State v. Nelson

• Decision Date: 03 March 1923
• Citation: State v. Nelson, 36 Idaho 713, 213 P. 358 (Idaho 1923)
• Parties: STATE, Appellant, v. PARLEY NELSON, Respondent
• Court: Idaho Supreme Court

213 P. 358

36 Idaho 713

STATE, Appellant, v. PARLEY NELSON, Respondent

Supreme Court of Idaho

March 3, 1923

CONSTITUTIONAL LAW - POWER OF THE LEGISLATURE - FINANCE AND REVENUE-CITIES AND VILLAGES-THEIR POWER TO TAX-DISTINCTION BETWEEN REGULATORY AND REVENUE TAXES.

1. The power of the legislature with reference to all matters of taxation, as well as of legislation generally, is plenary except as limited by the organic law.

2. Sec 2 of art. 7 of the constitution authorizes the legislature to provide such revenue as may be needful, by levying a uniform tax upon all property according to its value. It may also impose a license tax upon natural or artificial persons other than municipal corporations, and may also levy a per capita tax.

3. Sec 6 of art. 7 prohibits the legislature from imposing taxes for the purposes of any county, city, town or other municipal corporation, but authorizes it to invest the corporate authorities thereof, respectively, with the power to assess and collect taxes for all purposes of such corporation.

4. The term "taxes" as used in this section has reference only to property taxation, where the tax is assessed and collected upon property values, in the usual and ordinary manner.

5. The authority given the legislature by sec. 2 of art. 7 to provide revenue by other means than a valuation tax does not authorize it to delegate its taxing power, except in the manner and to the extent provided by sec. 6 of said article.

6. The legislative power of the state is by article 3 of the constitution vested in the Senate and House of Representatives, and it is a fundamental principle of representative government that except as authorized by the organic law, the legislative department cannot delegate any of its power to make laws to any other body or authority.

7. While municipalities such as cities and villages may pass regulatory measures which may incidentally raise revenue, such municipalities cannot in the exercise of their police power levy and collect a license tax upon individuals or businesses, or levy a per capita tax, for the purpose of raising revenue.

8. A distinction between a license tax for regulatory purposes and one for raising revenue: If imposed for regulation, authorized by sec. 2, art. 12, of the constitution, the license fees demanded must bear some reasonable relation to the cost of such regulation; but if it be imposed under the general taxing power granted by the organic law, the amount of such tax rests wholly within the discretion of the power levying the tax.

APPEAL from the District Court of the Ninth Judicial District, for Madison County. Hon. James G. Gwinn, Judge.

Prosecution for violation of a city ordinance. From judgment of the district court sustaining demurrer and discharging defendant, the state appeals. Affirmed.

Affirmed.

Roy L. Black, Attorney General, Jas. L. Boone, Assistant Atty. Genl., C. J. Taylor, L. Tom Perry, Otto E. McCutcheon and O. E. McCutcheon, for Appellant.

It is doubtful if any constitutional provision should be held void by implication. (Noble v. Bragaw, 12 Idaho 265, 85 P. 903; Gillesby v. Board Co. Commrs., 17 Idaho 586, 107 P. 71; State ex rel. Evans v. Steward, 53 Mont. 18, 161 P. 309; Hilger v. Moore, 56 Mont. 146, 182 P. 477.)

Legislative power in granting charters to municipalities is limited only by the constitution and the capability of receiving by such corporation. (Barnes v. District of Columbia, 91 U.S. 540, 23 L.Ed. 440; 1 McQuillin, Munic. Corp., sec. 121, p. 295.)

Sec. 3945, C. S., is protected by contemporary interpretation and long acquiescence. (12 C. J. 714, 715, and notes.)

The constitutional question is not involved. (Const., sec. 2, art. 12; In re Francis, 7 Idaho 98, 60 P. 561.) That provision only in Idaho, California and Washington. (See also, subd. 12, sec. 69, Act of 1893, now sec. 3948, C. S.)

A license to regulate is to be construed as license to raise revenue. (3 McQuillin, Munic. Corp., sec. 989, p. 2199; Ex parte Frank, 52 Cal. 606, 28 Am. Rep. 642; San Jose v. San Jose & S.C. R. Co., 53 Cal. 476; Fleetwood v. Read, 21 Wash. 547, 58 P. 665; Abraham v. Rosenburg, 55 Ore. 359, 105 P. 401; Salt Lake v. Christensen, 34 Utah 38, 95 P. 523, 17 L. R. A., N. S., 898.)

C. W. Poole and Geo. W. Worthen, for Respondent.

The legislature has plenary power, save as limited by the constitution, which may declare the prohibition, by direct inhibition or by such language (and provisions) as will clearly and unequivocally imply that there could be no other intendment. (Gillesby v. Board of County Commrs., 17 Idaho 586, 107 P. 71; McDonald v. Doust, 11 Idaho 14, 81 P. 60; Atkinson v. Board of Commrs., 18 Idaho 282, 108 P. 1046, 28 L. R. A., N. S., 412; Achenbach v. Kincaid, 25 Idaho 768, 140 P. 529, 69 L. R. A. 220; State v. Cochran, 55 Ore. 157, 104 P. 419.)

Secs. 2 and 6 of art. 7 of the constitution of Idaho impliedly prohibit the legislature from delegating to a city the right to impose a license tax for revenue. (State v. Camp Sing, 18 Mont. 128, 44 P. 516; State v. Union Central Life Ins. Co., 8 Idaho 240, 67 P. 647; Johnson v. Great Falls, 38 Mont. 369, 16 Ann. Cas. 974, 99 P. 1059.)

The doctrine of contemporary interpretation and long acquiescence has no application in this case, where the constitutional provision is clear. (12 C. J., sec. 68, pp. 715-717, and notes.)

The position of respondent that license taxes for raising revenue are for the legislature is supported by legislative construction. Ever since the adoption of our constitution the legislature has, by its enactment of license taxes, recognized the principle that the subject of license taxes is for the legislature. (State v. Camp Sing, supra; In re Kessler, 26 Idaho 764, Ann. Cas. 1917A, 228, 146 P. 113, L. R. A. 1915D, 322, and cases cited at p. 774.)

WILLIAM A. LEE, J. Dunn and William E. Lee, JJ., concur.

OPINION

WILLIAM A. LEE, J.

--The city of Rexburg passed an ordinance entitled "An ordinance for the raising of revenue by levying and collecting a license tax on certain occupations, trades, businesses, vocations and employments transacted, engaged in or carried on within the corporate limits of the city of Rexburg, Madison county, Idaho, etc." This ordinance, from its terms, is for the purpose of raising revenue and not for the purpose of regulation, for in addition to its title stating that it is for the purpose of raising revenue, section 2 thereof provides that "hereafter the following license tax for the purpose of raising revenue shall be due and paid to the city of Rexburg." This ordinance then classifies the various trades, occupations, professions and classes of business that shall be so licensed thereunder, and specifies the amount which each in its class shall pay. Section 5 provides that each physician and surgeon must pay a license tax of $ 5 per quarter.

Respondent Parley Nelson was a regularly licensed and practicing physician under the state law, and was engaged in the practice of his profession in said city when a demand was made upon him for the payment of this license tax. Upon his refusal to pay the same, he was informed against in the police court and fined for a violation of this ordinance. From this judgment he appealed to the district court, which sustained a demurrer to the complaint and discharged him from custody. Thereupon the city of Rexburg brings the cause here on appeal in the name of the state, as required by the statute in this class of actions. The record presents for our determination the single question as to the validity of this ordinance, appellant's contention being that the court below erred in holding said ordinance invalid.

The reason for the lower court sustaining the demurrer to the complaint and discharging the defendant does not appear in the record, but it seems clear that the court must have based its decision upon the ground that C. S., sec. 3945, in so far as it attempts to authorize the governing boards of cities and villages to levy and collect taxes upon its citizens in this manner, is not authorized by either sec. 2 or sec. 6 of art. 7 of the constitution, and that said section of the statute is therefore invalid, in so far as it attempts to invest a municipal corporation with the power to impose a license or per capita tax upon the inhabitants of any city or village within the state, or upon any business carried on therein.

C. S., sec. 3945, provides that a municipal corporation may: "Raise revenue by levying and collecting a license tax on any occupation or business within the limits of the municipality, and to regulate the same by ordinance. All such taxes shall be uniform in respect to the classes upon which they are imposed. Provided, however, that all scientific and literary lectures and entertainments shall be exempt from such taxation."

Article 7 of the constitution is entitled "Finance and Revenue." It governs the entire subject of taxation, and defines the limitations placed upon the legislature in the matter of raising revenue or authorizing any of the subdivisions of the state to do so. Sec. 2 of this article provides that: "The legislature shall provide such revenue as may be needful, by levying a tax by valuation, so that every person or corporation shall pay a tax in proportion to the value of his, her or its property, except as in this article otherwise provided. The legislature may also impose a license tax (both upon natural persons and upon corporations, other than municipal, doing business in this state); also a per capita tax: Provided, the legislature may exempt a limited amount of improvements upon land from taxation."

Section 5 provides that: "All taxes shall be uniform upon the same class of subjects within the territorial limits...