State ex rel. Meyer v. Story

• Decision Date: 04 May 1962
• Docket Number: No. 35205,35205
• Citation: 173 Neb. 741,114 N.W.2d 769
• Parties: STATE of Nebraska ex rel. Clarence A. H. MEYER, Attorney General, Relator, v. Roscoe E. STORY, as County Assessor of Adams County, and Randolph Oldsmobile Company, a corporation, and Mowbray Buick Rambler, Inc., a corporation, Respondents.
• Court: Nebraska Supreme Court

Page 769

114 N.W.2d 769

173 Neb. 741

STATE of Nebraska ex rel. Clarence A. H. MEYER, Attorney General, Relator, v. Roscoe E. STORY, as County Assessor of Adams County, and Randolph Oldsmobile Company, a corporation, and Mowbray Buick Rambler, Inc., a corporation, Respondents.

No. 35205.

Supreme Court of Nebraska.

May 4, 1962.

Syllabus by the Court

1. Taxes must be levied by valuation uniformly and proportionately upon all tangible property. Article VIII, section 1, Constitution of Nebraska.

2. The rule of uniformity prescribed by Article VIII, section 1, of the Constitution of Nebraska, inhibits the Legislature from discriminating between taxpayers in any manner whatever.

3. The Legislature does not have the power to release or discharge a tax, such action being prohibited by Article VIII, section 4, of the Constitution of Nebraska.

4. Laws 1961, chapter 382, section 1, page 1173, which amended section 77-1242, R.S.Supp., 1959, is unconstitutional as in violation of Article VIII, section 1, and Article VIII, section 4, of the Constitution of Nebraska.

Clarence A. H. Meyer, Atty. Gen., Lincoln, for relator.

Don Brock, Hastings, Jack Devoe, James E. Ryan, Lincoln, for respondents.

Heard before CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH, and BROWER, JJ., and SCHEELE, District Judge.

MESSMORE, Justice.

This is an original action brought under the Uniform Declaratory Judgments Act, sections 25-21,149 to 25-21,164, R.R.S.1943.

In the instant case it is not questioned that this court has jurisdiction to determine the constitutionality of Legislative Bill No. 489, Laws 1961, c. 382, § 1, p. 1173, which amended section 77-1242, R.S.Supp., 1959.

The relator's petition alleged in substance that the Seventy-second Session of the Nebraska Legislature in 1961 passed L.B. 489, which amended section 77-1242, R.S.Supp., 1959, by adding thereto the language italicized in the following quotation of said section: 'Dealers in motor vehicles shall report their vehicles on hand January 1 at 12:01 a. m. of each year as merchandise, describing each vehicle thus returned for ad valorem tax assessment, in the same manner and at the same proportion of actual value as other merchandise is assessed. When a motor vehicle which has been reported for taxation is sold to and registered by a Nebraska resident, prior to July 1, the dealer shall file a copy of the invoice required by section 60-617 with the county assessor, together with proof of such registration, and such dealer shall then be credited on his ad valorem tax assessment with the proportionate amount of tax for the balance of the registration year.'

The relator's petition further alleged that L.B. 489 became law without the signature of the Governor June 22, 1961, and on that date the Governor requested that an action be brought by the Attorney General to determine the constitutionality of such legislation. The petition then set forth certain reasons why L.B. 489 is unconstitutional. Those we deem pertinent to a determination of this action will be discussed in the opinion.

The respondents motor vehicle dealers denied that the act was unconstitutional, and affirmatively asserted it was constitutional.

The answer of the respondent county assessor did not deny facts that had been alleged, and alleged that his only interest in the controversy was whether or not the act was constitutional so that the county assessors would know how to perform their official duties.

The sole issue involved is the constitutionality of L.B. 489, and the relator has filed a motion for judgment on the pleadings which is now before this court.

In 1952, at the general election held that year, the voters of the state approved a constitutional amendment whereby Article VIII, section 1, of this state's Constitution was amended to read in part as follows: 'Taxes shall be levied by valuation uniformly and proportionately upon all tangible property and franchises, except that the Legislature may provide for a different method of taxing motor vehicles; * * *.'

In 1953, the Legislature, pursuant to the 1952 amendment to the Constitution, adopted a procedure for taxing motor vehicles in part as follows.

Section 77-1240.01, R.S.Supp., 1959, provides in part: 'Beginning January 1, 1954, in addition to the registration fees provided by Chapter 60, article 3, a motor vehicle tax is hereby imposed on motor vehicles registered for operation upon the highways of this state, * * * which motor vehicle tax shall be in lieu of all ad valorem taxes to which such motor vehicles would otherwise be subject.'

Section 77-1240.02, R.R.S.1943, provides: 'In the event an application is made after the beginning of the registration year for registration of any motor vehicle not previously registered by the applicant in this state, the motor vehicle tax for such year on such motor vehicle shall be reduced by one-twelfth for each full month of the registration year already expired as of the date such vehicle was acquired. An application shall first be submitted to the county assessor on a form prescribed by the Auditor of Public Accounts who shall compute the tax and certify the same to the county treasurer.'

Section 77-1240.03, R.R.S.1943, provides: 'Upon the transfer of ownership of any motor vehicle, the transferor shall be credited with the number of unexpired months remaining in the registration year; Provided, that where such vehicle is transferred within the same calendar month in which acquired, no refund shall be allowed for such month. Should such transferor acquire another motor vehicle at the time of such transfer, such transferor shall have the credit herein provided applied toward payment of the motor vehicle tax then owing and otherwise such transferor shall file a claim with the county assessor upon a form prescribed by the Auditor of Public Accounts. The county assessor shall certify to the county treasurer the amount of tax refund and the taxing unit where the motor vehicle is registered. The county treasurer shall make payment to the claimant from the undistributed motor vehicle taxes of the taxing unit where the tax money was originally distributed.'

Section 77-1241.01, R.S.Supp., 1959, provides: 'Motor vehicles not subject to a motor vehicle tax, including dealers' motor vehicles on hand on January 1 at 12:01 a. m. and not registered for operation on the highways, shall be subject to the ad valorem tax on tangible property; such tax shall be computed according to the schedule of values fixed by the State Board of Equalization and Assessment; Provided, that in the event a motor vehicle which has been assessed for ad valorem tax purposes, except dealers' motor vehicles on hand January 1 at 12:01 a. m., is later registered during the registration year for which taxes have been assessed, the owner against whom such ad valorem taxes have been assessed shall be credited with the proportionate amount for the period during which the motor vehicle tax has been paid.'

The phrase 'ad valorem' means literally 'according to the value,' and is used in taxation to designate an assessment of taxes against property at a certain rate upon its value. See, Powell v. Gleason, 50 Ariz. 542, 74 P.2d 47, 114 A.L.R. 838; State v. Wynne, 134 Tex. 455, 133 S.W.2d 951.

The procedure adopted by the 1953 Legislature shown by the above-cited sections of the statutes, has continued to be followed. There have been a few minor changes made in these statutes by the Legislature which have not changed this procedure. Under this procedure, a private owner of a motor vehicle who buys such a vehicle has the tax on it reduced by one-twelfth for each month that has expired at the time he acquired the motor vehicle. In the event the private individual sells his motor vehicle, he obtains a refund of taxes based upon the number of months remaining in the year, as indicated by one of the preceding sections of the statutes. A motor vehicle in the hands of a private owner is taxed for a full 12 months.

Dealers are required to list their motor vehicles on hand at 12:01 a. m. on January 1 each year, and the following November they pay the tax on those motor vehicles for the full year. However, a motor vehicle dealer does not have to pay any tax on any motor vehicle he owns at any time during the year if he at any time in the month of January sells those motor vehicles he listed on January 1 of the year. He does not pay any tax on motor vehicles he acquires after he has listed his stock of motor vehicles at 12:01 a. m. January 1 in each year. A motor vehicle dealer may sell any number of motor vehicles during January of each year and by so doing avoid taxes on such motor vehicles.

The foregoing is an aid in putting L.B. 489 in its proper perspective. However, the constitutionality of the procedure in taxing motor vehicle dealers prior to the adoption of L.B. 489 is not being questioned in this action.

When the constitutional amendment of 1952 authorized the Legislature to provide 'a different method of taxing motor vehicles,' it did not authorize it to provide a different method of taxing motor vehicle dealers.

Article VIII, section 1, of the Constitution of this state, is in part as follows: 'The necessary revenue of the state and its governmental subdivisions shall be raised by taxation in such manner as the Legislature may direct. Taxes shall be levied by valuation uniformly and proportionately upon all tangible property and franchises, except that the Legislature may provide for a different method of taxing motor vehicles; * * *.'

The relator contends that the Legislature may not withdraw any property from the principle of uniformity of taxation, and one owner of property cannot be compelled to pay a greater proportion of taxes according to the value of his property than another property owner of the same class is required to pay.

The relator argues that a private owner of a motor vehicle pays taxes on such vehicle all the...