263 P. 926 | Utah | 1928
There are eight causes of action alleged in the complaint. Plaintiff and its assignors are foreign corporations doing business within the state of Utah. The object of the action is to recover from the secretary of state certain fees paid to that officer as annual license fees for the privilege of doing business within the state. It is averred in the first cause of action that plaintiff is a Minnesota corporation; that it
Corpus Juris-Cyc. References:
[1, 2] Commerce 12 C.J. p. 109 n. 20; Corporations 14a C.J. p. 1253 n. 48.
[3] Courts 15 C.J. p. 931 n. 82. *213 has an authorized capital stock of $6,000,000; that stock has been issued, and is now outstanding, representing $4,948,800, and that the latter named amount is its total investment. It is further averred that plaintiff is engaged in manufacturing steel and other metal products, and in selling the same in Utah and in other states of the Union; that the amount of plaintiff's capital used and located within the state of Utah does not exceed 1.7 per cent. of the total invested capital. It is also alleged that the defendant secretary of state required and demanded of the plaintiff a fee of $750 as a condition precedent to doing business within the state for the year 1926, and that the plaintiff paid such fee under protest, and now brings this action to recover the amount so paid. The fee received by the secretary of state was thereafter turned over to the defendant John Walker as state treasurer, and for such reason the treasurer is made a party defendant in the action. The allegations in the other causes of action are similar. The nature of the business engaged in by the other corporations and the amounts of capital stock authorized and actually used in this state are different, but the fee demanded in each case was based upon the authorized capital stock of each corporation. The further allegation of the complaint is that the annual license fee or tax so paid by plaintiff under protest lays an unwarranted burden upon interstate commerce, and is unlawful, for the reason that the right to impose such tax or license is denied the state by article 1, § 8, subd. 3, of the Federal Constitution; likewise that the fee required by the statute is repugnant to Amendment 14, § 1, of that document, in that the fee is a tax upon property situated wholly without the state of Utah.
The Attorney General appeared and filed a general demurrer to each cause of action stated in the complaint. The demurrer was overruled. Defendants declined to further plead. Thereafter judgment was entered in favor of plaintiff for the amounts sought. From that judgment this appeal is prosecuted. *214
The secretary of state justifies his action in demanding the fees of which complaint is made by reason of the provisions of Comp. Laws Utah 1917, § 1271, as amended by Laws Utah 1919, and as further amended by chapter 66, Laws Utah 1, 2 1923. It is provided in that section as amended that all domestic and foreign cor-corporations, except insurance companies thereafter engaged in business within this state, shall procure annually a certificate from the secretary of state authorizing such corporations to continue to transact business within the state, and that each of such corporations shall pay annually to the secretary of state a corporation license tax as follows: "All corporations with an authorized capital stock of $10,000.00 or less, $5.00." The amount of the license fee is graduated to conform with the amount of the capital stock; the maximum being a fee of $750 for all corporations having an authorized capital stock of more than $4,000,000.
In a recent case, Badger v. Crockett,
The Attorney General relies chiefly on the opinion of the court in Baltic Min. Co. v. Massachusetts,
"The amount demanded is unimportant when there is no legitimate basis for the tax."
The Supreme Court of California in Perkins Mfg. Co. v.Jordan (Cal.)
"There is no substance in the argument of respondent that a different principle may apply in the case of filing fees graded on authorized capital than in the case of a privilege or excise tax based upon authorized capital. The effect upon interstate commerce and upon equal protection of the law to persons in the several states is the test, and neither the name nor the aim of the state tax can suffice to prevent consideration by the Supreme Court of the United States of the necessary effect and consequences of the state statute."
The foregoing statement of the California court has, in our judgment, abundant support in the decision of the Supreme Court of the United States. International Paper Co. v.Massachusetts,
Judgment affirmed.
THURMAN, C.J., and CHERRY, STRAUP, and HANSEN, JJ., concur.