103 Neb. 476 | Neb. | 1919
In 1903 the Postal Telegraph-Cable Company applied for a franchise in the city of Fremont and was granted the right to carry on a telegraph business therein for a period of 25 years. At that time the city had an ordinance, which is still in force, imposing an occupation tax of $60 a year on the business of transmitting and receiving interstate telegraph messages. The telegraph
The right of a municipality of the class to which plaintiff belongs to impose an occupation tax of this character, if it be reasonable, has already been determined by this court. Western Union Telegraph Co. v. City of Fremont, 39 Neb. 692; Western Union Telegraph Co. v. City of Fremont, 43 Neb. 499. And where a proper basis for classification exists, such a tax, if made applicable to all persons or companies in the occupation taxed, as in the present instance, does not deny the equal protection of the law guaranteed by the Fourteenth amendment. 6 R. C. L. 375, sec. 370.
On behalf of defendant it is argued that this tax is unreasonable; that the intrastate message receipts of defendant’s Fremont office, after payment of other expenses, are insufficient to pay the tax; that a part of such tax must be paid from the proceeds of interstate messages; that such payment casts a burden upon interstate commerce, and the tax is therefore violative of the federal Constitution.
The proof in support of these allegations shows that during the years 1914 and 1915 defendant’s Fremont office was operated' at a loss, and that a payment of the tax for these two years would occasion deficits on defendant’s intrastate business at Fremont of $143.73 and $128.45, respectively. No figures are offered for any of the preceding years. But, even if the evidence at hand is sufficient to warrant us in assuming antecedent and prospective losses in the operation of defendant’s business at Fremont, we do not regard this as a satisfactory test of the reasonableness or unreasonableness of the.tax involved. Defendant’s losses may be due to
The tax in'question is not a mere license or regulation measure, but one designed for revenue purposes. The statute authorizing its imposition and .the ordinance fixing its amount both clearly so designate it. The city is not limited to the mere rental value of the public property occupied by defendant’s poles and wires and the expenses arising from their supervision, and hence defendant’s evidence on these points can only be of incidental significance. The extent of the tax is a matter for the judgment and discretion of the municipal government, subject only to the restriction that it must not be prohibitory. 2 Cooley, Taxation (3d ed.) 1139, 1140.
Is the tax in question, when considered as á revenue measure, so unreasonable in amount as to be prohibitory? Mere proof of loss in operation for a period of two years by an individual telegraph company, without showing what the volume of business available in the municipality is, or what portion thereof is done by such company, or what facilities it has for handling the business offered, is insufficient to show that an annual occupation tax of $60 imposed for revenue purposes on the privilege of doing an intrastate business in a city of over 8,000 inhabitants is unreasonable.
Defendant’s proof shows that not only its intrastate, but also its interstate, business at Fremont was conducted at a loss during the years for which figures are given. Is this tax, then, a burden on interstate commerce? In imposing an occupation tax for revenue purposes, a municipality acts as the agent of the state, and where such tax is imposed on a telegraph company doing both an intrastate and an interstate business, any deficit arising from the payment of a tax on the privilege of doing an intrastate business within the municipality becomes a charge on the revenue such company obtains from its intrastate business as a whole, and the tax does not become a burden upon the company’s interstate business merely because the amount imposed by the municipality is greater than the company’s net receipts, in that municipality for intrastate business. If this revenue is insufficient section 7409, Rev. St. 1913, provides a remedy.
The judgment is
Affirmed.