Hurt v. Cooper
Decision Date | 01 December 1937 |
Docket Number | No. 7266.,7266. |
Citation | 110 S.W.2d 896 |
Parties | HURT et al. v. COOPER et al. McCRAW et al. v. S. H. KRESS & CO. et al. |
Court | Texas Supreme Court |
Appeal from Court of Civil Appeals of Fifth Supreme Judicial District.
Suits by J. W. Cooper and others and S. H. Kress & Co. and others against Robert L. Hurt and others and William McCraw, Attorney General, and others. From adverse decrees, the defendants appealed to the Court of Civil Appeals, which certified six questions to the Supreme Court.
Questions 1, 3, 4, and 5 answered.
William McCraw, Atty. Gen., Scott Gaines, Earl Street, and Wm. M. Brown, Asst. Attys. Gen., and Greenwood, Moody & Robertson, of Austin, for appellants.
Touchstone, Wight, Gormley & Price and Burgess, Chrestman & Brundidge, all of Dallas, Baker, Botts, Andrew & Wharton and Gaius G. Gannon, all of Houston, James W. Peavy (of Lufkin, Black & Graves), of Austin, and W. H. Dannat Pell, of New York City, for appellees.
HICKMAN, Commissioner.
This consolidated cause is before us on certificate from the honorable Court of Civil Appeals, Fifth Supreme Judicial District, at Dallas. That court, after drafting its tentative opinion, prepared by Justice Looney, deemed it advisable, in view of the importance of the questions involved and the necessity for an early adjudication and final disposition of the cause, to certify certain questions to this court. All questions certified relate to the constitutionality of our so-called chain store tax statute. The certificate states:
The act (Acts 44th Leg. [1935] 1st Called Sess., c. 400, Vernon's Ann.P.C. art. 1111d) is in twelve sections, and in substance provides, so far as material to a decision of the questions certified, as follows:
Section 1 makes it unlawful for any person, agent, receiver, trustee, firm, corporation, association, or copartnership, either foreign or domestic, to operate, maintain, open, or establish any store or mercantile establishment in this state without first having obtained a license to do so from the comptroller of public accounts.
Section 2 provides that any person, etc., desiring to operate, maintain, open, or establish a store or mercantile establishment in this state shall apply to the comptroller of public accounts for a license so to do, accompanying each application with a filing fee of 50 cents for each store or mercantile establishment operated or to be operated, which filing fees are declared to be for the purpose of defraying the cost of the administration of the act.
Section 3 relates to the duty of the comptroller to issue a license when he finds the application to be satisfactory and the filing and license fees prescribed in the act have been paid. It further provides that each licensee shall display the license so issued in a conspicuous place in the store or mercantile establishment for which same is issued.
Section 4 provides for a renewal license for each calendar year.
Section 5 provides that the term "store, stores, mercantile establishment or mercantile establishments," wherever used in the act, shall not include certain designated occupations. These so-called exemptions will be set out specifically hereinafter. That section prescribes the annual license fees as follows:
Section 6 makes the provisions of the act applicable to businesses controlled or held with others by majority stock ownership or ultimately controlled or directed by one management or association of ultimate management.
Section 7 defines "store," which definition will be copied later on in this opinion.
Section 8 makes it an offense for any person, etc., to operate or maintain any store or stores or mercantile establishment or establishments without having displayed in a conspicuous place in such store or establishment the license fee receipt for the current year, punishable by a fine of not less than $25 nor more than $100 and provides that each day of such violation shall constitute a separate and distinct offense.
Section 9 provides that the expenses incurred by the comptroller of public accounts in the administration of the act shall not exceed the amount received by him as application fees. It further provides that all moneys collected shall be paid by the comptroller into the state treasury daily as received and apportions these moneys as follows: One-fourth to the available school fund and the remainder to the general fund.
Sections 10 and 11 contain no provisions material to the present inquiry.
Section 12 recites that the state is badly in need of additional revenue, which fact creates an emergency an imperative public necessity that the constitutional rule requiring bills to be read on three separate days be suspended.
Six questions are certified by the honorable Court of Civil Appeals. The first is as follows: "(1) Was the Act in question enacted by the Legislature primarily for the purpose of raising revenue under its taxing powers, or was it enacted primarily as a regulatory measure, under the police power?"
It is sometimes difficult to determine whether a given statute should be classed as a regulatory measure or as a tax measure. The principle of distinction generally recognized is that when, from a consideration of the statute as a whole, the primary purpose of the fees provided therein is the raising of revenue, then such fees are in fact occupation taxes, and this regardless of the name by which they are designated. On the other hand, if its primary purpose appears to be that of regulation, then the fees levied are license fees and not taxes. Hoefling v. City of San Antonio, 85 Tex. 228, 20 S.W. 85, 16 L.R.A. 608; Brown v. City of Galveston, 97 Tex. 1, 75 S.W. 488; City of Fort Worth v. Gulf Refining Co., 125 Tex. 512, 83 S.W.2d 610; Royall v. Virginia, 116 U.S. 572, 577, 6 S.Ct. 510, 29 L.Ed. 735; Dayton-Goose Creek Ry. Co. v. United States (D.C.) 287 F. 728; Texas Co. v. Brown (D.C.) 266 F. 577, 37 C.J. p. 169, § 6.
Applying this principle to the act in question, we experience no difficulty in reaching the conclusion that the so-called license fees levied thereby are primarily occupation taxes. The act makes two separate levies. One is a levy of a filing fee of 50 cents for each store, and as to this levy it is provided that its purpose is to defray the cost of the administration of the act, and that the expenses incurred in its administration shall not exceed the amount realized therefrom. The other is a levy of a license fee for each store from which much revenue will be realized. The act apportions the revenue between the available school fund and the general fund, and the only fact stated for the existence of an emergency is that the state is badly in need of additional revenue. The tentative opinion of the Court of Civil Appeals accompanying this certificate correctly answers this question in the following language:
Question No. 2 was submitted only in the event that our answer to question 1 should be that the primary purpose of the act was regulation under the police power. In view of the answer which we have returned to question 1, that question passes out of the certificate.
Questions 3 and 4 are as follows:
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