State ex rel. Western Union Telegraph Company v. Minnesota Tax Commission
| Citation | 155 N.W. 1061,132 Minn. 93 |
| Decision Date | 14 January 1916 |
| Docket Number | 19,652 - (252) |
| Parties | STATE EX REL. WESTERN UNION TELEGRAPH COMPANY v. MINNESOTA TAX COMMISSION |
| Court | Supreme Court of Minnesota (US) |
Upon the relation of the Western Union Telegraph Company this court granted its writ of certiorari directed to Samuel Lord J. T. Hale and J. G. Armson, constituting the Minnesota Tax Commission, to review the proceedings of the commission in the matter of the assessment of the telegraph lines and property of relator for the purpose of taxation for the year 1915. Reversed.
Taxation of telegraph companies -- construction of Classification Act -- classification of property.
Laws 1913, chapter 483, classifying for purposes of taxation "all real and personal property subject to a general property tax, and not subject to any gross earnings or other lieu tax," construed and held to apply to the property within the state of telegraph companies.
C. M Ferguson and Francis N. Whitney, for relator.
Lyndon A. Smith, Attorney General, and William J. Stevenson, Assistant Attorney General, for respondent.
Certiorari to review the action of the Minnesota Tax Commission in the matter of the assessment for purposes of taxation for the year 1915 of the property of the Western Union Telegraph Company.
The telegraph company made and filed with the commission the annual statement required by law, showing in detail the property owned by it in this state. After a hearing, the commission determined that the "true cash value of the telegraph lines owned, operated or leased by the Western Union Telegraph Company in the state of Minnesota is the sum of one million four hundred and sixty-eight thousand dollars ($1,468,000)," and assessed the same for purposes of taxation for the year 1915 at the full sum so determined to be the true cash value. It is this action of the commission that relator seeks to have reviewed and reversed by this court.
The question is whether or not Laws 1913, p. 710, c. 483, referred to as the "Classification Act," applies to telegraph companies. If it does not, no fault is found with the valuation fixed by the commission, or with its decision assessing the property of relator at the full valuation. But if the Classification Act applies to the property of telegraph companies, the action of the commission necessarily fails.
Chapter 483, p. 710, Laws 1913, is entitled "An Act to classify property for taxation purposes and to fix the per cent of 'full and true value' at which property in each class shall be assessed." Omitting immaterial portions, the body of the act is as follows:
Section 1. "Classification of real and personal property for taxation purposes. All real and personal property subject to a general property tax and not subject to any gross earnings or other lieu tax is hereby classified for purposes of taxation as follows:"
Class 1. (Iron ore, valued and assessed at 50 per cent of its true and full value.)
Class 2. (Household goods, etc., valued and assessed at 25 per cent of its true and full value.)
Class 3. (Live stock, machinery, unplatted real estate, etc., valued and assessed at 33 1/3 per cent of its true and full value.)
Class 4. "All property not included in the three preceding classes shall constitute class four (4), and shall be valued and assessed at forty (40) per cent of the full and true value thereof.
Section 2. "All acts and parts of acts inconsistent herewith are hereby repealed.
Section 3. "This act shall take effect and be in force from and after January 1st, 1914."
If this act covers the property of telegraph companies, it is plain that such property is within Class 4, and must be valued and assessed at 40 per cent of its full and true value, instead of at 100 per cent thereof, as was decided by the tax commission. If, on the other hand, the act does not cover the property of telegraph companies, such property is to be valued and assessed for the purposes of taxation "at the true cash value thereof" under G.S. 1913, § 2263.
There can be no doubt of the intent of the legislature in passing the so-called "General Classification Act" to classify for purposes of taxation all real and personal property within the state that was subject to a general tax, and not subject to any gross earnings or other lieu tax. Was the property of telegraph companies, when the classification act was passed April 24, 1913, subject to a general property tax? Was such property subject to any gross earnings, or other lieu tax? These are the pivotal questions and must be determined from the statute relating to taxation of the property of telegraph companies as it stood at the time the classification act was passed. This statute is found in R.L. 1905, §§ 1032-1034 (G.S. 1913, §§ 2262-2264), which give the law on the subject as it was enacted by Laws 1891, p. 70, c. 8, and has been ever since. After providing that every telegraph company shall make and file annually with the state auditor a verified statement showing the total number of miles owned, operated or leased within the state, the total number of stations and instruments, the total number of miles in each separate line or division with the number of separate wires thereon and the average number of poles per mile, it is provided (G.S. 1913, § 2263):
"Upon receipt of such statement, the auditor shall lay it before the state board of equalization" (now the tax commission),
Section 2264 provides the method of collection by the state treasurer.
There is no room for doubt that under this law the property of telegraph companies is "subject to a general property tax." It is equally clear that it is not subject to a "gross earnings" tax. The only difficulty is in deciding whether such property was subject to any "other lieu tax." We think it reasonably plain that by the words "or other lieu tax," as used in the Classification Act, the legislature meant a tax or method of taxation adopted in lieu of a general property tax. Were it not for the provision in the act of 1891, carried into the Revised Laws, and existing at the time the classification act was passed, that "such tax shall be in lieu of all other taxes, state and local," there could be no reasonable argument made in favor of the position that the property of telegraph companies was subject to any "lieu tax," or was not covered by the Classification Act. But this provision of the prior. law, and the use of the phrase "or other lieu tax" in the Classification Act, gives an opportunity for a very plausible argument in support of the decision of the commission, an opportunity that has been thoroughly taken advantage of by counsel for the state. This argument is, in brief, that the property of telegraph companies has always been in a class by itself for taxation purposes; that taxes in this state, with the exception of inheritance taxes and poll taxes in villages, are all property taxes, though differing in the method of determining the value; that in every law which has provided for a method of determining the value of property for taxation different from the common method of having the local assessor ascertain and report the value, the legislature has said that the tax shall be "in lieu of all other taxes;" that the legislative intent in adopting the Classification Act was to provide a standard of assessing values for local assessors, and not to provide such a standard in cases where the valuation was not fixed by local assessors, but by some special statutory method, or, as in this case, by the tax commission.
It is true that there has always been a statute specially relating to the assessment and taxation of the property of telegraph companies. By Laws 1867, p. 32, c. 22, such companies paid "an annual tax of forty cents per mile for every mile of route occupied in lieu of all other taxes." From 1881 to 1887, the state board of equalization assessed telegraph lines at their true cash value, and the tax was "in lieu of all other taxes state and local." From 1887 to 1891, telegraph companies paid a two per...
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