| Ala. | Nov 15, 1897
It is stated in the abstract filed in this case, sustained by the petition of the Board of Revenue as sét out therein, that the sole question in the case is, “Whether the assessment on the gross income of the said Capital City Water Company was legal, and whether or not subdivision 5 of section 454 of the Code of 1886, (Code of 1896, § 3912), under which said tax was levied, is valid.” The supposed illegality of the assessment as made is based on the alleged unconstitutionality of the statute under which it was levied. The language of the petition of appellant to said board is, “Respondent avers, that it has been advised, and believes, and upon such information and belief, states that said assessment is illegal; the statute under which it is levied being in violation of the constitution of Alabama.”
After the case was carried by certiorari to the circuit court, as is stated in the abstract, “it was there shown, that during the year 1890, said Capital City Water Company received the sum of $22,295.22 as its gross income from the operation of its works during the year 1890.”
The Board of Revenue, whose decision was sought to be reviewed on certiorari in the circuit court, had assessed the appellant company on said sum as its gross receipts for the year 1890, and the circuit court, whose
It is a well accepted principle of law, that the State constitutions are not in their -nature enabling acts, to which class the constitution of the United States belongs, but are limitations on legislative power, and that the legislature may pass any law not in conflict with the State or Federal constitution, the rule being, that “the Federal Government can do nothing but what is authorized expressly or by clear implication, while that of the State can do whatever is not prohibited.” —Dorman v. The State, 34 Ala. 230; Davis v. The State, 68 Ala. 62, Moog v. Randolph, 77 Ala. 606; Cooley on Const. Lim., 88, 89; 3 Am. & Eng. Encyc. of Law, 689.
The provision appearing in the earlier constitutions of this State on the subject of taxation was simply: “All lands liable to taxation in this State shall be taxed in proportion to their value.” The taxing power was not defined, qualified or restrained by any other provision than by this simple . declaration. On personal property, either specific or ad valorem taxes could be imposed, and on other subjects of taxation they could be laid, as the legislature deemed best. This unrestrained power of the State, except as to land, to levy taxes, found justification as was held, in the principle, that taxes being regarded as the contributions of the people for the support of the State, ought to be assessed on the subjects of taxation as the people by their representatives designate, and that the legislature may be trusted to do no more in this regard than an economical and just administration of the State government would require.—Ala. Gold Life Insurance Co. v. Lott, 54 Ala. 506. For the purpose of restraining an abuse of this very general power to tax, the constitution of 1868 substituted for the one theretofore prevailing, another restraining provision, that “All taxes levied on property in this State, shall be assessed in exact proportion to the value of such property.”’—Const. of 1868, Art. XIV, § 1; Mayor v. Stonewall Insurance Co., 53 Ala. 576. To place still further restraints upon the taxing power, as experience had suggested to be wise, the framers of the constitution of 1875, retaining the same provision above quoted in the constitution of 1868, added the other provisions therein appearing on the subject, (Art. XI, §§ 4,
In this last Code, after specifying in the thirteen sub-' divisions of section 453, the different properties upon which a tax of sixty cents on each hundred dollars of its value should be annually levied, follows section 454, designating “Other subjects of taxation and rates thereon,” which section, in seven subdivisions, specifies these different subjects of taxation, in neither of which was included any of the subjects of the preceding section, 453. These subdivisions include the gross amount of sales of merchandise premiums, commissions, receipts and incomes of different persons, firms, associations and corporations, including water works, telegraph, telephone, express, sleeping car companies, running their cars in this State, &c.
From the revenue law itself, it is thus made plain, that there is a marked distinction kept up between property taxed as such, and other subjects of taxation. Said section 453 relates to property as such, — property which is tangible and visible, capable of being reached and condemned. Section 454 has reference to subjects of taxation other than property, — to subjects, rather, of occupations, privileges and business, which in the nature of things are incapable of determinative value. The general term, “subjects of taxation,” embraces all property as such, and all other items on which a tax rate may be laid. The term property, as employed in section 453, is a more limited one, and is but a species of the genus, “subjects of taxation,’’ as employed in section 454.
The decisions of this court also recognize the legislative classification of these subjects of taxation. As was said, for instance in Lott v. Ross, 38 Ala. 156" court="Ala." date_filed="1861-06-15" href="https://app.midpage.ai/document/lott-v-ross--co-6507006?utm_source=webapp" opinion_id="6507006">38 Ala. 156, 159, construing the section of the then Code, touching an assessment on the gross amount of sales of merchandise during the tax year, “Nor are we able to decide that the words, ‘taxable property’ are here used in the sense of ‘taxables,’ or ‘taxable subjects,’ and. not according to their ordinary signification of things taxed which are
It is manifest, as has been shown, that the sections of the Code referred to, carefully maintain this, distinction between property and other subjects of taxation. The same thing appears also in the constitution, since the limitations, referred to, on the legislature to impose taxes, are with reference to property, and no' provision is made whatever with reference to the taxation of other subjects of taxation. In the absence of such restrictions as to subjects of taxation, other than property as such, it would appear plain that as to these, the law-making power, responsible alone to the people, is left to the exercise of a full and free discretion, — a power never to be taken as surrendered by intendment or implication. Battle v. Mobile, 9 Ala. 236, s. c. 44 Am. Dec. 438 ; Ex parte City Council, 64 Ala. 463" court="Ala." date_filed="1879-12-15" href="https://app.midpage.ai/document/ex-parte-city-council-of-montgomery-6510552?utm_source=webapp" opinion_id="6510552">64 Ala. 463 ; Ala. G. L. Ins. Co. v. Lott, 54 Ala. 499" court="Ala." date_filed="1875-12-15" href="https://app.midpage.ai/document/alabama-gold-life-insurance-v-lott-6509313?utm_source=webapp" opinion_id="6509313">54 Ala. 499 ; Mayor v. Stonewall Ins. Co., 53 Ala. 576. Except for the section 454 of the Code, specifying subjects of taxation, other than the ones specified in section 453, it is plain that all the different occupations and enterprises mentioned therein, as carried on in this State, which ought, in all reason and justice, to contribute their just share of the expenses of the State Government under which they live and prosper, would escape any of the burdens of taxation for carrying on their several businesses. This was never the design of the law-making power.
The point as to the constitutionality of the statute under which a tax on gross income was imposed, was raised in the case of the Western Union Telegraph Co. v. State Board of Assessment, 80 Ala. 278, supra; and after careful consideration its constitutionality was sustained ; a decision that found complete support in the previous decision of Lott v. Ross, 38 Ala. 156" court="Ala." date_filed="1861-06-15" href="https://app.midpage.ai/document/lott-v-ross--co-6507006?utm_source=webapp" opinion_id="6507006">38 Ala. 156, supra, and we are asked to overrule that case. The suggestion for overruling it, as may be supposed, and any expectation that it might be done, no doubt grew out of the recent de
This point, however, is urged upon the further .contention, that the tax imposed in this case is an income tax, susceptible of definite ascertainment as to its amount, and therefore it is property. The provision is for a tax of one per cent, “On the gross receipts during each tax year of all cotton-pickeries” and other specified businesses, including water .works, -“after deducting'the expenses of carrying on such business.” The intention of this last clause was in the interest of these different enterprises, that they might not be too heavily burdened in the imposition of a tax on gross receipts, and that each might be taxed on the same equitable basis. The gross incomes of some companies are large, earned by the outlay of very great sums, while with others, such incomes, whether large or small, are made by the expenditure of comparatively small sums. And so, in several of these different businesses, as classified in the different subdivisions of section 454 of the Code, we find that the legislature, while imposing a tax in every instance on the. gross receipts, accompanies the provision with another, that the expense of carrying on the business may be deducted. "Without this, 'the levy would be made upon the gross receipts without any deduction whatever. No tax had been or was proposed to be levied on net incomes, but a levy was first authorized by said section 453 on property as such. What followed, as to other subjects of taxation, was designed to be and was, really, a tax on the business or occupation of the tax-payer-. As was well said in Lott v. Ross, 38 Ala. 156" court="Ala." date_filed="1861-06-15" href="https://app.midpage.ai/document/lott-v-ross--co-6507006?utm_source=webapp" opinion_id="6507006">38 Ala. 156, supra, in respect to the imposition of a tax on gross receipts, it is not “a property or income tax, but an occupation or privilege tax, the amount being regulated by the-extent to which the privilege has been enjoyed,”
The judgment of the circuit court is affirmed.
Affirmed.