City of Hueytown v. Burge
| Decision Date | 14 January 1977 |
| Citation | 342 So.2d 339 |
| Parties | CITY OF HUEYTOWN, a Municipal Corporation v. H. S. BURGE et al. SC 1666. |
| Court | Alabama Supreme Court |
James H. Weaver, Jr., Birmingham, for appellant.
Ralph L. Armstrong, Bessemer, for appellees.
Drayton N. Hamilton, Montgomery, for Ala. League of Municipalities, amicus curiae.
This is an appeal from a decision of the Circuit Court of Jefferson County, Bessemer Division, holding that certain municipal ordinances of the City of Hueytown were void as applied to appellees and members of their class, and enjoining the city from collecting taxes or fees under those ordinances from members of that class. We modify and affirm.
The plaintiffs filed a complaint against the City of Hueytown in Jefferson Circuit Court, Bessemer Division, alleging that they were representatives of a class of merchants whose businesses were located outside Hueytown's city limits but within its police jurisdiction. The Court was asked to render the following relief:
1. To declare that Hueytown's Ordinances 3--J and 209 are unconstitutional, illegal and invalid as applied to the plaintiffs and others similarly situated;
2. To suspend the operation of those ordinances against plaintiffs and others similarly situated;
3. To declare that Ordinance 209 is unenforceable and uncollectible respecting sales made outside the City of Hueytown;
4. To determine that refunds should be made to the plaintiffs, attorneys fees and other costs to be paid, and equitable relief, if any, be awarded plaintiffs.
We quote pertinent parts of Ordinances 3--J and 209:
Section 9. That the schedule of license for the year beginning October 1st, 1973 required to be paid to the City of Hueytown for engaging in or carrying on businesses, occupations, or professions, without said City but within the police jurisdiction thereof, is hereby declared to be one-half the amount required for engaging in or carrying on such businesses, occupations or professions within the City of Hueytown.
Levy of Tax in Police Jurisdiction. There is hereby levied, in addition to all taxes of every kind now imposed by law, . . . a privilege or license tax against the persons on account of the business activities . . . as follows:
(a) Upon every person engaged or continuing, within the police jurisdiction of the city and beyond the corporate limits thereof, in the business of selling at retail any tangible personal property whatsoever, including merchandise and commodities of every kind and character . . .
(b) . . . operating places of amusement or entertainment, billiard and pool rooms, bowling alleys, amusements devices, musical devices, theaters, opera houses, moving picture shows, . . .
(c) . . . selling at retail machines used in mining, quarrying, compounding, processing and manufacturing of tangible personal property, . . .
(d) . . . selling at retail any automotive vehicle, truck trailer, semitrailer or house trailer, . . .
Following the trial, the lower court awarded plaintiffs' relief, holding:
1. That Ordinances 3--J and 209 were void and of illegal effect as applied to plaintiffs and all other merchants similarly situated 2. That operation of such ordinances was suspended as applied to plaintiffs and all other merchants similarly situated;
3. That the City of Hueytown was permanently enjoined from interfering with the plaintiffs and all other merchants similarly situated in reference to collection of tax or fees imposed by such ordinances.
The City of Hueytown appeals from this order, citing Alabama Code, Tit. 37, § 733 (Recomp.1958) as authority for their position:
The quoted statute allows a municipality to assess a license tax against businesses located outside the corporate limits of the municipality but within the police jurisdiction in order to reasonably reimburse the city for supervision of the businesses so located, including police and fire protection. Atlantic Oil Company v. Town of Steele, 283 Ala. 56, 214 So.2d 331 (1968); City of Homewood v. Wofford Oil Company, 232 Ala. 634, 169 So. 288 (1936). When such an assessment occurs it is presumed to be a valid exercise of the police power of a municipality unless it is shown that the city has manifestly abused its power or invalidity appears from the face of the ordinance itself. Atlantic Oil Company v. Town of Steele, supra; City of Andalusia v. Fletcher, 240 Ala. 110, 198 So. 64 (1940).
Our authorities have placed the burden on the challenger to establish affirmatively by competent evidence that abuse or invalidity exists, Franks v. City of Jasper, 259 Ala. 641, 68 So.2d 306 (1953); City of Andalusia v. Fletcher, supra. Although these tax levies may not be imposed as a source of general revenue, Alabama Power Company v. City of Carbon Hill, 234 Ala. 489, 175 So. 289 (1937), the presumption that the ordinances are valid exercises of the municipality's police power, as we have indicated, requires that the challenger go forward with competent evidence that the city has imposed an illegal tax.
By stipulation, documents relating the operating expenses for the police and fire departments, together with records of the revenues received from business licenses and sales tax licenses, were admitted into evidence. Also admitted were a listing of licenses issued in the police jurisdiction for the years 1969--73 and a recapitulation of license tax collections for the years 1969--73 and a part of 1974.
Several witnesses testified for the plaintiff expressing various complaints concerning the inadequacy of protective services outside the city limits but within the police jurisdiction. Each of these witnesses paid business license and sales taxes to the City of Hueytown.
The license and sales tax revenue figures for police jurisdiction businesses are revealing. When compared with general revenue receipts they show:
1969 1970 1971
---------- ----------- ----------
General license revenue $62,010.95 $73,224.95 $79,460.77
General sales tax revenue 39,576.98 64,232.92 69,093.00
Police jurisdiction
licenses 1,953.10 2,215.54 5,054.05
Police jurisdiction
sales taxes 3,627.05 4,566.54 2,046.05
1972 1973
---------- -----------
$94,230.80 $103,781.28
90,050.39 102,861.00
4,342.78 4,989.72
1,865.27 2,105.47
On the other hand, general operating expenses for the fire and police departments during the same period were:
1969 1970 1971 1972 1973
----------- ----------- ----------- ----------- -----------
$101,524.61 $111,944.53 $135,948.50 $161,536.70 $191,101.94
Obviously, the receipts from business licenses and sales tax collections from in-city sources far exceed those from police jurisdiction businesses, but this fact does not make legal the taxes imposed on the latter. Not only do the police and fire department expense records themselves fail to distinguish between in-city and police jurisdiction services, but the testimony of the mayor and the fire and police department heads establishes as a fact that in projecting their budgetary requirements no consideration has been given to the differences between the cost of rendering services to police jurisdiction businesses and those offered to others. The fire chief testified that it cost the city $158.83 for each fire call answered; however, this figure was an average based upon all such calls, whether inside or outside the city. On the question regarding cost allocation between such calls he testified:
Q. In this 1972 budget, how much of this budget did you set aside or how much of this budget is allocated to the cost of your supervision of those visits outside of the city?
A. It's all mixed up with the ones in the city.
Q. There's no separate account to supervise these businesses outside of the city limits?
A. No, sir, it's all mixed up.
Q. Now, the budget for the year 1973, it was the same way as 1972?
A. The same amount of money?
Q. No, but it was the same regarding about not allocating anything outside, but all mixed up, no billing out by the city of your department ahead of time as to what the cost is going to be or the estimate is going to be to supervise those businesses, just all lumped in together, is that correct?
A. That's correct.
He also testified that usually at the end of the year he would prepare a report of the in (city) and out calls for the information of the mayor and council, but he did not furnish them with any other statistics, and at budget hearings...
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