215 Wis. 645 | Wis. | 1934
Under the three-year-average method of assessing incomes which obtained in this state at the time of the assessment under review, the law required the payment of a tax on all average net incomes by every person residing
The basic theory of taxation as stated in 1 Cooley, Taxation (3d ed.), 1, has been referred to approvingly by this court in Fitch v. Wisconsin Tax Comm. 201 Wis. 383, 230 N. W. 37, as follows:
“In the very opening sentence of Cooley on Taxation (3d ed.) we find it stated that ‘Taxes are the enforced proportional contributions from persons and property, levied by the state by virtue of its sovereignty for the support of government and for all public needs. The state demands and receives them from the subjects of taxation within its jurisdiction that it may be enabled to carry into effect its mandates and perform its manifold functions, and the citizen pays from his property the portion demanded, in order that, by means thereof, he may be secured in the enjoyment of the benefits of organized society. The justification of the demand is therefore found in the reciprocal duties of protection and support between the state and those who are subject to its authority, and the exclusive sovereignty and jurisdiction of the state over all persons and property within its limits for governmental purposes.’ ”
The exaction of a tax can be justified when one is enjoying the protection of government either for himself or his property. Fitch v. Wisconsin Tax Comm., supra. As long as one continues to enjoy that protection he should contribute toward the expense of maintaining it. The reasonableness of this rule was recognized by the legislature in
The method prescribed for determining the tax liability under circumstances such as exist in this case, is provided for in sec. 71.09 (2), Stats. 1929, and that section reads:
“Liability to taxation for income which follows the residence of the recipient in the case of persons, other than corporations, who move into or out of the state within the year shall be determined for such year by the ratio of time which the residence of such taxpayer in the state bears to the entire calendar or fiscal year. The deductions for personal exemptions provided for in sec. 71.05 shall be prorated on the basis of the time of residence within and without the state. The net income of such person assignable to the state for such year shall be used in averaging the income subject to assessment under this chapter. ...”
The state desires to recover into its treasury the tax that it may justly levy upon one domiciled in this state, and in the present case the taxpayer was domiciled here for one-sixth of the year. The guiding question, then, is what is the amount of tax this taxpayer owes. This we hold is answered according to the statute when the taxpayer’s entire net income for the year in question, added to that of the two preceding years and the total thus obtained divided by three, is taken as the tax base. When the tax is computed upon this amount and divided by six, this figure representing the proportionate time of the taxpayer’s residence in Wisconsin during that year, the amount thus arrived at is the tax chargeable.
In the instant case, the entire income involved followed the taxpayer’s residence. In a situation where the taxpayer moving out of the state has income which follows his residence. and also income derived from property located or
This interpretation of the statute is the only one that avoids unreasonable results and prevents discrimination between taxpayers.
By the Court. — The judgment of the circuit court is reversed, and cause remanded with directions to require an assessment of tax in accordance herewith.