378 S.W.2d 515 | Mo. | 1964
Lead Opinion
Respondent, Delta Air Lines, Inc., filed its petition under § 536.100
Delta Air Lines, Inc. (which we shall refer to as Delta) is an air.carrier of both passengers and property operating interstate under appropriate federal authority; it also operates into certain foreign countries. It is a Louisiana corporation, duly registered in Missouri, with its principal place of business in Georgia. It operates over certificated routes in twenty states, including Missouri. During 1959, its aircraft made 12,160 arrivals and departures at the St. Louis airport (St. Louis County), 1,458 at the Kansas City airport, and 2,904 at the Springfield airport. As of January 1, 1960, it had 17 daily flights scheduled to or from St. Louis, 4 daily flights to or from Kansas City, and 4 to or from Springfield; its certificated route miles in Missouri were 385, as compared with 12,555 system-wide, the ratio being 3.0665%. During 1959, only 3 types of Delta’s planes were flown in Missouri on its scheduled flights, namely, Convair 340/440’s, Douglas DC-6’s, and Douglas DC-7’s. No craft of its other types entered Missouri. Of the three types flown in Missouri Delta owned and used 28 Con-vair 340/440’s, 7 Douglas DC-6’s, and 16 Douglas DC-7’s. The net depreciated cost of all planes of each of these 3 types as of January 1, 1960, and as determined by the Commission was, respectively, $7,478,-458, $1,494,957, and $15,539,144, aggregating $24,512,559. The 5 types not flown in Missouri during 1959 consisted of the following (the figures in parentheses show the Commission’s respective depreciated valuations) : 10 Douglas DC-3’s ($241,501); 4 Douglas DC-7 85-passenger coaches ($5,800,147); 6 Douglas DC-8’s ($25,489,489) ; 5 Curtiss-Wright C-46’s ($339,709) ; and 4 Lockheed L-049’s held in storage for sale ($1,049,502). The aggregate depreciated valuation fixed by the Commission on all of Delta’s aircraft was thus $57,432,907. The cost and depreciated values of the various individual planes varied widely because of differences in types and dates of purchase. The aggregate depreciated value of the 5 types of planes not flown in Missouri constituted slightly more than 57% of the valuation of all of Delta’s planes.
Of the 3 types flown in Missouri during 1959, the Convair 340/440’s flew 1,042,-006 miles in Missouri as compared to 15,800,275 everywhere; the Douglas DC-6’s, 163,968 as compared to 11,015,087; the Douglas DC-7’s, 75,688, as compared to 17,443,958. These figures aggregated are: 1,281,662 miles in Missouri and 44,259,320 miles everywhere. The other 4 types which were flown exclusively outside Missouri (omitting the Lockheeds) flew a total of 12,081,957 miles. Thus, the ratio of miles flown in Missouri to total miles flown was 2.2748%. The ratio of miles flown in Missouri to miles flown everywhere by the types operated in Missouri was 2.8958%. No figures were submitted as to the miles flown by individual planes, — hence there is and can be no objection to considering the miles flown by types. It has been agreed that the aircraft of any certain type were used interchangeably in performing a particular service. The approximate percentages of time spent in Missouri by the 3 types of planes flown there were as follows: Con-vair 340/440’s — 6.5949%; Douglas DC-6’s —1.4886%; Douglas DC-7’s — 0.4339%.
Section 155.040, which provides for the assessment of aircraft, is as follows: “1. The state tax commission shall assess, adjust and equalize the valuation of all aircraft operated in this state in air commerce by every airline company. The valuation apportioned to this state shall be the portion of the total valuation of the aircraft as determined by the state tax commission on the basis of the arithmetical average of the following two ratios:
“(1) The ratio which the certificated route miles of the airline company within the state bears to the total certificated route miles of the airline company;
“(2) The ratio which the miles flown by aircraft of the airline company within this state bears to the total miles flown by the aircraft of the airline company during the immediately preceding calendar year.
“2. In the event one ratio is inapplicable, then the apportionment shall be made on the basis of the remaining ratio alone.” Section 155.050 provides that the Commission shall apportion the valuation, as determined under § 155.040 to the various governmental subdivisions “in which the airline company has arrivals and departures.” Section 155.060, relied on in part by appellants, is (in so far as material here) as follows: “Taxes levied on all aircraft under this chapter shall be levied and collected in the manner provided for the taxation of-railroad property, and the county courts and other officials shall perform the same duties ,and may exercise the same powers in levying and collecting the taxes on aircraft as such officials are required to perform in the levy and collection of taxes on railroad property. * * * ”
Section 155.020 (the “reporting” section) requires that each airline company shall, on or before May 1st in each year, furnish to the Commission a sworn statement showing: “(1) The total length in this state of its certificated routes; (2) The total length of its certificated routes; (3) The total miles flown in this state by its aircraft during the next preceding calendar year; (4) The total miles flown by such aircraft during the next preceding calendar year; (5) The total number of all aircraft owned, used or leased by such airline company on the first day of January in each year, and the actual cash value thereof; (6) The other information the state tax commission requires to enable it to carry out the provisions of this chapter.”
The Commission fixed the amount of its assessment ($751,592) by first taking the total value (depreciated cost) of all of Delta’s aircraft, including those not operated in Missouri in 1959 and also including the 4 Lockheeds which had not been operated at all, a figure of $57,432,907; it then applied to that figure the average of the two ratios provided in § 155.040, the first ratio being 2.2748%, the second 3.0665%, and the average 2.6707%. The resulting figure was $1,533,860; it then deducted an equalizing factor of 49%, thus arriving at its final assessment figure of $751,592 as that part of the total valuation apportioned to Missouri.
The Circuit Court reversed the order of the Commission, with the direction that the assessment should be $285,609. Apparently this figure was arrived at through findings that only the value of those planes which were flown in Missouri should be considered, that a formula should be applied separately to each type of plane and the results added, and that in lieu of the averaged statutory formula of route miles and miles flown, the amount of the assessment should be computed by applying respective percentages based upon a ratio of the maximum time spent in Missouri by each type of plane to its total time spent elsewhere. The Court further found that the decision of the Commission was in exces.s of its statu
We state the basic contentions of the parties .here without specific reference to the points of their briefs. Appellants insist: that the Commission correctly considered and included the valuation of all Delta’s aircraft and correctly applied the statutory formula to such value, since this computation constituted only a fair apportionment to Missouri of its share of the unitary or integrated value of its aircraft operated in Missouri; that a correct interpretation of Chap. 155 of the statutes permits this; that nothing in the statutes requires an assessment of each type of aircraft separately, or “by-type,” nor an assessment by a formula based solely upon “time spent” in Missouri as compared with time spent elsewhere; and that Delta had failed to show that the assessment as made was so grossly excessive, unfair and unreasonable as to be invalid, constitutionally or otherwise. Delta contends that the statutes contemplate the apportionment to Missouri of a part of the total valuation of the aircraft oper-rated in Missouri; that the assessment as made by the Commission constituted such an arbitrary, grossly excessive and unreasonable apportionment of value to Missouri as to violate constitutional provisions for due process and the commerce clause of the federal constitution. As more or less subsidiary points, Delta also insists: that the only permissible mode of assessment under the statutes consists of the application of the proper formula separately to each type of aircraft, and that the only proper and. lawful standard of reasonableness is one based on the ratio of time spent in Missouri to’ the total time spent elsewhere, by those planes which actually operated in Missouri.
The initial and basic issue here is whether the Commission was authorized by Chap. 155 to apply the apportionment formula to the aggregate value of all aircraft of Delta (as it did) or whether it should have been applied only to the value of those “aircraft operated in this state in air commerce,” or, in other words, only to the aggregate value of those planes which were flown in Missouri during 1959. We have answered that question in considerable detail in an opinion recently adopted in Banc in the case of United Air Lines, Inc. v. State Tax Commission et al., Mo., 377 S.W.2d 444, and in a Per Curiam opinion modifying the original opinion in certain respects. We also discussed there in considerable detail the cited authorities, which accounts for the absence of such a discussion here. It was there determined, after a consideration of all the arguments now made pro and con, that Chap. 155 contemplates that the apportionment formula should be applied only to the valuation of the aircraft which were operated in Missouri in air commerce during 1959; was also held, and now adhere to both rulings, that there is no requirement in the statutes that the assessment be made separately “by-type,” nor is there any requirement that it be made in the aggregate. We repeat here, however, that it would not seem appropriate for the Commission to shift back and forth from one method to the other under differing circumstances, although we do not intimate that it has done or might do so.
The parties here agree that if the method of assessment approved in the United case is applied here the assessment would be $358,089. This, technically speaking, still leaves the contention of Delta that
It is true that our conclusions here result in an increase of $72,480 over the assessment directed by the trial court ($285,609). That assessment figure was, in our view, arrived at under misconceptions as to the necessity of the by-type approach, the elimination of the route miles ratio and the finding that the maximum assessment legally permissible was $285,609. When we consider that the Commission was necessarily apportioning to the State of Missouri its fair share of taxation on aircraft concededly valued at $24,512,559 (Missouri planes only), we readily see that the difference is not such as to make the assessment arbitrary or unfair or one which, per se, attributes to Missouri values which exceed “the value of its aircraft * * * actually present in Missouri * * (Quoted from Delta’s brief in Banc.) Indeed, Delta substantially concedes this, as indicated by the further quotation from its brief in Banc, as follows: “On the other hand, if the statute is construed as Delta contends so that an ultimate assessment of either $326,965 (on a ‘by-type’ basis) or $358,089 (on a ‘lump sum’ basis) is sustained, then there is relatively little difference between the assessments based on the statutory formula and an assessment based on the value of Delta’s aircraft that were actually present in Missouri, and the Court may be able to conclude that the statutory formula as construed by Delta and the Dissenting Opinion can constitutionally be applied to Delta in this particular in
While we agree, generally, with paragraph 1 and in part with paragraph 5 of the Court’s findings, we do not concur in paragraphs 2, 3, or 4, nor in the amount fixed in the order and judgment. Under these circumstances, we reverse the judgment and remand the cause with directions to enter a new judgment in accordance with the views expressed in this opinion.
. All statutory citations refer to RSMo 1959 and V.A.M.S., although the petition for review was actually filed pursuant to the 1949 statutes.
Dissenting Opinion
(dissenting).
I dissent in this case, and dissented in United Air Lines, Inc. v. State Tax Commission of Missouri, Banc, Mo., 377 S.W.2d 444, for the following reasons stated in the opinion of Houser, C., adopted in Division No. 1, before transfer to the Court en Banc, hereinafter set out without quotation marks. If the next session of the General Assembly desires to' clarify the statutes involved, it may be helpful for it to have these views as well as those stated in the principal opinion.
The basis of the decision of the Tax Commission is that in enacting new Chapter 155 the General Assembly has extended to commercial airline companies the unit method of assessment heretofore applied to the rolling stock of railroads. In the case of a railroad system operating in several states it has long been considered that the only practical method of assessing and collecting taxes upon that portion of the system lying within the taxing state is to make an assessment and valuation of the entire system, “as a homogeneous unit representing a single profit-earning business,” 51 Am.Jur. Taxation § 877, and then to assign a percentage of that total valuation to the taxing state, according to some fair and reasonable method of apportionment. 84 C.J.S. Taxation § 426 c. The courts have considered that the valuation of the rolling stock of railroads as a whole under the unit method of assessment and the apportionment of such value to the taxing state in the proportion the number of miles of railroad operated in the taxing state bears to the total mileage of lines in the entire system, is a proper and permissible method of arriving at an assessment of rolling stock, Pullman’s Palace Car Co. v. Pennsylvania, 141 U.S. 18, 11 S.Ct. 876, 35 L.Ed. 613; St. Louis Southwestern Ry. Co. v. State Tax Commission, Mo.Sup., 319 S.W.2d 559.
Under the unit method of evaluating that portion of the property of an interstate carrier having a tax situs in a nondomicil-iary state the taxing authority first determines the value of the entire system as a whole, and then determines what percentage of that value is allocable to the taxing state. 51 Am.Jur. Taxation § 877 ; 84 C.J.S. Taxation § 426 c, p. 839. The valuation of the property of an interstate carrier in its entirety, as the basis for apportionment, has always been at the foundation of the unit method, or “rule of entirety” as it was originally denominated. Judson on Taxation, 2nd Ed., § 259. That this is what the General Assembly had in mind in enacting Chapter 155 is apparent from a consideration of its various provisions. In order for the State Tax Commission to determine the value of the entire system of an airline company the latter is required to report the “actual cash value” of “all aircraft owned, used or leased by such airline company on the first day of January in each year.” § 155.020(5). Section 155.040 provides the method by which this state’s share of that total valuation shall be apportioned. The prescribed formula incorporates the arithmetical average of two ratios. The first ratio relates to certificated route miles, and is ascertained by dividing the total certificated route miles everywhere in the entire Delta system by the certificated route miles of Delta within Missouri. The information as to total length of certificated routes everywhere and total length of certificated routes in this state is required to be furnished by the airlines. § 155.020(1) and (2). The second ratio relates to miles flown, and is ascertained by dividing the total miles flown by the aircraft of Delta everywhere in its entire system during the preceding year by the miles flown by Delta aircraft within this state during that period. The information as to total miles flown everywhere in the entire system and total miles flown in this state is required to be furnished by the airline companies. § 155.020(3) and (4).
There is nothing in § 155.040 to support the view that the words "the aircraft” occurring in the second sentence are limited to aircraft operated in this state, as contended by Delta. The second sentence does not undertake to apportion to this state a. portion of the valuation of the aircraft “operated in this state.” It apportions to Missouri a portion of “the total valuation of the aircraft.” What total valuation of what aircraft? Obviously, the total “actual cash value” of “all aircraft owned, used or leased by such airline company on the first day of January in each year,” information required to be furnished by § 155.020; information required to be in the files of the State Tax Commission at the time of the assessment. Significantly, the airline company is not required to give the Commission information as to the total valuation of all aircraft operated in this state; is not required to provide the basis for the calculation Delta would have the Commission make. It is reasonable to assume that if the General Assembly had intended that
The first sentence of § 1S5.040, which defines and limits the subject of taxation to aircraft having a taxable situs in Missouri, is not inconsistent with this construction. Its language “all aircraft operated in this state” has no reference to the apportionment provisions of the second sentence. The first sentence serves merely to identify aircraft operated in this state as the subject of taxation, as distinguished from aircraft not operated in this state. It constitutes a legislative recognition of the rule that aircraft not operated in this state cannot constitutionally be subjected as such to direct ad valorem taxation. The words “the aircraft” in the second sentence do not refer to the words “all aircraft operated in this state” in the first sentence, under the doctrine of last antecedent. This rule is merely an aid to construction, and is not to be applied where a consideration of the entire act clearly requires the application to words more remote. State ex rel. St. Louis Public Service Co. v. Public Service Commission, 326 Mo. 1169, 34 S.W.2d 486; 82 C.J.S. Statutes § 334.
■' That the General Assembly had the railroad statute in mind in enacting Chapter 155 is evident by the provision of § 155.060 that taxes levied on aircraft under this chapter shall be levied and collected in the manner provided for the taxation of railroad property.
Considering the over-all objectives and purposes of Chapter 155 it seems clear that “the aircraft” occurring in the second sentence of § 155.040 relate and apply to the words “all aircraft owned, used or leased by such airline company” occurring in § 155.020(5). We conclude that Chapter 155, considered as a whole as well as section by section, reveals a clear intention that in assessing aircraft of interstate airline companies for ad valorem taxation the State Tax Commission shall make a total valuation of all of the aircraft of the company, wherever operated, as the basis for the allocation, under the unit method of assessment.
. The Missouri statute directs the State Tax Commission to “assess, equalize and adjust only such proportion of the total value of all the rolling stock of such railroad company as the number of miles of such road in this state hears to the total length of the road as owned or controlled by such company.” § 151.060, (3).