203 S.W.2d 33 | Ky. Ct. App. | 1947
Reversing.
The appellant, Frances P. Newman, listed for taxation as of July 1, 1945, her present right to receive future income from a life insurance policy, and a tax bill in the amount of $311.93 was placed in the sheriff's hands for collection. She also listed the right for taxation as of July 1, 1946. Conceiving that the listing as of July 1, 1945, was not required by law, in view of certain decisions of this court and Chapter 39 of the Acts of 1946, now KRS
The court sustained the demurrer apparently on the ground that appellant had voluntarily listed the property for taxation and is therefore estopped to claim an exemption granted after the listing. Appellant contends that she should not be penalized for her good *280 faith in honestly listing her property in an effort to comply with the law, and that to compel her to pay the tax on property listed as of July 1, 1945, would violate the equal protection clause of the Fourteenth Amendment to the Federal Constitution and also section 172 of the Kentucky Constitution, which requires that all property in the same class be taxed at the same rate, since other owners of similar property who failed to list it as of July 1, 1945, cannot be compelled to list it and to pay a tax thereon provided they have listed it as of July 1, 1946. An understanding of the questions involved requires a brief resume of the decisions and legislation affecting this particular type of property.
In Commonwealth v. Sutcliffe,
In the meantime the General Assembly, at its 1946 session, had passed an act classifying the right to receive future income for tax purposes and providing that the owner of such right on July I of each year shall pay to the State alone a tax of five cents upon each $100 of the fair cash value of the right on the assessment date. Chapter 39, Acts of 1946, KRS
The Act became effective June 19, 1946. The appellant had listed her "right to installment payments under the terms of a life insurance policy" as of July 1, 1945, and later she listed the same property as of July 1, 1946. The listing as of July 1, 1945, was on the faith of this court's opinion in the Drake case first handed *282
down on June 22, 1945. However, under the subsequent extension of the opinion giving it prospective effect only, the owners of this species of property were not required to list it prior to July 1, 1946. It is appellee's contention that section 3 of Chapter 39 of the Acts of 1946 is merely a statute of limitation against an action to assess property for taxation and does not affect any proceeding to collect taxes, and since appellant voluntarily listed her property for taxation the statute has no application. It is also asserted that the statute is invalid. It is unnecessary to consider the statute since the opinion in Button v. Drake, supra, is controlling. Under the extension to that opinion giving it prospective effect only, the type of property owned by appellant was not taxable prior to the assessment date, July 1, 1946, and the fact that she honestly listed the property as of July 1, 1945, on the faith of the first draft of this court's opinion in the Drake case, does not preclude her from resisting collection of the tax. There is no element of estoppel. As a general rule a taxpayer who has listed property for taxation under a mistake, either of law or fact, may have the error corrected. The rule is stated thus in 51 Am. Jur., Taxation, section 667: "A mistake in a tax return does not preclude a taxpayer from showing the actual facts and from having his tax liability determined by correct principles of law applicable to such facts, where he acted in good faith and did not intend to mislead the taxing authorities." This rule was followed in Gray v. R. J. Reynolds Tobacco Company,
The judgment is reversed with directions to overrule the demurrer to the petition and for further proceedings consistent herewith. *283