*1 AND DETERMINED ARGUED CASES THE IN SUPREME MISSISSIPPI COURT OF THE
AT 1925. MARCH TERM, Att’y ex rel. M. R. & N., v. Co.* State Knox, Gen., Gulf,
Same Stone. 1925.) (En Suggestion July Banc. June of Error Overruled 1925. [104 25045]. 689. Nos. So. require- subject “Income tax" held not to constitutional
1. Taxation. taxing proportion ment to value assessment of general according under to laws value. excise, tax” a tax within An'“income is an not on meaning requirement of of section of the state Consti- value, proportion tution, be shall taxed to its general taxes uni- under laws and and shall assessed according its true value. rules form Law. Taxation. all same taxation 2. Constitutional If of class.Jor alike, equality clauses state and Constitutions are taxed of federal complied with. are subjects legislature make a reasonable classification of the alike, taxation, and, are if all of the same class taxed of equality the state and federal are clauses both Constitutions of complied with. tax, graduated according Law. Taxation. Income Constitutional requirement equality income, not to held violate amount graduated according taxation; tax, in- amount equal protection deny come, laws. does according income, graduated in- the amount of the A tax equality come, clause either of section not violate does M. &3ST.R. Gen. Go. Gulp, Syllabus. 138 Miss.] equal protection clause
the state Constitution nor the laws federal Amendment to the Constitution. Fourteenth *2 Exemption Law. Statutes. income Taxation. 4. Constitutional from resting upon power tax, legislature has to which classification malee, Constitution; equality ex- held not to violate clause of legis- emption tax, resting income which on from classification power malee, deny equal protection lature has held not of laws. exemption tax, An from income which rests classification legislature make, power not violate the which the has does equality of the state or federal Constitutions. clauses either provision Constitutional Law. Taxation. re- 5. Constitutional for self-executing; demption property held sales statute of from nonpayment providing property taxes is sale of for of for redemption provide property. void of for for failure Constitution, redemption provides 79 for Section of nonpayment taxes, property of sales for of from thereof providing self-executing, the sale of and a statute for provide nonpayment it fails to is not void because of taxes for the property. redemption of the for the requirement that taxes shall he assessed Constitutional 6. Taxation. hy apply to hy held not to income and collected assessor sheriff taxes. requirement taxes the state Constitution that of section of
The by by and collected the sheriff has the assessor shall assessed be only taxes, application as can but to such be to income no charge of, primarily against, by assessment an fixed property. commerce, burden interstate is not on net income Tax on 7. Commerce. part although derived in whole or in is income therein included commerce. such from commerce, interstate al- on is not burden income net A tax on part derived whole or in though therein income included commerce. interstate from impose tax on net income residents and State of
8. Taxation. n hy it, may include therein income de- corporations created state. without business rived from imposing therein and income of residents a tax net
A state by may income corporations include therein derived created the state. without business from Att'y M. &N. B. Gulp, Gen. v. Appellant. .
Brief [138 for . payment Law. Sale land 9. income taxes held Constitutional for of of deprive process not to owner due law. without of payment taxes, by The sale of land for the the owner due thereof, by prescribed made the sheriff in manner lafo judgment, deprive sales an under execution on does not process owner of the land of due law. without Constitutionality provision I'O. Constitutional Law. Statutes. separable thereby; statute cannot raised one not affected if statute, portions remainder invalid leave remainder valid. constitutionality provision of a of a statute cannot be raised thereby, separable if one not it is affected from the remainder statute. McGowen, JJ., dissenting. Anderson Cyc., 766; Taxation, 37, pp. 707, Taxation, Cyc., 1. 2. *Headnote 746, 747; Law, pp. J., 884; Taxation, 3. Constitutional C. Section Law, Cyc., p. J., 883; Taxation, 4. C. Constitutional Section Cyc., p. 739; Law, J., (Anno); 12 C. *3 Constitutional Section 133 Taxa 1381, Cyc. (Anno); Taxation, tion, pp. Cyc., p. (Anno); 6. 1382 J., 37 37 728 Commerce, (Anno); Taxation, 'Cyc., 12 126 8. p. 7. 811; C. Section 37 1334; Cyc., Taxation, p. Law, J., 10. 37 Constitutional 9. 12 C. 177; Statutes, Cyc., p. 36 982. Section discussing question *(1) constitutionality Authorities (N. S.) 864, *4 art. sec. 1869, 12, 20; Constitution 3888, 3890; 3886, v. Stvope, 571; Kuykendall, Daily 83 Miss. 47 Adams v. Mississippi 121; Miss. George, Vassar v. 47 386; Miss. Worrell, 67 Cook, Bank v. 40; 47; 56 Miss. Miss. Mills v. Bank-, Winona v. Adams Bank Oxford, 535; 78 Miss. v. Enochs Thomas, 70 517; Miss. Alexander v. 663; 69 Miss. Skillmañ, Cola Co. v. 91 Miss. Coca State, 103; 133 Miss. v. Worrell, Bank v. Cole. 87 646; v. Miss. Agency Ins. 677; Canning State, 101 Co. v. Miss. Barataría 67 47; Miss. Widman, State 112; v. Macon, 55 Miss. 890; Holberg v. Robertson, 116 Miss. Co. v. 204; Postal Tel. 782; 72 So. p. 26 R. C. sec. L., 124,
74 & M. N. it. Gxjle, AttN Gen. v. Appellant.
Brief
[138
Miss.
II-A.
5 of the Act
Section
does not make tax a prop-
tax.
5,
Section
Income Tax
erty
Act; Section
In-
30,
come Tax Act;
Flint
31,
Section
Income Tax
v. Stone
Act;
Tracy
1912
Go.,
B Ann. Cas.
Thompson Kreutzer,
1316;
v.
112.Miss. 165;-
Thompson McLeod,
Adams
B. B.
75 Miss. 275; Norsworthy
Boseberry,
v.
135 Miss.
845; Lewis’ Sutherland, Statu-
Construction (2
Ed.), 410-411; McIntyre v. Ingra-
tory
ham,
28; Koch y. Bridges,
Hemphill, III. act not violate does section 135, Con- state stitution. Enochs v. State, 133 143; Miss. State v. Adler ¡ 68 Thibodeaux 487; v. State, Miss. 683'.
iy. Act need not state for what purpose im- Laws posed. Laws 1918, p. 88; 1920, 103; 1922, p. Laws Laws p. 98; 1924, p. 107.
y. The act does not conflict with the commerce clause
S.U. Glue Go. v. Oak Greek,
of the Federal Constitution.
62 L. Ed.
321; Underwood Typeiuriter Go.
247 U. S.
1141,
Chamberlain,
L.
v.
Ed. 169,
yi. The act is not violative the Fourteenth Amend- ment to the Federal Constitution —the exemptions in the act do not invalidate it. Sec. 201, Model Income Tax Act; Laws New ch. York, 1917, Laws 726; Mass., 1921, ch. sec. Income Tax Act 2; of Ore., sec. sub-sec. 10; Lbr. Go. v. Pierce Standard (Ore.), Pac. 812; Bells B. Go. v. Gap B. Pennsylvania, 33 L. Ed. IT. S. Flint v. Tracy Go., Stone A. supra; G. L. By. Go. 232; Daughton, v. L. Ed. Fort Smith 262 L. 413; Ed. Go. Arkansas, Lbr. 64 L. Ed. 251 IT. S. 532; Bill- ings Illinois, 4A L. Ed. 188 U. S. v. N. 102; Keeney *5 M. &N. R. Có. 75 Att’y Gen. v. Gtjle, Knox, Appellant. 138 Brief for 56 536; 56 L. 222 U. S. Mills v. Miss. Ed.
7.,
Gooh,
Tombigbee Mills, 78
676;
Miss.
Harrison
40; Adams v.
Go.
A.,
G.
VII. Even others held invalid, the act will not struck down. Sec. 42, Income 97Go., Tax Adams v. Oil Miss. 1924; 879; Standard Act, Express 535; 107 Miss. American Go. v. Johnson Beer, Long 113 377. v. Miss. Go., Furniture may tax incomes of residents
VIII. State
and domes-
corporations
from sources both within
tic
derived
supra; Maguire
Garter,
without
state.
v.
v.
Schaffer
Maguire
IX. any provision thereof, must be tax-act, bot- own situation. v. Gar- tomed on the defendant’s Shaffer R, supra; & G. R. L. N. O. M. R. 89-90; 6 C. Go. v. ter, Express 110 American Go. v. 305; Miss. State, supra; Beer, (Mo.), Pugh 581; S. W. v. Gratoford Stauffer S.) Pugh, (S. D.), (N. note; 32 L. R. A. Rosen- 226 IT. S. L. Ed. Underwood 7., thal v. N. Type. Ed. L. IT. S. 113. Chamberlain, v.Go. presented by demurrer which have
X. no Questions Express American situation. Go. v. basis defendant’s Miss. 535. Beer, Broion S Flowers, Hester, Hilbun and S
Deavours appellee. clearly 112 of our violative
I. The law is supreme of the United States Constitution. The attempted by power the Con- the exercise condemned Congress asked states gress States. United gave power. The states installment to deliver new M. & B. N. Gt. Gen. Gtjle, Brief for [138 *6 appellant in the Amendment. it Sixteenth If the rule present adopted for in the contends case had been in the necessity Pollock case there have been would no for the Sixteenth Amendment. nothing assumption
If there were to warrant our that supreme this court will follow the court of the United question general except States on a of a nature like this Hattiesburg Grocery Company in the decision case that would be sufficient. In that case the Pollock decision recognized ruling authority. opinion as a in the Hattiesburg Company quoted Grocery large case is as a part appellant brief but fact commits this reasoning court to that should condemn the law attacked herein. purposes stop
For our here with we the statement property that all taxes on rents from the reve- property nues derived from of whatever nature are taxes property. operation equality provisions of Under and the requirement imposed according that taxes shall be taxpayer to value it property intended that who owns pay worth thousand five dollars shall five much the man times as as who owns worth one thousand dollars; that the man with taxable twenty-five pay twenty-five worth thousand dollars shall man times as much as the who taxable has values of one thousand dollars. Under the tax law is not im- posed proportion value but the rate increases with The man with increase of values. an income of five pay eight thousand dollars and one-half would times as the man of much taxes as with the income one thousand twenty-five an income dollars, man with thousand eighty pay dollars would much man times as as the with an income of one dollars. thousand recognizes Hattiesburg court in
This case three things: (1) An tax in it some has ele- property; (2) of a tax on it ments tax has some such persons; (3) such a tax on tax must elements & R. M. N. Att'y Gulf] Brief for 112. It is if the court had said: conform to section upon property also, a is, a tax is burden “Such operate imposing upon persons it can burden law point begins up un- at to distribute to the government equally contravention the burdens in- court about Furthermore, 112.” reasons property. species deny It is said come as a prop- right derived from it because income is other to tax exemption erty till such time continue when would property should have bécome confused with the derived identity income. The and lost its other recognizes are circumscribed sec- income tax laws give important. is not name we tion 112. The *7 thing. disposition No material of it the The effect Grocery Company Hattiesburg decision to in the shown large majority away of from the courts at the head break supreme States court. Our which stands the United largely patterned present after the Federal law is Act closely it resemble it that does and so of 1913 Regulations Treasury the 43 our law the Rules applicable Department to our Statute. are made people to submitted amendment of section 112 The necessary grad- this to a authorize in 1924 state bearing all law income tax incomes uated empower Congress to Amendment was Sixteenth apportioning reaching impose without all incomes a tax according population. among part of it states power suggested Congress a fresh investiture thing legislature suggested got the same and did it; our get it. not here, are now at above that “We have said
We legislation story point in of income in the same supreme marked with that the Federal state history of income taxa- Federal decision in Pollock point practically every state This is has tion.” pass. to the fact that attention have called We Mississippi, year states, refused three besides 1924, legislatures power respective to enact in their to vest M. &N. R. Gtjle,
Brief for
[138
adopted
law.
forty-
such
The state of Massachusetts
its
expressly authorizing
fourth Amendment in 1915
taxa-
authority
Any
tion of incomes.
from that state must he
light
Opinion
used
of that amendment.
of Justices,
y.
Trefry
N.
E.
613,108
570;
Mass.
Putman, 227 Mass.
L.
R. A.
1917-F,
Mass.
(cid:127)522,
N. E. 99;
adopted
We state de- adopted any in the Pollock rule cision has different case, in that the conclusion reached decision. from The Geor- spoke gia and the Missouri court several court decades case. the decision in'the Pollock And the before Missouri Co, M. N. R. & Att’t Gule, 138 Miss.] Brief for Ludlow-Gaylor in
court
Wire Co. v.
indicated
Wollbrmck
(1918),
it
that
Mo.
that would not at
time take
position
property
that a tax on income is not
tax on
previously
it not
committed itself
1869 the case
had
Glasgoiv
Bowse.
call to the
the further fact
We
court’s attention
that
large
go
than did the
number of the
further
courts
su-
preme
in the Pollock
of the United
case.
States
property.
courts hold
the income itself is
Such
that
position
supreme
of the
court of the
entrenched
United
profits
property
a tax on
and returns from
States
that
property
income is
is a tax on the
from which such
de-
go
say
thing
that
rived.
further
But other
courts
taxable as
derived
itself
such
inepmes
property, the
them-
a tax on incomes is a tax on
being
property.
especially State v.
Find-
See
selves
Opinion
(N. H.),
Justices
30 Del.
108 Atl.
er,
To that a tax on incomes the doctrine derived property, property, the nature whatever the income a burden from which is de- arguments rived we cannot add to the authorities opinion and in Chief Justice found Fuller case. we have of Mr. in the Pollock When Justice Field investigation of these labored two results of the appeared lawyers judges who aided the able learned appear a fruitless undertak- to be that case would support part try further ing to furnish on our especially conclusion the court since their conclusion, accepted that time since has announced in that case been jurisprudence. part as a of our one im- the tax as treats 1924 law
Furthermore, posed upon property. means dividend “The word corporation, trust association, made 'distribution whether in members, or estate, to its shareholders stock;” 2, Sub. own Section or its cash or other par. (d). levied,, hereby assessed “There is ” income. paid net the entire . . . collected and *9 M. &N. R. Gule,
Brief for [138 Miss. par. Section 1st “A hereby imposed like tax is shall be levied and collected . assessed, . . respect
with
entire net income as herein defined
”
.
.
.
property
from all
.
in
owned
.
.
state.
par.
Section
imposed by
2nd
from last. “The tax
law
.
.
.
being
ag’ainst
prop-
addition to
tax
erty,
profession
occupation”
or
business, trade,
shall also
personal
taxpayer.
debt of the
5. Section
Section
exclusively
property gains
6 of the act deals
with
profits
par. (b)
tangible,
and losses; and sub.
treats
ex-
isting property
thing
as income. The
taxed
profits
or
whether it
still in hand
not.
If
or
it is in
it is
hand
taxed and there is a lien on it to secure the
“gains,
tax. Section 11
in the items
includes
to be taxed
profits
paid”
and income ...
in whatever form
“dealings
property,
from
personal
real
whether
or
growing
ownership
any
out of the
or the use of
interest
property,
in such
interest,
also
rent, dividends, securities
”
any
.
.
.
and incomes derived from
source whatever.
In the case of a non-resident there
on
tax laid
his
property earnings
within
interest on
state;
bonds,
bearing obligations;
notes or other interest
dividends
‘‘
corporations;
royalties
from domestic
rentals and
any
or
interest
within
state,
profits
gains,
operation
and income from the sale,
or
ownership
any property
within the State.” Section
(1)
(a).
par.
provides
sub.
And
section
imposed by
apply
act
shall
izicome of
trust.” The act
kind
“estates
held
specifically
expressly
includes
very
supreme
items which the
court of the United States
says
taxing property.
canziot be taxed
In
without
tax-
ing
tangible presezzt-izz-hazid
returns
stock,
upon property
law fastens
States
United
su-
prezne
appor-
protection
said was withizi the
provisions
despite
tiozimezzt
of the Federal constitution
presence
Eisner
the Sixteenth Amendment.
imposing
McGomber, 252
U.
words in 1924 onr are law “assessed and levied, paid.” and collected The Federal Act uses words paid.” par. (a), “levied, and collected Sub. section describing subjects of our 1924 Act of the tax is ver- par. (a) batim the same as sub. 213 of the significant. 1921 Federal Act. It means that This trying we are to tax all “from source incomes whatever general gov- derived” the same manner as does the government got ernment. But the Federal the consti- way. get tutional barriers out of the have tried to We ours way out of the failed. Our 1924 Act levies the tax upon occupations or acts, or It is businesses. directly upon expressly levied all incomes “from Why whatever source derived.” refer to “source recognizes which derived?” reference This differ- ences between incomes determined the sources there- of. The words “from whatever source derived” are taken from the 1921 Federal Act that Act in turn takes them from the Sixteenth Amendment arid the got Amendment the idea from the Pollock decision. uphold
II. it undertaken When excise an runs into ab- law state numerous difficulties given by surdities. Turn to the definition excise Grocery Company Hattiesburg court in the case de- apparently possible, if the characteristics of this termine, See, elusive class of taxes. 26 R. C. L. Brown 34; also, Maryland, (6:688); v. 25 U. S. Philadel- 30 Ed. 12, Whet. phia, etc., Mail 8. 8. Co. v. U. S. L. Penn., Postal Tel. Co. 39 L. Ed. 1200; U. S. Adams, imposes III. act a burden on interstate com- This Transportation merce. or ra- commerce, is essential to every ther it is itself; it, commerce obstacle regulá- by legislative authority burden laid Company 24 L. tion. Ed. B. B. 95 U. S. Eusen, Ferry 527; State, Miss. 65, Co. v. Eelena-Grendale 138 Miss.—6. M. &N. R. Gen. v. Gulp, [138
Brief for
Express
Auditor,
Adams
Go. v. Ohio
57 So.
State
Sup. Ot.
VI. belonging that to class similar to on others building belongs. appellee loan associa- Banks and profit. corporations organized They are, are tions profitable knowledge, more far of common as matter railroads. The carrier than common as business ventures power position legislature has that the state takes exempt property may be This but true, taxation. leg- general character the revenue measure of this in a per- power discriminate between is without islature *12 by taxing occupying one and refus- the same class sons arbitrary exemption un- ing other. The to tax the is reasonable. be founded must valid, in order to be
Discrimination, principle, upon the in otherwise a reasonable distinction equal exemption pure the of and a denial favoritism Sugar Refining protection Go. v. of the laws. American 102. It must have a 45 L. Ed. 179 U. S. Louisiana, upon resting real Citi- distinction, basis, .reasonable Ed. 1206; 57 L. Fuller, Tel. Go. v. TJ. zens Ripe 46 L. Connolly 184 U. S. -v. Union Seioer Go., 81 Miss. Go., Oil Cotton Ed. Ballard Miss. Rep. 476. L. R. Am. 533, 62 A. St.
34 So. granting exemptions of dis- other forms The of tendency usually have crimination-in taxation does safely may “strengthen” In we fact, the favored class. [Sup. Ct. M. &(cid:127)N. R. Co. Att V Gulf, Gen. v. [138 Brief nothing that it the assertion was this and more vouchsafe equal protection pre- clause was inserted to which the expense government of must vent. The burdens singled No class can be out and on all alike. fall “strengthened” expense the of others. It useless to at subject opinion pursue than to refer to the further this Pollock case. Mr. Justice Field ap- denying of the act invalid section 18 If VII. pellee equal protection then the entire act laws, attorney-general makes contention invalid. The exemption if of hanks and others he “Even that: ’’ tax act will not be struck down. the income held invalid, argument presents this act he And corpora- as to the court so include the “amended” “make them and thus for the in- mentioned liable tions appellee.” support along toAnd this tax with come Company, supra, theory v. Standard Oil cites he Adams referred ío can be the case relied do not think We support point. authority Tne this reason is that an dealing separate with a sec- the court in that case dealing Chapter privilege with various tion of the Code independent merely an it fact was taxes. In Chapter privileges under all general Code invalidity go of this section did The were levied. chapter. section there was still Without whole the left privilege complete taxation. scheme permit but law to invalid this clause hold To levying actually tax effect have the would stand largest business state. classes one legislature doing expressly what he court would namely, hanks and tax state domestic to do, refused legislature If buildings saw associations. loan largest single class of busi- this, to refuse fit he said that would have can it how state, in the ness passed Connally exemption in it? without the act *13 supra. Pipe Co., Union Seioer M. &N. it. Gule, Gen. v. Brief for
yin. right redemption under execution—no Sale provided. process pro- of law. Section of the Act Due payable vides that the tax due and this law shall under “personal taxpayer pay liable to be debt from Mississippi.” same to the state of provides “Every imposed by Section that: this penalties thereon, interest Act, increases, and all payable, per- time it is due become from the shall person pay persons, to from the liable debt, sonal Mississippi.” state of same provides machinery enforcing then for Section 30 “wilfully taxpayer if the Of course refuses” collection. requested by any “pay” to do so the Com- tax when taxpayer agents, under can, or one his such missioner provisions five hundred dollars section be fined assuming jail months. But six sent grace punishment by of the Com- be, rather harsh procedure superseded more humane missioner, making taxpayer, of the then out of the the debt it. how to do 30 tells “judgment” on the roll, it is entered And. when per- “thereupon upon” of the a lien becomes required sheriff is against it is issued. whom son respect required proceed law with manner “in the to him. fees are allowed And the same to executions.” Tax are sales re- a tax sale. treated as not even This is Monday April. First quired by on the be made law to on the can made execution This is sale under selling Monday at a A sheriff land month. First forty acres each in tracts the land must offer tax sale all he brings that is sells. forty due, amount and if offering proceeds a sale under execution' he But at sixty acres each. hundred one in tracts of land requires Hemingway’s the sheriff Code, Section to in- tax sales conveyances at land sold all to file chancery there to re- clerk in the office dividuals years. main for two
86 Knox, Att’y M. &N. R. Co. Gen. v. Gulp, Appellee.
Brief for [138 Miss. Section requires give the clerk to notice to the sixty days owner of such land at expira- least before the period tion redemption, of the warning him that his land has been sold and that the title will become.absolute purchaser unless redeemed a certain date. provision redemption provided. No for The con veyance payment is executed forthwith ‘£ purchase money .conveyance such and shall vest in the purchaser right, all the title and interest which the de fendant had in gone. such lands.” land is It The no longer belongs to the defendant. It has been sold under conveyance execution and a pur inis hands purchaser chaser. The is entitled posses to immediate sion. say
We submit that it no answer to that section 79 executing. of the Constitution is self That the courts remedy legislature will afford a where furnishes none. process comprehends Due giving’ of law more than one right bring rights. pro to a suit to his enforce ceeding extraordinary authorized is and unusual, with precedent legislative judicial history out in the and giving judicial the state. It has the effect of sanction, thereby to conclusiveness sale transfer of power legislature when the was without to di rect such transfer. sale and The so-called ££warrant” of judgment. the Commissioner is It is but fiat of an administrative officer not entitled to be judgment. Judgments treated and dealt-with as are only hearing, after a rendered full and fair a court of competent jurisdiction the defendant has which been duly legally given op where he is an summoned and portunity They leg final result of heard. are ally according proceedings, constituted law the proceeds ££whichhears land, condemns; before it upon inquiry judgment after trial.” and renders Brown Miss. 468. v. Com., 50 Board Levee Savings City Jachson, In the Union So. Banh executing; 388, it held self that section 79 is was% N. M. & B. Co. Gule, Gen. 138- Brief legislature provide
that if fails to the courts scheme, will relief. call attention the fact that afford We dealing special improve- case with chapter ment 1912. This statute is statute, 260, Laws entirely Tax Act. different the Income
Another vast difference between the
Act and the
*15
prop-
Income Tax
that under the 1912Act
the
Act'is
actually
improvement
erty
by
is
benefited
the
affected
by
only.
judgment.
proceeding in rem
the
It
ais
'
extraordinary
the
character of
statute condemns
from him
it. That after his
has been taken
may
process
apply
he
to
under this
courts
unusual
the
expensive litigation
long
to
start a
recover it.
and
and
contemplates.
“redemption”
not the kind
section 79
is
required
an
under
The citizen
to become
cannot be
actor,
losing
property.
penalty
enjoy
He
his
his
guaranty.
constitutional
Delta Levee
own secure under
Dancy,
64 Miss. '555.
Ellis,
Pool v.
Board v.
Miss.
period
two-year
during
all
And at
time
pay
go
courthouse,
to
to the
taxes
owner has
do is
pius
property,
costs,
and his
due on his
interests
necessity
no
-for court
is
is redeemed. There
employing
necessity
proceedings.
eoun
is no
There
right
all he has to do
redeem absolute and
sel. The
is
“redemption”
money.
pay
kind of
This
is
is
by purchase
Redemption
contemplates.
Constitution
suit.
levy
power
of commissioner
IX. Uncontrolled
usurped.
power
The asses-
of tax assessor
assess taxes —
powers
his duties and
officer
sor
cannot be transferred
a constitutional
is
legislature
to another offi-
Cyc.
70 Miss.
Yonella,
or a
cer
board. State
argument
legislature
that the
to the
It
no answer
powers
a
assessor,
duties and
cannot transfer the
say
or board,
another officer
officer,
constitutional
privilege
purely
or excise
question
tax in
that the
contemplates
clearly
a tax the
for the Act
tax,
ascertaining
at
arrived
amount of which is to be
M. N.
& R. Co.
Gen. v.
Gtjle,
Brief for
Miss.
[138
determining
principal
applied
to which
to be
statutory rate. That ascertainment and determination
through
long
must
so
be
as the Constitution
the.assessor
respect.
in that
remains unamended
support
principles
These
find
in cases like French v.
State, 52
759, where was held that the sheriff
rights
and tax collector has
under the Constitution which
They,
support
taken from him.
cannot be
also, find
cases like
Thibodeaux,
State v.
69 Miss.
92, which it
agent
Was held that the revenue
did not have and could
given
power
not under
Constitution
to collect
privilege
(the
tax under the
sheriff)
collector
had
knowingly
refused
failed to collect.
See,
State
also,
The citation of
few
cases
we
will,
proposition
for
we
sustain
contend.
think,
Stoutenburgh
which
141;
129 U.
v.
Mich. Gen. B. B.
Hennich,
S.
Mfg.
Company
Powers,
45;
v.
U.
Gorham
v.Go.
law protection secretary the Interior of forest delegation held an unconstitutional reservations was power legislative a ministerial officer. A later case Melting Pittsburgh Go. v. effect is B.'S O. same to the 229 Fed. Go., B. B. following line of cases the familiar
There is another supreme States in United Yich decision Hophins, it is an U. S. which-hold v.Wo legislative power delegation place unconstitutional arbitrary power of a board discretion within grant applicant permitting deny license to con- or profession. engage in See, also, a business duct People People, Sholem, v. 128 N. E. 616; 58 S. E. Noel v. E. Wyeth 86 N. Thomas, 925; 200 Mass. 377; v. N. B. B. note; Go., Minn. 1475and G. A. L. E. State W. 941. 88 S. State, Fite N. W. rights effect of the disturbed —retroactive Vested XI. objectionable being Act that this clear It is law. *17 partakes of retrospective And it some of in character. post for no matter law, when anof ex attributes the facto actually may profit gain the is accrued, have or the prescribed according of paid to schedule rates be to paid is not when the if the tax Com- Act. And in this M. &N. R. Co. Gen. v. Gum, Brief [1S8 for agent guilty taxpayer or missioner his demands it, is be of a fined five crime and can hundred dollars and sent jail months. The for six Act fixes the base valuation property acquired if 1912, 16, March were be- as fore this is true whether date, acquired purchase, donation, devise or inheri- acquisition tance. If the after occurred say, January March 16, 1922, basó acquisition. valuation fixed as of the date is aWhile depreciation depletion (which deduction for reasonable or types many property, could not the case of occur unimproved agricultural upon such as lands, lands etc.) buildings, provided by there are no the Act, no permitted paid for allowance is the ad valorem taxes upon property during transpiring the interval be- subsequent tween March or the of its date ac- during year quisition, date of sale and the taxable un- provisions der upon of the ad valorem Act, taxes paid being during a deductible item when particular year for which the income tax is assessed levied, (p. Regulations, pp. 11-12.) Laws Appeal chancery county. XII. court Hinds Section — any taxpayer provides desiring ap- 36 of the Act peal from a of the decision Commissioner do so filing petition chancery county court of Hinds proceedings requesting a “review of the of the Commis- this.petition must file a sioner.” he With solvent bond controversy, the amount and when double notice given up the Commissioner the record sent to the chancery may in its court. This court allow discretion, other additional evidence but a introduced, taxpayer given trial novo is de as matter of right. jurisdiction chancery of the circuit courts clearly in defined Section Constitution. 156. And jurisdiction chancery defines court. an There is to be found no intimation intention to con- appellate jurisdiction fer this tribunal char- *18 Gxjle, & M. N. R. Co. Att’y Gen. Knox, Appellee. Brief for Mississippi hav- the court acter. The circuit court is ing consti- jurisdiction all matters not vested language of section tution in some other court. Note “Original jurisdiction all not vested of matters 156— appellate and such court, Constitution in some other this jurisdiction prescribed by law.” as be shall where the court had
In Power v. 93 So. Robertson, clause initiative and referendum under consideration the clearly pointed out that “the the Constitution was cognizable jurisdiction questions of all court has circuit exclusively vested some have not been court that other court.” gifts Privileges to domestic XIII. immunities — corporations Section Act allowed. —deductions Paragraph
provides allowable. the deductions gifts, provides etc., made to that contributions, section exclusively operated corporations organized for re- purposes, may ligious, or educational scientific charitable, prescribed regulations by the “if verified under rules approval the Governor,” be Commissioner, with of a non-resident In the case deductions. allowed as the contribution unless not allowed deduction is such corporations of the class enumer- made to “domestic” objectionable provision in the section is the ated. The a non-resident this “In the case of therein: last sentence to contributions or be allowed deduction shall gifts corporations, or to such vocational made to domestic fund.” rehabilitation not whether charitable- to a resident it matters
As
foreign
corpora-
a domestic
institution
favored
corporations
only domestic
non-resident,
but
to a
tion,
abridgment
clearly an
can be considered. This is
guaranteed
privileges
under the Four-
and immunities
Constitution. A dis-
of the Federal
teenth Amendment
by the
condemned
Unit-
of this character was
crimination
supreme
Yale,
U. S.
in Travis v.
ed States
authority
be cited.
need
Of investments of capital property; or from tax on other say really with we we take issue few when courts— Georgia If the with none but those of and Missouri. produc- direct burden were exemp- ing be demand the taxed there would no for nor that bonds of certain there fear ; tions would if the returns therefrom would be reduced value kinds were made subject to the tax. here no occasion
And we there is submit necessary than further to examine this statute trying to enforce law which to ascertain the state is *20 regnant, all- is the section 112. This condemned proposition. asking an in- The that state is sufficient specifically exclusively a tax be enforced as come generically privilege excise. This court an tax—not as bearing property ma- to treat it not is asked being not amenable sec- therefore terial extent and as to be enforced that if the law allowed say tion 112. We accomplished “the re- there have been will as written adopted Constitution was of the sult which section ’’ prevent. remain but substance The shadow will gone. need revenue measures The framers of will be they property if can itself about the trouble themselves handicapped earnings being constitu- take without limitations. tibnal Gassedy orally
Argued J. and W. H. H. Creeltmore ap- N. Flowers, Brown and T. for the and J. J. state, pellees. Hattiesburg reporting
Reporter’s case of In Note: Agent, Company Revenue Grocery State Robertson, dis- So. in Miss. 88 So. No. 21739 M. &N. B. Gxjee, Gen. v. Appellees. Brief for [i'38 senting opinion suggestion of Mr. Justice Sykes on the reports. not included the official It error was is, appended impor- to this case because of the therefore, tance of the
questions present and the involved interest opinion attaching to this follows: case. (dissenting). held this income When we Sykes, J. being an excise and not a constitutional law to the I serious doubts as had tax, correctness holding, time those doubts not arise but at that did to a impelled degree Upon certainty me to dissent. analy- careful a re-examination authorities opinion I have come to the conclusion that our sis of we suggestion of error should be sus- erred, and tained. my judgment and as this is a such is tax,
In prop- of the Constitution. It of section 112 violative erty incomes derived or it taxes because received tax, property, personal, mixed; and the un- real, from separated tax on cannot be from constitutional professions, callings, from incomes, the tax derived opinion in it In the this case is said that: vocations. income can be framed under which “No definition person activities who can be dissociated produced that a tax on income or received so neces- it, production sarily among its includes elements re- ceipt property, extent . . . and to that is a tax resulting gain performance an act on the person performing . . . rule is, and the when it, imposed performance of an it will act, on the *21 the tax is although pro- property, it is a tax on be classified as not portioned property of the used in to the value amounts produced the act is taxed.” or which with connection 88 So. my judgment of the is con- this conclusion
In previous In the trary court. case of this decisions Thompson, 112 Miss. 72 So. Kreutzer, Auditor, of pro- chapter of which Laws it held that 891, was M. &N. K-. Gulp, 1SE Brief for privilege occupation fee for an annual or of
vided tax, twenty person, pursuing cents an acre each etc., holding buying, owning, more than the business of or property timber a tax, thousand of one acres lands therefore violative of section 112 of the Constitution. and “Ownership opinion In stated that: not is is a by government, rights privilege but is one of the conferred protect. governments organized were . . which . legal sense‘property’ synonymous . . In . is strict a ‘right ownership’ of and means one’s exclusive with the enjoying, disposing possession, right of and of a thing. . . . may
“Property of also the section Con- be, signify used to stitution here under consideration is, ‘things thing a In order that owned, owned.’ right owner- have a course, some one of must, ship thing A on all its tax on a a tax essen- thereof. a of tax on an essential attribute a tial thing attributes; thing a tax on itself. So that a is a tax on the right necessarily thing a of tax on owner- owned ownership right ship tax of of and a on a thereof; thing thing necessarily a on itself. No defi- tax property be framed can which does include nition ownership. Consequently, right no tax can be im- the posed ownership right -also is not a tax on property.” on virtue it means of the construe this case
As I right possession, ownership property has the one property every enjoying, using lawful man- this necessary proper, in- he ner which sees right ownership property he has the this cident to property, if it be land, cultivate the rent, lease, rights ownership, incidents of are mere that all of these necessarily on the received tax and that and therefore tax its on user, reality a tax on the owner- is in It itself. ownership ship virtue of because required owner. Nec- necessarily certain are acts; *22 &N. R. Att’y M. Gulp, Knox, Appellees.
Brief Miss. [1'38 essarily pay property has lie or taxes lose his and a provident necessarily property owner to use this wishes personal enjoyment himself for either for his inor order provident derive income therefrom. some The owner, good necessarily prop- the wants to citizen, make his erty productive property providently and wherever is necessarily used some income derived therefrom, right the to receive this hut an incident of the ownership upon property. right of taxA the in- directly upon property a burden and a tax itself. ownership nearly Aside from the property of homes, all of the purpose deriving is owned for owned of If revenue therefrom. the owner of were in- would active, be mere barren waste, ownership be a would detriment to the its state. All ownership provident judgment my of in nec- contemplates essarily activity the exercise of virtue ownership. of this
The doctrine enunciated same in the Kreutzer case Thompson, in reiterated that of was Auditor, McLeod, chap- wherein it was held So. provided privilege ter of 1912, 110 the Laws which for a persons pursuing . . tax all . business turpentine extracting standing prop- from trees was erty opinion tax. In the in that case it is stated that: privilege, any, privilege “The if taxed, is right pine or of the owner or lessee trees to ‘extract ” turpentine standing from trees.’ privilege
In other words, case activity extracting person turpentine privilege standing tax in the trees. instant case is expression, activity if I use the inactive mere, profits person to receive his rents or from his real personal activity property. Certainly applying pine greater passive ax is much than the an tree mere receiving receptivity prof- one issues, and rents, property. And the court from his McLeod its case requires says: no observe at “It refinement to once that M. & N. R. Co. 97 Gen. v. Gulp, Brief for *23 an operating, is additional burden of taxation, indirectly, directly, upon complainant’s but property.” opinion
It will be noted that the
in the McLeod case
Sup.
refers to the Pollock Case, 157
S. 558,
U.
15
Ct.
Rep.
Hylton
673, 39 L. Ed.
(3
and the
759,
3
Case, U. S.
Dall.) 171,
From a careful consideration of this court in the three above-named I am cases satisfied that opinion contrary in reasoning’ this case is to the in those cases and in direct’ conflict with them.
Coming now to a consideration of the decisions of other following quotation The courts: from the case of Pol Sup. Rep. v. Trust U. Co., lock 15 558, 680, Ct. opinion is L. Ed. made in the 811, in the McLeod case: “ upon property respect ‘A tax holders of their es personal, yielded real or or tates, whether of the income payment such estates,' of which cannot be upon taxes,’ are direct and ‘an annual tax avoided, annual value appears or annual user of real estate to us same in substance an annual on the real es paid or tate, out the rent income. would This .growth land law taxes received from income produce of the land. Mr. Justice Patterson observed Hylton 3 produce, States, U. S. 1 L. Ed. 171, v. United 556, ’ independently of its is of no value.” “Land, language distinguished Coke, In the ‘What profits land thereof?’” but profit land income
If is the then tax thereof, necessarily profit a The tax on land. Pollock cases hold property property that a tax received income from placed upon by tax looking through burden the income tax, because the placed up- substance, burden form to property derived, on the from which the income is itself property and is tax. therefore
138 Miss.—7. M. &N. E. Ct. Gen. Gulp, Appellees.
Brief [1'38 Sup. 236, Rep. 1, Case, Brushaber U. S. Ct. L. A. Ann. Cas. 1917D R. 500, 60 L. Ed. 1917B quotes approval case, from Pollock reaffirms with announced. the doctrine therein Macomber, The later case of Eisner v. U.S. 205, Sup. Rep. A. 64 L. Ed. 9 L. R. re says: ferring Pollock In income tax to the cases cases upon rents “it held that taxes real personal upon from investments estate and returns taxes were effect direct imposed reason own arose, from which such ’’ ership. *24 Opinion 220 Mass. N. Justices, In the of E. 613, 108 prop upbn the incomes of that: “A tax is held erty upon reality itself.” To is in tax very opinion and learned elaborate effect is the same supreme in the case of Alabama Elias- court of berg 56,11 Ala. A. L. So. Brothers v. Grimes, R. 300. called to the been de- has
In fact our attention contrary opinion, ato hold cisions of two courts which Georgia namely, These cases Missouri. and those of opinions, Alabama in the and criticised are reviewed supreme opinion supra. later In fact from very doubts much that court it seems Missouri holdings. case of In the State of its former wisdom concurring opin- in the 278 Mo. S. W. v. Koeln, an ‘in- “The idea that he states: ion of Justice Graves, property, a tax law, in in tax’ fact is, come therefore, rises before us Constitution, of our violative Banquo’s ghost.” to the ter- ghost be to confined like for this I would opinion my but Missouri, limits ritorial en- been jurisdiction now has his territorial brethren Mississippi. larged to include say I wish that under In conclusion the above de- property, an incident of cision the owner his owner- right ship, the undoubted to receive the has income from Mar., 1925] & Gulp, M. N. E. Co. 99 Appellees. 138 Miss.] Brief for property. reception That the mere of this income engaging is not occupation, calling trade, upon right that a tax taxa it- self and therefore is a tax, and is violative my judgment of the Constitution. In suggestion of error be should the law de- sustained, and clared unconstitutional. joins dissenting inme J., views herein Anderson,
expressed. opinion C. J., delivered the of the court. Smith, question presented The decision these cases is validity (chapter non of vel the Income Tax Act imposed 1924), by Laws of on all but cer- excepted tain net incomes from whatever source derived. ground on which it is claimed that the act is void that it conflict with Fourteenth Amendment to the federal Constitution and with several sections necessary, the state Constitution, which, when ref- specifically erence will be hereinafter made. provision
As to the of section 112 of the state Con- “property proportion stitution that shall taxed gen- its value,” “shall for taxes under be assessed according eral uniform its laws, rules, true *25 value.” appellees’ contention in connection is that a property
tax on from a income derived is tax on the property derived, and, from which income is the as the imposed tax here all it so far was, is on income, property, property on the affects income from a tax property from the derived, which income was the which permits proportion Constitution taxed and to be according to its true value. Hattiesburg Grocery by contention ruled
This is 25 L. R. 4, v. 88 A. So. Robertson, 34, 748, consideration, wherein held that court, after mature [Sup. Ct. N. Co. M. & K. Gtjle, Gen. v. Opinion [138 Miss. of the Court. prop- is not a tax on an excise and the is tax on income a erty derived. As income have been from which property in- pointed on income from out tax there was property on tax elements both cludes some persons, strict- cannot be classified as and of a on tax Property ly alone can- alone. of itself on either produce or dealt must be used with in income, .but gain way person, or income be by can before some though income definition of no therefrom, and derived in- property, framed does not from can be which derived by person pro- whom it was clude the activities enjoyed. or received, duced, property, though but which not' eo nomine
A tax,
merely
pay
of his
must
because
owner
owner thereof
property (Thompson
ship
112 Miss.
Kreutzer,
property
special
891),
use of
of a
or because
165, 72 So.
gain
or
or not revenue
is
reference whether
without
(Thompson
112 Miss.
McLeod,
383,
therefrom
derived
674),
1918A,
Ann. Cas.
893,
L. A.
1918C,
R.
In v. Farmers’ Pollock S. Id., L. U. Ed. S. Ct. appellant relied on L. Ed. Ct. appellees Grocery Hattiesburg here, Co. case recognized income is a tax on an ex the fact that the court holding in other cases therein, the error cise, and property is a tax on from on income a tax caused derived, which the income from gain referring from the income court’s from the activities of dissociated alone, there can activities thereof, without the owner property; that the But it is said Hat- no *26 101 N. R. Co. M. & Gen. Gtjle, Knox, Opinion the Court. 138 Company controlling tiesburg Grocery here, case is not question expressly here in that the act for tbe reason imposed by property, designates it one on tbe tax held to be dealt it should be as such. therefore with is based on section of the which act, contention 5 This provides: by imposed this act addition to all other tax
“The imposed every imposed tax this law, taxes penalties increases, interests thereon, and all act, being against property, a tax business, addition occupation, provided, profession, as in act or trade, payable, from the time if is due shall also become taxpayer pay personal debt from liable same, Mississippi.” to the state tax-imposed by the act is
This declaration
qualified
property
against
words “as
provided,” and as hereinbefore set forth
act
provides
property
on
act
for which
income is
from which
derived is one
sense
production
enters into the
of such
of the elements
not on
the mean-
and therefore is
within
income,
ing
Moreover
Constitution.
“the
of section
in a
contained
that it shall
statute
mere declaration
particular
regarded
character
a tax of
does not
apparent
desig-
it is
that it cannot be so
if
make
nated
such
meaning
consistently
and effect of
with
Tracy
107,
U. S.
Co.,
Flint v.
S. Ct.
act.”
Stone
389,
1912B,
L. Ed.
Ann. Cas.
342,
appellees
that a tax on
do not contend
income is
property in
that it
a tax
the sense
on the
a tax
gain
money
or
which constitutes
revenue
aggregate
person
and on the
of which
amount
a That it is not such a
income is determined.
tax,
his
Hattiesburg Grocery
126 Miss.
Co. v. Robertson,
55,
see
748;
25 A. L. R.
Pollock v. Farmers’ Loan &
88 So.
L. Ed.
Id.,
U. S.
Ct.
Trust
15 S.
Co.,
equality provisions of the state and Federal Constitu- (1) all are: That incomes are taxed tions therein graduated according rate hut the is rate, at the same to (2) income; the amount of of 18, designated corporations act the of certain imposed exempted from the tax therein. equality
Assuming that the
clause of section 112 of
applies
general pur
to taxes for
the state Constitution
poses
to such
are
it
valorem,
other than
as
ad
well
legislature may
make
reasonable
clas
settled
subjects
taxation,
of
if all
of
of
and,
sification
equality
alike,
are taxed
same class
clauses
both
complied
are
and Federal Constitutions
the state
with.
Vicksburg
Holberg
112;
Miss.
Town
55
Macon,
v.
Bank
Miss. 47, 7
219;
Tax
67
So.
Worrell,
Collector,
v.
Clarks
Agency
Miss.
40
637,
87
So.
Cole,
228;
Ins.
v.
dale
State
291,
745,
66
Ann. Cas.
108 Miss.
So.
1917E,
Lawrence,
v.
Mississippi Fire
v.
City
Insurance
322;
Co.,
Jackson
Pennsyl
Gap
95
Bell’s
R. Co. v.
845;
So.
132
Cooley
33 L.
232, 10
892;
S. Ct.
Ed.
vania,
U.
Ed.)
authority
(4th
See, also,
704-717.
on Taxation
cited
hereof.
next subdivision
under
of such
classification
reasonableness
The
legislature,
for the
instance
determination
first
requirement
therefor does not mean that
“according
judg
must
reasonable
classification
be
reviewing judges, but that the court
must
ment
regard
legislators could
that the
reason
able to see
as
doing
proper
violence to
without
common
able
Mensching,
People
N. Y.
N. E.
sense.”
(N.
City
S.)
R. A.
Ann. Cas.
10 L.
Jack-
&N.
M.
B. Co.
Gtjle,
Gen. Opinion
the Court.
Mississippi
Co.,
son v.
Fire Insurance
In Knowlton v. U. page wherein the 996, L. at Ed. 747, 774, 969, 44 S. Ct. graduated it dealing inheritance tax, a court was with was said: the fact that made exhibits which
“The review
we have
person
ability
imposed
of
with reference
taxes
placed
the same have
bear
is
whom
burden
government. So,
foundation of
been
from the
levied
a number
eco-
and
thinkers,
some authoritative
also,
progressive tax is more
that a
nomic
contend
writers,
the absence
just
equal
proportional
In
one.
a
and
than
question
it is
whether
limitation,
of constitutional
’’
judicial.
legislative
not
and
or is not is
light
argument
of the fact
in the
is
-this
viewed
When
by the su-
graduated
held
has been
a
tax on
that
prin-
preme
to violate
not
court of the United States
ciple
that
equality
the further fact
and
taxation,
expressly
by the Constitutions
authorized
such
approved
“has been
of number of our sister
states,
enlightened govern-
years
many
many
most
for
many of the
the sanction
and has
ments
the world,
say
thoughtful
difficult
it would
economists,”
most
104
M.
&N. Co.
Ct.
R.
Gulf,
v.
Opinion
”[138
the Court.
necessary
that
such
of in
tax,
classification
say nothing
come therefor,
unreasonable,
of its
being impossible
regard
doing
to.so
it without
violence
Magoun
to common sense.
also,
Trust
See,
v.
&
Illinois
Savings
170 U. S.
S.
Bank,
Ct.
42 L. Ed.
283, 18
594,
1037;
Billings v. Illinois,
23
97,
188 U. S.
S. Ct.
L. Ed.
272, 47
400;
Titusville,
Clark v.
184
329,
382,
U. S.
22 S. Ct.
46
L. Ed. 569;
Co.,
Brushaber v. Union P. R.
“These but of are the effect the by of classification and have made been before amount, by judgment and considered before court, and the plaintiff has been to the in adverse contention of error. by up . . . Classification amount came for considera- M. &N. R. Co. Gen. v. Gule, Opinion 138 Miss.] the o£ Court. Magoun and decision in
tion v. Illinois Trust & Sav. Sup. Rep. 594, L. Ed. 170 U. Ct. Bank, recog- plaintiff That in and was sustained. error case, urged against attempts his he nizes, to contention, and power decision to the state over inheri- limit its hy explain power, and to not the taxes tances, imposed, but the discriminations which were to claimed grading by the the resulted taxes amount have misunderstanding legacy. the This, think, the we ’’ opinion. proceeded relevancy then to The-court show hy. apply Magoun it to case the rule announced and to dealing. which then the tax with it was graduated feature case, In the Brushaber wherein present was attacked on the federal tax principle ground fundamental violated overruling objec- equality court, taxation, said: tions, in reason was
“That its want of foundation absolute plainly pointed 178 U. S. right Moore, Knowlton v. out urge Rep. Sup. L. Ed. ruling necessarily in that case by the it was foreclosed made.” n graduated consid- under inheritance
Moreover, by imposed, not eration in Knowlton v. was Moore right government, and, but the federal state, not a state and inherit is conferred government Federal that the said it cannot he Federal imposed government under consid- there the tax which right withheld eration could have conferred pleasure, there- its taxed at inherit the there controlling Nor point here. case not in fore that equal protection law can it said he that, apply not Amendment does of the Fourteenth clause point here, government, that case Federal the for the toon question there called the court pro- the tax graduated feature *30 decide whether the question it would inequality exact duced taxation —the M. &N. ft. Gulf, Opinion Miss. [138 of tlie Court. imposed if the tax had been a had to decide state have ground deprived challenged on the that it the com- and plainant equal protection of the law. principle equality concerned, far
In so graduated no difference between there is graduated privilege and an examination tax, and years privilege many tax laws of state for this back majority great graduated of them are that the discloses appropriate according to an standard, Insurance Miss. Agency upholding So. Cole, court, privilege pointed “grad- out that it was tax, legislature,” fixed a standard uated said class are taxed that “all of the same and this alike, ful- requirement of the law.” fills the provides apply act that it 18 of shall Section except— corporations all following
“(1) organizations That the shall be ex- empt agricultural, from taxation under this act: labor, savings mutual fraternal horticultural, banks, orders, companies, religious, cemetery charitable or scientific as- leagues, business chambers of sociations, commerce, leagues, social clubs, boards of civic trade, farmers fruit growers or like Federal associations, land farm banks organized operated pub- associations, loan when part purposes lic and when no the income inures to the private stockholder or benefit of and na- member, tional banks and state banks and domestic mutual build- organized ing under loan associations laws Mississippi.” state exemptions power of the state to confer from taxa- by long
tion character line of of this is settled decisions Mississippi extending Mills v. Cook, Miss. Mississippi City Jackson v. Fire Insurance Co., exemption if 845. Moreover, Miss. 95 So. should affecting be stricken from the act without void, the remainder thereof. Adams v. Standard Oil Co., 97 the act. 53 So. section 42 of
As to section 79 of state Constitution: *31 N. R. Co. 107 M. & Att’y Gule, v. Knox, Opinion the Court. of redemption right provides from of that This nonpayment taxes shall of for the real estate all sales by prescribed Section law.” to be “on conditions exist defaulting’ provides a that the 30 of the act by for the taxpayer may the sheriff levied be on and sold by fails to payment but act, himnnder tax due prescribe land be redeemed on conditions which self- is of the Constitution a This section from sale. such prescribe, legislature executing, of the and the failure redemption right shall be on which conditions Savings invalidate the statute. Union not exercised does City 84 So. 122 Miss. Jackson, & Co. v. Bank Trust 388. Constitution: 135 of the state As to section
' and the assessor, the officeof tax creates This section of the taxing appellees’ that the ascertainment contention is purpose person’s a amount of under this be can thereof, made, it is an assessment regular by only tax as Constitution, section of disposed objection statute of in was sessor. This page at where 133 Miss. So. State, Enochs v. in it said: requirement implied section 135 of the state
“The by the assessed assessor be that taxes shall Constitution, by duties is one of whose sheriff, collected and collect court), (as has heretofore construed taxes privilege only to application but such can taxes, no primarily an assessment of, fixed against, property” citing v. charge Adler, State — 69 Miss. State, Thibodeaux 487, 9 So. 13 So. pointed out is an ex- hereinbefore
An income tax. not cise and the Federal Constitution: clause of the commerce
As to
& Northern Railroad
Mobile
The income
Gulf,
intra-state
Company
inter- and
both
from
is derived
by the state on
a tax
and its contention
commerce,
interstate com-
portion
income derived
of its
M. &N. R. Co.
-Ct.
Bule,
Ben. Opinion of the
[138'Miss.
Court.
meaning
merce
burden on such commerce within the
of this
of the Federal
clause
Constitution.
If the tax
question
gross
were on
income a serious
would be here
gross,
presented, but it
but on net, income, and
part
a tax on net
derived
income,
whole
from in
terstate
is not
commerce,
burden'thereon within the
meaning of
clause of the
Federal Constitution, as
pointed
supreme court
out
of the United States in
*32
Company
Creek,
Glue
v. Oak
247 U. S.
38
321,
S. Ct.
L. Ed.
62
499,
1135,
748;
Ann. Cas. 1918E,
Underwood
Typewriter
254
Chamberlain,
Co. v.
U.
113, 41
S.
S. Ct.
Ed.
v.
45,
65 L.
252
S.
Carter,
U.
40
36, S. Ct.
Shaffer
Daugh-
Ed. 445;
L.
Atlantic Coast
64
Line R. Co. v.
221,
ton,
262 U.
620,
S.
43 S.
As to of clause of the state and Federal Constitutions: provides: 30 of act
Section “If imposed by portion any this act or of such sixty paid days not within tax be after the same becomes issue a due, the commissioner shall warrant under official any county seal the sheriff of of directed the state levy upon commanding per- him to and sell the real and owning person sonal the same, with- found payment county for of the amount his thereof. prescribed by . . . and manner the same law re- spect against judg- issued executions proceedings, of a court of ments or attachment record.” M. &N. R. Oo. Y Gen. v. Knox, Axi Gtjle, Opinion the Court. appellees prop- is that a sale of contention of the The deprives provision erty of the act the owner under this Why process law. due should have thereof without apparent, that contention is without effect is merit. appellees remaining
The of the be contentions disposed together. They are that section 36 following provisions other sections of act conflict (1) Constitutions: with either the state or Federal gain, ascertaining prescribed 6 for method disposition profit, or income from sale or pro- acquired passage (2) act; on or before the gains include of section 11 that income shall or vision property; provision profits (3) the from the sale of 'of paragraph “in case of non- 10 of section as to con- deduction shall allowed resident this gifts corporations, or made domestic tributions or pro- (4) the fund;” or rehabilitation such vocational “may be deter- of section 15 certain facts visions general apportionment processes formulas of mined approval prescribed with the the commissioner *33 Governor.” validity necessary the to determine
It is not us any provisions act, for the of the rea- non of of these vel any appear that from the that record son it does appellees and all of them, of these them affect the income without effect on the act invalid, if stricken validity both under the thereof, of the remainder the express"pro- construing general the and statutes, rule for in 42 of the act. vision therefor having the The court dismissed action on the below judgment theory must be that the act is the void, reversed.
Reversed and remanded. (concurring). The tax in J. income law Holden, by upheld state declared valid court and the Hattiesburg Grocery case of Co. v. Robertson, years ago. 25 A. R. about five So. L. That M. &N. K. Co. Gtjle,
Concurring Opinion. [138 Miss. by decision any has not been overruled court nor an- legislature; nulled positively the and as it announces the Mississippi, law of duty it is the of this court to it in follow the case now before us. The law in the instant case the same
principle purpose passed upon as the income tax law Hattiesburg supra. held valid the case, It is not a but an tax, excise income tax. This has been already plain decided, too for discussion. principal present difference between the Income Tax Hattiesburg gradu- Act and case ating progressive or feature, rate of tax on net incomes. my equal This feature of the law is obnoxious to sense of just nearly but taxation, all of the courts, includ- ing supreme court of the United hold that States, progressive proper, ground rate is valid and on the equally it taxes all net within the incomes same class. I go contrary principle cannot ato so well settled country, including courts of our our own with ref- majority court, privilege (See erence to or excise taxes.
opinion by cited.) the Chief Justice to cases repeal any;
This court no nor does it laws, makes legislature power regard. has the in this A sole authority duty pass validity has legislature, the laws made and construe and apply regardless them as and that is written, true, whether, such laws are or wise, unwise, obnoxious or popular. remedy oppressive, If law is undesirable and legislature repeal
is to have the it; can- courts expressed legislature not annul will if the law under is valid the Constitution. (dissenting). majority J. from the dissent I Anderson,
(cid:127) opinion. years ago joined Judge Four I with Sykes *34 opinion dissenting Hattiesburg in a in Grocery Co. 126 Miss. 89 So. in which Robertson, we held long as as section 112 of our that, Constitution stood, taxing there be no in this state could income tax law in- M. &N. it. Ill Gxjle, Opinion. Dissenting personal property. After real come derived from and thorough question the the reconsideration of most opinion. capable, The ma which am I am still of I opinion jority present holds that far it the so case, not vio consideration does the income tax statute under upon the is founded Constitution, late majority opinion 112 of the section judgment my the foun in that ease. In Hattiesburg are Grocery Co. case weak. dations the sup principally relied on cited of the and One porting cases opinion is Farmers’ that case Pollock v. Co., 39 L. Ed. 429,15 & U. Loan Trust S. exactly of what converse case decided 759. This Hattiesburg in the referred to case did. The cases sustaining Grocery in fact do sus it, Co. case as which Georgia cases; opinion, and tain are the Missouri opinion reasoning my weak and in both of which is unsound. under consideration income statute
Section 4 provides net income. Sec- of the entire the taxation among provides, things, the basis for ascer- other tion 6 taining gain from sale sustained derived or loss property, go disposition personal is which to real open up act is not construc- The make income. all net income derived It tion as to what taxed. is profits made from and includes source whatsoever personal disposition real and both the sale or other property. enjoy personal right acquire, real and own,
The rights right. re- is a natural It one people by 32 of our Constitution. served to away materially legislature nor take it can neither impair granted a.privilege citizen it. It government legislative branch of per- from real and be taxed as The net such. original sole source the ex- sonal very Its value. It no other istence of value. has its profits issues, consist of rents, fundamentals profits, Except rents, issues, for the therefrom. *35 112 M. &N. R. Co. Ct. AttN Gen. Knox, Gtjle, v. Opinion. Dissenting Miss. [138 property; be dead it would would be worthless. The in pure come statute is a simple. revenue measure It occupation personal not an prop is tax so far real and erty priv imposing It is is concerned. not a license law a ilege property, tax that character of for there is no pretense police power of an exercise of involved. In Thompson Kreutzer, v. 112 Miss. 72 165, So. it 891, was said that: thing
“A aon a tax tax on all its essential attributes; thing tax on an essential attribute of is a tax thing thing on the essarily itself. that a So tax on a owned nec- right ownership
a tax on the thereof.” simple question The only whether tax on the at thing gives tribute of a it value ais tax on the thing question itself. It seems that to ask that is to an swer it. Here we have a tax on the net income from personal property; only real and gives gives attribute which property. position to such
value
This
sus
Hylton
(3 Dall.)
tained
Case, 3
L.
U. S.
171, 1 Ed.
556; Brushaber
240 U. S.
60 L.
Case,
236,
S. Ct.
1, 36
Ed.
L. R. A.
Ann.
500,
1917D, 414,
1917B,
Cas.
713; Eisner
205,
v.
252 U.
Macomber,
192,
40 S.
I it is conceded opinion, majority counsel for the state, if a tax derived effect, that, on net income from real and personal property ais direct on the itself, such tax our violates section Constitution. my Hattiesburg judgment Grocery In Co. case is unsound but most its mischievous effects, ought overruling to be overruled. Hatties- burg Grocery case would not leave this Co. without Thompson authority upon, state to "Stand squarely supra, and that are conflict, case McLeod, M. &N. it. Co. Gen. Gulf, Opinion. Dissenting appears opinion in to me. And furthermore, Hattiesburg Grocery case neither criticized nor over- chapter In case. the latter ruled the McLeod case, of 1912 was under the Laws consideration, which was *36 levy payment “an act to and collect and enforce the occupation privilege upon per- or an annual tax all fee persons, associations or business firms cor- sons, porations, and pursuing extracting turpentine the business of standing fixing a tax of trees,” one-fourth of cup per year extracting for each or box used in one cent turpentine. although The court held that the tax, occupation privilege a not tax, called or but such, property in fact a tax on was in truth and land part, pine which the trees were and violated section 112 requiring uniformity equality of our Constitution question discussing In there in taxation. involved, part language: the court used by “It counsel for the state if that, is conceded imposed attempted property tax to be tax, here the' imposing In it act is unconstitutional follow- and.void. frequently ing announced so courts, rule, looking through form to the substance, is manifest operates, exacted the act under that the tax review operate, really tax, can and a not upon place any privilege to tax. are not called limi- We right upon of the state to exact licenses im- tation really pose privilege require that are such and to taxes right precedent to the as a condition to do the taxes business within the confines of our commonwealth. We question right to also, do of the state, measure a privilege by or amount of business volume done. attempts say legislature . . to the citi- . Here the zen: ‘‘ ‘Although recognize you are the lawful we lessee standing pine produce, which when trees, or owner of although tapped, product resin, an annual we your you paid full share of have demanded and have upon standing pine the soil trees and which taxes these M. &N. K. Co. Gen. v. Gulf, Opinion.
Dissenting [138 continually lay feeds nevertheless them, thou shaft not gum ax to the tree to extract the natural without sub- jecting you have the state of Mis- sissippi to an additional tax of one-fourth aof cent for ’ you each box cut. ££ right This act strikes down the inherent prop of the erty lay property. owner to hand Every his own pine enjoys right owner of a tree the same natural to ex gum vineyard tract tree from.the as the owner of a has pluck grapes. his own thing It would be the same require privilege precedent right tax as a of the owner pull pecans ripe pecan from his orchard or to en pure joy spring a drink of from the water cool questioned homestead. ... If old lawfully the tax here can imposed, legislature he then the of our state, desperate in a search effectually can revenue, brush equality uniformity aside the essential feature of de provision manded Constitution. The *37 proportion shall in be taxed to its value would be nulli integrity and the of the fied, Constitution itself de stroyed.” principle taxing the difference in in
What is the tur- pentine pine extracted from trees and the income derived personal property? from real and If any, there is it beyond capacity They my to see it. are both income. sought by For a tax is to be illustration, levied the state turpentine person by on the extracted from the trees extracting on his or on the in land, used means the tur- pentine- does not make difference which. The —it that to be a direct tax holds on the land itself and therefore violative of section 112 of our Constitution. On the other the seeks tax state hand, income from products agricultural cotton and corn other and of landowner. The court an to he excise holds tax and property not a tax on the land. There is no sort of refine- Hattiesburg Grocery ment which Co. and the Hattiesburg McLeod cases can be reconciled. Either the M. N. R.& Att'y Gule, Opinion. Dissenting 138 Miss.] right. Grocery can- McLeod case is Both or the case Co. right. not he in- the net a tax so far as levies
If the statute, property, personal held uncon- were come and from real go down, act have would the whole stitutional, separable part balance. scheme it is not legislature monstrosity. have would No left be a would enacted it. appears a radical differ- to me there itas
However, upheld in the Hatties- statute ence income tax between the burg Grocery consideration the one under case latter, section be found and that is to here, per- land and provides, far as so substance, the income on that the tax sonal are concerned, against charge lien therefrom shall be simply means that The statute derived. from which it is property; personal the real it shall be a tax on there- net income measured amount of the tax to be basing tax instead words, from. In other personal property, it is the real value of assessed just as it is made but therefrom, based on the net if it had been against charge itself as much a view this it, As thereof. I value based on the assessed simply bald statement provision statute is personal real on the tax effect that a direct property itself. you. The fram-
Good-bye last of is the thought they adoption by your ers our Constitution security affording taxpayers some the state were They mis- against unequal were unjust taxation. away by you been whittled have taken. Little little *38 By this stroke little left. until there was courts away. swept vestige Now remaining has been small name, a new giving taxation scheme of each all in the name. It is may number. be taxed times without the Consti- ,The hindrance let or state without now, overflowing. tomaw fill insatiate its tution in this concurs J., dissent. McGowen, are notes 27 L. R. A. tax” collated “income 1915B, L. A.R. L., p. (3) question 569; The 26 R. 153. C. to whether income “property” taxation, constitutional limitations on within see notes 313, 758, pp. L.; 26 L. R. R. C. 25 A. 152-154. L. R. 11 A. county. court of from circuit Newton Appeal Judge. E. Wilson, Hon. G. on the relation of state, Bush H. Action Knox, against general, attorney the Gulf, Mobile & Northern Company. Mississippi, Action the state of Bailroad on attorney general, against Bush H. relation of Knox, the Y. E. judgment plaintiff Stone. From for defendants, together appeal. appeals. considered on Cases Beversed remanded. Attorney Cassedy, Knox, E. General, Bush J. W. Sharp appellant. and Greekmore & E. G. for Greekmore, M. N. R. Mar., 1925] & Co. 73 Gen. v. Gulp, Appellant. Brief 138 presumptions I. All are favor constructions Co., Lbr. the Act. City Richards v. 101 Validity Darnell v. 109 Johnson, Johnson 678; 570; Miss. Miss. v. Reeves, State v. 112 Wheatley, 227; Miss. 113 Miss. 555; Waugh, 105 University Colley’s v. Miss. 623; Constitu- tional Limitations 228, 233, 236, (7 Ed.), pp. 227, 232, 256; Natchez R. R. Co. 252, 254, v. 242, (Miss.), Crawford L. & N. R. R. Co., State v. 596; 53 454 (Miss.); 55 So. So. State Hart v. Henry, State, Miss. Miss. 125; v. 87 87 II. act does violate section 112 of the Consti- Constitution; Hattiesburg Gro. Co. v. tution. Sec. 112, L, 88 141 Robertson, 34, 4, 126 So. 26 R. C. 35 and Co., Union Brushaber v. R. R. 240 et 60 L. 1, U. seq.; Ludlotv v. Wall- 43 Glasgow Roivse, 493; Ed. v. Mo. 479; brick, Waring Savannah, 339, 196; 272 Mo. 205 S. v. W. Purnell v. N. C. 45 Page, 93; 125, 534; S. W. Ga. R. R. R. Philadelphia Co., State 24, 45 Md. A. 361, 511; (4 Ed.), 3477; on Taxation sec. Cooley 1743, p. Cooley Cooley’s Ed.), 1752; secs. 1751 Taxation, (4 Con- Thomas v. 77. S., 680; Limitations (7 Ed.), stitutional on Taxation 481; Ed.), 48 L. Ed. Judson 363, (2 U. S. R. L. Black on Income 645, 24; C. Taxes par. p. 567, 142; Commomvealth 26 R. C. L. 44, p. par. 31, (3 Ed.), B 695, 1916 Ann. Werth, 604, 116 Va. S. E. Cas. Adams v. Bank, 532; 78 Miss. Code Secs. 3775, 1906, 3823, 3824, 3830, 3789, 3790, 3800, 3801, 3813, 3849, 3876, 3877, 3857, 3858, 3855, 3856,