Town of Newville v. Price
| Decision Date | 11 July 1979 |
| Citation | 372 So.2d 1314 |
| Parties | TOWN OF NEWVILLE et al. v. Henry PRICE. Civ. 1770. |
| Court | Alabama Court of Civil Appeals |
James W. Rane, Abbeville, for appellants.
C. H. Espy, Jr., Dothan, for appellee.
This is an appeal from a decision by the Circuit Court of Henry County holding an ordinance of the Town of Newville invalid in its application to the plaintiff, Henry Price, and enjoining the defendants from collecting the license fees prescribed by the ordinance. We affirm.
On October 25, 1976, the Town of Newville, Henry County, Alabama passed an ordinance levying a tax on the sale of brewed or malt beverages of five (5) cents for each can or bottle sold, stored or delivered within the corporate limits of the Town and two and one-half (2.5) cents for each can or bottle sold, stored or delivered within the police jurisdiction of the Town. At the time of the passage of the ordinance, there were two businesses within the Town limits subject to the tax. There was no such business within the police jurisdiction outside the Town limits. The plaintiff owned and operated one of the businesses within the corporate limits of Newville. Plaintiff subsequently moved his business to a new site beyond the corporate limits sign but within the police jurisdiction of Newville. A subsequent survey commissioned by the Town of Newville showed that the corporate limits in fact pass through plaintiff's place of business.
Plaintiff brought this action for declaratory judgment in the Circuit Court of Henry County, paying into court the amount alleged to be due but seeking to have the ordinance levying the tax declared invalid and the defendants restrained from collecting the tax. The circuit court granted judgment for plaintiff. The Town of Newville appeals.
Since the case of Van Hook v. City of Selma, 70 Ala. 361 (1881), the Alabama courts have consistently held that cities are not authorized to levy a license tax on businesses located within the police jurisdiction but outside the city limits for purposes of raising general revenue. Rather, the amount of the tax must reflect reasonable compensation for the expense of municipal supervision over the particular business. City of Hueytown v. Burge, 342 So.2d 339 (Ala.1977); Franks et al. v. City of Jasper, 259 Ala. 641, 68 So.2d 306 (1953); Hawkins v. City of Prichard, 249 Ala. 234, 30 So.2d 659 (1947); Alabama Power Co. v. City of Carbon Hill, 234 Ala. 489, 175 So. 289 (1937). When such a license tax is enacted, the ordinance is presumed reasonable unless the contrary appears on its face or is shown by proper evidence. This presumption places the burden upon the licensee to demonstrate invalidity. Franks et al. v. City of Jasper, supra. The licensee must show that the city's decision to tax was an arbitrary one and not based on any effort to relate the fee charged to the reasonable cost of supervision. City of Hueytown v. Burge, supra.
The defendant contends that when there are no businesses located in the police jurisdiction at the time the ordinance is passed, the city has no duty to relate fees to be charged in the police jurisdiction to the cost of supervision. We do not agree. The Supreme Court of Alabama in Hawkins v. City of Prichard, supra, stated that ...
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...State v. Sanderson Equipment Co., 380 So.2d 298 (Ala.Civ.App.1979), cert. denied, 380 So.2d 299 (Ala.1980); Town of Newville v. Price, 372 So.2d 1314 (Ala.Civ.App.1979). A municipality owes the residents of, and businesses located in, its police jurisdiction, the duty "to provide for the sa......
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...State v. Sanderson Equipment Co., 380 So.2d 298 (Ala.Civ.App.1979), cert. denied, 380 So.2d 299 (Ala.1980); Town of Newville v. Price, 372 So.2d 1314 (Ala.Civ.App.1979). Under that statute, a municipality may assess a license tax against businesses located outside the corporate limits of th......
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