Cohen v. Harrington

• Decision Date: 08 January 1999
• Docket Number: No. 97-165-Appeal.,97-165-Appeal.
• Citation: 722 A.2d 1191
• Parties: Richard M. COHEN, et al., v. Thomas HARRINGTON, et al.
• Court: Rhode Island Supreme Court

722 A.2d 1191

Richard M. COHEN, et al., v. Thomas HARRINGTON, et al.

No. 97-165-Appeal.

Supreme Court of Rhode Island.

January 8, 1999.

Kevin A. McKenna, Providence, for plaintiffs.

Richard G. Riendeau, John T. D'Amico, Jr., Providence, Richard B. Wooley, William G. Brody, Providence, Joseph P. Carroll, Woonsocket, William G. DeMagistris, Philip M. Sloan, Jr., John T. Gannon, Mark P. Welch, Pawtucket, Steven T. Hartford, Westerly, Christopher E. Fay, Cranston, Walter J. Kane, Harrisville, Bruce E. Vealey, Cranston, for defendants.

Present WEISBERGER, C.J., and LEDERBERG and BOURCIER, JJ.

OPINION

BOURCIER, Justice.

This case comes before us on the plaintiffs' appeal from a Superior Court final judgment declaring G.L.1956 chapter 34 of title 44, constitutional. Chapter 34 provides an alternative to the traditional personal property tax for motor vehicles. The plaintiffs, who are from different municipalities within the State of Rhode Island, believe that chapter 34 of title 44, which permits a motor vehicle tax that varies according to each municipalities' personal property tax rate—is unconstitutional¹ The General Laws permit motor vehicles to be taxed either through the traditional ad valorem personal property tax or through what the statute refers to as an "excise tax." See chapter 34 of title 44, "Excise on Motor Vehicles and Trailors." The tax statutes in question read as follows:

"44-34-1. Motor vehicle and trailer excise tax.—There is hereby created an excise tax on motor vehicles for the state of Rhode Island. The cities and towns are hereby authorized to administer and collect the excise on registered motor vehicles and trailers in lieu of property tax."

"44-34-2. Assessment—Valuation—Proration—Abatement and cancellation—Exemption from tax.—(a) Except as hereinafter provided, the tax assessors of each city and town shall assess and levy in each calendar year on every vehicle and trailer registered under chapter 3 of title 31 for the privilege of the registration, an excise measured by the value thereof, as hereinafter defined and determined."

The valuation of motor vehicles, for the purposes of that so-called excise tax, is determined by the Rhode Island State Vehicle Value Commission. Those values are set for each motor vehicle based on its make, model, and year and are standard throughout the state. After those valuations are determined, the individual municipalities, pursuant to § 44-34-2, apply the personal property tax rate that is applicable in that municipality to the valuation determined by the state commission. Thus, for any particular make, model, and year of a vehicle, the tax on it may vary according to the municipality in which it is located because although the valuation is the same statewide, the rate applied to that valuation varies throughout the state.

The General Laws further provide that nonpayment of that tax results in the inability to register a motor vehicle. General Laws 1956 § 31-3-4 provides:

"Proof of payment of sales or use tax.— Each person before obtaining an original or transferral registration for a motor vehicle in this state shall furnish evidence that any tax due with reference to the motor vehicle pursuant to the provisions of chapters 18 and 19 of title 44, has been paid in accordance with regulations prescribed by the tax administrator, and on such forms as shall be approved by the tax administrator and the state registrar of motor vehicles. The registrar of motor vehicles shall, upon the request of the tax administrator, and after due hearing by the tax administrator, suspend or revoke a motor vehicle registration of any person who shall fail to pay any tax due in connection with the sale, storage, use, or other consumption of such motor vehicle pursuant to the provisions of chapters 18 and 19."

The plaintiffs, in their complaint filed in the Superior Court, seek damages, a declaratory judgment, and injunctive relief based on their challenges to the motor vehicle tax scheme set forth in chapter 34 of title 44. They assert initially that the statute violates the due process and equal protection clauses of our Rhode Island Constitution as well as the United States Constitution because, they argue, excise tax rates are required to be uniform throughout the state.² Further, they posit that it is a violation of the equal protection clauses of the Rhode Island and United States Constitutions that some municipalities, but not all municipalities, offer tax exemptions to handicapped and/or older persons. Additionally, plaintiffs contend that prior to enacting chapter 34 of title 44, the General Assembly failed to comply with the mandate of article 4 section 15 of the 1843 Rhode Island Constitution and also that the trial justice erred in refusing to certify the plaintiffs as a class for purposes of litigating the plaintiffs' action.

Because it assists in our resolution of the plaintiffs' initial concerns involving the due process and equal protection clauses of our constitution and the United States Constitution, it is important to point out that at the hearing before this Court, plaintiffs' counsel conceded that if the tax provided for in chapter 34 of title 44 was found to be a property tax, the differing tax rates in the various municipalities would not create a due process or equal protection problem. We agree with that conclusion. Counsel further asserted, however, that because nonpayment of this tax impedes vehicle registration which is a privilege granted by the state, and because the General Assembly has named it as such, this tax is an "excise tax." With that contention, however, we disagree. We conclude, notwithstanding that the tax does impinge upon the privilege of vehicle registration, that based upon its method of application as set forth in chapter 34 of title 44, this tax is not an excise tax, but is instead a property tax. Accordingly, we need not address specifically plaintiffs' arguments with respect to the alleged due process and equal protection violations but address only the plaintiffs' excise tax contention.

The plaintiffs place great weight on the fact that the General Assembly labeled the tax an excise tax. In Automobile Club of Oregon v. State of Oregon, 314 Or. 479, 840 P.2d 674, 682 (Or.1992), the court said "the character of a levy is determined by its function, not by the label the legislature attaches to it." Our own Court has said, "[a]s a general proposition of statutory construction, titles do not control the meaning of statutes. 2A Sands, Statutes and Statutory Construction § 47.03 (4th ed.1973). * * * Further, the title of an act *** cannot control or vary the meaning of a statute where that statute is unambiguous." Orthopedic Specialists, Inc. v. Great Atlantic & Pacific Tea Co., 120 R.I. 378, 383-84, 388 A.2d 352, 355 (1978). Thus, regardless of the nomenclature used by the General Assembly, it is the nature of the tax itself that determines whether the tax is an excise tax or a property tax.

"The line that separates an excise tax from a property tax is a difficult one to draw, and courts have not fully succeeded in developing a truly useful definition of either concept." Weaver v. Prince George's County, 281 Md. 349, 379 A.2d 399, 403 (Md.App.1977). However, the Maryland court has explained more recently that:

"[I]t has been held that where a tax is levied directly by the Legislature without assessment and is measured by the extent to which a privilege is exercised by a taxpayer without regard to the nature or value of his assets, it is an excise. Where, however, the tax is computed upon a valuation of the property and is assessed by assessors, and where the failure to pay the tax results in a lien against the property it is a property tax, even though a privilege might be included in, the valuation." Montgomery County v. Waters Landing Limited Partnership [99 Md.App. 1

] 635 A.2d 48, 55 (Md.App.1994), (quoting Weaver, 379 A.2d at 404). (Emphasis added.)

In Montgomery, the Maryland court held that the tax in question, a tax imposed before a building permit is issued for a development, was an excise tax because it was not based on the value of the property but on the size and type of the development. Thus, the tax was essentially on the use of the property and not on the mere ownership of the property itself.

The tax we are concerned with here, however, differs from the tax in Montgomery, because it is incidental to the ownership of the motor vehicle, as demonstrated by the fact that it is based on the value of the motor vehicle, and not on the extent or manner in which the vehicle is used. Although a person cannot renew the registration of a motor vehicle or transfer ownership of the vehicle without paying the tax, registration of the vehicle is not revoked immediately upon nonpayment of the tax.³ That is because the tax is not specifically for the privilege of registering.⁴ Although the...