International Business Machines Corp. v. Vaughn

• Decision Date: 27 November 1957
• Citation: 98 So.2d 747
• Parties: INTERNATIONAL BUSINESS MACHINES CORPORATION, Appellant, v. J. H. VAUGHN, as Tax Assessor of Okaloosa County, Florida; C. L. Campbell, as Tax Collector of Okaloosa County, Florida; and C. M. Gay, as Comptroller of the State of Florida, Appellees.
• Court: Florida Supreme Court

Page 747

98 So.2d 747

INTERNATIONAL BUSINESS MACHINES CORPORATION, Appellant, v. J. H. VAUGHN, as Tax Assessor of Okaloosa County, Florida; C. L. Campbell, as Tax Collector of Okaloosa County, Florida; and C. M. Gay, as Comptroller of the State of Florida, Appellees.

Supreme Court of Florida.

Nov. 27, 1957.

Rehearing Denied Dec. 18, 1957.

Jones & Harrell, Pensacola, for appellant.

Clyde Campbell, Crestview, for appellees.

THOMAS, Justice.

The appellant asked the chancery court to declare that certain electric accounting machines owned by it and used exclusively by the United States Air Force at Eglin Field were not subject to taxation by Okaloosa County and that the appellees--Tax Assessor and Tax Collector--be restrained from assessing and collecting taxes on the property.

Jurisdiction over that part of Eglin Field on which the machines are located was ceded in 1937 by the then Governor of Florida, to the United States of America which had acquired the land for the site of forts, magazines, arsenals, dockyards and other needful federal buildings. The grantee was vested with exclusive jurisdiction over the property reserving, however, to the state jurisdiction concurrent with the United States 'so far that all process, civil or criminal, issuing under authority of said State of Florida, or any of the Courts or judicial officers thereof,' could be 'executed by the proper officer * * * upon any person * * * amenable to the same * * *.' Property of the United States was secured from taxation by the state. The cession was made subject to the applicable 'terms and effect' of statutes of the state.

The chancellor dismissed the complaint and we are now requested to decide whether or not the machines are taxable.

The appellees, insisting that the order of dismissal was proper, direct us to Section 16 of Article XVI and Section 1 of Article IX of the Constitution, F.S.A., which they claim prohibit the exemption from taxation of privately owned property located on the lands described in the deed of cession and they assert that certain provisions in the deed itself secured to the state the right to tax that property. This position is based, of course, on the premise that the machines are in fact owned by the appellant though used in the military establishment and, presumably, rented to the United States.

But for the effect of the deed of cession upon its status, the property of the appellant, a corporation, would be subject to taxation unless 'held and used exclusively for religious, scientific, municipal, educational, literary or charitable purposes.' Section 16, Article XVI, supra. Clearly it is devoted to none of these purposes. But the pivotal point is not 'use' but 'jurisdiction'.

Under the other cited part of the Constitution, Section 1, Article IX, the legislature is mandated to provide a rate of taxation that is uniform and equal and to secure a just valuation of all property except that exempted by law for the very purposes listed in Section 16, Article XVI.

At first glance, and considering the question only in the light of organic and statutory law of the state, it would seem that the accounting machines owned by the appellant are taxable. But it is necessary to explore further our own statutes and to examine the decisions of the Supreme Court of the United States dealing with the effect of a deed of cession upon the taxable character of private property located in the area over which the jurisdiction of the state is relinquished by the deed.

Section 192.06, Florida Statutes 1951, and F.S.A., which was enacted to implement Section 1, Article IX, supra, carries the simple provision for the exemption from taxation of property, real and personal, of the United States. Since the enactment of Chapter 25, Laws of Florida, Acts of 1845, now designated as Sections 6.02 and 6.04, Florida Statutes 1955, and F.S.A., provision has existed for deeds of cession from the Governor to the United States saving to the United States exemption from state taxation of the property of the United States.

The appellees contend that the provisions of organic law to which we have referred were a part of the deed of cession and that that instrument could not operate as an exemption of private personal property required to be taxed by Section 16, Article XVI, and not exempt under the statute, Section 192.06, supra.

We have carefully weighed the argument that our Constitution and statutes not only do not allow, but actually prohibit, the escape of appellant's machines from the tax burden and have also considered whether or not any language appearing in the deed of cession could be construed as saving to the state the right to impose the tax.

We have already referred to the provisions of the deed reserving certain jurisdiction in the state but do not find the language used, relating to execution of process, subject to the interpretation that the state intended to retain the right to tax the property located in the ceded territory even if it could have done so. James v. Dravo Contracting Company, 58 S.Ct. 208, 302 U.S. 134, 82 L.Ed. 155; Surplus Trading Co. v. Cook, infra. Nor can we accept the view that saving to the United States security from taxation did by implication reserve to the state the right to tax the property involved.

A comparison of the above language...