Greene, Auditor v. Frankfort Distillery Co.

Decision Date29 May 1925
Citation209 Ky. 427
PartiesRobert L. Greene (now W.H. Shanks), Auditor v. Frankfort Distillery Company, Incorporated.
CourtUnited States State Supreme Court — District of Kentucky

1. Licenses — Statute Imposing License Tax on Corporations Held Intended to Operate Prospectively Only. — Acts 1906, chapter 22, article 11, imposing annual license tax based on capital stock of corporations employed within state, was intended to operate prospectively only, and hence corporation engaged in distillery business, which in 1917 paid tax provided for by that act, was not required to pay additional fee for that year under Acts (Sp. Sess.) 1917, chapter 5, imposing special tax on distilleries.

2. Statutes — No Law Held Retroactive Unless such Intent Clearly Expressed or Necessarily Implied. — No law can be held retroactive, unless such legislative intent is clearly expressed or necessarily implied.

3. Taxation — Taxing Statute Cannot be Construed Prospective as to Some and Retroactive as to Others. — A taxing statute cannot be construed prospective as to some and retroactive as to others.

Appeal from Franklin Circuit Court.

FRANK E. DAUGHERTY, Attorney General, and CHARLES F. CREAL, Assistant Attorney General, for appellant.

JOHN D. CARROLL and HAZELRIGG & HAZELRIGG for appellee.

OPINION OF THE COURT BY JUDGE CLARKE.

Affirming.

In 1906 an annual license tax, based upon the amount of capital stock employed in this state, was imposed upon all corporations doing business in the state, except such as were engaged in named kinds of business. Chapter 22, article 11, Acts of 1906.

Appellee, a West Virginia corporation, then and now engaged in the distillery business here, coming within the provisions of that act, paid the tax thereby imposed in the years 1907 to 1917, inclusive. In 1917, the legislature placed the distillery business in a class by itself, and required all parties engaged therein to pay an annual license tax of two cents on every proof gallon of distilled spirits liable for tax to the federal government, which fact, by a provision of the 1906 act, automatically relieved distillers from the provisions of that act.

The act of 1917 became effective July 25, 1917, and, in accordance with its terms, appellee paid to the state $8,766.19 as a license fee for the year 1917. By this action it seeks to recover that sum, under section 162 of the statutes, which requires the auditor to issue a warrant on the treasurer for any money paid as taxes when no such taxes were in fact due.

As is agreed by counsel, appellee's right of recovery depends solely upon whether the act of 1906 was retroactive or prospective, that is, whether the first year's tax thereby imposed was for 1906 or 1907, since if the latter, the license fee paid by appellee thereunder in 1917 conferred upon it the right to do business in the state for the whole of that year, and it could not be required to pay another license tax for the same privilege under the 1917 act, as, in fact, it did.

It is a well settled rule of construction that no law can properly be held retroactive unless such legislative intent is clearly expressed or necessarily implied. Otherwise the presumption is conclusive that the law was intended to operate only in the future and upon future transactions. This rule of construction is certainly of equal, if not peculiar, force with reference to a law imposing a tax upon the privilege of doing business in the state, since it is hard to believe the legislature intended such provision to apply to privileges already enjoyed, especially where, as here, a criminal liability is attached to a failure to comply therewith, which was clearly beyond their power in so far as concerned business done in 1906 prior to the effective date of the law.

There is no express provision in the act that it shall be retroactive. It imposes an annual license tax for doing business in the state, and clearly contemplates that each fee paid shall cover an ordinary calendar year, beginning January 1st. The report, if filed, must show the business transacted in and out of the state during the previous calendar year, to enable the taxing authorities to determine the proportion of the capital stock employed in the state, and to be taxed, but it is...

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1 cases
  • Grieb v. National Bank of Kentucky's Receiver
    • United States
    • Kentucky Court of Appeals
    • December 5, 1933
    ... ... support of this argument they cite James, Auditor, et al ... v. Blanton et al., 134 Ky. 803, 121 S.W. 951, 123 S.W ... cite Dunlap v. Littell, 200 Ky. 595, 255 S.W. 280; ... Greene v. Frankfort Distillery Co., 209 Ky. 427, 273 ... S.W. 28; Shanks v ... ...

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