Myers v. Oklahoma Tax Commission

• Decision Date: 07 November 1956
• Docket Number: No. 37308,37308
• Citation: 303 P.2d 443
• Parties: Morris T. MYERS, Plaintiff in Error, v. OKLAHOMA TAX COMMISSION, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 443

303 P.2d 443

1956 OK 291

Morris T. MYERS, Plaintiff in Error, v. OKLAHOMA TAX COMMISSION, Defendant in Error.

No. 37308.

Supreme Court of Oklahoma.

Nov. 7, 1956.

Syllabus by the Court.

1. The graduated gift tax authorized by the Gift Tax Act, 68 O.S.1951 §§ 1041 to 1047, inclusive, is an excise tax and not a property tax, and is not violative of Article X, section 12 of the Oklahoma Constitution.

2. The Legislature's inherent power of taxation cannot be excluded by mere implication arising from fact that Constitution granted specific powers but failed to mention or provide for such inherent power, and if such power is to be excluded by implication, express powers enumerated should be accompanied by negative terms whereby such exclusion would arise by reasonable implication.

Appeal from Oklahoma Tax Commission.

Appeal by Morris T. Myers from an order of the Oklahoma Tax Commission assessing additional gift taxes against him for the year 1953, and paid under protest. Order of the Oklahoma Tax Commission affirmed.

Byrne A. Bowman, Oklahoma City, for plaintiff in error.

R. F. Barry, Oklahoma City, for defendant in error.

HALLEY, Justice.

July 1, 1953, Morris T. Myers, joined by his wife, gave in trust to M. T. Myers, Jr. certain real estate located in Cleveland County, Oklahoma, and on March 15, 1954, Morris T. Myers and wife each made a gift tax return covering the above gift and each paid a gift tax of $495, on an estimated total value of the land involved of $26,500, less the exclusions of $3,000 for each donee.

October 20, 1954, the Oklahoma Tax Commission made an additional assessment of $1,160, based upon an adjusted value of $75,000, or an increase in value of $42,500, and notified the donors, who paid the additional gift tax under protest. December 22, 1954, M. T. Myers filed a protest.

It was stipulated by the parties that the only ground relied upon by protestants in this appeal is:

'The gift tax is imposed at graduated rates contrary to provisions of Article X, Section 12 of the Constitution of Oklahoma which permit graduated taxes to be imposed only on income taxes, estate and inheritance taxes, and legacy and succession taxes.'

It was further stipulated that if the Gift Tax Act, which is 68 O.S.1951 §§ 1041 to 1047, is unconstitutional, protestant owes no further gift taxes, but if held to be constitutional, the protestant owes all of the proposed additional gift tax.

A hearing on the protest was held before the Commission on March 1, 1956, and the additional tax of $1,160, plus interest, was held due. Claim to the $495 is waived. We shall refer to the parties as Protestant and the Commission.

Section 1041 of the Gift Tax Act, supra, provides in subsection (b) that the tax shall apply to all transactions whereby property rights or interests are 'donatively passed or conferred upon another, regardless of the means or device employed', and shall apply where the transfer is in trust or otherwise, direct or indirect and whether the property is real, personal, tangible or intangible.

Section 1042 provides that the tax shall be computed according to a Rate Schedule, beginning with one per cent of taxable net gift not in excess of $10,000 and increased to ten per cent where gift has a value in excess of $10,000,000.

The protestant asserts three reasons why the Legislature had no right to pass an Act providing for a graduated gift tax. First: Our Legislature had no inherent power to tax and since the graduated gift tax was not provided for in the Constitution the Act providing for such an Act was unconstitutional. Second: Even if there be complete and plenary inherent power to tax without Constitutional empowerment, express empowerment as to certain graduated taxes was intentional exclusion of a graduated gift tax. Third: A graduated gift tax is excluded under the maxim 'expressio unius est exclusio alterius.'

The controlling section of our Constitution is Article X, section 12, which is as follows:

'The Legislature shall have power to provide for the levy and collection of license, franchise, gross revenue, excise, income, collateral and direct inheritance, legacy, and succession taxes; also graduated income taxes, graduated collateral and direct inheritance taxes, graduated legacy and succession taxes; also stamp, registration, production or other specific taxes.'

The protestant has presented an interesting discussion of the chronological development of judicial interpretation of the constitutional power of the Congress of the United States to tax and the 'time-place' therein of the adoption of the Oklahoma Constitution. He cites Section 8 and Clause 4 of Section 9 of Article I of the United States Constitution and Pollock v. Farmers' Loan & Trust Co., 1895, 157 U.S. 429, 15 S.Ct. 673, 39 L.Ed. 759; Stanton v. Baltic Mining Co., 1916, 240 U.S. 103, 36 S.Ct. 278, 60 L.Ed. 546; Knowlton v. Moore, 1900, 178 U.S. 41, 20 S.Ct. 747, 44 L.Ed. 969, and other cases in an effort to show what the thinking of the writers of our Constitution was. We cannot agree with his conclusions that those who wrote our Constitution intended to limit our legislators as to items of taxation when it did provide for graduated income taxes, graduated collateral and direct inheritance taxes, graduated legacy and succession taxes. They wanted to remove all questions as to those things which were in controversy in the courts at that time.

The protestant agrees that a gift tax is an excise tax and is provided for by the Constitution but thinks that the graduated gift tax is not.

Protestant recognizes that this Court had before it the question here presented in Daube v. Oklahoma Tax Commission, 194 Okl. 487, 152 P.2d 687, decided in 1944, but contends that the question in that case does not adequately and thoroughly consider the question presented in the present appeal, and insists that the opinion in the Daube case should be overruled.

No decision handed down subsequent to the Daube case, no statute or constitutional provision adopted since then is cited to justify a re-consideration of the questions decided therein.

Let us consider the three contentions made by protestant. He insists that the Oklahoma Legislature has no inherent power to tax and cites in support of this contention Simpson v. Hill, 128 Okl. 269, 263 P. 635, 56 A.L.R. 706, wherein this Court announced that the Legislature has no inherent power to convene because it has only such powers 'as are given it expressly, or by clear implication, in the Constitution.' This case is relied upon to destroy the holding in the earlier case of In re Harkness' Estate, 83 Okl. 107, 204 P. 911, 42 A.L.R. 399, where it is stated in the first paragraph of the syllabus:

'A state has inherent power to impose an inheritance tax.'

He insists that the above statement in the Harkness case is mere dictum. Dictum or not, we are of the opinion that the...