Independent School Dist. v. Pfost

• Court: Idaho Supreme Court
• Writing for the Court: MCNAUGHTON, J.
• Citation: Independent School Dist. v. Pfost, 51 Idaho 240, 4 P.2d 893 (Idaho 1931)
• Decision Date: 29 October 1931
• Docket Number: 5642
• Parties: INDEPENDENT SCHOOL DISTRICT, CLASS A, No. 1, CASSIA COUNTY, STATE OF IDAHO, Respondent, v. EMMITT PFOST, Commissioner of Law Enforcement, State of Idaho, and BURLEY HOME OIL COMPANY, a Corporation, Appellants

4 P.2d 893

51 Idaho 240

INDEPENDENT SCHOOL DISTRICT, CLASS A, No. 1, CASSIA COUNTY, STATE OF IDAHO, Respondent, v. EMMITT PFOST, Commissioner of Law Enforcement, State of Idaho, and BURLEY HOME OIL COMPANY, a Corporation, Appellants

No. 5642

Supreme Court of Idaho

October 29, 1931

LICENSES-GASOLINE TAX-SCHOOL AND SCHOOL DISTRICTS-CONSTITUTIONAL LAW.

1. In determining type of tax, substance of tax law, rather than designation given tax by legislature, must be considered.

2. Gasoline tax, although statute called it "license tax," held not "license tax," and therefore not limited by Constitution to per- sons and nonmunicipal corporations doing business in state (Laws 1923 chap. 172, sec. 2, as amended by Laws 1929 (Ex. Sess.), chap 2, sec. 1; sec. 4, as amended by Laws 1931, chap. 68, sec. 1; sec. 10, as amended by Laws 1931, chap. 68, sec. 3; Const art. 7, sec. 2).

3. Gasoline tax held not unconstitutional because not one of three kinds of taxes mentioned in constitutional provision (Laws 1923, chap. 172, sec. 2, as amended by Laws 1929 (Ex Sess.), chap. 2, sec. 1; sec. 4, as amended by Laws 1931, chap. 68, sec. 1; sec. 10, as amended by Laws 1931, chap. 68, sec. 3; Const., art. 7, sec. 2).

4. Applying gasoline tax to gasoline used by school district held not violation of constitutional protection of principal and interest of school endowment funds (Laws 1932, chap. 172, sec. 2, as amended by Laws 1929 (Ex. Sess.), chap. 2, sec. 1; sec. 4, as amended by Laws 1931, chap. 68, sec. 1; sec. 10, as amended by Laws 1931, chap. 68, sec. 3; Const., art. 9, sec. 3).

5. Presumption that state and municipalities are exempt from general tax law applies only to property taxation, not to excise or privilege taxes.

6. Gasoline Tax Act, not exempting federal agencies using highways, held not unconstitutional, notwithstanding it could not include them (Laws 1923, chap. 172, sec. 2, as amended by Laws 1929 (Ex. Sess.), chap. 2, sec. 1; sec. 4, as amended by Laws 1931, chap. 68, sec. 1; sec. 10, as amended by Laws 1931, chap. 68, sec. 3).

7. School districts and municipalities held not exempt from gasoline tax, despite constitutional provision against levying property tax on property of municipal corporations (Laws 1923, chap. 172, sec. 2, as amended by Laws 1929 (Ex. Sess.), chap. 2, sec. 1; sec. 4, as amended by Laws 1931, chap. 68, sec. 1; sec. 10, as amended by Laws 1931, chap. 68, sec. 3; Const., art. 7, sec. 4).

APPEAL from the District Court of the Eleventh Judicial District, for Cassia County. Hon. A. B. Barclay, Judge.

Action to restrain the collection of a gasoline tax. Judgment for plaintiff. Reversed.

Judgment reversed, with directions. Petition for rehearing denied.

Fred J. Babcock, Attorney General, and Maurice H. Greene, Assistant Attorney General, for Appellants.

The tax imposed by chap. 172, 1923 Sess. Laws, as amended, is an "excise" or "privilege" tax. (Pierce Oil Co. v. Hopkins, 264 U.S. 137, 44 S.Ct. 251, 68 L.Ed. 593; Standard Oil Co. v. Brodie, 153 Ark. 114, 239 S.W. 753; Shanks v. Kentucky Oil Co., 225 Ky. 303, 8 S.W.2d 383; Texas Co. v. State, 31 Ariz. 485, 53 A. L. R. 258, 254 P. 1060; Gafill v. Bracken, 195 Ind. 551, 145 N.E. 312.)

Excises are taxes laid upon the manufacture, sale or consumption of commodities and upon certain callings or occupations. ( Flint v. Stone Tracy Co., 220 U.S. 107, Ann. Cas. 1912B, 1312, 31 S.Ct. 342, 55 L.Ed. 389; State of Maine v. Grand Trunk R. Co., 142 U.S. 217, 12 S.Ct. 121, 35 L.Ed. 994; 1 Cooley on Taxation, 132; 26 R. C. L. 35; Hancock v. Singer Mfg. Co., 62 N.J.L. 289, 41 A. 846, 851, 42 L. R. A. 852.)

The nature of a tax must be determined by its operation rather than the legislative name applied to it. (Educational Films Corp. v. Ward, 282 U.S. 379, 51 S.Ct. 170, 171, 75 L.Ed. 400.)

An act of the legislature will not be held unconstitutional unless shown to be repugnant beyond a reasonable doubt. (Noble v. Bragaw, 12 Idaho 265, 85 P. 903; Olson v. Idora Hill Min. Co., 28 Idaho 504, 518, 155 P. 291; In re Edwards, 45 Idaho 676, 266 P. 665; Williams v. Baldridge, 48 Idaho 618, 284 P. 203.)

Because the ultimate consumer eventually bears the ultimate burden of every excise tax, he may not for that reason assert that he is being taxed. (City of Portland v. Kozer, 108 Ore. 375, 217 P. 833; City of Louisville v. Cromwell, 233 Ky. 828, 27 S.W.2d 377.)

A municipal corporation is not being taxed by a dealer's tax on gasoline and may not claim exemption from the tax. ( City of Portland v Kozer, supra; City of Louisville v. Cromwell, supra; Crockett v. Salt Lake County, 72 Utah 337, 62 A. L. R. 667 270 P. 142; People v. City and County of Denver, 84 Colo. 576, 272 P. 629; City of Jackson v. State, 156 Miss. 306, 126 So. 2.)

Exemptions from a taxation statute are never presumed. (Bistline v. Bassett, 47 Idaho 66, 62 A. L. R. 323, 272 P. 696; 2 Cooley on Taxation, 1403-1408.)

The motor fuels tax does not exempt school districts. (Crockett v. Salt Lake County, supra.)

Wolfe & Nielson, for Respondent.

Since school districts are not specifically mentioned in the gasoline license law, that law should be construed as not including them. (State v. Fitzpatrick, 5 Idaho 499, 51 P. 112; People v. City and County of Denver, 84 Colo. 576, 272 P. 629; O'Berry v. Mecklenburg County, 198 N.C. 357, 67 A. L. R. 1304, 151 S.E. 880.)

Taxation is described in the Constitution as (1) direct taxation of property; (2) license on natural persons and corporations doing business in the state; and (3) per capita taxation. (Const., sec. 2, art. 7; In re Gale, 14 Idaho 761, 95 P. 679; State v. Union Cent. Life Ins. Co., 8 Idaho 240, 67 P. 647; Northern P. R. Co. v. Gifford, 25 Idaho 196, 136 P. 1131; In re Kessler, 26 Idaho 764, Ann. Cas. 1917A, 228 146 P. 113, L. R. A. 1915D, 322; State v. Nelson, 36 Idaho 713, 213 P. 358; Smallwood v. Jeter, 42 Idaho 169, 244 P. 149.)

"Excise tax" is included in sec. 2, art. 7, of the Idaho Constitution under license tax.

The gasoline license tax is the kind of tax mentioned in sec. 2, art. 7, of the Idaho Constitution, whether it be called an "excise" tax or "license" tax.

A school district is a municipal corporation as that term is used in sec. 2, art. 7, of the Constitution of the state of Idaho. (School District No. 8 v. Twin Falls County etc. Ins. Co., 30 Idaho 400, 164 P. 1174; Ferguson Fruit & Land Co. v. Gooddin, 44 Idaho 76, 258 P. 557; Storey & Fawcett v. Nampa etc. Irr. Dist., 32 Idaho 713, 187 P. 946.)

MCNAUGHTON, J. Lee, C. J., and Budge, Givens and Varian, JJ., concur.

OPINION

MCNAUGHTON, J.

In this case the school district seeks to enjoin the Commissioner of Law Enforcement of the state of Idaho and Burley Home Oil Company from collecting from it the gasoline tax provided for in chapter 172 of the 1923 Session Laws and amendatory acts.

The defendants demurred to the complaint. The demurrer was overruled. The defendants not desiring to plead further, judgment in conformity with the allegations and prayer of the complaint was entered against them. They appeal.

The law points relied upon in behalf of the school district and exhaustively and carefully briefed by both sides may be classified as follows. It is claimed: (1) that the law does not specify school districts or municipal corporations and was not meant to require a tax on gasoline used upon the highways by them; (2) that the tax is a license tax attempted to be enforced against the express inhibition contained in sec. 2, art. 7, of the Idaho state Constitution; (3) that if it is not a license tax it is in contravention of the methods of taxation prescribed by sec. 2, art. 7, of the Constitution, which authorizes only three methods of taxation, to wit: a property tax, a license tax and a per capita tax; (4) that the tax is an attempt to divert the school funds and is prohibited by sec. 3, art. 9 of the Constitution; (5) that the act is contrary to the spirit of our Constitution in that it is an attempt to tax one agency of the state for the benefit of another; that is, it is an attempt to withdraw and use school funds for the benefit of the state highways.

These points involve the interpretation of certain provisions of the gasoline tax law of Idaho and provisions of the state Constitution relating to taxation and school funds.

The purpose of the law and the character of the tax are disclosed by the following excerpts from the act as amended:

"Sec. 2. . . . That in addition to the taxes now provided for by law, each and every dealer, as defined in this Act, who is now engaged or who may hereafter engage in his own name, or in the name of others, or in the name of his representatives or agents in this State, in the sale of motor fuels herein defined, shall, not later than the fifteenth day of each calendar month beginning with the second calendar month after this Act has become effective, render a statement to the Commissioner of Law Enforcement of the State of Idaho of all motor fuels sold and/or used by him or them in the State of Idaho during the preceding calendar month, and pay a license tax of five cents per gallon on all motor fuels as shown by such statement in the manner and within the time hereinafter provided." (Sess. Laws 1923, chap. 172, sec. 2, as amended by Sess. Laws, Extraordinary Session of 1929, chap. 2, sec. 2.)

"Sec. 10. Any person, firm or corporation who shall buy and use any motor fuels as defined in this Act for the purposes of operating or propelling stationary gas engines, tractors, or motor boats, or who shall purchase or use any of such fuel for cleaning or dyeing or other commercial use of the same except in motor vehicles operated or intended to be operated upon any of the public highways of the State of Idaho, and who shall...