152 So. 915 | La. Ct. App. | 1934
This is a suit by the state of Louisiana for the collection of a license tax from the defendant corporation. There was judgment below dismissing the suit, and plaintiff has appealed.
The license tax alleged to be due is based upon the alleged operation of an office building by the defendant, and the suit is brought under the authority of section 37 of Act No.
The defendant in its answer denied that it was engaged in the business of operating an office building within the provision of and in the sense intended by section 37 of Act No.
In dismissing the suit below, the judge, a quo, did not pass upon the constitutional questions raised in defendant's answer, holding that the business of defendant upon which a tax was attempted to be collected in this proceeding did not come within the purview of section 37 of Act No.
The contention of the defendant is that it is not in the business of operating an office building because it is merely renting the surplus space in a building which it intends ultimately to occupy in its entirety in the future, when the reasonable expansion of its business will demand greater space. The fact that a part of its building is leased to tenants is said to be unimportant and simply an incident suggested by business expediency; a ten-story building being necessary to justify the use of the land upon which it is erected because of its great value resulting from its advantageous commercial location. Otherwise, it is said, the cost of housing defendant's business in the desirable locality it occupies would be prohibitive, or, in any event, ill-advised. It is pointed out that by excluding all tenants who might be said to have some connection with defendant's business, such as its subsidiaries and its attorneys. only 17.1 per cent. of the building, or approximately one-sixth of the space is occupied by outsiders.
We find that section 37 of Act No.
Exclusive of the space occupied by subsidiaries and counsel, about one-seventh of defendant's building is occupied by tenants whose business is entirely disassociated from defendant's. These tenants paid the defendant for the offices during the year 1932, $13,779.76, and, if we add the $8,000 paid by defendant's attorneys, the sum received in rental would be $21,779.76. A very considerable portion of the space in the building, it thus appears, is rented by the defendant and quite sizeable revenue derived therefrom. We can understand the advantage to be derived from the erection of a structure of sufficient size upon expensive ground and the renting of its surplus space until such time as defendant's business expansion would require it, but, to the extent of the revenue derived from the occupants of the surplus space, it seems obvious to us that the defendant is "operating an office building" and "deriving revenue therefrom" within the meaning and intendment of the act of 1932, for, by its very terms, it expressly contemplates the imposition of a tax upon those who operate an office building in whole or in part, whether occupied by the owner or not. The situation would be different, we take it, if there were one or two unoccupied offices in the building from which a comparatively negligible revenue were derived, when, it might be said that the insignificance of the space and the revenue could not be classed as an office building business.
In the case of State of Louisiana v. Heymann,
After considering the particular facts in the instant case, we say, as our Supreme Court said in the Heymann Case: "There is no doubt that the appellant (appellee) in the present case is engaged in the business of operating an office building."
For the reasons assigned, the judgment appealed from is reversed, and this cause is remanded to the civil district court for the parish of Orleans for further proceedings according to law and consistent with the views herein expressed.
Reversed and remanded.