Title Guarantee Loan & Trust Co. v. State
Decision Date | 24 May 1934 |
Docket Number | 3 Div. 102. |
Citation | 228 Ala. 636,155 So. 305 |
Parties | TITLE GUARANTEE LOAN & TRUST CO. v. STATE. |
Court | Alabama Supreme Court |
Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.
Appeal to the circuit court by the Title Guarantee Loan & Trust Company from an assessment for taxation made by the State Tax Commission. From the decree, complainant appeals.
Affirmed.
Facts showed that Title Guarantee Loan & Trust Company employed moneyed capital in substantial competition with loan and investment features of national banks, making company subject to excise tax imposed by statute for privilege of conducting business employing moneyed capital coming into competition with business of national banks (Gen.Acts 1932 [Ex.Sess.] p 107).
The appeal is taken from the decree of the circuit court of Montgomery county, in equity, rendered upon appeal to that court to review an assessment of an excise tax against appellant, made by the State Tax Commission pursuant to the Act of October 22, 1932, levying an excise tax on the business of banking and financial institutions. Gen. Acts 1932 (Ex. Sess.), p. 107.
The cause was tried on an agreed statement of facts, as follows:
1932 ad valorem taxes on abstract books, office equipment and other
personal property ................................................... $972.00
1932 State Corporation franchise tax ................................... 400.00
1932 State Corporation permit .......................................... 100.00
leaving, according to contention of appellant, no tax payable upon said return.
On the hearing the trial court sustained the assessment, except that one item of $959.20, income from Alabama Bridge Corporation bonds, was stricken as part of the net income upon which the excise tax is to be calculated, thus reducing the tax to $956.36.
Smyer, Smyer & Bainbridge, of Birmingham, for appellant.
Thos. E. Knight, Jr., Atty. Gen., and Frontis H. Moore, Asst. Atty. Gen., for the State.
The constitutionality of the statute (Gen. Acts 1932, Ex. Sess., p. 107) is questioned upon the ground that the tax therein levied is actually an income tax; that income is property, and the tax imposed is in excess of the ad valorem tax rate limited by section 214 of the Constitution. Eliasberg Bros. Mercantile Co. v. Grimes, 204 Ala. 492, 86 So. 56, 11 A. L. R. 300.
The act specifically defines the tax levied to be "an excise tax for the privilege of engaging in this State in the business of banking and of conducting a financial institution, as in this Act defined, and of conducting a business employing moneyed capital coming into competition with the business of national banks measured by its net income for such taxable year at the rate of five per cent. of such net income." Section 3. The same intent is expressed in the title and throughout the body of the act.
Our decisions have long recognized the distinction between a direct property tax and a tax on the privilege of doing business in which such property is employed.
Among many cases we cite, as illustrative, the cases of Smith v. Court of County Commissioners, 117 Ala. 196, 23 So. 141; Windham v. State, 16 Ala. App. 383, 77 So. 963 (Id., 202 Ala. 697, 79 So. 877); Mills v. Court of Com'rs of Conecuh County, 204 Ala. 40, 42, 85 So. 564.
In fixing the measure of the excise tax the Legislature may, and should, have regard to the value of the privilege to the taxpayer. The gross income from the business has been recognized for a third of a century as a legitimate basis...
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