Walker v. Wedgwood

• Decision Date: 04 November 1942
• Docket Number: 7015
• Citation: 130 P.2d 856,64 Idaho 285
• Parties: JOHN P. WALKER, Respondent, v. GEORGE W. WEDGWOOD, Tax Commissioner of the State of Idaho, Appellant
• Court: Idaho Supreme Court

130 P.2d 856

64 Idaho 285

JOHN P. WALKER, Respondent, v. GEORGE W. WEDGWOOD, Tax Commissioner of the State of Idaho, Appellant

No. 7015

Supreme Court of Idaho

November 4, 1942

TAXATION-INCOME TAX-FEDERAL OFFICERS-ACTION TO RECOVER TAXES-PROCEDURE-STATUTES, CONSTRUCTION OF.

1. Where taxpayer seeking to recover state income taxes had complied with statutes relating to review of action of commissioner, and fact that suit had been brought under declaratory judgment statute rather than a suit to determine by review the action of the commissioner had not imposed an additional burden upon the commissioner, relief would not be denied on ground that taxpayer's suit should have been one to review the act of the commissioner in refusing a refund. (I.C.A., sec. 61-2412, subd. b, 4, as amended by Laws 1933, c. 159; secs. 61-2467 to 61-2469, 61-2478; Sess. Laws 1933, chap. 70.)

2. Where a statute is taken from another jurisdiction and there are changes or omissions, ordinarily, such changes or omissions are deemed to have been purposely made.

3. Generally, taxes cannot be recovered unless there has been a protest made at the time of their payment.

4. The Legislature in passing a statute has in mind extant law and its interpretation and legislates in relation thereto.

5. Where neither state income tax statute which had been patterned very largely upon federal statute authorizing recovery of taxes not paid under protest nor any amendment mentioned whether recovery of taxes depended upon their having been paid under protest and Supreme Court held at time state tax law was passed that other taxes could not be recovered unless there had been a protest at the time of their payment, the Legislature intended that income taxes should not be refunded unless they had been paid under protest. (I.C.A., sec. 61-2412, subd. b, 4, as amended by Sess. Laws, 1933, chap. 159; sec. 61-2478; 26 U.S. C.A. Int Rev. Acts, p. 128.)

6. That state income tax was required to be paid or security given for its payment as a prerequisite to its recovery was not such "duress" as to obviate necessity of payment under protest to authorize recovery. (I.C.A., sec. 61-2412 subd. b, 4, as amended by Sess. Laws, 1933, chap. 159; secs. 61-2467, 61-2478.)

7. Where taxpayer had paid state income tax for 1939 without protest, he was not entitled to recover such payment, notwithstanding that he had paid the tax or given security for its payment before institution of suit for its recovery. (Sess. Laws, 1933, chap. 70; I.C.A., sec. 61-2412, subd. b, 4, as amended by Sess. Laws, 1933, chap. 159; secs. 61-2467, 61-2478.)

8. The state income tax statute providing that "gross income" does not include income which may not be by the Federal Constitution or laws included in gross income did not manifest an intent to tax salaries of federal officials on ground that United States Supreme Court decision holding that states were authorized to tax such salaries and federal statute authorizing states to tax such salaries had declared that there had never been any bar to such taxation and that the Legislature intended to tax such salaries when the previous bar should be lifted, where the state and federal governments were not authorized to tax salaries of each other's officials when the income tax statute was passed. (I.C.A., sec. 61-2412, subd. b, 4, as amended by Sess. Laws, 1933, chap. 159; sec. 61-2478; Public Salary Tax Act of 1939, 26 U.S. C.A. Int. Rev. Acts, pp. 1163-1165.)

Appeal from the District Court of the Third Judicial District, in and for Ada County. Honorable Charles F. Koelsch, District Judge.

Action by federal employe to recover state income taxes paid for years 1939 and 1940. Judgment for plaintiff. Affirmed in part and reversed in part.

Judgment reversed as to the 1939 taxes and affirmed as to the 1940 taxes. Costs to respondent.

Bert H. Miller, Attorney General, and J. R. Smead and D. W. Thomas, Assistant Attorneys General, for appellant.

There is nothing in the United States Constitution or laws to exempt respondent from the state income tax, nor to prevent in any way the state's power to lay such tax, for 1939 and 1940 at least. (Helvering v. Therrell, 303 U.S. 318, 82 L.Ed. 758; Helvering v. Gerhardt, 304 U.S. 405, 82 L.Ed. 1427; Graves v. New York, 306 U.S. 466, 83 L.Ed. 927.)

Legislative intent should control and is to be gleaned from the terms of the statute, its purposes and objects. (Gallafent v. Tucker, 48 Idaho 240, 281 P. 375; City of Idaho Falls v. Pfost, 53 Idaho 247, 23 P.2d 45.)

An amendment to a statute making it directly applicable to a particular case does not necessarily indicate that it did not originally govern such a case, especially where there is no change of phraseology but only added language used to express more clearly the previous meaning and intent. (Rural Ind. School Dist. v. New Ind. School Dist. (Iowa), 94 N.W. 284; Young v. Three For One Oil (Cal.), 36 P.2d 1065; Hoffman v. McNamaee (Cal.), 282 P. 990; U.S. Trust Co. v. Helvery, 307 U.S. 57, 83 L.Ed. 1104, 59 S.Ct. 692 at p. 107.)

Lawrence B. Quinn and R. W. Beckwith for respondents.

In construing a statute it is the court's duty to determine the legislative intent and purpose of the law as manifested by the whole act, in the light of conditions of affairs and circumstances existing at time of enactment. (Idaho Gold Dredging Co. v. Balderston, 58 Idaho 622, 78 P.2d 105; Swain v. Fritchman, 21 Idaho 783, 125 P. 319; Turner v. Rosebury Irr. Dist., 33 Idaho 746, 198 P. 465; State v. Fite, 29 Idaho 463, 159 P. 1183.)

In construing amendment court must presume legislature did not change words of statute idly and without reason, but intended amended statute to have a meaning different than theretofore accorded it, and courts must consider former statute, remedy sought by amendment, and amended statute. (Moody v. State Highway Dept., 56 Idaho 21, 48 P.2d 1108; In re School District, 34 Idaho 222, 200 P. 138; 59 C. J. 1097, note 35; City of Portland v. Pratt, 55 P.2d 799.)

Where a statute is adopted from another jurisdiction with a provision omitted the court will conclude that it was not intended that the omitted provision should prevail in Idaho. (Hendrix v. Gold Ridge Mines Inc., 56 Idaho 326, 54 P.2d 254; Girard v. Defenbach, 61 Idaho 702, 106 P.2d 1010.)

The State of Idaho was, at the time of the passage of the state income tax act in 1931, incapable of taxing federal employees, they being immune from the tax. (Art. 7, Sec. 4, Idaho Constitution; Dobbins v. Erie County, 16 (pet) U.S. 435, 10 L ed. 1022; Buffington v. Day, 11 Wall 113, 20 L ed. 122; New York ex rel Rodgers v. Graves, 299 U.S. 401, 57 S.Ct. 269, 81 L ed. 306.)

The public salary act of 1939, intended to and did, affect and control only those incomes and persons subject to federal tax and could not affect state legislation constitutionally enacted. (26 U.S.C. A., Sec. 22 (a); 53 U.S. Statutes at Large, Chap. 59, pp. 574-577; Coates v. U.S., 111 F.2d 609.)

GIVENS, C.J. Holden and Ailshie, JJ., and Sutton, D.J., concur, Budge, J., concurs in the conclusion. Sutton, D.J., sat in place of Morgan, J.

OPINION

GIVENS, C. J.

Respondent, an employe of the federal government, though not a constitutional officer thereof, sued, under the declaratory judgment statute, 1933 S. L., ch. 70, p. 113, appellant, tax commissioner of the state of Idaho charged with the duty of collecting the state income tax, to recover income taxes paid by him to the state for the years 1939 and 1940. The 1939 tax was paid without protest, but the 1940 tax was paid under protest. The trial court sustained respondent's contention and theory that the legislature by the statute as passed in 1931 ^[1] and amended in 1933 ^[2] did not intend to tax the salary of federal officers, and that the taxes were paid under duress, therefore, protest was unnecessary to afford relief.

Appellant, in the first instance, urges this procedure was incorrect and that the suit should have been one for review of the act of the commissioner in refusing a refund under sec. 61-2467, I. C. A. All requirements of secs. 61-2467-8-9, I. C. A., were complied with, and, therefore, there is no essential difference in the substance of the two proceedings, nor has the slightest additional burden or inconvenience to the commissioner been suggested by reason of the fact that this suit is sought under the declaratory judgment statute rather than a suit denominated to determine by review the action of the commissioner.

Neither the state income tax statute as passed in 1931 nor any amendment makes mention of whether the recovery of taxes is or is not dependent upon their having been paid under protest. The federal statute prior to 1924, as construed by the courts, permitted no refund unless the tax had been paid under protest. (Fox v. Edwards, 287 F. 669; Warner v. Walsh, 24 F.2d 449.) In 1924 Congress amended the law, 43 Stat. at Large, ch. 234, sec. 1014, p. 343, providing that taxes could be recovered although they had not been paid under protest. This then was the federal statute at the time our statute was adopted. The state law was patterned very largely upon the federal statute. Where one statute is taken from another jurisdiction and there are changes or omissions, the ordinary rule of statutory construction considers that such changes or omissions were purposely made. (Hendrix v. Gold Ridge Mines, Inc., 56 Idaho 326, at 338, 54 P.2d 254; Girard v. Defenbach, 61 Idaho 702, 106 P.2d 1010.)

At the time our income tax law was passed, this court had uniformly held that other forms of taxes could not be recovered unless there was a protest made at the time of their payment. (Shoup v. Willis, 2 Idaho 120, 6 P. 124; Howell v. Board of Commissioners, 6 Idaho 154, 53...