Town of Somerton v. Moore, Civil 4454

• Decision Date: 01 December 1941
• Docket Number: Civil 4454
• Citation: 58 Ariz. 279,119 P.2d 239
• Parties: TOWN OF SOMERTON, a Municipal Corporation, Petitioner, v. THAD MOORE, D. C. O'NEIL and WARREN PETERSON, as Members of the State Tax Commission of Arizona, Respondents
• Court: Arizona Supreme Court

119 P.2d 239

58 Ariz. 279

TOWN OF SOMERTON, a Municipal Corporation, Petitioner, v. THAD MOORE, D. C. O'NEIL and WARREN PETERSON, as Members of the State Tax Commission of Arizona, Respondents

Civil No. 4454

Supreme Court of Arizona

December 1, 1941

Original proceeding in Certiorari against the State Tax Commission to review its action in making and ordering an additional assessment against the Town of Somerton. Action affirmed.

Mr. Ray C. Bennett, for Town of Somerton and Mr. George D. Locke Special Assistant Town Attorney, for Petitioner.

Mr. Joe Conway, Attorney General, and Mr. W. E. Polley, Assistant Attorney General, for Respondents.

OPINION

ROSS J.

The Town of Somerton is a municipal corporation and owns and operates its own waterworks system. During the summer of 1941 the State Tax Commission audited its books, records and accounts, as it is authorized to do under the statute (section 73-1316, Arizona Code 1939) and, upon the information obtained therefrom and after a hearing, on August 12, 1941, made an additional assessment against the town on its gross income from sale of water in the sum of $403.55, for the period from May 1, 1935, to December 31, 1940, claiming the right to do so under the excise revenue act. Sections 73-1301 to 73-1334, Arizona Code 1939.

The town sued out this writ of certiorari, and the return thereto shows that the ground upon which the additional assessment is resisted is that the water system is not self-sustaining and that the cost of operating it is more than the income therefrom.

In City of Phoenix v. State, 53 Ariz. 28, 85 P.2d 56, the question was whether the city should pay a tax on the income of its water sales and we there held that the city was engaged in a business or enterprise in the operation of its waterworks system and, except when exercising purely governmental functions, was subject to the same liability for taxes as a private corporation or an individual. This, we think, is decisive. Under the excise revenue act, the liability to pay the sales tax is not dependent upon a profitable or successful business or enterprise. If it were many taxpayers doubtless would escape the tax. It reaches all taxpayers, whether they make a profit or not in their business.

The case of City of Phoenix v. Moore, 57 Ariz 350, 113 P.2d 935, relied upon by petitioner, is not in point. There we held that swimming pools and golf courses were integral parts...