Metropolis Ferry Co. v. Com.
Decision Date | 08 June 1928 |
Citation | 225 Ky. 45,7 S.W.2d 506 |
Parties | METROPOLIS FERRY CO. v. COMMONWEALTH. |
Court | Kentucky Court of Appeals |
Appeal from Circuit Court, McCracken County.
Action by the Commonwealth of Kentucky against the Metropolis Ferry Company. From a judgment for plaintiff, defendant appeals. Affirmed.
Wheeler & Hughes, of Paducah, for appellant.
W. A Berry, of Paducah, for the Commonwealth.
Section 1, c. 120, Acts 1924, now section 4224b1, Kentucky Statutes Baldwin's 1924 Supplement, is as follows:
The above section was re-enacted in 1926, and the tax increased from 3 cents a gallon to 5 cents a gallon. Section 1, c. 169, Acts 1926, now section 4224b1, Kentucky Statutes, Baldwin's 1926 Supplement.
This is an action by the commonwealth against James R. Nelson and Clyde Randolph, partners doing business under the firm name and style of Metropolis Ferry Company, to recover taxes on gasoline purchased by them in Illinois and used in this state in the operation of their ferry. A recovery was sought at the rate of 3 cents a gallon from June 16, 1924, until February 21, 1926, as provided by the statute then in force, and at the rate of 5 cents a gallon from February 21, 1926, until September 1, 1926, as provided by the amendment of 1926. The demurrer to the answer as amended having been sustained, and the demurrer to the petition having been overruled, and the defendants having declined to plead further, judgment was rendered in favor of the commonwealth. The defendants appeal.
The facts admitted by the pleadings are these: Nelson and Randolph are citizens and residents of the state of Illinois, and their principal place of business is at Metropolis, in that state. The situs of their personal property is also in that state. All the gasoline purchased by them in the state of Illinois was used in the operation of their ferry between the city of Metropolis, in Illinois, and the Metropolis Ferry landing, in McCracken county, Ky. 75 per cent. of the gasoline was used in the state of Kentucky.
It will be observed that the act provides that the words "at wholesale" shall be held to mean and include "any person who shall purchase or obtain such gasoline without the state, and sell or distribute or use the same within the state." As the gasoline, the taxes on which are sought to be recovered in this action, was all purchased in the state of Illinois, and it is conceded that 75 per cent. thereof was used in this state, the case falls within the statute. Therefore the only question to be determined is whether the act imposing the tax, in the circumstances presented, violates any provision of the state or Federal Constitution.
The principal ground on which the validity of the act is assailed is that a tax on the use of property is a tax on the property itself, and that such a tax violates section 171, the uniformity clause of our Constitution. providing in part as follows:
"Taxes shall be levied and collected for public purposes only and shall be uniform upon all property of the same class subject to taxation within the territorial limits of the authority levying the tax."
In support of this position it is insisted that the case is ruled by Dawson v. Kentucky Distilleries & Warehouse Co., 255 U.S. 288, 41 S.Ct. 272, 65 L.Ed. 638, and followed by this court in Craig, Auditor, v. E. H. Taylor, Jr., & Sons, 192 Ky. 36, 232 S.W. 395. Each of those cases involved the validity of an act imposing upon every person engaged in the business of manufacturing whisky, or in the business of owning and storing the same in bonded warehouses within the state, an annual license tax of 50 cents a gallon upon all whisky either withdrawn from bond or transferred in bond from Kentucky to a point outside the state. In discussing the question, the United States Supreme Court said:
It further said, "To levy a tax by reason of ownership of property is to tax the property," and therefore concluded that the tax in question was a property tax. The same view of the question was taken in Craig, Auditor, v. E H. Taylor,...
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