of South Carolina and imported the same in tank car lots, and have stored, used, and consumed such imported gasoline and motor fuels "for public purposes in connection with the discharge of the functions devolving upon them as municipal corporations under the laws of the State of South Carolina"; and, in addition, that they are not engaged in the handling of gasoline as a business or occupation, and have derived no revenue therefrom, the gasoline so imported being stored and used solely for municipal purposes; and further, that, if the act is upheld, plaintiffs will be compelled to pay a tax upon the storage and use of gasoline for strictly municipal purposes.

They assail the act as violative of both the Federal and State Constitutions.

It is asserted that the act is unconstitutional under the Federal Constitution (article 1, § 8, subd. 3) because it attempts to regulate interstate commerce and to impose a burden thereupon.

Under the State Constitution, its invalidity is urged under three heads: (1) That the tax is not such a tax as the General Assembly has the power to impose, in that: (a) It is a license tax imposed on a business or occupation, and as such cannot be made applicable to municipal corporations storing and using gasoline for governmental purposes. (b) It is a tax on the mere ownership of property and the alleged inherent right to use the same free from governmental interference; (2) the tax is not uniform and equal; and (3) the act attempts to levy a tax on the property of municipalities and counties contrary to section 4, article 10, of the Constitution.

All of the objections to this statute above presented (with the exception of ground (3) were fully considered and decided against plaintiff's contentions in Gregg Dyeing Company v. Query et al. (S. C.) 164 S.E. 588, the opinion in which will be filed herewith.

There remains, then, for consideration in this cause, only the objection that the act is violative of the Constitution, section 4, article 10, in that it imposes a tax on the property of a municipality or county, exempt by law.

Section 4, article 10, of the Constitution provides: "There shall be exempted from taxation all county, township and municipal property used exclusively for public purposes."

Plaintiffs claim that property of political subdivisions, used for public purposes, are exempt from all duties or taxes of whatever nature or description; that the policy of this state is for a liberal construction of the exemption from taxation allowed municipal corporations; and that the act taxes instrumentalities of government and impedes and burdens the exercise of governmental functions.

It is true that, in the absence of express declaration by the Legislature, there is a presumption, generally, against the intention of the legislative body to tax an instrumentality of state government or a state agency; and that, where an exemption from taxation of its property is claimed by such instrumentality or agency, a liberal construction of the exemption will be allowed by this court. State v. Columbia, 115 S.C. 1O8, 104 S.E. 337. But in the instant case, the taxing body of South Carolina has expressly and clearly enacted that all municipalities, counties, and political subdivisions shall pay this tax. Rules of presumption and policy, therefore, disappear in the light of expressed legislative declaration.

We have just held in the Gregg Case, supra, that this tax is not a tax on property at all; but that it is an excise imposed on the storage of gasoline in South Carolina for use and consumption in this state. Does, then, the constitutional exemption claimed by plaintiffs, as municipal corporations, extend to excise taxes as well as property taxes?

In South Carolina, taxes generally may be grouped into two classes; ad valorem taxes on property and taxes on privileges, excises, licenses, franchises, and other classifications of like kind.

A study of article 10 of our Constitution, entitled "Finance and Taxation," convinces us that the framers of that instrument in this article were dealing solely with ad valorem taxes on property. See Gregg Dyeing Co. v. Query et al., supra; City of Louisville v. Cromwell, 233 Ky. 828, 27 S.W.2d 377.

As was pointed out in that case, and in other decisions of this court, there is no inhibition in our Constitution on the power of the General Assembly to impose excise taxes. As the provisions of article 10 deal only with ad valorem taxes on property (and, in addition, with license taxes on occupations and businesses, income taxes, and others expressly thereon named), it would seem logically to follow that the exemptions provided for in that article would apply only to the kinds of taxes therein dealt with and regulated. As neither this provision of the Constitution, nor any other, in any way refer to excise taxes, we hold that the exemptions therein allowed cannot be claimed against such taxes. In this conclusion we are not without support from eminent authority.

In 26 R. C. L. p. 315, we find: "An exemption from taxation applies primarily to the annual general property tax. Whether it is to be extended to other classes of taxes depends upon various circumstances. Thus it does not ordinarily apply to excises, especially to such as are not in lieu of property taxes but are imposed upon the enjoyment of a privilege."

Churches and similar institutions, likewise exempted under this article, have been denied by this court exemption from liability for street improvement assessments. Wesley M. E. Church v. Columbia, 105 S.C. 303, 89 S.E. 641.

In addition, our conclusion is sustained by an almost unanimous line of contemporaneous authorities upholding a tax of this character against like objections of municipal corporations and governmental subdivis...