Haman v. Humboldt County
| Decision Date | 30 November 1971 |
| Citation | 98 Cal.Rptr. 673,21 Cal.App.3d 634 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Richard HAMAN et al., Plaintiffs and Appellants, v. COUNTY OF HUMBOLDT and Wallace Martin, Tax Collector of the County of Humboldt, Defendants and Respondents. Civ. 28443. |
Mathews, Traverse & McKittrick, Eureka, for appellants.
Raymond W. Schneider, County Counsel, Charles P. Selden, Deputy County Counsel, Eureka, for respondents.
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Plaintiffs are fishermen residing in California, whose boats, federally registered in Oregon or Alaska, were assessed for taxation in 1968 by respondents at the 24 percent level generally applied to personal property in the County of Humboldt. But purporting to act under Revenue and Taxation Code, section 227, the assessor, after determining the actual cash value of all other boats in the fishing fleet, those federal registry and documentation were in California ports, reduced their assessments to one percent.
Plaintiffs paid taxes aggregating $5,230.07. Their taxes computed upon the one percent formula, if applicable, would have been $248.50. Having paid under protest, they seek to recover the difference, asserting violation of their constitutional right to equal protection of the laws. (Cal.Const. art. I, §§ 11, 21; U.S.Const. amend. 14, § 1.)
Other constitutional issues are of public concern, and necessary to complete decision of this appeal. (Cf. Bayside Timber Co. v. Board of Supervisors (1971) 20 Cal.App.3d 1, 6, 97 Cal.Rptr. 431.)
The County Board of Equalization refused to make any reduction or other changes in the assessments made for each of plaintiffs' vessels because the vessels were not documented at a California port as of the 1968 lien date.
The respondents state, 'Our only contention is that these boats are not documented in a port of California and therefore do not qualify for the tax treatment under Revenue and Taxation Code Section 227.'
That section was enacted in 1967, and provides:
Appellants contend that they have been singled out for discriminator taxation, by operation of Revenue and Taxation Code, section 227; and that thereby they have been denied the equal protection of the laws. Respondents do not contend that assessment of, and hence taxing of, appellants' fishing boats 24 times as much as those registered at a California port, is not discriminatory in fact. The major issue is the validity of section 227 itself.
The mandate of California Constitution, article XIII, section 10, as of the tax date in question, was that all property is to be assessed where situated.
Revenue and Taxation Code, section 1138, provides: 'Vessels documented outside of this State and plying in whole or in part in its waters, the owners of which reside in this State, shall be assessed in this State.'
While appellant Hunter Offshore Enterprise is an Oregon corporation, it concededly is the alter ego of Gilbert A. Hunter, living in Bayside, California. The master and crews of the corporation's four boats concerned living in Eureka and operated the boats of Eureka.
Respondent county in its brief states, If that is so, appellants all were taxed illegally and have been illegally denied the tax refunds sought.
But such a rule has not been promulgated by either the United States Supreme Court nor ours. The decisional perimeter stops short of that statement.
The tax situs of personal property such as a boat may be at the domicile of the owner, under the long-established assumption that where that where the owner is, there his personal property will be also. (Star-Kist Foods, Inc. v. Byram (1966) 241 Cal.App.2d 313, 50 Cal.Rptr. 381.)
As of the tax lien date, the first day in March 1968 (Rev. & Tax.Code, § 2192), there was only a 1/366th chance that any given boat utilized in fishing on the high seas actually would be situated within the taxing jurisdiction. (Cf. Rev. & Tax.Code, § 404.)
Hence, the tax situs of the fishing vessels registered elsewhere may be determined to be the actual residence of those owning, claiming, possessing or controlling the vessel on the date, or by the fact that the property had an established permanent situs. (Cf. Brock & Co. v. Board of Supervisors (1937) 8 Cal.2d 286, 289, 65 P.2d 791.) Appellants' testimony adequately established that both of such conditions were present here. 1
The fishing boats in question were not engaged in interstate commerce, nor yet in foreign commerce, both of which are forbidden to United States fishing vessels. All were navigated through state waters into the high seas, from which they returned into state waters with their catch. Thus tax problems related to interstate carriers or foreign carriers are not involved. (Cf. Scandinavian Airlines System, Inc. v. County of Los Angeles (1961) 56 Cal.2d 11, 14 Cal.Rptr. 25, 363 P.2d 25.) The fishing vessels of appellants might deliver fish to ports than in Humboldt County. There is no specific claim that they did so in the tax year 1968. If apportionment was necessary (cf. Flying Tiger Line, Inc. v. County of L. A. (1958) 51 Cal.2d 314, 333 P.2d 323), it has been waived by failure to assert it (Star-Kist Foods, Inc. v. Byram, supra, 241 Cal.App.2d 313, 319, 50 Cal.Rptr. 381).
All of the boats concerned are part of a fishing fleet, operating on the high seas off the Oregon and California coasts. All of the appellants are licensed as commercial fishermen by the State of California. All boats of the fleet, including the plaintiffs', during the tax year delivered fish to Eureka canneries, pursuant to previous orders. Some of plaintiffs' boats delivered fish also in other ports, depending upon where the fish were taken.
The defendants stipulated, and evidence was convincing, that there was no manner nor thing in the way plaintiffs' boats are operated which differed from the operation and activities of California registered boats. No intrinsic physical differences between the two groups of fishing boats themselves was asserted. Plaintiff Krasch's boat was registered in Alaska. Federal registration (46 U.S.C. § 18) of all other boats of the plaintiffs herein was in Oregon.
No claim is made that the states of federal registry made any levy on any of these boats in 1968, although they had in previous years. No constitutional exemption is claimed. 2
To state taxing authorities, the federal registration of a fishing boat is only evidentiary. Registration 3 is required to be made with the collector of the district wherein is located the port to which it belongs (46 U.S.C. § 17) 'which port shall be deemed to be that at or nearest to which the owner, if there be but one, or if more than one, the husband or acting and managing owner of such vessel, usually resides.' (46 U.S.C. § 17; cf. County of Los Angeles v. Craig (1940) 38 Cal.App.2d 58, 100 P.2d 818.)
'Usual residence,' of course, fixes domicile and therefore, the state of registry may accept the registration as fixing domicile and hence establishing taxability of the vessel there. 4
Respecting Revenue and Taxation Code, section 227, respondents urge that the Legislature's classification will not be overthrown by the courts unless palpably arbitrary. It is said that a classification is not invalid under equal protection standards, if any set of facts that can reasonably be conceived would sustain the distinction. But a stricter standard is applied to testing suspect classifications, or involving fundamental interests, than as to those not suspect nor involving fundamental interests. (Estate of Horman (1971) 5 Cal.3d 62, 75, 96 Cal.Rptr. 433, 485 P.2d 785.)
Considerable liberality has been afforded to classification, where the issue has been whether an enactment was or was not a special, rather than a general law. But since taxation is in invitum, a compulsory burden placed on the individual for the common good, a fundamental interest is involved. (People v. Mahoney (1939) 13 Cal.2d 729, 739, 91 P.2d 1029.)
Where his burden is made 24 times as much as that imposed upon his fellows in relation to their comparable property, it certainly is suspect.
Nothing inherent in such registry out of state appears to justify an assessment 24 times as great as that imposed upon other entirely comparable boats, operating side by side for the same purposes. Burdens imposed upon federally licensed fishing boats pro tanto hamper the fisheries. Unequal burdens on instrumentalities of interstate commerce are illegal, although nondiscriminatory local taxation is permitted. (Gloucester Ferry Co. v. Pennsylvania (1884) 114 U.S. 196, 217, 5 S.Ct. 826, 29 L.Ed. 158; People v. Alaska Pacific S. S. Co. (1920) 182 Cal. 202, 207, 187 P. 742.) By analogy, discriminatory local taxation upon fishing boats is prohibited to the states. (Toomer v. Witsell (1948) 334 U.S. 385, 395-396, 398, 403, 68 S.Ct. 1156, 92 L.Ed. 1460.)
The trial court found ...
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