114 Va. 364 | Va. | 1913
delivered the opinion of the court.
This is a proceeding instituted by Henry L. Schmelz, surviving and continuing partner of Schmelz Brothers, bankers, under section 567 of the Code, to be relieved from an alleged erroneous assessment of taxes and levies upon personal property of the said partnership for the years 1891 to and including the year 1911.
Upon the hearing of the motion the Circuit Court of Elizabeth City county was of opinion that the assessment complained of was erroneous, in this, that the property assessed was not taxable in the county of Elizabeth City or in the city of Hampton, and entered an order exonerating the firm from the payment of all taxes and levies on said property in the said county and city. The auditor of public accounts not being satisfied with that decision, petitioned the court, in accordance with the provisions of section 573 of the Code, for a rehearing. Upon the rehearing, which was de novo, the court being of opinion that its order on the original hearing was correct, adhered to and confirmed it. To that order this writ of error was awarded upon the petition of the Commonwealth, the county of Elizabeth City and the city of Hampton.
The court certifies in its order that upon the rehearing the following facts were proved: “That from 1886 to 1903 H. L. Schmelz and George A. Schmelz conducted a private banking business in the town of Hampton, Ya., under the firm name and style of ‘Schmelz Brothers, Bankers, Hampton, Virginiaand that on July 1, 1903, they discontinued the banking business in Hampton, but continued to own and hold property in Elizabeth City county. In 1891 the same partners opened a bank in the city of Newport News, Ya., under the firm name and style of ‘Schmelz Brothers, Bankers, Newport News, Virginia,’ and the said business
Two questions are raised by this writ of error for the decision of this court. The first, in the language of the petition, is: “A. Granting that the only property assessed, from which relief was sought in the pending proceeding, was personal property not otherwise taxed, used solely in Newport News, was it not taxable in Elizabeth City county, where both partners resided?”
The question raised by this assignment of error is whether property invested in a partnership business and not otherwise taxed, is subject to taxation where the partners reside, or where the partnership business is conducted?
In many, if not in most of the States, the situs for' the taxation of partnership property is fixed by statute; but where it is not so, the decisions do not seem to be in accord, though the weight of authority and the better reason seem to be in favor of the view that the situs of
By section 492 of the Code, Avhich declares by whom property is to be listed and to whom taxed, it is provided that “If the property belong to a company or firm it shall be listed for taxation by and taxed to the company or firm.”
Section 494 of the Code provides: “The commissioner or his duly qualified deputies shall, on personal application to each person, firm and corporation residing, doing business, or having an office in his dictrict, obtain answers to interrogatories addressed to such person, firm, or corporation not otherwise taxed on its property in order to ascertain from them all personal estate, money, contracts, and credits which are owned by such person, firm or corporation and are subject to assessment for taxation under this chapter.”
By section 143 of the tax bill, Pollard’s Code, vol. 2, p. 2265, it is provided that “When any incorporated company, firm or person is engaged in more than one business, which is made by the provisions of this act subject to taxation, such incorporated company, firm or individual shall pay the tax provided by law on each branch of its or his business.”
Under the provisions of the Code and tax bill, a partnership is, for the purpose of taxation, treated as an entity. The firm and not the individual members of the partnership are considered as the owners of the partnership property. Its property is to be taxed to the “firm” — that is, to the partnership, and not to the individual members of the firm. It seems to us that the proper construction to be
The next assignment of error, as stated in the petition, is as follows :
“B. Granting that this property was not taxable because not used in Elizabeth City county, did not the applicant, by seeking redress under the statute for such cases made and provided, so submit the partnership to the jurisdiction of the Circuit Court of Elizabeth City county as that it became the duty of that court to hear and consider the evidence tendered at the rehearing showing the taxable capital of Schmelz Brothers, Bankers, used in Elizabeth City county; in other words, although even if the court were correct in exonerating the capital used in Yew-port Yews, was it not in error in refusing in this proceeding to tax property that was admittedly taxable in this county?”
This assignment of error, as we understand it, raises the question whether, under our statute, where a taxpayer makes a motion to correct an erroneous assessment because the property with which he is assessed is not taxable in the county or city where it is listed for taxation, and for that reason his motion must prevail and he must be exonerated from such erroneous assessment, may he not in that same proceeding be assessed with and held liable for taxes upon property with which he is taxable and has not been assessed for taxation in the county or city where the erroneous assessment was made? In other words, if
The answer to this question depends upon the terms of the-statute under which the plaintiff sought relief. By section 567 it is provided that “Any person assessed with taxes on lands or other property, aggrieved by any such assessment, may, unless otherwise specifically provided by law, within two years from the first day of September of the year in which such assessment is made,” apply to the proper court for relief.
Section 568, which provides what the court may do, contains the following provisions: “If the court be satisfied that the applicant is erroneously assessed with any taxes, and that the erroneous assessment was not caused by the failure or refusal of the applicant to furnish a list of his property, real and personal, to the commissioner, on oath, as the law requires; * * * in either case the court may order that the assessment be corrected. If the assessment exceeds the proper amount, the court may order that the applicant be exonerated from the payment of so much as is erroneously charged, if not already paid, and if paid, that it be refunded to him. If the assessment be less than the proper amount, the court shall order that the applicant pay the proper taxes. A copy of any order made under this section correcting an erroneous assessment shall be certified by the court to the Auditor of Public Accounts and the Treasurer of the State.” See also, as to levies and local taxes, section 571 of the Code.
We are, therefore, of opinion that the court did not err in so far as it held that the plaintiff was not assessable with taxes in the county of Elizabeth City or in the city of Hampton upon the property of Schemlz Brothers, employed in their partnership business in the city of Hew-
Its order must, therefore, be reversed and the cause remanded to the court for further proceedings to be had not in conflict with the views expressed in this opinion.
Reversed.