491 P.2d 1371 | Colo. | 1971
Lead Opinion
delivered the opinion of the Court.
Appellants, State Farm Mutual Automobile Insurance Company and Fireman’s Fund Insurance Company, paid the occupational tax monthly as it became due, but did so under protest. They filed suit seeking a refund and an adjudication that the ordinance was null and void as to them. Appellants, Security Life and Accident Company and Capitol Life Insurance Company, did not pay any of the monthly assessments as they became due, and intervened in the State Farm action. All joined in contending that the occupational tax as to them is prohibited because of the enactment of 1965 Perm. Supp., C.R.S. 1963, 72-1-14(1)(c), which provides inter alia “ * * * no other occupation tax or other taxes shall be levied or be collected from any insurance company by any county, city or town within this state * * *."
Denver, in filing counterclaims against the intervenors, demanded the payment of back taxes and the imposition of a penalty under subsection 1.20 of Ordinance 232 for failure to pay such taxes as they came due.
All parties waived oral argument, and the trial court held section 72-1-14(1)(c) violative of the Colorado constitution, supra, and void as to home rule cities insofar as it purports to bar Denver from imposing a business
In their joint brief, appellants admit that summary judgment was appropriate; however, they dispute the trial court’s interpretation of the applicable laws so as to render Ordinance 232 valid as to them. Their arguments will be discussed under I. Additionally, intervenors seek reversal of the judgment for 6% interest on the taxes if found to be valid. That issue will be discussed under II.
I.
Appellants argue that the regulation of the insurance industry is a matter of state, not local, concern, and therefore outside Article XX, Section 6, supra; that C.R.S. 1963; chapter 72, including section 72-1-14(1)(c), establishes a comprehensive regulatory program; that by making it “ * * * unlawful for any person to engage in business within Denver . . . without having paid the tax * * *” (subsection 1.6-1), Ordinance 232 attempts to regulate the insurance business and, therefore, is unconstitutional as applied to appellants. Appellants further contend, arguendo, that if the regulation of the insurance industry is a matter of both state and local concern, section 72-1-14(1)(c) expressly pre-empts the field of insurance company taxation, and therefore the Denver occupation tax would still be unconstitutional as. applied to appellants.
We have already determined in Duffy, supra, that business occupational privilege taxes imposed -solely for the purpose of raising revenue for city governmental activities is strictly of local concern, and consequently that Denver, as a home rule city, has the power to impose such taxation under Article XX, section 6, supra.
A reading of the entire ordinance indicates that the .tax is not imposed) upon the right to do business, but upon the engaging in business in Denver. See Post v. Grand Junction, supra. In subsection 1.3-1, supra, it is stated that “[t]he tax levied under this article is im.posed purely for revenue purposes for the support of the government of . . . Denver * * *." (Emphasis added.) In subsection 1.26, supra, it is declared that “* * * the purpose of the levy of the taxes imposed by this article is for the raising of funds for the payment of the expenses of operating the City. * * (Emphasis added.) And, in subsection 1.5-2, supra, it is rioted that:
“No delinquency in payment of the tax herein provided for and no. violation or conviction for .such violation of this article, shall be grounds for the; suspension 'dr revocation of any other license issued to any .person.'engaged in business within Denver, by the Manager of Safety and Excise, Manager of Health and. Welfare, and the' Manager of Revenue nor any other official of Denver under any licensing provisions of the Revised Municipal Code.or other ordinances, nor shall the same be grounds for the suspension or revocation of any other license issued by any licensing authority pursuant to the statutes enacted by the General Assembly of Colorado.”'
It is obvious that Ordinance 232 was drafted with the distinction between regulation and taxation well in iriind. Post v. Grand Junction, supra. We adhere to Denver v. Duffy, supra, and hold the ordinance to be exactly what it purports to be, a revenue producing measure for Denver.
Appellants next argue that the tax exemption established in section 72-1-14(1)(c) is an integral part of the regulation of insurance companies, and, thus, that it is a legislative declaration, under the police power, of the state’s public policy, by which a municipality is bound even with regard to matters of strictly local concern. For this proposition, appellants cite Denver v. Tihen, 77 Colo. 212, 235 P. 777 (1925) as “in point” and “determinative” of their position. The case, however, is distinguishable from the instant case. Tihen, supra, involved a municipal assessment levied upon a nonprofit cemetery. A state statute extended a constitutional exemption from taxation (Colo. Const. art X, § 5) to include local assessments upon such property. The Court held that the public nature of nonprofit cemeteries, which provide a needed function which otherwise would devolve upon the public, indicated a state-wide policy of complete exemption from the burdens of taxation, including assessments, to be salutary. Insofar as Tihen, supra, stands for the proposition that the matter of assessment for local improvement districts is of state-wide concern, we expressly overrule it.
The statute involved in the instant case, however, imposes state taxes on profit-making companies for the operation of the state insurance department which is charged with the duty of regulating the companies. The exemption attempted to be granted therein is perfectly
II.
Intervenors ask that in the event we uphold the tax that we find the trial court erred in assessing 6% per annum interest on their back taxes. We agree. Although the trial court failed to specify by what authority it assessed the charge, Denver implies that it was made under authority of Ordinance 232. This contention is without merit. The court expressly declined to impose the penalty provided under subsection 1.20, supra. The specific rate provided by that section of the ordinance is 1% per month to be imposed by the Manager of Revenue, after certain findings of wilfullness. Such charge cannot be made by the court under authority of Ordinance 232. It appears, consequently, that the taxing of interest probably was imposed under C.R.S. 1963, 73-1-2, which, in part, provides for a 6% annual rate on bills, bonds, notes and other instruments in writing. Such agreement, however, “* * * must be one expressing mutuality of contract.” Cobb v. Stratton’s Estate, 56 Colo. 278, 138 P. 35 (1914). Clearly, a contractual relationship is not involved in a claim for overdue taxes. See People ex rel. Du Page County v. Smith, 21 Ill. 2d 572, 173 N.E.2d 485 (1961).
Judgment declaring section 72-1-14(1)(c) to be unconstitutional as applied to Denver is affirmed, and judgment imposing an interest charge upon intervenors for back taxes is reversed.
Concurrence Opinion
specially concurring.
I expressed my basic disagreement with Ordinance
