State ex rel. Pfost v. Boise City

• Citation: 57 Idaho 507,66 P.2d 1016
• Decision Date: 25 March 1937
• Docket Number: 6380
• Parties: STATE on the Relation of EMMITT PFOST, Commissioner of Law Enforcement, Appellant, v. BOISE CITY, a Municipal Corporation, Respondent
• Court: Idaho Supreme Court

66 P.2d 1016

57 Idaho 507

STATE on the Relation of EMMITT PFOST, Commissioner of Law Enforcement, Appellant, v. BOISE CITY, a Municipal Corporation, Respondent

No. 6380

Supreme Court of Idaho

March 25, 1937

GASOLINE TAX-LIABILITY OF MUNICIPALITIES.

1. Statute requiring applicant for gasoline dealer's permit to file a bond did not apply to municipality, since municipality could not be effective applicant for such permit, and statute expressly stated no bond was required where municipality imported fuel for its own use.

2. That permit, bond, and penal provisions of gasoline tax law were inapplicable to municipalities would not defeat balance of law as applied to municipalities, unless such provisions were so inseparably a part of entire law that legislature would not have made law applicable to municipalities without including such provisions.

3. Municipality could not escape payment of gasoline tax on gasoline imported from outside the state, and used by municipality in its vehicles, on ground that municipality did not use state highways and therefore was being taxed to keep up state activity, since municipality received benefits from surrounding state highways.

4. Municipality importing gasoline from outside of state and using gasoline in municipally owned vehicles held liable for gasoline tax, notwithstanding that permit, bond and penal provisions of gas tax law were inapplicable to municipality.

APPEAL from the District Court of the Third Judicial District for Ada County. Hon. Charles E. Winstead, Judge.

Appeal from judgment of court sustaining demurrer and entering judgment of dismissal. Reversed.

Judgment reversed. Costs to appellant.

J. W Taylor, Attorney General, Bert H. Miller, former Attorney General, and Ariel L. Crowley, Assistant Attorney General for Appellant.

This court has expressly held the motor fuels act applicable to municipal corporations. (Independent School Dist. v Pfost, 51 Idaho 240, 4 P.2d 893, 84 A. L. R. 820; City of Burley v. Pfost, 51 Idaho 255, 4 P.2d 898.)

The language of the motor fuels act in force when construed in Independent School District v. Pfost, and City of Burley v. Pfost, supra, has been modified to conform to the terms of those decisions (Chapters 46, 1933, 172, 1923, sess. Laws; chapter 7, Title 48, I. C. A.).

Municipal corporations in Idaho may be subjected to such burdens as the legislature may see fit to impose, barring only limitations imposed by the Constitution. (Sandpoint W. & L. Co. v. Sandpoint, 31 Idaho 498, 173 P. 972, L. R. A. 1918F, 1106; Vineyard v. City Council, 15 Idaho 436, 98 P. 422.)

Thornton D. Wyman and Z. Reed Millar for Respondent.

The legislature is prohibited from imposing a license tax upon municipal corporations. (Sec. 2, article 7, Idaho Const.)

The tax must be for the use of the public of the district taxed; and one taxing district cannot be taxed for the benefit of another. (State v. Board of Commrs. of Douglas Co., 109 Neb. 35, 189 N.W. 639; Smithberger v. Banning, 129 Neb. 651, 262 N.W. 492, 100 A. L. R. 686; State v. Board of Commrs. of Allen County, 124 Ohio 174, 177 N.E. 271.)

If the excise is on a municipal function, even though on a proprietary function the rule as to exception, not exemption, prevails. (Idaho Falls v. Pfost, 53 Idaho 247, 23 P.2d 245; State v. City of Montgomery, 228 Ala. 93, 151 So. 856.)

GIVENS, J. Morgan, C. J., Holden, Ailshie, and Budge, JJ., concur.

OPINION

GIVENS, J.

Boise City purchased at Linnton, Oregon, imported and used 10,066 gallons of gasoline in motor vehicles operated by Boise City allegedly "upon the public highways and streets within the State of Idaho" upon which it refused to pay the State the tax of $ .05 per gallon as demanded by appellant under chapter 46, 1933 Session Laws, page 60, on the ground that it was not a "dealer" as defined in said chapter, and therefore not subject to the provisions thereof, and that the legislature did not intend by the act to have the word "dealer" apply to a municipality, on which theory the trial court sustained a general demurrer to appellant's complaint.

The State concedes in its brief that section 2 of the act requiring a permit and the payment of, in effect a license fee of $ 5 therefor, does not apply to the city as otherwise violative of section 2, article 7 of the Constitution.

Section 3 of the act provides as follows:

"Every applicant for a dealer's permit, except municipal corporations importing motor fuels solely for their own use, shall file with the commissioner a bond. . . ."

It will be noted that the bond is not required of every dealer, but of every "applicant" for a dealer's permit. The State having conceded that the permit provision does not apply to a municipal corporation, section 3 does not apply to a municipal corporation because in the first instance, if a permit could not be required, it could not be legally issued, and the city therefore could not be an effective applicant therefor. In the second place, where the city imports fuel for its own use, the statute expressly states no bond is required.

Sections 4, 6, 7, 8, and 9, provisions dealing with phases of the permit and bond sections, are eliminated from the operation of the act as to municipalities because their supporting conditions precedent do not apply.

Section 20 subjects a dealer, which if the act applies to, includes municipal corporations, for violation of the act, to criminal prosecution punishable by fine and imprisonment. Conceding without deciding that the fine might be applicable to a municipal corporation, there is no statute fixing the criminal responsibility of the officers of a municipal corporation for the acts of a municipal corporation, or at least none has been called to our attention, whereby such officer or officers could be incarcerated as perhaps officers of a private corporation could be. To consider that a municipal corporation therefore comes within the definition of "dealer" as stated by the act, and under the provisions of the act, other than those indicated perforce eliminated, we must consider that the legislature would have passed the act as thus reduced, i. e., without the permit, bond, and penal provisions, which we should do unless such provisions are so inseparably a part of the entire act, that the legislature would not have passed the act making the tax applicable to gasoline imported and used by a municipal corporation without these enforcing and regulatory sections, and since other provisions entirely adequate to enforce payment remain, as demonstrated by this very action herein, and the central and main object of the act is the $ .05 tax, credited in the main to the state highway fund, such eliminations do not as to this phase defeat the balance of the statute, if applicable. (Johnson v. Diefendorf, 56 Idaho 620, 57 P.2d 1068.)

Prior to this act, the statute of 1923 as amended in 1927 and 1929 was held to authorize the collection by the sellers of gasoline within the State, of a similar gallonage imposition considered an excise tax, from municipalities. ( Independent School Dist. v. Pfost, 51 Idaho 240, 4 P.2d 893, 84 A. L. R. 820.) It is true there was no question there of the municipality importing gasoline from without the State. The imposition of the tax however though indirect, because paid in the first instance by the dealer, but nevertheless an ultimate exaction from the municipality as consumer, was held not to be unconstitutional. If the city's construction of the 1933 act be given force and effect, it results in this situation: That a municipality which buys its gasoline within the State pays, to the dealers and through the dealers, the State $ .05 per gallon tax. If as in the case at bar, the municipality buys the gasoline from without the State, it does not so pay the tax. Did the legislature intend this result? South Dakota, construing a somewhat similar statute and considering the precise result, has held to the contrary. State v. City of Sioux Falls, 60 S.D. 330, 244 N.W. 365, quoting with approval City of Portland v. Kozer, 108 Ore. 375, 217 P. 833, which was in turn quoted with approval by this court in Independent School Dist. v. Pfost, 51 Idaho 240 at 253, 254, 4 [57 Idaho 511] P.2d 893, 84 A. L. R. 820, distinguished by this court in the consideration of the kilowatt tax in City of Idaho Falls v. Pfost, 53 Idaho 247, 23 P.2d 245, and the construction of the 1923 act set forth by the court in Independent School Dist. v. Pfost, supra, was clearly correct:

"A property tax cannot be levied in Idaho against the property of the United States, the state, counties, towns, cities and other municipal corporations because such property is exempted by sec. 4, art. 7, of the State Constitution. This exemption of property from taxation where not expressed in the Constitution or legislative act will generally be assumed in the absence of the expression of a clear intent not to exempt it. . . .

"However, this rule applies only to property taxation, and does not apply to excise or privilege taxes. . . ."

Crockett v. Salt Lake County, 72 Utah 337, 270 P. 142, 60 A. L. R. 867, where a statute quite similar in terms was considered, held the statute applicable to the municipality on the theory of City of Portland v. Kozer, supra, followed with approval in Independent School Dist. v. Pfost, supra, and distinguished as to the statute considered in City of Idaho Falls v. Pfost, supra, at page 262 (Idaho Report):

"Appellant relies on Independent School Dist. v. Pfost, supra and the similarity of the language used, as declaratory by the court of the applicability of this statute to municipal corporations. It will, however, be observed that the requirements of sec. 3 herein must apply, if at all, to...