Hart v. Tax Comm'r

• Decision Date: 31 October 1921
• Parties: HART v. TAX COMMISSIONER.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

240 Mass. 37

132 N.E. 621

HART

v.TAX COMMISSIONER.

Supreme Judicial Court of Massachusetts, Berkshire.

Oct. 31, 1921.

Report from Superior Court, Berkshire County; Richard W. Irwin, Judge.

Suit by Marjorie Sinclair Hart against William D. T. Terfry, Tax Commissioner, for abatement of income tax. Case reported. Judgment ordered for plaintiff.

Sanborn Gove Tenney, of Williamstown, for complainant.

J. Weston Allen, Atty. Gen., and Arthur E. Seagrave, Sp. Asst. Atty. Gen., for the Commonwealth.

DE COURCY, J.

It is agreed that the complainant was a resident of New York at all times prior to January 26, 1918. She then became, and has since remained, a resident of this commonwealth. Under protest she filed a return of income received during 1917 and paid a tax assessed thereon. During the years 1917 and 1918 there was no state income tax in the state of New York; and in 1917 the levy was made in that state upon the personal property of the complainant from which her income for that year was derived. In these proceedings for abatement the only question raised is the right of this commonwealth to levy said income tax.

By our income tax law, St. 1916, c. 269, § 2 (now G. L. c. 62, § 1), the income taxable is that ‘received by any inhabitant of this commonwealth during the calendar year prior to the assessment of the tax.’ By section 12 of the act the return of his entire income which every taxable individual inhabitant is to make ‘shall be made on or before the 1st day of March in each year, and shall relate to the income received during the calendar year ending on the preceding 31st day of December.’ It was further provided by said section 12, which was in force when the complainant became an inhabitant, that

‘The return required by this section shall be filed by every person who is at any time between the 1st day of January and the 30th day of June in any year an inhabitant of the commonwealth, if such person has in the preceding year received income taxable thereunder. * * * In the case of any such person who has become an inhabitant of the commonwealth after the 1st day of February in any year, such return shall be due and shall be filed 90 days after he becomes such an inhabitant. Every person who is an inhabitant of the commonwealth at any time between the 1st day of January and the 30th day of June, both inclusive, in any year, shall be subject to the taxes imposed by this act.’

The amendment of this section by St. 1919, c. 136, § 2 (now G. L. c. 62, § 25), made no change affecting the present case.

The above-quoted language of the statute apparently embraces the tax here involved. The validity of such a tax, when assessed under the facts here presented, depends largely upon the nature of our income tax. No positive and uniform definition of the word ‘income’ is accepted even by economists; and the concept of legal or taxable income varies with the judicial interpretation of the varying statutes. See Ann. Cas. 1913C, 984, note. In the opinion of the Justices, 220 Mass. 613, 624, 108 N. E. 570, 574, it was said:

‘A tax upon the income of property is in reality a tax upon the property itself. Income derived from property is also property. Property by income produces its kind; that is, it produces property and not something different. It does not matter what name is employed. The character of the tax cannot be changed by calling it an excise and not a property tax. In its essence a tax upon income derived from property is a tax upon the property.’

See also Tax Commissioner v. Putnam, 227 Mass. 522, 531, 116 N. E. 904, L. R. A. 1917F, 806, and cases cited; Maguire v. Tax Commissioner, 230 Mass. 503, 512, 120 N. E. 162.

It follows that our income tax, under the present statutes at least, is not an excise, where the income of a preceding year might be taken...