In re Opinions of the Justices

• Decision Date: 02 April 1923
• Citation: 120 A. 629
• Court: New Hampshire Supreme Court
• Parties: In re OPINIONS OF THE JUSTICES.

120 A. 629

In re OPINIONS OF THE JUSTICES.

Supreme Court of New Hampshire.

April 2, 1923.

Opinions of the Justices of the Supreme Court on Questions submitted to them by the House of Representatives as to validity of proposed taxation statutes.

Honorable William J. Ahern, Speaker of the House of Representatives—Sir:

In response to yours of March 21st ult., transmitting a resolution of the House passed that day, the undersigned, Justices of the Supreme Court, submit the following in answer to the inquiries therein contained:

I. In 1915 the House of Representatives required our opinions upon the question "whether any constitutional provision would be violated by imposing a tax at the uniform rate upon money received as interest or dividends." Upon this question the Justices were not agreed. Pour, understanding "the uniform rate" to mean the rate applied in the taxation of other property in the taxing district, failed "to discover any substantial ground upon which 'they' would be justified in advising that the proposed act is clearly in violation of any provision of the state Constitution," while the opinion of one of the Justices was adverse to the constitutionality of the proposed legislation. The first question of those now submitted is a repetition of the question asked in 1915. The views then held are still entertained. There seems to be no occasion for the Justices then answering to add to what was then said. The opinions then submitted are printed in the Journal of the House for 1915, p. 435, and in 77 N. H. 611, 93 Atl. 311.

II. This question implies that the rate of the proposed tax is to be different from that upon other property. If by any process of reasoning a rate can be reasonable which is unequal or disproportional, reasonableness of that character is outside our Constitution, and we are all agreed that a tax at an arbitrary rate which is not a proportional distribution of public expense is not permitted by the fundamental law. State v. Express Co., 60 N. H. 219.

III. The third inquiry relates to "a tax * * * upon gasoline or motor vehicle fuels of like nature sold in this state, at the flat rate, for example, of 2 cents on every gallon sold, or an excise tax on the sale of gasoline." A tax levied upon the privilege of selling gasoline is clearly outside the power to levy "proportional and reasonable assessments, rates and taxes." State v. Express Co., 60 N. H. 219; Curry v. Spencer, 61 N. H. 624, 60 Am. Rep. 337. But your inquiry seems to suggest that what is intended is not the levy of a tax, but rather that the purpose in view is to fix a charge, Or toll, for the use of the public highways of the state. It is within the legislative power to provide that all highways, or any specified highways, shall be toll roads, and open to travel only upon the payment of a specified charge.

"Although, ordinarily, turnpikes are built and owned by corporations created by the state, for the purpose of constructing and maintaining them, what the state may do indirectly through such agencies it may do directly—that is, it may itself lay out and construct such improved public roads, and charge reasonable tolls to all persons using the same." Kane v. State, 81 N J. Law, 594, 597, 80 Atl. 453, 454 (L. R. A. 1917B, 553, Ann. Cas. 1912D, 237).

Many instances might be cited where governmental undertakings are supported in whole or in part by charges made upon those who avail themselves of the advantages afafforded thereby. Waterworks, sewers, wharves, locks, and canals are often maintained in this manner. Charges made in this way are not taxes.

"There is no analogy between the imposition of taxes and the levying of tolls for improvement of highways; and any attempt to justify or condemn proceedings in the one case, by reference to those in the other, must be misleading. Taxes are levied for the support of government, and their amount is regulated by its necessities. Tolls are the compensation for the use of another's property, or of improvements made by him." Sands v. Manistee, etc., Co., 123 U. S. 288, 294, 8 Sup. Ct. 113, 115 (31 L. Ed. 149).

Tolls that are reasonable in amount, and not discriminatory, have uniformly been upheld. Constitutional limitations upon the taxing power have no application to such a levy. Carson v. Brockton, 175 Mass. 242, 56 N. E. 1, 48 L. R. A. 277; Id., 182 U. S. 398, 21 Sup. Ct 860, 45 L. Ed. 1151; Merrimack River Savings Bank v. Lowell, 152 Mass. 556, 26 N. E. 97, 10 L. R. A. 122; Silkman v. Water Commissioners, 152 N. Y. 327, 46 N. E. 612, 37 L. R. A. 827; City of East Grand Forks v. Luck, 97 Minn. 373, 107 N. W. 393, 6 L. R. A. (N. S.) 198, 7 Ann. Cas. 1015; Wagner v. Rock Island, 146 Ill. 139, 34 N. E. 545, 21 L. R. A. 519; Ampt. v. Cincinnati. 56 Ohio St. 47, 46 N. E. 69, 35 L. R. A. 737; Jones v. Water Commissioner, 34 Mich. 273; Huse v. Glover, 119 U. S. 543, 7 Sup. Ct. 313, 30 L. Ed. 487; Hendrick v. Maryland. 235 U. S. 610. 35 Sup. Ct. 140, 59 L. Ed. 385.

It is a matter of common knowledge that since the advent of the use of automotive vehicles upon highways large sums have been expended in making the conditions more favorable for that class of traffic. No reason appears why the Legislature may not impose upon those who accept the benefits of such highway improvement and maintenance a reasonable charge for the use made. It is upon this ground that the state registration systems for automobiles have been sustained. The purpose of these laws is "to secure some compensation for the use of facilities provided at great cost from the class for whose needs they are essential, and whose operations over them are peculiarly injurious." Hendrick v. Maryland, supra, 235 U. S. 622, 35 Sup. Ct. 142, 59 L. Ed. 385.

It is apparent that the exaction of a toll as in the case of a bridge could not be put into practical operation in reference to the present-day use of highways generally. Some other measure of the use must be found, and the determination of what measure shall be adopted is within the province of the Legislature.

"No constitutional objection lies in the way of a legislative body prescribing any mode of measurement to determine the amount it will charge for the privilege it bestows." Kane v. State, supra, 81 N. J. Law, 598. 80 Atl. 455, L. R. A. 1917B, 553, Ann. Cas. 1912D, 237.

"It is clearly within the discretion of the state to determine whether the compensation for the use of its highways by automobiles shall be determined by way of a fee, payable annually or semiannually, or by a toll based on mileage, or otherwise." Kane v. State of New Jersey, 242 U. S. 160, 168, 37 Sup. Ct. 30, 32 (61 L. Ed. 222).

While the payment proposed will not be an exact measure, yet it will so far approximate thereto as to be within the power of the Legislature to adopt. The charge cannot be imposed upon sales of gasoline, etc., generally, but only when the commodity is sold for consumption in the operation of vehicles upon the highways. A charge so limited amounts to the same thing, in substance, as a toll for the use of the highways, and may lawfully be imposed by the Legislature.

IV. In 1911 the House of Representatives asked the opinion of the Justices as to the validity of proposed legislation imposing a graduated Inheritance tax upon property passing to lineal descendants. Upon the question of the validity of provisions determining the rate to be imposed by the amount of property concerned, the Justices in the time then available were unable to answer the question. In 1919 (Laws 1919, c. 37) a statute was enacted graduating the tax substantially as proposed in 1911. No case under this act has been brought before the court. The present inquiry as to the legality of such a tax upon collateral inheritance presents the same question. As the House has been seen fit to reopen the question which no one interested has so far cared to raise, we have no choice except to give the House the opinions we entertain.

In 1878 the Legislature adopted "an act to defray the cost of probate courts." Laws 1878, c. 74. This act provided that"All estates settled in the probate courts of this state and all transfers of property from the dead to the living, by gift, bequest or devise, and every succession made under the laws of this state, regulating the distribution of intestate estates * * * shall pay one per cent. on the value of said estates ** * provided that all legacies or property passing by will or by the laws of this state to husband or wife, children and grandchildren of the person who died possessed as aforesaid, shall be exempt from tax or duty."

This provision was incorporated in chapter 64 of the General Laws, and, a further limitation upon the exemption having been repealed (Laws 1879, c. 57, § 16), the constitutionality of the tax or duty imposed by the foregoing language was assailed in Curry v. Spencer, 61 N. H. 624. In this case it was decided in 1882 that the tax thereby sought to be imposed could not be upheld because, "immunity from disproportional taxation being expressly reserved in our bill of rights, and the power of proportional taxation only being granted," no ground was found upon which the tax could be upheld, "for" It is said in the opinion "if it is to be regarded as a tax on property, it is open to the objection of unequal and double taxation, and if it is to be regarded as a tax on a civil right or privilege, it is discriminating and disproportional." This decision was accepted as a correct exposition of the principles of the existing Constitution as applied to legislation of this character, and at the next session of the Legislature the statute was repealed in toto. Laws 1883, c. 50. In the constitutional convention of 1903 propositions apparently intended to leave the whole matter of taxation to the discretion of the Legislature were rejected, as was also a resolution introduced by Mr. Ham of Portsmouth, authorizing the imposition of "assessments, rates, and...