118 Va. 455 | Va. | 1916
delivered the opinion of the court.
This writ of error brings in question the validity of a license tax assessed against the plaintiff in error for the year 1912 under an ordinance of the city of Norfolk, the material part of which is as follows:
“Any person who shall engage in the business of sending telegrams from the city of Norfolk to a point within the State of Virginia, or of receiving telegrams in the city of Norfolk, from a point in the State of Virginia, excepting, however, telegrams sent to or received by the government of the United States or this State, or their agents or officers, shall pay a license tax of $500.00, and in addition $1 per pole on each pole and $1 on every hundred feet of conduit in the streets or alleys of the city of Norfolk owned or used by said person . . . Nothing in this ordinance shall be construed as imposing a license tax on . interstate commerce.”
The company refused to pay the tax, and a fine was imposed by the police justice of the city. The company took an appeal' to the circuit court, where a jury was waived and all matters of law and fact were submitted to the court, and the judgment here complained of was rendered against the company. The errors assigned may be considered under two general heads.
We do not think the tax in' question can be regarded as an inspection tax. The city claims that the business of the company “cannot be reached by an ad valorem system” (Ya. Const, sec. 170), and that this tax was a revenue measure and was charged for the privilege of doing business in the city. This would seem to be the correct interpretation of the ordinance. (Robinson v. Norfolk, 108 Va. 14, 20, 60 S. E. 762, 15 L. R. A. (N. S.) 294, 128 Am. St. Rep. 934.) It is true that the tax is graduated to some extent by the number of poles and feet •of conduit owned by the company, but the ordinance operates upon all alike, and, if the city did not violate any constitutional inhibitions, it had the right to adopt its own method in fixing the amount. The graduation of license taxes (not merely inspection taxes), according to amount or extent of business, either with or without a fixed minimum, is a common and widely approved practice. Judson on Taxation, sec. 450; Clark v. Titusville, 184 U. S. 329, 22 Sup. Ct. 382, 46 L. Ed. 569; Howland v. Chicago, 108 Ill. 500; St. Louis v. Bircher, 7 Mo. App. 169; Va. Tax Bill, sec. 36, Code 1904, p. 2214; Ould & Carrington v. City of Richmond, 23 Grratt. (64 Va.) 464, 14 Am. Rep. 139; Petersburg v. Cocke, 94 Va. 244, 248, 26 S. E. 576, 36 L. R. A. 432; Postal Tel. Co. v. City of Norfolk, 101 Va. 125, 43 S. E. 207 (ordinance substantially the same as in this case except that the fixed minimum was $250 instead of $500); Commonwealth v. Werth, 116 Va. 604, 609, 82 S. E. 695.
2. The second proposition upon which the company relies for a reversal of the judgment is that the license tax in question is an illegal burden on interstate commerce (the company doing a large interstate business), and is also confiscatory, and hence violative of the United States Constitution.
The soundness of this position depends, in our view of the case, solely upon the correctness and sufficiency of the method used by the company in its effort to demonstrate, as a matter of calculation and bookkeeping, that the tax is a burden on interstate commerce and confiscatory, as alleged. The calculation adopted by the company shows, according to figures taken from the evidence and employed in the petition, that the tax exceeded the net. income from intrastate business at the Norfolk office for the year 1912 by the sum of $1.82, allowing nothing for interest on investment, and, according to figures taken from the evidence and employed in the reply brief for the company, the calculation shows a deficit of $13.00 if no interest be allowed on investment, and $48.55 if such interest be allowed. We shall not go further into the figures testified to by the company’s witnesses than may be necessary to show the principles upon which these results depend.
The total interstate and intrastate receipts at Norfolk for 1912 were $47,136.74, and the intrastate receipts alone were $3,880.11. . The total operating expenses at Norfolk for that year (not including taxes, .depreciation or “overhead charges”)
Counsel for the company claim that a distinction between these cases and the one at bar is found in the fact that railroad traffic consists of a variety of articles differing in size and value, and other particulars which affect the rates, whereas the traffic of a telegraph company consists only of telegrams which are free from these differences. This distinction, however, while it would doubtless greatly simplify the evidence necessary to show the relative cost of intrastate and interstate telegraphic traffic, does not change the principle that the court cannot, in the absence of proof of the relevant facts, assume that the ratio of expense to revenue is the same as to each class of traffic.
But a still more serious objection to the method in question is to be found in other figures employed in the calculation. To further reduce the showing of revenue from the intrastate re
In our opinion there is no error in the judgment complained of, and it will be affirmed.
Affirmed.