McCarty v. Conway

• Decision Date: 26 June 1934
• Citation: 255 N.W. 913,215 Wis. 645
• Parties: MCCARTY v. CONWAY ET AL.
• Court: Wisconsin Supreme Court

215 Wis. 645

255 N.W. 913

MCCARTY

v.CONWAY ET AL.

Supreme Court of Wisconsin.

June 26, 1934.

Appeal from a judgment of the Circuit Court for Kenosha County; S. E. Smalley, Circuit Judge.

Action by Earl H. McCarty to review an order of W. J. Conway and others, constituting the Wisconsin Tax Commission, modifying a determination of the County Board of Review of Kenosha County. From a judgment confirming the order of the Wisconsin Tax Commission, the plaintiff appeals.--[By Editorial Staff.]

Judgment of the circuit court reversed, and cause remanded, with directions.

Action brought by plaintiff to review an order of the Wisconsin Tax Commission, modifying a determination of the county board of review of Kenosha county. There was an additional assessment of income tax against the plaintiff involving income of the year 1929. The action is brought under section 71.16, Stats.

Plaintiff resided in Wisconsin throughout the years of 1927, 1928, and until March 1, 1929. He then terminated his Wisconsin residence, moving to Portland, Ore. Prior to leaving Wisconsin, he filed a return for income of 1928 and later paid his tax thereon. He filed no return in Wisconsin for 1929, and on July 15, 1930, the assessor for Kenosha county made a doomage assessment of incomes against him for that year of $150,000. Upon appeal by plaintiff, this assessment was modified by the board of review. An appeal from its order was taken to the Wisconsin Tax Commission by both plaintiff and the assessor. The tax commission found plaintiff's net taxable income for 1929 to be $40,467.64, added one-sixth of that amount, to wit, $6,745, to the 1927 and 1928 income, divided the total thus obtained by three, thereby obtaining the sum of $122,088 as the average taxable income for 1929. Plaintiff appealed to the circuit court for Kenosha county, which confirmed the order of the commission except as to the amount of plaintiff's exemption. From this judgment the plaintiff appeals.

WICKHEM, J., dissenting.Randall, Cavanagh, Stephenson & Mittelstaed, of Kenosha, for appellant.

James E. Finnegan, Atty. Gen., and Herbert H. Naujoks, Asst. Atty. Gen., for respondents.

FAIRCHILD, Justice.

Under the three-year average method of assessing incomes which obtained in this state at the time of the assessment under review, the law required the payment of a tax on all average net incomes by every person residing within the state or by his personal representative in case of death, and declared that every natural person who was domiciled in the state “shall be presumed to be residing within the state for the purposes of determining liability for income taxes and surtaxes.” Section 71.01, Stats. 1929. There is no dispute but that the appellant was domiciled within the state during the months of January and February, 1929. Carter v. Sommermeyer, 27 Wis. 665;Kellogg v. Supervisors of Winnebago County, 42 Wis. 97;Kempster v. City of Milwaukee, 97 Wis. 343, 72 N. W. 743;Will of Eaton, 186 Wis. 124, 202 N. W. 309.

[1][2] The basic theory of taxation as stated in Cooley, Taxation (3d Ed.), has been referred to approvingly by this court in Fitch v. Wisconsin Tax Comm., 201 Wis. 383, 230 N. W. 37, 38, as follows: “In the very opening sentence of Cooley on Taxation (3d Ed.), we find it stated that ‘Taxes are the enforced proportional contributions from persons and property, levied by the State by virtue of its sovereignty for the support of government and for all public needs. The State demands and receives them from the subjects of taxation within its jurisdiction that it may be enabled to carry into effect its mandates and perform its manifold functions, and the citizen pays from his property the portion demanded,in order that, by means thereof, he may be secured in the enjoyment of the benefits of organized society. The justification of the demand is therefore found in the reciprocal duties of protection and support between the State and those who are subject to its authority, and the exclusive sovereignty and jurisdiction of the State over all persons and property within its limits for governmental purposes.’ ”

The exaction of a tax can be...