77 Neb. 311 | Neb. | 1906
Lead Opinion
The appellant is a corporation organized and existing under the laws of this state. Its main office is in Lincoln, Lancaster county, Nebraska. It owns and operates about 50 elevators, mostly in this state, and its business is that of buying, cleaning, selling and shipping grain to the .various markets of the world. It owns and operates elevators at some 40 different towns, situated in several different counties throughout the state. It also owns elevators at Lincoln, Rulo and Holdrege, called cleaning elevators. The manner of conducting its business is such that in handling, disposing of and shipping its grain to market it all passes through the cleaning elevators at Lincoln, Rulo or Holdrege. It buys no grain at its Lincoln cleaning elevator, and the grain that goes through this elevator comes from some of its outside elevators, situated
Capital stock .f350,000
Surplus and profits. 70,000
Total valuation of stock. $420,000
Property assessable in Lancaster county (itemized) . $83,265
Property outside of Lancaster county otherwise assessed. 336,735
Total valuation of stock.'. $420,000
The assessor of Lancaster county raised the amount of the property scheduled as assessable in that county $10,000 to cover the grain in appellant’s elevator in the. city of Lincoln. Objections thereto were filed with the board of equalization. A hearing was had, the objections were overruled, and the case was appealed to the district court, where a trial resulted in the dismissal of the appeal, an aifirmance of the order of the board of equalization, and an appeal therefrom was taken to this court.
The bill of exceptions establishes the following uncontro-verted facts: First. The appellant’s capital stock and surplus was $420,000, which represented all of its property. $83,265 worth of that property was situated and taxable in Lancaster county. The remainder of it, to wit, $336,735 worth, was not used in Lancaster county, but was located and used in other counties. Second. The appellant’s Lincoln elevator is a transfer and cleaning house, and no grain goes into that elevator except grain in transit, on its way from the company’s elevators situated in other counties. Third. That the item in controversy, to wit, $10,000 worth of grain in. appellant’s Lincoln elevator, was grain in transit. It is claimed by appellant that this grain in transit was purchased by, or represented a part of,
We find that F. D. Levering, appellant’s assistant treasurer, testified in substance that the capital stock and surplus of the company in 1904 Avas $420,000; that his company owned and was then operating from 45 to 52 elevators in Nebraska and Kansas, 8 or 9 in Kansas and the remainder in Nebraska; that the only elevator the company liad in Lancaster county, outside of Lincoln, was at Waverly; that the only place the company buys grain in Lancaster county is Waverly; that it was not using any of its capital in buying grain in Lincoln; that the company bought no grain in Lincoln; that all of the capital of the company other than the amount invested in permanent improvements was used in buying grain at points outside of the city of Lincoln; that all of its capital, except the listed items reported and assessed in Lancaster county, to Avit, $336,735, was invested in grain elevators and grain outside of Lancaster county; that all of this portion of the company’s capital Avas located and was being used by the company in other counties than Lancaster; that it was invested in elevators, cribs, scales, gas engines and grain.
E. J. Herring, avIio Avas in the employ of the appellant company, and Avho has especial charge of the assessment of its property in this state and Kansas, testified as follows: “Q. At the company’s outlying elevators in other counties than Lancaster county, do you know what method the assessors of the various counties adopted in arriving at the amount of capital stock the Central Granaries Company Avas using at these elevators located in these various counties? A. Yes, sir. Q. State to the court whether or not the assessors where these various elevators were located arrived at the amount of capital that you had invested at that particular point by taking into consideration the Avhole year’s business, or volume
On cross-examination the witness further stated: “A. They took the average capital, the com cribs, the elevator, the gas engine, and the bank account, and the horse power, and any other tangible property we had. Q. And added it to the average capital or subtracted it? A. Added it to the average capital. Q. Did they add the real estate? A. We have no real estate.- Elevators are personal property. Q. They added the personal property to the average capital? A. Yes, sir. Q. And the cash on hand? A. Yes, sir. Q. And the grain on hand? A. No, sir; I did not say that. Q. That is a part of your tangible property, is it not? A.. No, sir; that is figured in this average capital.”
The only evidence introduced by the appellee was the testimony of the county assessor, the instructions of the state board to county assessors, and the intructions of the Lancaster county assessor to his deputies. None of this testimony in any way controverts the evidence above quoted. Prom the foregoing, we are of opinion that the evidence is sufficient to show, prima facie, that appellant was assessed in the various counties where it was engaged in business (outside of Lancaster county) to the amount of $336,375 as average capital employed in its business in said counties.
The appellant contends that, the action of the taxing officers of Lancaster county in adding $10,000 to its schedule for grain in its Lincoln elevator subjects it to double taxation to that extent, and the district court erred in refusing to grant it the relief prayed for by its
That appellant is a grain broker, within the meaning of section 66, ch. 73, Laws 1903, commonly called the “New Revenue Law,” and should be assessed in the manner therein pointed out, is beyond question. That section reads as follows: “Every person, company or corporation engaged in the business of buying and selling grain for profit, shall be held to be a grain broker, and shall, at the time required by this act, determine- under oath the average amount of capital invested in such business, exclusive of real estate or other tangible property, assessed separately, for the preceding year, and taxes shall be charged upon such average capital the same as on other property. For the purpose of determining the average capital of such grain broker the county assessor or deputy assessor shall have the right to inspect all books of account and the checkbooks of such grain broker and shall determine and fix the amount of such capital by such inspection.” As we have already seen, the appellant, before it returned its schedule to the assessor of Lancaster county, listed $336,375 of its average capital in other counties. And this brings us to the consideration of what is meant by, or included in, the words “average capital” as used in the section of the revenue law above quoted.. It would seem that the legislature recognized the difficulty which would arise in attempting to assess grain brokers on the amount of grain on hand on the first day of April. If that method of assessment should be adopted, then it is safe to say that grain dealers would have no grain on hand at that time. If-the plan of assessing the capital stock of corporations dealing in grain, wherever such company or corporation is located, should be adopted, we might find all of such capital was invested in’ grain, stored in various elevators throughout the state, which would have to be assessed where located and this would result in
It is contended by the appellee that the' rule that a taxpayer who appeals to the district court from the action of the board of equalization in matters of assessment has the burden to show that the decision of the board is erroneous, requires us to affirm the judgment of the district court. It is a sufficient answer to this contention to say that the evidence contained in the record establishes prima facie, at least, the contention of the appellant; and where there is no dispute as to the facts, and the record shows forth the action of the board, together with the evidence on which such action is based, the matter then becomes a question of law to be determined by the reviewing court, and not one of fact. In such a case the presumption invoked has no application. It appears from the record that the reason given by the assessor for adding the $10,000 in question to the appellant’s schedule was that he was not satisfied that the appellant’s average capital had been properly assessed in other counties throughout the state. Neither the
Lastly it is contended by the appellee that the tax on the average capital of grain brokers, provided for by the section in question, is a tax on the business, or, in other words, a business tax, and is not a property tax within the meaning of the constitution; that, in addition to such business tax, it was proper, and it had the right, to tax the grain in question. That the legislature has the power to provide for taxing the business of grain brokers is beyond question. But that it has not done so seems clear. A business tax is defined to be- a tax on the privilege of carrying on a business or employment, and is commonly imposed in the form of an excise tax on the license to pursue the employment. It is usually a specific sum, or a sum whose amount is regulated by the business done, or the income or profits earned. Such, for instance, as 2 per cent, on the gross premiums of an insurance company, or any given per cent, on the volume of the particular business conducted. The statute in question, however, makes no such provision. On the "contrary, it states in plain terms that “taxes shall be charged upon such average capital the same as on other property.” The average capital is thus treated as property, and the amount of the tax levied thereon depends upon the rate of taxation for all 'state, county and municipal purposes, the same as though levied on real estate, or other tangible property..
We are therefore of opinion that the district court erred in dismissing the appeal herein, and that the appellant is entitled to the relief sought.
For the foregoing reasons, the judgment of the district
Reversed.
Rehearing
The following opinion on rehearing was filed July 12, 1907. Former judgment of reversal vacated and judgment of district court affirmed:
1. Taxation: CLASSIFICATION: Constitutional Law. The classification (laws 1903, ch. 73, sec. 66) of “every person, company or corporation engaged in the business of buying and selling grain for profit” as a “grain broker,” for purposes of assessment, and providing for the assessment of the average capital of grain brokers, is not unconstitutional.
2.-: Assessment. The amount of capital invested in a business ordinarily is the whole amount of money invested and used in carrying on that business. ■ The average capital of a grain dealer is defined by section 66 of the revenue law to be the average amount which the total investment in the business of the grain dealer exceeds the tangible property which can be separately assessed at the time of assessment. The assessor, from the examination pointed out in the statute, must find what capital of the business there was, if any, from time to time during the tax year, not including in the computation the tangible property on hand and capable of assessment at the time of assessing, and the average or mean of the capital so found is to be assessed as property in addition to the tangible property.
The facts in this case, so far as the essential questions' of law involved are concerned, may be found in the former opinion, ante} p. 311. A rehearing was granted, new briefs have been filed, and oral argument heard thereon. The plaintiff is a corporation engaged in buying and selling grain. It operates a large number of grain elevators located in different counties of the state. Among* them it operates an elevator in Lancaster county for the transfer and cleaning of grain in transit to eastern markets.. It returned to the assessor of Lancaster county for taxation a statement of its capital stock, its surplus
1. The section of the statute under consideration provides that “every person, company or corporation engaged in the business of buying and selling grain for profit, shall be held to be a grain broker,” and it is largely from this provision that attorneys for defendant draw their argument that the taxation imposed by this section on average capital is an occupation tax. Section 1, art. IX of the constitution, authorizes the legislature to tax peddlers, auctioneers, brokers, and others named, “in such manner as the legislature shall direct.” It is, hoAvever, not to be supposed that the purpose of the legislature in providing that a dealer in grain “shall be held to be a.grain broker” Avas to enable it to levy an occupation tax upon grain dealers, and so evade the above provision of the constitution. To determine what class of persons may be included in the term broker for the purpose of levying a.n occupation tax, it Avould be necessary to ascertain the true definition of the Avord broker as that term was generally understood at the time of the adoption of the constitution. The legislature could not enlarge its poAver to levy an occupation tax by extending the meaning of the words employed in the constitution beyond their reasonable and generally accepted significance Avlien adopted. A different purpose is apparent in adopting a specified term to be applied to dealers in grain. The fact that the Avords “grain broker” are used instead of some other words is of no significance. By this section the legislature provides a manner to ascertain the value of the property of “persons, companies or corporations engaged in the buying and selling
2. A very important question in this case, and one that has been very much debated, is Avhat is meant by average capital as used in the statute referred to. Tn our former opinion it was said: “Average capital used in the business evidently means the money used in buying grain, and all of the money so used.” It is also considered in that opinion that grain in elevators is a part of the average capital of the business, and, being assessed as a part of such average capital, it cannot be separately specifically assessed. This led us to the conclusion that the assessor erred in placing the grain in plaintiff’s elevator in Lincoln upon the schedule for assessment. The average capital of the business is generally understood to mean all of the money invested in the business and would include all property used in the business..
There is in New York a general statute which provides that nonresidents of the state doing business therein shall be taxed on the capital invested in such business as personal property. It was held that by the words “capital invested in such business” ivas meant the money which was put into the business with the intention that it shall be used in the transaction of the business. People v. Feitner, 67 N. Y. Supp. 893. This is the ordinary use of the word capital. Does the use of these words in this section of the statute and the connection in which they are used require us to inferna different meaning? It is
A similar idea is found in the statutes of the state of Louisiana. Their revenue act contains the following declaration: “In assessing mercantile firms the true intent
“In assessing the merchandise or stock in trade, the taxing authorities took the total amount of meat received during the previous year, and divided the same by 12, thus reaching what is called the ‘average’ value of stock on hand during the previous year.” In regard to this method of obtaining the average value, the court said: “The assessors’ contention is that the monthly receipts of merchandise during the year should be added together, and their sum total divided by 12. This method necessarily counts merchandise sold during the month as a part of the stock on hand at the end of each month, and is an assessment of the amount of purchases, rather than of stock on hand. As the money or credits received from sales are also taxable, this method would lead to double taxation, in contravention of the express provisions of section 7, which declares that no property shall be taxed twice in the same year.’ Tinder the assessors’ rule, a merchant whose entire capital is $5,000 might be taxed on $10,000 on stock in trade, if he each month sold $5,000
The court said that their statute does not provide “that the capital eo nomine shall be assessed, but that all the elements which enter therein shall be so valued as io represent a fair average of the capital employed.” The same may be said of our statute, if we look to its intention and results. While our statute names “average capital,” and declares that “taxes shall be charged” thereon, and so, when taken literally, requires average capital to be assessed in that name as an element of property, still the result and the manifest intention of the statute is to enable the assessing authorities to ascertain the proper assessable value of all the property used in the business. We may then say with the Louisiana court: “The meaning of the proviso, therefore, is that the average amount of stock, money, rights, credits, etc. (including real estate), which may vary through the year, shall be taken as the basis of assessment.” That is, all property, real and personal, used in the business is to be .assessed, and if the assessor, from the examination of the books, etc., which the statute requires him to make, finds that the property so assessed is less than the property (including money on hand or in bank, and real estate) in use in the business at other times during the preceding tax year, he ascertains from the books of account and checkbooks of the grain broker how much more property has been in use in the business at other times during the year than is so used at the time of the assessment. For instance, if he finds no grain, or but a small quantity, on
The judgment heretofore entered in this case is vacated and the judgment of the district court affirmed.
Judgment accordingly.
Rehearing
1. Taxation: Avebage Capital. The average capital of grain dealers, mentioned in section 66 of the revenue law (laws 1903, ch. 73), is not the average of the total capital used in the business, but is the excess of such capital over the real estate and other tangible property which can be viewed by the assessor and “assessed separately.”
2. Average capital is not average purchases, nor average sales, and cannot be found by adding together the amount of purchases or the amount of sales during the year, and dividing the sum by an arbitrary divisor.
3. Average capital is the average of the amount of cash and all other property of every hind used in carrying on the business; and, if there is an excess of this average of capital over the amount of real estate and other tangible property that can be viewed by the assessor, then such excess is to be added for assessment.
The appellant has filed in this case a brief in support of a motion for a rehearing. From this brief it appears that the opinion herein is not at all understood by counsel for appellant. Speaking of the opinion the brief says: “It is vague, hazy, indefinite, and muddy as it can be, and I speak respectfully. It furnishes no definite rule or guide that can be followed either by the assessor or the grain broker.” The case is one of very much importance. The opinion is supposed to be a guide for assessors in all parts of the state in assessing grain dealers. If the court has failed to. so state its views as to enable the learned and able counsel for appellant to understand them, it would seem to be desirable to attempt to make the opinion clearer, so that assessors, who are not supposed always to possess the legal acumen of appellant’s counsel may be able to understand the construction which the court attempts to give to this statute. Counsel understand that the average capital of a grain dealer is to be found by adding together all the purchases
Average capital.$3,250
Amount on hand as tangible property.... 5,000
Total assessment .$8,250
Can it be successfully contended by anyone that in this method or process you have not assessed the $5,000 of grain twice, once as average; capital and once as tangible property?” This proposition of counsel shows two important particulars in which the court has been misunderstood :
First. We do not consider that average capital can be found by adding the total of purchases during the year and dividing that amount by any number whatever,
Second. Counsel understands the opinion to mean that the average capital used in the business is to be ascertained by some method and is to be assessed at all events, and, in addition to this average capital, the real estate and all tangible property is to be assessed also, whereas the view of the court is that all tangible property of a grain dealer is to be assessed in precisely the same manner as the property of other persons and corporations is assessed. In addition to this, the assessor is to ascer
We think that the statute in question meets this requirement, and that the construction which we have given it is the correct one.
The motion for rehearing is
Overruled.
Dissenting Opinion
For the reasons given in our former opinion, I dissent from the foregoing conclusions.