City of De Land v. Florida Public Service Co.

• Citation: 119 Fla. 804,161 So. 735
• Court: United States State Supreme Court of Florida
• Decision Date: 21 May 1935
• Parties: CITY OF DE LAND v. FLORIDA PUBLIC SERVICE CO.

161 So. 735

119 Fla. 804

CITY OF DE LAND v. FLORIDA PUBLIC SERVICE CO.

Florida Supreme Court

May 21, 1935

En Banc.

Suit by the Florida Public Service Company against the City of De Land. Decree for complainant, and defendant appeals.

Affirmed. Appeal from Circuit Court, Volusia County; M G. Rowe, Judge.

COUNSEL

D. C Hull and Hull, Landis & Whitehair, all of De Land, for appellant.

J. E Futch and Scarlett & Futch, all of De Land, and E. W. & R. C Davis, of Orlando, for appellee.

OPINION

DAVIS Justice.

The Florida Public Service Company brought this suit to restrain the enforcement of a certain ordinance of the city of De Land imposing on it as the solely affected party a special municipal tax equal to 10 per cent. of the charge made by it on each and every sale of electricity in said city, regardless of the purpose thereof. The circuit court upon final hearing, after full proofs of the allegation pro and con set forth in the pleadings, perpetually enjoined the enforcement of the ordinance as complained of by the plaintiff below (hereinafter referred to in this opinion as the 'power company'). The city of De Land (hereinafter referred to as the city) has appealed from that final decree.

The ordinance in controversy is as follows:

'An ordinance Levying a Tax on Sales of Electricity, Providing for the Collection of such Tax, and Prescribing Penalties for the Violation of the Provisions of such Ordinance.

'Be it ordained by the City Commission of the City of De Land:

Section 1. That there is hereby levied by the City of De Land, on each and every sale of electricity in said City, a tax equal to ten per cent. of the charge made by the seller of such electricity, which tax shall in every case be paid to the City by the seller not less often than monthly.

'Section 2. That each and every seller of electricity, in respect of sales of which a tax is hereby levied, shall keep complete records showing all sales of electricity in said City, which records shall show the price charged upon each sale, the date thereof and the date of payment thereof, and shall at all reasonable times be open for inspection by the duly authorized agents of said City, who shall have authority to make such transcripts thereof as they may desire.

'Section 3. That the tax hereby levied on sales of electricity shall apply to all sales of electricity, whether delivered through the medium of a meter or other measuring device, or otherwise, to premises located in the City of De Land.

'Section 4. That in all cases where the seller of electricity collects the price thereof at monthly periods, the tax hereby levied shall be computed on the aggregate amount of sales to each consumer during such period, provided that the amount of tax to be paid to the City shall be the nearest whole cent to the amount computed.

'Section 5. That the tax hereby imposed shall apply to sales of electricity to the City of De Land, whether for municipal street lighting, power, or otherwise, to the same extent as in the case of any other consumer of electricity.

'Section 6. That the tax hereby imposed shall be paid by the seller to the treasurer and collector of said City monthly, in the manner following: on or before the 15th day of each month, the seller shall report in writing under oath, to the City Manager of said City of De Land, an itemized list of all consumers of electricity in the City of De Land, giving in each instance the amount paid by each consumer of electricity in said City for the preceding month, together with all amounts paid for electricity used during the preceding months which were unpaid at the time of rendering previous reports, and said seller, at the respective times of rendering such monthly reports shall in each such case pay to the treasurer and collector of said City the amount shown to be due the City by said report, and the treasurer and collector of said City shall issue receipt therefor.

'Section 7. That any seller of electricity, or any person, persons, firm or corporation, or any officer, agent or representative of any person, persons, firms or corporation, wilfully failing or refusing to pay the tax hereby imposed, or violating any of the provisions of this ordinance, shall be subject to a fine of not more than One Hundred ($100.00) Dollars, or to imprisonment for not more than thirty days, or to both such fine and imprisonment, for each and every violation.

'Section 8. That if any section, portion or clause of this ordinance shall be held void, inoperative or unconstitutional, for any reason, such invalidity or unconstitutionality shall not affect or invalidate the remaining portions thereof.

'Section 9. That the tax hereby imposed is placed upon the seller, and shall in no case be passed on by the seller to the consumer or collected from the consumer, and no seller of electricity in the City of De Land shall, at any time, increase the rates now being charged to consumers of electricity in the said City of De Land.

'Section 10. That all ordinances and parts of ordinances in conflict with the provisions of this ordinance be and the same are hereby repealed.

'Section 11. That this ordinance is hereby declared to be an emergency measure and that the same shall take effect immediately upon its passage and approval by the Mayor.

'Section 12. That a copy of this ordinance shall be posted in two public places in the City of De Land within ten days after the passage thereof.'

The pertinent portion of the city charter of De Land relied on to support the right to enact and to enforce the ordinance in question is section 21 of chapter 11466, Acts Ex. Sess. 1925, approved November 30, 1925. Said section provides in part as follows: 'That the City Commission shall within the limitations of this Act, have power by ordinance to levy and collect taxes upon all property, privilges and professions taxable by laws for State purposes. * * *'

It is contended by the 'power company' not only that the city has no charter power to levy and collect such a tax as the ordinance provides for, but that it is (1) arbitrary, unreasonable, and confiscatory; (2) that it impairs the obligation of the city's lighting contract with the power company contrary to section 10 of article 1 of the United States Constitution; (3) that it violates section 20 of chapter 11466, supra (the city charter), which inhibits passage of utility rate regulatory ordinances as emergency measures; (4) that the levy of sales taxes by the city is not authorized by its charter; (5) that the ordinance is not a proper emergency measure; (6) that the tax imposed by it is not at a uniform and equal rate of taxation, as required by sections 1 and 5 of article 9 of the Constitution of Florida; (7) that the ordinance deprives the power company of its property without due process of law, in violation of the Fourteenth Amendment to the United States Constitution; (8) that said ordinance constitutes double taxation, and is therefore illegal and void.

The last-stated objection, that is, that the tax imposed is illegal and void, because it constitutes double taxation, will be first disposed of by a specific decision of it in this opinion, since the question concerning it has been properly raised by the appellee and is so often asserted before this court as if the premises involved in it were a sound proposition of constitutional law, which it is not, as the long list of authorities hereinafter cited will demonstrate.

The Federal Constitution does not afford protection against double taxation by the states. The Fourteenth Amendment no more forbids double taxation than it forbids doubling the amount of a tax, short of confiscation, if not infected with vices rendering the process for taxation unconstitutional on other grounds. Fort Smith Lbr. Co. v. Arkansas, 251 U.S. 532, 40 S.Ct. 304, 64 L.Ed. 396; St. Louis S.W. R. Co. v. Arkansas, 235 U.S. 350, 35 S.Ct. 99, 59 L.Ed. 265; Swiss Oil Corp. v. Shanks, 273 U.S. 407, 47 S.Ct. 393, 71 L.Ed. 709; Interstate Busses Corp. v. Blodgett, 276 U.S. 245, 48 S.Ct. 230, 72 L.Ed. 551.

So, unless the instant tax is to be held invalid on other grounds, the tax in controversy in this case will not be declared illegal under either the federal or state Constitution, merely because it may justly be subject to criticism as a double taxing of the power company for its privileges of doing business in the city of De Land.

But, like all tax measures when called in question in the courts, the nature of the instant tax ordinance is to be determined by its practical operation and effect rather than by what it is named. Thus, it must be tested by the character of its incidence upon the subject at which it is directed, and by the manner in which it affects the taxpayer in its practical operation in the course of its administration, and in that view of it only will the courts undertake to weigh and determine its validity in the light of the limitations of the state and national Constitutions. Spoliation under the guise of taxation always will be declared unconstitutional, whatever its name or form. Henderson Bridge Co. v. Henderson, 173 U.S. 592, 19 S.Ct. 553, 43 L.Ed. 823; Shaffer v. Carter, 252 U.S. 37, 40 S.Ct. 221, 64 L.Ed. 445; Child Labor Tax Case (Bailey v. Drexel Furniture Co.), 259 U.S. 20, 42 S.Ct. 449, 66 L.Ed. 817, 21 A. L. R. 1432.

The city tax ordinance under attack in this case is shown by the proofs to have a definite practical operation and effect, and to possess the characteristics hereinbefore specified, as follows: (1) It is a tax confined to the power company as the sole seller of electricity in De Land; (2) it is expressly forbidden to be passed on to the consumer as tax upon the transaction of sale; (3) it is likewise...