58 Ga. App. 94 | Ga. Ct. App. | 1938
Lead Opinion
Louis A. Regenstein and Mrs. Venia L. Regenstein, husband and wife, instituted the present action against the
In dealing with exemptions, the subject now under consideration, the income-tax act of 1931 provides as follows: “Personal exemptions and credits. — There shall be deducted from the net income of resident individuals the following exemptions: (a) In the ease of a single individual, a personal exemption of $1500. (b) In the case of a married individual living with husband or wife, $3500. (c) In the case of a widow or widower having minor child or children, natural or adopted, $3500.” Code, § 92-3106. In determining the question now before the court, a consideration of the above provisions relating to personal exemptions is of first importance. State Revenue Commission v. Brandon, supra. We believe, conservatively speaking, that it was the intention of the legislature, in granting to a married individual living with husband or wife, an exemption of $3500, to limit the exemption of a married individual to that amount. Any provision or provisions of the act whereby it is claimed that the husband may reduce Ms taxable income by substantially two $3500 exemptions simply because he has a wife with or without some independent income, whether the return made be joint or separate, should be plain and unambiguous to this effect. No such provision can be found in our income-tax act. In Hoeper v. Tax Com., 284 U. S. 206 (52 Sup. Ct. 120, 76 L. ed. 248), it was said: “Liability for the tax rests upon the person by whom the income, in respect of which the tax is imposed, is received or receivable. The recipient of the income is the person taxable, and unless expressly exempted every recipient is liable therefor. Where a married woman living with her husband has an income of her own, independent of her marital status, the same is not to be considered as a part of her husband’s income, but the wife is the recipient and the income is taxable, and the wife is the person liable.” This was quoted approvingly in Brandon v. State Revenue Commission, 54 Ga. App. 62 (186 S. E. 872), affirmed, 184 Ga. 225 (190 S. E. 660). Thus the husband or the wife is not responsible for the tax produced by
Under the Federal income-tax act, where the incomes of the husband and the wife, totaled, exceed the amount of the one exemption allowable, a return is required, for the amount in excess of $3500 is “taxable income.” Under our statute, where neither the income of the husband nor that of the wife equals or exceeds $3500, there is no “taxable income” (Code, § 92-3111), even though the incomes totaled exceed $3500 as net income, or $5000 as gross. It is not easily understood why a husband and a wife are each allotted an exemption of up to $3500 and are required by the Code, § 92-3201 (b) to make q return where the net income of neither exceeds $3500, but totaled exceeds such sum, since the act in other eases only requires a return where there exists taxable income. This is unquestionably the provision referred to by the Supreme Court as indicating an intention on the part of the legislature of allowing the husband and wife only one $3500 exemption, and its presence in the act certainly can not be given the effect of allowing an exemption of more than $3500 to the husband where the income of the wife is less than $3500. Nor do we think it necessarily follows, from the fact that the Code, § 92-3201 (b), provides that where a joint return is made the tax shall be computed on the aggregate amount (which provision is adopted from the Federal act, wherein only one $3500 exemption is allowed to husband and wife), that the total income of the husband and the wife is to be dealt with only as one indivisible sum, which represents and is to be regarded as the income of the husband and wife as an entity, with no regard for the amount contributed by each, and as to which each is entitled to the personal exemption of $3500. As we have pointed out above, to give the act the construction claimed for it by counsel for the plaintiffs, the provision should be plain and unambiguous. “Taxation is the rule, and exemption
Under the construction that we have placed upon the income-tax act, the petition does not state a cause of action for the entire amount sued for. However, since Mrs. Regenstein was entitled to an exemption of $3500 so far as to absorb her small income for each of the years in question (which sums the petition alleges were considered in arriving at the amount of tax paid for each of those
Judgment reversed.
Dissenting Opinion
dissenting. The claim in the petition that the plaintiffs were entitled to a refund of a part of their income taxes, which they had overpaid, was based solely on the ground that each of them was entitled to an exemption of $3500; and their able counsel state in their brief that the only question in the case “was whether or not the husband and the wife are each entitled to a deduction of $3500 where a joint income tax return is filed and where the income of the wife is less than $3500, but the aggregate income of both is in excess of $7000.” I agree with my colleagues that the proper answer to the question is that the husband and wife, under the facts of the case, were entitled to only one exemption of $3500. This being true, and it being the only question for the determination of this court, the decision of the trial court dismissing the petition on general demurrer should be affirmed. The further holding of my colleagues that the plaintiffs, although not entitled to a double exemption, are nevertheless entitled to recover “a few dollars,” is a ruling upon a matter not raised by the pleadings and not argued in the briefs of counsel for either party. Such a recovery was not asked for in the petition, and the plaintiffs are not entitled to recover something which they did not sue for.
