Gamble-Robinson Fruit Company, a Corp. v. Thoresen
| Decision Date | 16 July 1925 |
| Citation | 204 N.W. 861,53 N.D. 28 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Burleigh County, Jansonius, J.
Affirmed.
T. H H. Thoresen, for appellant.
While a tax assessed under Sec. 2110, Comp. Laws 1913 is in form a property tax, it is intended to reach, among other things the primary corporate franchise granted to it by the state and as to that it is in substance or effect, to some degree at least, a tax upon the privilege of being a corporation. Grand Forks Co. v. Cream of Wheat Co. 41 N.D. 330.
The statute does not in terms impose a franchise tax as distinguished, or separated from a tax on personal property but the Supreme Court of the state construes the tax upon this additional amount as a tax "in substance or effect, to some degree, at least, upon the privilege of being a corporation, or in other words, a tax upon corporate franchise granted it by the state. Individuals are not required to include in their lists of taxable property any share or portion of capital stock or property of any corporation which such corporation is required to list. Comp. Laws 1913, §§ 2077, 2102, 2103, 2110; Grand Forks Co. v. Cream of Wheat Co. 253 U.S. 325.
Obviously a statute which is designated, primarily, or exclusively, to reach the entire corporate excess of a domestic corporation, without regard to where its business is transacted or capital employed, would be poorly adapted to reach only that portion of the corporate excess of a foreign corporation which may be attributable to the transaction of business within the state. Burleigh Co. v. Standard Oil Co. 201 N.W. 510.
Newton, Dullam & Young, for respondents.
It is presumed that different acts passed at the same session of the legislature are imbued by the same spirit and actuated by the same policy, and they should be construed each in the light of the other. Houston & T. R. Co. v. State, 95 Tex. 523, 62 S.W. 114.
This is an appeal from an order overruling a demurrer to the complaint. The complaint alleges that the plaintiff is a corporation organized and existing under the laws of the state; that, pursuant to the provisions of chapters 305 and 307 of the Session Laws of 1923, the defendant prepared a blank form designated "Corporate Excess Tax Return," which form contemplated that from the value of the corporate stock there should be deducted the aggregate value of the real property and the tangible personal property of the corporation listed for taxation, and, further, that there should be deducted the amount of moneys and credits owned by it; and that the balance remaining should be the amount taxable under chapter 305; that said blank was furnished to the plaintiff and return made thereon as of January 1, 1925 and that after deducting the value of the real and personal property listed for taxation from the actual value of the shares of stock, there remained a balance of $ 16,697.08; that the amount of moneys and credits owned by the plaintiff, as reported in said return, was $ 31,472.82; that after further deducting the amount of moneys and credits, there remained no balance to be certified to the county auditor as corporate excess taxable against the plaintiff for the year 1925; that notwithstanding the provisions of the acts of the legislature referred to, the requirements of the corporate excess tax return blank and the information furnished, the defendant notified the plaintiff to the effect that he was about to certify to the county auditor of Burleigh county the sum of $ 16,697.08 as the amount of corporate excess to be taxed against it at the rate of the general property tax in the city of Bismarck, the taxing district in which the plaintiff's business is located, on the basis of 75 per cent of the value so certified; that the defendant refused to deduct from such sum the amount of moneys and credits owned by the plaintiff as shown in its return; that the plaintiff's capital is invested in moneys and credits reported by it and that the value thereof is reflected in the value of its shares of stock, and that if the defendant certifies the amount of the corporate excess mentioned in the notice the moneys and credits owned by the plaintiff will in fact be taxed, whereas, under chapter 307 of the Session Laws of 1923, moneys and credits are expressly exempted from taxation; that unless the defendant is restrained and enjoined he will certify the sum of $ 16,697.08 for taxation as the amount of the taxable corporate excess of the plaintiff for the year 1925; that such threatened action is unwarranted, is contrary to and in violation of the statutes of the state; that it will impose undue and unjust burdens on the plaintiff, will subject it to taxes on property specifically exempted, will take its property without due process of law and will deny to it the equal protection of the laws, contrary to the provisions of the Constitution of North Dakota and to § 1 of the Fourteenth Amendment to the Constitution of the United States; and that such threatened certification will cause the plaintiff to suffer irreparable injury. The plaintiff prays judgment that defendant be required to deduct the moneys and credits owned by the plaintiff and that the defendant be restrained and enjoined from certifying for taxation the sum of $ 16,697.08, or any other sum, as the amount of the corporate excess taxable against it.
The decision of this case turns upon the construction and effect of chapters 305 and 307 of the Session Laws of 1923. These acts are as follows:
"Chapter 305. Sec. 1. Amendment Section 2110 of the Compiled Laws of 1913 as amended by chapter 221 of the Session Laws of 1919 and chapter 119 of the Session Laws of 1921 is hereby amended and re-enacted to read as follows:
The president, secretary, or other principal accounting officer of any domestic corporation, joint stock company or association whether incorporated or not, excepting bank and loan and trust companies, the taxation of which is provided for by other legislation, shall make out and mail to the tax commissioner, upon blanks furnished by the tax commissioner for such purpose which may be upon the same blank upon which the income tax return is made out, a sworn statement setting forth the following information concerning said corporation.
1. The name and location of the corporation, joint stock company or association.
2. The amount of capital stock authorized and the number of shares into which said stock is divided.
3. The amount of capital stock paid up.
4. The market value, or if it has no market value then the actual value of the shares of stock, and in estimating the actual value of the capital stock, the surplus and undivided profits shall be included.
5. The value of all its real estate.
6. The value of its personal property which is listed for taxation and taxed at the rate of the general property tax.
7. The aggregate amount of the 5th and 6th items shall be deducted from the amount of the 4th item, and the remainder, if any, shall be listed and taxed as corporate excess. The real and personal property, except money and credits, of each corporation, joint stock company, or association shall be listed and taxed the same as other real and personal property.
Sec. 2. The amount of corporate excess taxable against each corporation shall be assessed by the tax commissioner and shall be certified by him to the county auditors of the several counties on or before July first of each year, and the county auditor shall enter such assessment upon the tax list of the taxing district where its principal office or place of business is located, and extend taxes upon the same at the rate of the general property tax. The basis of assessment of corporate excess shall be such percentage of the total value thereof as is now or may hereafter be provided by statutes specifying the classification of property for purposes of taxation.
(1) Money and credits, as the same are defined in § 2074 of the Compiled Laws of North Dakota for the year 1913, are hereby exempted from taxation except moneyed capital of the citizens of the State of North Dakota which is so invested or used as to come into competition with money invested in bank stock of banks doing business in this state. This act shall not be construed so as to exempt the income from any class of money or credits from the operation of the existing or any future income tax law, nor to exempt any class of money or credits from the existing or any future law imposing a tax upon transfers of property, by will, gift or intestate law.
Sec. 2. Emergency. Whereas an emergency exists in that bank stock was inadvertently exempted from taxation by the section above amended and there is now no adequate method provided by law for the taxation of bank stock, therefore, this act is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval."
The principal contentions center about P 6, § 1 of chapter 305 in light of chapter 307 which specifically declares that moneys and credits are exempted from taxation....
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