32 S.W.2d 634 | Ark. | 1930
STATEMENT BY THE COURT
Appellant, an operator of a taxicab business in the city of Fort Smith, brought this suit in equity against *656 appellee, the Commissioner of State Revenues, to enjoin him from enforcing against appellant and collecting, under the provisions of act 65 of 1929, the 4 per cent. tax on the gross amount of income received by appellant from the operation of his business.
A demurrer was filed to the complaint and sustained, and, appellant declining to plead further, his cause was dismissed for want of equity, and from the decree this appeal is prosecuted.
The complaint, among other allegations, alleged that he has from his business as a motor vehicle carrier a large gross income from fares and charges collected for the transportation of persons and property, but that the necessary expenses of operating his business, keeping his vehicles in repair, etc., virtually consume all the gross income from the business; that he has a large amount of capital invested in the business, more than $15,000, and that the motor vehicles depreciate in value and have to be replaced every three years; that during the time the act has been in force from the 1st day of March, 1929, to and including the 1st day of October, 1929, the gross amount received in the operation of the business was $17,047.20, and that the operating expenses for that period amounted to $17,595.18, a loss of $547.98; that the tax attempted to be collected, under said act on his gross income for that period would amount to the sum of $681.88, which, if he was required to pay, would increase the loss from the operation of his business for the period to the sum of $1,229.86; that the income and expenses for the period are typical of his income and expenses for similar periods throughout the entire time he has been engaged in the business. It was further alleged that a full, complete and correct statement of the gross revenue received by appellant during the period and expenses paid out in the operation of the business and the showing of the profit and losses of the business during each and every month of the period was attached as exhibits and made a part of the complaint. And "that *657
the tax provided for by 67 of the act aforesaid, as applied to this plaintiff's business, is arbitrary, unreasonable and oppressive, and, if collected against this plaintiff's business, will confiscate his property, and deprive him thereof, without due process of law."
(after stating the facts). In Merchants' Transfer Warehouse Co. v. Gates,
This complaint does not allege that the tax provided for by 67 of the said act is arbitrary, unreasonable, oppressive and confiscatory, but only that "as applied to this plaintiff's business," it is so and would confiscate his property and deprive him thereof without due process of law. It was also alleged the amount appellant had realized from his business during the period and the amount of expenses he had been compelled to pay in its operation, showing a loss of a substantial sum, which would be further increased if he were compelled to pay *658
the tax in the amount of $681.88. It was not alleged that the amount paid out for operating expenses of the business was not unreasonable nor more than was reasonably required for the operation thereof. In other words, appellant contends that the act "as applied to his business" is arbitrary, unreasonable, oppressive and confiscatory, and therefore invalid. He alleges, however, not that the general business required by the act to pay the tax, but only that his business, was carried on at a loss, without consideration of the amount of the tax required to be paid, showing the revenues received and the expenses paid in the operation thereof. It is no longer questioned that the State has the power to levy such a privilege tax. Merchants' Transfer Warehouse Co. v. Gates, supra; Cyclopedia Automobile Law, p. 6, and cases there cited; Hester v. R. R. Corn.,
"An excise is, however, to be judged by its effect upon persons or corporations generally, and is not to be considered unreasonable because it is prohibitive upon certain financially weak persons or corporations. Only those excise laws whose general operation is confiscatory and oppressive are unconstitutional. See also Ohio Tax Cases,
"Whether a license tax is prohibitory is primarily a legislative question. `All presumptions and intendments are in favor of the validity of the tax; — in other words, the mere amount of the tax does not prove its invalidity.' The reasonableness of an occupation tax does not depend on whether or not a hardship results in an isolated case, but instead upon the general operation of the tax in the class to which it applies. The amount of the tax is not to be measured by the profits of the business taxed, and the mere fact that the particular person taxed conducted his business at a loss does not of itself make a tax unreasonable." Cooley, Taxation (4th ed.) *659
3433. See also Wright v. Hirsch,
In the case of Fiscal Court v. F. A. Cox Co., 117 S.W. 296,
No error was committed in sustaining the demurrer and dismissing the complaint for want of equity, and the decree is accordingly affirmed.