Dean Taylor Cadillac-Olds, Inc. v. Thompson
| Decision Date | 07 December 1993 |
| Docket Number | INC,CADILLAC-OLD,No. 62493,62493 |
| Citation | 871 S.W.2d 5 |
| Parties | DEAN TAYLOR, Cape County Autopark I, Inc., Cape County Autopark II, Inc., Cape County Autopark III, Inc., and Fred A. Groves Motor Co., Plaintiffs/Appellants, v. Mary THOMPSON, Collector, et al., Defendants/Respondents. |
| Court | Missouri Court of Appeals |
Donald S. Hilleary, Donald S. Hilleary, P.C., Clayton, for plaintiffs, appellants.
Warren L. Wells, City Atty., Cape Girardeau, for defendants, respondents.
This is an action to recover license taxes imposed by the City of Cape Girardeau. Plaintiffs are five automobile dealers in Cape Girardeau: Dean Taylor Cadillac-Olds, Inc. (Dean Taylor); Cape County Autopark I, Inc. (Cape I); Cape County Autopark II, Inc. (Cape II); Cape County Autopark III, Inc. (Cape III); and Fred A. Groves Motor Company (Groves). Defendants are Mary Thompson, in her capacity as City Collector, Alvin Stoverink, in his capacity as Finance Director, and the City of Cape Girardeau (the City). Plaintiffs are challenging the City's Gross Sales License Tax ordinances which the City employs to tax and license various merchants for the privilege of doing business in Cape Girardeau. At various times in 1990, each dealer paid, under protest, the Gross Sales License Tax imposed by Chapter 16, Article III 1 of the Code of the City of Cape Girardeau (Code) for the tax year August 1, 1989 through July 31, 1990. Each plaintiff filed a protest letter and then filed a lawsuit to recover the full amount of the taxes paid. 2 The five lawsuits were consolidated into this single action. The trial court ruled in favor of defendants. We affirm.
Section 16-3 of the Code lists specific businesses which are subject to a license tax set at a flat annual rate. 3 Article III, consisting of §§ 16-50 through 16-72, outlines the Gross Sales License Tax. The businesses listed in § 16-51, including automobile dealers, are taxed a percentage of their annual gross receipts for the privilege of conducting business within the city limits of Cape Girardeau. The ordinances were enacted pursuant to § 94.110, RSMo 1986.
Plaintiffs' principal point on appeal is that the trial court erred in finding the ordinance constitutional. In their brief, they argue the ordinance "divides one natural class ... into two parts and then taxes each part in an unequal and nonuniform manner." They contend this violates the Uniformity Clause of the Missouri Constitution 4 and the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution.
There is no absolute requirement of uniformity in taxation. 508 Chestnut, Inc. v. City of St. Louis, 389 S.W.2d 823, 830 (Mo.1965). Uniformity of taxation does not require that all potential subjects of taxation be taxed, nor does it mean universal taxation. Id. The only requirement is that the taxation of all subjects within a particular class be uniform. Id. "Uniform" refers to the measure, gauge or rate of the tax. Id. A municipality has the power to divide a taxable class into a number of subclasses and tax each subclass differently. Village of Beverly Hills v. Schulter, 344 Mo. 1098, 130 S.W.2d 532, 535 (1939). Such a taxing scheme does not violate the constitutional requirement of uniformity where all substantially similarly situated persons are subjected to the same burden. Id.
In 508 Chestnut, the court found an ordinance constitutional that taxed only hotel or motel rental receipts from transient, as opposed to nontransient, guests. 508 Chestnut, 389 S.W.2d at 832. In Beverly Hills, a municipal ordinance provided any merchant engaged in the sale, transport, or storage of specifically defined quantities of gasoline or motor fuel would be subject to a license tax. Beverly Hills, 130 S.W.2d at 534. The Village of Beverly Hills had three businesses, only one of which was engaged in the activities covered by the ordinance in question. Noting that there is a presumption that such an ordinance complies with the requirement of uniformity, the court held the ordinance did not violate the Uniformity Clause of the Missouri Constitution or the equal protection provisions of the Fourteenth Amendment. Id.
Clearly, if our supreme court affirms the subclassification of hotel operations for taxation purposes, we must affirm the subclassification of the varied businesses covered by the Cape Girardeau ordinance. A much clearer distinction exists between an automobile dealer and a piano dealer than between hotel rental receipts from transient guests and rental receipts from nontransient guests.
Plaintiffs also argue that the trial court erred in declaring plaintiffs bore the burden of proof. They acknowledge the general rule that a party asserting an ordinance is unconstitutional bears the burden of proof. Plaintiffs contend, however, the ordinance in question is unconstitutional on its face and, therefore, the rule placing the burden on plaintiffs is inapplicable in the instant case.
There is a presumption of constitutionality which can be overcome only by the most explicit demonstration that a classification is a hostile and oppressive discrimination against particular persons and classes. Walters v. City of St. Louis, 259 S.W.2d 377, 386 (Mo. banc 1953). License fees for revenue purposes must be reasonable, but such a fee fixed by ordinance is prima facie reasonable. 508 Chestnut, 389 S.W.2d at 832. The burden is on the party contesting the ordinance to negate every conceivable basis which might support it. Walters, 259 S.W.2d at 386.
We agree with plaintiffs that the general burden of proof rule has no application where, without the necessity for extraneous evidence, it appears from the provisions of the ordinance itself that it is unconstitutional. McKay Buick, Inc. v. Love, 569 S.W.2d 740, 743 (Mo. banc 1978). However, that is not the case here. The ordinance in this case is not unconstitutional on its face. Therefore, plaintiffs bear the burden of proof.
Plaintiffs further contend the trial court imposed an improper burden of proof on the plaintiffs. 5 Before we will declare a license tax to be unjust or unreasonable, a flagrant case of excessive and oppressive abuse of power or improper discrimination by the municipality must be established. 508 Chestnut, 389 S.W.2d...
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