State ex rel. Wedgwood v. Hubbard
| Decision Date | 25 May 1942 |
| Docket Number | 6996 |
| Citation | 63 Idaho 791,126 P.2d 561 |
| Parties | STATE OF IDAHO, on relation of Geo. W. Wedgwood, Commissioner of Finance of the State of Idaho, and Calvin E. Wright, State Auditor of the State of Idaho, Appellant, v. CORA HUBBARD, Administratrix of the Estate of John W. Kimbrough, Deceased, Respondent |
| Court | Idaho Supreme Court |
TAXATION-INHERITANCE TAX-RATES OF TAXATION, COMPUTATION OF-STATUTES, CONSTRUCTION OF.
1. Under inheritance tax statute providing that when market value of property or interest transferred exceeds $25,000 the tax upon such excess up to $50,000 shall be four per cent. thereof, and on excess over $50,000 and up to $100,000 six per cent. thereof, the four per cent. tax is applicable to the difference between $25,000 and $50,000 and not to $50,000 in excess of the first $25,000. (I. C. A. secs 14-405, 14-406, Sess. Laws, 1935, 1st Ex. Sess c. 56.)
2. Where net taxable value of estate left to decedent's mother as his sole heir, after claims and administration charges and statutory exemption were deducted, was $88,371.35, the estate was subject to inheritance tax of two per cent. on $25,000, four per cent. on $25,000 and six per cent. on $38,371.35. (I. C. A. secs. 14-405, 14-406, Sess. Laws 1935, 1st Ex. Sess. c. 56; 14-407, subd. 2-a.)
3. Generally in construing clause of statute imposing inheritance tax, regard must be had for general scheme of the statute as a whole, and the various provisions of the statute should be so interpreted as to make it a harmonious whole.
4. Inheritance tax laws are special laws and in case of doubt are to be strictly construed against the government and in favor of the taxpayer.
5. The rule of "strict construction," generally applied to operation and effect of statute imposing an inheritance tax and to proceedings thereunder, does not apply to interpretation of the language of the statute, in ascertaining the intention of the legislature, and the real meaning and purpose of the legislature is the thing to be sought, and a fair and reasonable construction, if disclosed, is to be given effect.
6. A contemporary construction of a co-ordinate branch of government charged with duty of enforcing statute is entitled to consideration and carries weight in construction of the statute, since it is a practical and administrative construction and if extended over a period of time, leads to conclusion that the statute has received the tacit approval of the legislature.
7. The weight given to an executive or departmental practice in construing a statute is increased when the legislature has re-enacted the statute in the same words without indicating that the previous construction placed thereon was incorrect.
APPEAL from the District Court of the Seventh Judicial District, in and for the County of Adams. Honorable A. O. Sutton, Judge.
Appeal from judgment determining amount of inheritance tax. Reversed.
Judgment reversed. Costs to appellant.
Bert H. Miller, Attorney General, and D. W. Thomas, Assistant Attorney General, for Appellant.
It is a well settled rule that the contemporaneous construction of a statute by those charged with its execution and application, especially when it has long prevailed, while not controlling, is entitled to great weight. The weight to be given such construction is increased when the legislature, subsequently amends such law, fails in any way to indicate its disapproval of the settled construction of officers and administrative heads in the past. (25 R. C. L. 1043 Sec. 274; Bashore v. Adoff, 41 Idaho 84, 238 P. 534; Ada County v. O. S. L. R. R. Co., 97 P. 534; United Pacific Ins. v. Bakes, 57 Idaho 537; 67 P.2d 1024; Notes: 73 L.Ed. 356, 61; Notes; 84 L.Ed. 54, 58.)
Title 14, Chapter 4, Idaho Code Annotated, as amended, being a revenue statute, should be construed strictly in favor of the purpose or object of the statute--revenue--and strictly against exemptions or exceptions. (70-102 I. C. A.; Salisbury v. Lane, 7 Idaho 370, 63 P. 383.)
Geo. Donart, for Respondent.
Where a doubt exists as to the construction of a statute imposing an inheritance tax, it should be resolved in favor of the person taxed and the statute construed strictly against the taxing power. (61 C. J., page 1626, Section 2413; In re Estate of Ullman, Ann. Cas. 1915C, 321; In re Steehler's Estate, 233 P. 972 (Cal.); People v. Koneig, 85 P. 1129.)
The deceased, John W. Kimbrough, left a gross estate of $ 104,089.99 to his mother, his sole heir. Claims and administration charges amounted to $ 11,718.64, and the exemption of $ 4,000, as provided by section 14-407 (2-a) I. C. A., as amended, left a net taxable value of $ 88,371.35.
This litigation arises out of a conflict as to the manner of computing the inheritance tax due from said estate under sections 14-405 and 14-406 I. C. A., chapter 56 of the 1935 First Extraordinary Session Laws, page 153. [1] The probate court of Adams County determined the amount of tax due under the provisions of 14-405 and 14-406, as amended as follows:
Amount of taxable property $ 88,371.35
Tax on value of property up to $ 25,000 at 2%
2000.00
802.28
Total
$ 3302.28
On appeal the district court affirmed.
The State of Idaho appeals herein, contending the tax should have been computed as follows:
Amount of taxable property $ 88,371.35
Tax on value of property up to $ 25,000 at 2%
Under the state's construction of this statute the inheritance tax due is $ 500 more than the tax found to be due under the respondent's manner of computing the tax. The difference arises out of the construction of the phrase "upon such excess [over $ 25,000] up to $ 50,000," the state maintaining that this refers to the difference between $ 25,000 and $ 50,000, and the respondent contending that this refers to an excess of $ 50,000 over $ 25,000, or the difference between $ 25,000 and $ 75,000.
Subsections "b," "c," "d," and "e," of section 14-406, as amended, refer to the excess taxable at progressive rates as "over" a certain figure and "up to" another figure. If we adopt the respondent's construction of subsection "a" as meaning the excess of $ 50,000 between $ 25,000 and $ 75,000, then subsection "b" must mean upon the $ 50,000 over $ 75,000 and up to $ 125,000, whereas it expressly states "upon such excess, over $ 50,000 and up to $ 100,000, six per cent thereof." Likewise, each of the amounts mentioned in subsequent subsections would be $ 25,000 larger than the stated amount. The statute clearly states that upon the first $ 25,000 worth of the market value of such property the tax shall be 2%; that upon the $ 50,000 worth of property over $ 50,000 and up to $ 100,000, the tax shall be 6%; and upon the property worth over $ 100,000 and up to $ 200,000 the tax shall be 8%. By giving to these provisions the meaning patently intended by the legislature it follows that "upon such excess up to $ 50,000" can mean only that the 4% shall be charged against the $ 25,000 difference between the primary amount of $ 25,000 and the first figure stated in subsection "b," $ 50,000.
"In accordance with general rules, in construing a clause of a statute imposing an inheritance tax, regard must be had for the general scheme of the statute as a whole; the various provisions of the act should be so interpreted as to make it a harmonious whole." (61 C. J. 1625, sec. 2411.)
While the law is as contended by respondent that the inheritance tax laws are special laws and in case of doubt as to their construction are to be strictly construed against the government and in favor of the taxpayer (61 C. J. 1626, sec. 2413), there is this further rule: "The rule of strict construction, ordinarily applied to the operation and effect of a statute imposing an inheritance tax and to the proceedings thereunder, does not apply to the interpretation of the language of the statute in ascertaining the intention of the legislature" (ibid.); and the real meaning and purpose of the legislature is the thing to be sought after, and, a fair and reasonable construction, if disclosed, is to be given effect. (In re Fulham's Estate, 96 Vt. 308, 119 A. 433.)
Furthermore, section 14-406 as now written was adopted in 1929. The 1935 amendment only increased the rate of tax on each progressive amount. Since the adoption of the statute in 1929 the construction urged by the state has been placed upon these sections. [2] As stated in United Pacific Ins. Co. v. Bakes, 57 Idaho 537, at 545, 67 P.2d 1024, the "contemporary construction by a co-ordinate branch of the government, charged with the duty of enforcing the statute, is when called upon by the courts to construe the statute, entitled to consideration and carries weight for two reasons: First, it is a practical and administrative construction of the act; and second, where extended over a period of time leads to the conclusion that such construction being known to the legislature has received its tacit approval as being correct." See also Ada County v. Bottolfsen, 61 Idaho 363, at 374, 102 P.2d 287, and other cases there cited.
The weight given to executive or departmental practice is increased when the legislature re-enacts a statute in the same words and without indicating that the previous construction placed thereupon has been incorrect. (25 R. C. L. 1045, sec. 274; Oden v. Gates, 119 Tex. 76, 24 S.W.2d 381.)
Authorities are cited and argument is made to the effect that statutes are to be strictly construed against exemptions or...
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... ... administrative officers of the State is entitled to great ... weight and will be followed by the Court unless ... Breckenridge v. Johnston, 62 Idaho 121, 108 P.2d ... 833; State ex rel. Wedgwood v. Hubbard, 63 Idaho ... 791, 126 P.2d 561 ... No ... ...