In re City of Enid
| Citation | 158 P.2d 348,195 Okla. 365,1945 OK 135 |
| Decision Date | 24 April 1945 |
| Docket Number | 30353. |
| Parties | In re CITY OF ENID. |
| Court | Oklahoma Supreme Court |
As Corrected June 1, 1945.
Appeal from Oklahoma Tax Commission.
Proceeding in the matter of the protest of the City of Enid, a municipal corporation, against the proposed assessment of sales tax on tickets of admission to the municipal swimming pool during certain months of the period from June 1, 1935, to September 30, 1940. From an adverse order of the tax commission, the City of Enid appeals.
Order sustained.
Syllabus by the Court.
1. A declaration in a statute providing for the levy and collection of a sales tax that the tax thereby imposed is an excise tax, must be accepted unless the declaration is incompatible with the effect of the statute.
2. Taxes upon the gross proceeds or receipts from the sale of admissions to a swimming pool owned and operated by a municipal corporation levied pursuant to the provisions of the Oklahoma Consumers' Tax Law of 1935, art. 7, ch. 66 S.L.1935; The Consumers and Users Tax Act 1937, art. 10, ch 66, S.L.1937; and The Consumers and Users Tax Act 1939, art 11, ch. 66, S.L.1939, are 'excises' and the assessment and collection of such taxes does not constitute an attempt to tax the property of a city or town in violation of sec. 6, art. 10 of the Constitution.
Geo. Howard Wilson, City Atty., of Enid, for appellant.
A. Francis Porta, of El Reno, and A. L. Herr and A. D. Howell, both of Oklahoma City, for appellee.
This is an appeal by the City of Enid from an order of the Oklahoma Tax Commission assessing said city for sales tax on the gross proceeds or gross receipts derived from the sale of admissions to a swimming pool owned and operated by the city during certain months of the period from June 1, 1935, to September 30, 1940.
The taxes sought to be collected allegedly became due and delinquent under the Oklahoma Consumers' Tax Law of 1935, art. 7, ch. 66, S.L.1935; the Consumers and Users Tax Act, 1937, art. 10, ch. 66, S.L.1937, and the Consumers and Users Tax Act, 1939, art. 11, ch. 66, S.L.1939.
It is shown that during the period hereinabove mentioned, the city owned and operated a swimming pool which was located in Government Springs Park, which park was owned by the city and operated by its employees. A charge of admission to the swimming pool of fifteen cents for adults and ten cents for children was made by the city and resulted in the collection of substantial revenues. No sales tax was charged by the city or collected from the patrons of the swimming pool for the period above mentioned, the city having taken the position that the swimming pool was not within the classification of businesses or occupations described and defined in the aforesaid Acts, the gross sales of which are made subject to the tax.
The principal contention is that, since no sales taxes were charged or collected upon the receipts from the operation of the swimming pool, and since no action was taken by the Tax Commission within the fiscal year to enforce collection of any sales tax upon said receipts, any attempted collection of such taxes thereafter would be, in effect, the levying of a tax against municipally owned property in contravention of sec. 6, art. 10 of the Constitution.
In order to determine whether or not the tax levied by the aforesaid Acts might, under any circumstances, be construed as a property tax, it is necessary to notice the levying provisions of the respective Acts.
Sec. 4(a), art. 7, c. 66, S.L.1935, provides as follows:
Sec. 5, art. 10, ch. 66, S.L.1937, provides, in part, as follows:
'There is hereby levied an excise tax of two (2%) per centum, except where a greater rate is hereinafter provided, upon the gross proceeds or gross receipts derived from the sale subsequent to May 31, 1937, to consumers or users, for use or consumption, of the following: * * *
'There is hereby levied a like tax of two (2%) per centum upon the gross proceeds or gross receipts derived from:
Sec. 5, art. 11, ch. 66, S.L.1939, is, in part, as follows:
'(j) Dues or fees to clubs, and the sale of tickets or admissions to place of amusement, to athletic, entertainment, recreational events, or dues or fees for the privilege of having access to or the use of amusement, entertainment, athletic or recreational facilities, including free or complimentary passes and tickets, admissions, dues or fees, such free or complimentary passes, tickets, dues or fees hereby being declared to have a value equivalent to the sale price of tickets, passes, admissions, fees or dues of like kind or character.'
In the case of City of Ardmore v. State ex rel. 168 Okl. 316, 32 P.2d 728, it was held that sec. 6, art. 10 of the Constitution applies to a property tax and has no application to an excise tax. Board of Com'rs v. Oklahoma Tax Comm., 185 Okl. 625, 95 P.2d 605; In re Baptist General Convention, Okl., 156 P.2d 1018.
We here point out that in the levying provisions of the 1937 and 1939 Acts the Legislature was careful to define the tax as 'an excise tax.'
In the case of Lutz v. Arnold, 208 Ind. 480, 193 N.E. 840, 844, 196 N.E. 702, it was said:
'The declaration in a statute that the tax is of a particular nature, while not conclusive, is very important and must be given consideration in construing the statute. As said in the case of Flint v. Stone Tracy Co., 220 U.S. 107, at page 145, 31 S.Ct. 342, 346, 55 L.Ed. 389, Ann.Cas.1912B, 1312: 'While the mere declaration contained in a statute that it shall be regarded as a tax of a particular character does not make it such if it is apparent that it cannot be so designated consistently with the meaning and effect of the act, nevertheless the declaration of the lawmaking power is entitled to much weight.''
See, also, White Dental Mfg. Co. v. Commonwealth, 212 Mass. 35, page 40, 98 N.E. 1056, 1059, Ann.Cas.1913C, 805, and annotation 103 A.L.R. 18.
In the case of Oklahoma Tax Comm. v. Sisters of Sorrowful Mother, 186 Okl. 339, 97 P.2d 888, the court was concerned with art. 11, ch. 66, S.L.1937, 68 Okl.St.Ann. § 1291 et seq., designated as the 'Use Tax, 1937,' which Act is very similar to the Acts involved herein. The court held that such tax was neither a tax on the property of plaintiff nor its income; that it was an excise tax which the state is authorized to exact, and, in connection with the 'Consumers Tax Act', it had for its primary purpose the raising of revenue for state purposes.
In the case of Wiseman v. Phillips, 191 Ark. 63, 84 S.W.2d 91, 96, the Arkansas court was dealing with its sales tax law which levied a tax of 'two (2%) per centum of the gross proceeds' derived from certain sales. Therein it was said:
"There is no exact definition of excises, but ordinarily they are duties laid on the manufacture, sale, or consumption of commodities, or upon certain callings or occupations, and are generally referable to the police power of the state.' See, also, Sparling v. Refunding Board, 189 Ark. 189, 71 S.W.2d 182. From these decisions we are bound to conclude that the tax levied by said Act No. 233 is an excise tax or privilege tax that is not prohibited. Whether it is such a tax on the purchase or the sale, or the right to acquire personal property for use or consumption, or whether it is a tax on the transaction, it is unnecessary to determine. Whatever it is and by whatever name it may be called, its character must be determined by its incidents, and its validity must be measured by the Constitution under the rules stated. It is certain that it is not a tax levied upon any one's occupation; therefore, not an occupation tax. The merchant is not taxed. He is a tax collector. The tax is required of the purchaser and the merchant must collect and account for it. The buyer's occupation is not taxed. It is not a pursuit or occupation to buy at retail for use or consumption.'
The question involved in the case of State ex rel. Missouri Portland Cement Co. v. Smith, 338 Mo. 409, 90 S.W.2d 405, 407, is, in some respects, similar to the question presented herein. In that case the State Highway Commission contended that it was not required to pay a sales tax upon materials purchased for the construction and maintenance of state highways. It was shown that the law had levied a tax of one per centum...
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