Union Tank Car Co. v. Day

• Decision Date: 08 July 1924
• Docket Number: 26107
• Citation: 101 So. 581,156 La. 1071
• Court: Louisiana Supreme Court
• Parties: UNION TANK CAR CO. v. DAY, Sheriff, et al

101 So. 581

156 La. 1071

UNION TANK CAR CO. v. DAY, Sheriff, et al

No. 26107

Supreme Court of Louisiana

July 8, 1924

Appeal from Twenty-Second Judicial District Court, Parish of East Baton Rouge; Harney F. Brunot, Judge.

Suit by the Union Tank Car Company against Robert B. Day, Sheriff and others, to enjoin collection of tax. From decree of dismissal, plaintiff appeals.

Affirmed.

Edward N. Goodwin, and Campbell, Harding & Pratt, all of New York City, and Eugene J. McGivney, of New Orleans, for appellant.

A. V Coco, Atty. Gen., and A. J. Thomas, of Baton Rouge (Harry P Sneed, of New Orleans, of counsel), for appellees.

LAND, J. O'NIELL, C. J., ST. PAUL, J., concurs. BRUNOT, J., recused.

OPINION

LAND, J.

The Louisiana Tax Commission assessed for the year 1922, at a valuation of $ 499,800, certain tank cars, 510 in number, owned by the Union Tank Car Company, a nonresident corporation, without domicile in the state of Louisiana.

Said cars were being used at the time in interstate commerce, and were operated by the lessees of plaintiff company over various railroads running through the parishes of the state.

The total tax in question amounts to $ 15,118.85, and was levied, at the rate of 30 1/4 mills, by sections 1 and 5 of Act 109 of the Extra Session of 1921; the latter section being enacted to carry into effect section 16 of article 10 of the state Constitution of 1921, which provides that:

"Rolling stock operated in this state, the owners of which have no domicile therein, shall be assessed by the Louisiana Tax Commission, and shall be taxed for state purposes only, at a rate not to exceed 40 mills on the dollar of assessed value."

The total state tax of 30 1/4 mills thus imposed consists of the general state tax of 5 1/4 mills, provided for in section 3 of article 10 of the present Constitution, and levied for the year 1922 under section 1 of Act 109 of 1921, the annual revenue act of the state, and also of 25 additional mills levied under section 5 of said act, and provided for in section 16 of article 10 of the state Constitution.

1. Plaintiff tendered in the court below the general state tax of 5 1/4 mills upon the assessment of its rolling stock as made by the Louisiana Tax Commission, but seeks in the present suit to enjoin the tax collector of the parish of East Baton Rouge from collecting the additional tax of 25 mills, on the ground that section 16 of article 10 of the state Constitution, and section 5 of Act 109 of 1921, deny to plaintiff the equal protection of the laws, and authorize and require the taking of plaintiff's property without due process of law, as said provisions provide for the levy and collection of a tax for state purposes at the rate of 25 mills on the dollar of assessed value of plaintiff's rolling stock --

"Whereas no such tax is levied upon any real or personal property, or upon rolling stock or cars owned by residents of the state of Louisiana, or owned by nonresidents of said state having a domicile therein."

Plaintiff company also alleges that said provisions are illegal and void under the Fourteenth Amendment of the Constitution of the United States, in that said additional state tax is discriminatory and arbitrary.

We fail to find any unconstitutional discrimination against plaintiff company under the provisions of the state Constitution and statute in question. Section 6 of article 10 of the state Constitution declares that --

"The Legislature may provide that all local, municipal, and district taxes shall be assessed and extended on the parish assessment roll and collected by the tax collector of the parish."

This method of assessment and collection of all local taxes is merely permissive and not mandatory. It is a matter left by the state Constitution to the sound discretion of the Legislature. Had the law-making body of the state seen fit to do so, all local taxes could have been made assessable and collectible under the state assessment only. Section 16 of article 10 of the state Constitution, therefore, is not in violation of any fixed constitutional requirement as to the assessment and collection of local taxes, in that said section provides that the rolling stock of nonresident owners, without domicile in the state, shall be assessed for state purposes only, "at a rate not to exceed 40 mills on the dollar of assessed value." All personal and real property in the state is declared subject to the payment of a general state tax, not to exceed 5 1/4 mills under section 3 of article 10 of the state Constitution, and also to the payment of local, municipal, and district taxes by other provisions of the organic law. Article 10, §§ 5, 10, 13; article 12, § 15; article 14, §§ 11, 12, 14; article 16, § 1. Not only plaintiff's rolling stock, but the rolling stock of all resident owners and of nonresident owners with domiciles in the state, is made to contribute its just portion of this state-wide tax. The only difference in the manner of assessment and collection of local taxes levied on the rolling stock of nonresident and nondomiciled owners, and on other rolling stock owned in the state, is that the former is collected under state assessment and for state purposes only, in the form of an additional lieu tax, under section 16 of article 10 of the state Constitution, and under section 5 of Act 109 of 1921, and the latter is collected by local tax collectors and apportioned to the locality in which the domiciles of such owners are situated, under Act 170 of 1898, § 29, and Act 9 of Ex. Sess. 1917, § 5.

The sections of the Constitution and statute in question have clearly for their purpose, the fixing of a general average rate of local taxation as to the rolling stock owned by nonresidents without domicile, so as to make such rate conform, as nearly as practicable, to the local tax rate paid on rolling stock owned by residents and nonresidents with domiciles in the state, and thereby approximate a general equality in the burden of local taxation that should fall upon the two classes of property.

It must be assumed that the state has secured by this method of taxation a reasonably fair distribution of the burden of local taxes by the levy of the additional lieu tax of 25 mills on the rolling stock of nonresidents without domicile in the state, in the absence of proof to the contrary in the record. The federal Constitution does not require more than this in the matter of state taxation of the property of nonresidents. Travellers' Insurance Co. v. Connecticut, 185 U.S. 364, 22 S.Ct. 673, 46 L.Ed. 949.

We cannot presume intentional discrimination by the state against nonresident and nondomiciled owners of rolling stock operated within its limits. Plaintiff company has failed to prove that the additional tax levied is in excess of what would be legitimate as a general average local tax on its rolling stock. The record is barren of evidence to show that the operation of Act 109 of 1921 causes plaintiff company to pay higher taxes on its tank cars than it would have to pay were it a Louisiana corporation, or a nonresident corporation with domicile in the state. The presumption of substantial equality in taxation in this case is not rebutted by the admission in the record that in some parishes in the state the total of all state, parish, and local taxes is in excess of the total of the state tax of 5 1/4 mills and the additional tax of 25 mills, while in other parishes, including the parish of East Baton Rouge, it is considerably less. Instead of selecting as a standard of uniformity the parish of East Baton Rouge, where the rate of local taxation is low, had plaintiff chosen the parish of Orleans, where the rate of local taxation is high, instead of paying higher taxes than the resident owners of rolling stock in the parish of East Baton Rouge, as asserted, plaintiff would pay lower taxes than resident owners of such stock in the latter parish. The same result would be arrived at by comparison with high local rates in other parishes. The additional tax of 25 mills is clearly a tax in lieu of all local taxes, a method of taxation employed by the state, both as to the severance tax, and as to taxes on banks domiciled out of the state and engaged in business in the state. Section 21 and section 9 of article 10 of Constitution 1921.

The general scheme of taxation adopted by the state in article 10 of the present Constitution provides:

(1) A general state-wide ad valorem tax of 5 1/4 mills (section 3). (2) Inheritance taxes (section 7). (3) License or occupation taxes (section 8). (4) Taxes on banks domiciled out of the state (section 9). (5) Taxes on nonresident owned rolling stock (section 16). (6) Severance tax (section 21).

The first three of these taxes are levied generally, while the last three are distinctly lieu taxes.

It is to be observed that, while the state tax proper of 5 1/4 mills is levied under section 1 of Act 109 of 1921, the 25 mill tax is levied under section 5 of said act, "in addition to the taxes levied in the amount and for the purposes designated in the foregoing sections of this act."

The state has allocated this additional tax to state purposes only. This method...