Rainier Nat. Park Co. v. Henneford

• Decision Date: 24 May 1935
• Docket Number: 25454.
• Citation: 45 P.2d 617,182 Wash. 159
• Parties: RAINIER NAT. PARK CO. v. HENNEFORD et al.
• Court: Washington Supreme Court

45 P.2d 617

182 Wash. 159

RAINIER NAT. PARK CO. v. HENNEFORD et al.

No. 25454.

Supreme Court of Washington

May 24, 1935

Department 2.

Appeal from Superior Court, Thurston County; John M. Wilson, Judge.

Action by the Rainier National Park Company against Harold H Henneford and others, constituting the tax commission of the state of Washington. From a judgment dismissing the action after demurrer to the complaint was sustained, plaintiff appeals.

Affirmed.

Grosscup & Morrow and Hayden, Metzger & Blair, all of Tacoma, for appellant.

G. W Hamilton and E. P. Donnelly, both of Olympia, for respondents.

BLAKE Justice.

This is an appeal from a judgment dismissing an action for injunctive relief upon sustaining a demurrer to the complaint. The complaint challenges the right of the state to collect from plaintiff the tax imposed on businesses and occupations under Laws of 1933, c. 191, p. 869.

Appellant is a corporation organized and existing under the laws of West Virginia. On April 8, 1928, the Secretary of the Interior of the United States entered into a contract with appellant, by the terms of which the latter was granted, for a term of twenty years, the right to establish, maintain, and operate facilities for the accommodation and entertainment of visitors to Rainier National Park. The concessions included were the rights to operate and maintain hotels, inns, lodges camps, playgrounds, and facilities for transportation. By the terms of the contract, the appellant obligated itself to exercise its rights 'in such manner as the Secretary shall deem in every respect satisfactory and designed to promote the object for which the park was created and established.' Moreover, it was agreed that the appellant should file with the Secretary a tariff or schedule of charges to be made for the several kinds of service given and that such tariff should be subject to such modifications 'not inconsistent with a reasonable profit on the investment of the company in the park' as the Secretary might see fit to make.

The objections of appellant to the tax, as we understand counsel's argument, are twofold: First, that the imposition sought to be levied under Laws of 1933, c. 191, p. 869, is a license tax which the state has no power to impose upon appellant, because its rights derive from the government of the United States; second, that, under the terms of its contract with the Secretary of the Interior, appellant is a governmental agency, and therefore exempt from taxation by the state.

I. While the tax imposed by Laws of 1933, c. 191, p. 869, is an excise and not a property tax ( State ex rel. Stiner v. Yelle, 174 Wash. 402, 25 P.2d 91), it is in no sense a license tax. It is not imposed as a prerequisite to entering into, or for the regulation of, business, but solely for revenue purposes. See Cooley on Taxation (4th Ed.) §§ 26, 1688. From such a tax a private corporation is not exempt, even though the rights it exercises may be, in whole or in part, derived from the federal government. Federal Compress & Warehouse Co. v. McLean, 291 U.S. 17, 54 S.Ct. 267, 269, 78 L.Ed. 622; Pacific Telephone & Telegraph Co. v. City of Seattle, 172 Wash. 649, 21 P.2d 721.

II. Nor does the fact that appellant derives its rights under a contract which reserves supervisory powers in the Secretary of the Interior make of it a federal instrumentality, or exempt its business from state taxation. Thomson v. Union Pacific R. Co., 9 Wall. (76 U. S.) 579, 591, 19 L.Ed 792; Baltimore Shipbuilding & Dry Dock Co. v....