Riley v. Ayer & Lord Tie. Co.

*108 Holden, P. «L, delivered the opinion of the court. The Ayer & Lord Tie Company, a corporation operating a creosoting plant, enjoined the state auditor from the collection of the privilege tax imposed against it for the privilege of carrying on the business of a creosoting plant in this state, under sections 77, 79, chapter 118, Laws of 1926. Section 77 of the act imposing the tax' reads as follows: “Creosoting Plants. — Each creosoting plant operated in this state shall pay a privilege tax or occupation fee for running their business of twenty-five cents (25c) per *109 thousand upon each thousand feet of timber board measurement, of any kind and all kinds treated at the plants.” Section 78 of the act provides the method of ascertaining the tax and the collection thereof by the state auditor, and section 79 provides a penalty for failure to pay the tax, after demand, and the manner of collecting the penalty from the taxpayer. The last two sections named are exact rescripts of sections 2 and 3 of chapter 111, Laws of 1912, which provide for the ascertainment and collection of the privilege tax imposed by section 1 of chapter 111, Laws of 1912, 'which reads as follows: “Each creosoting plant operated in this state shall pay a privilege tax or occupation fee for running their business of one fortieth (1-40) of one mill upon each foot of timber, board measurement, of any and all kinds treated at the plants and sold,” and is brought forward as section 77 of said chapter 118, Laws of 1926'; but it will be observed that the provisions of section 77, chapter 118, Laws of 1926, are different from those of section 1, chapter 111, Laws of 1912, as we shall point out and discuss. Section 1 of chapter 111, Laws of 1912, provided that each creosoting plant should pay a privilege tax of one-fortieth of one mill upon each foot of timber, board measurement, of any and all kinds treated at the plants “and sold.” One-fortieth of one mill equals two and one-half cents upon each thousand feet of timber treated by the creosoting plant. The said section 77 of chapter 118, Laws of 1926, changes the said section 1 of chapter 111, Laws of 1912, in that it imposes a privilege tax of twenty-five cents per thousand upon each thousand feet of timber “treated at the plant” (“sold” being omitted). Thus it will be seen that, in bringing forward the privilege tax law, the first section of tha chapter imposing the tax against creosoting plants was changed, either by intention or by mistake in the transcript, so as to *110 impose a privilege tax of twenty-five cents per thousand feet of timber treated with creosote, instead of two and one-half cents per thousand feet of timber treated “and sold.” The tax imposed by the 1926 act is ten times greater than that imposed by the act of 1912. It will also be noticed that the 1912 section fixes the tax against the timber treated “and sold;” whereas the tax under the 1926 sections is alone against the timber treated. Therefore it will be seen that sections 78 and 79 of chapter 118, Laws of 1926, which are exact rescripts of sections 2 and 3 of chapter 111, Laws of 1912, are not workable with section 77, for the reason that the ascertainment and collection sections do not fit in with section 77, chapter 118, Laws of 1926, because the last-named sections provide that the tax shall be on the “total board foot output and total gross sales of such plant,” whereas the section imposing the tax provides that the tax shall be upon the timber “treated at the plants.” So, it is argued by counsel for the creosoting- company, that lire act is void as being- unworkable, and means nothing. However, we shall omit a discussion of this contention, because the case will be decided upon another point. The bill of complaint of the creosoting company charges, among other things, that it is engaged in the legitimate business of creosoting timber and forest products, which process prevents decay of the timber and prolongs its life by such treatment; that the material so treated is obtained from the forests of Mississippi, and that its business is to treat and sell at its plant such products, and that the creosoting plant is operated for that purpose; that the products of this plant, after treatment, are sold in this state and shipped and distributed in other states; that the creosoting company heretofore paid a privilege tax for one thousand seven hundred thirty-five dollars and seventy-five cents per annum for the privilege of carrying on its business, but that the tax now assessed under the 1926 law is ten times greater than that imposed by the 1912 law, amounting- to seventeen *111 thousand three hundred fifty-seven dollars and forty-one cents instead of one thousand seven hundred thirty-five dollars seventy-five cents; that the tax under the 1926 law is so unreasonable and excessive as to be prohibitive, and, if imposed and collected, will destroy the business of the creosoting company and amount to confiscation of its property; that it is contrary to the due process and equal protection clauses of the Fourteenth Amendment to the federal Constitution; that the tax imposed by the last act is prohibitive, and is also discriminatory in that no such prohibitive tax is imposed upon like businesses and industries; and that the tax imposed is so great that the business will not survive it, because the products of the plant cannot be sold upon the market in competition with other like businesses which are not subject to such a prohibitive tax. The attorney-general demurred to the bill of complaint, thus admitting the truth of the charges; and, when the court overruled the demurrer, the state refused to plead further. Judgment was rendered accordingly, from which this appeal is prosecuted. The attorney-general concedes the invalidity of the 1926 act as denying equal protection of the law. We have reached the conclusion that the privilege tax imposed by chapter 118, Laws of 1926, is unconstitutional and void, because it violates the Fourteenth Amendment to the federal Constitution, in that it denies equal protection of the law in imposing a prohibitive tax for carrying on the business of creosoting timber, whereas other businesses of like kind are not thus assessed with a prohibitive tax. To put it in different words, the particular business here in question is destroyed by the prohibitive tax imposed, when like businesses are not destructively taxed; consequently, the imposition of the tax is discriminatory and denies equal protection of the law. 37 C. J., pp. 186, 190, 192, 193, 198, and 200; 12 C. J. 1155; Adams v. Standard Oil Co., 97 Miss. 879, 53 So. 692; Bodge v. Kelly, 88 Miss. 209, 40 So. 552, 11 L. R. A. (N. S.) 635, 117 Am. St. Rep. 733; State v. Law *112 rence, 105 Miss. 58, 61 So. 975; State v. Allen, 83 Fla. 214, 91 So. 104, 26 A. L. R. 735; Roach v. Ephren, 82 Fla. 523, 90 So. 609; Fiscal Court v. F. & A. Cox Co., 132 Ky. 738, 117 S. W. 296, 21 L. R. A. (N. S.) 83; Kendrick v. State, 142 Ala. 43, 39 So. 203; Salisbury v. Equitable Purchasing Co., 177 Ky. 348, 197 S. W. 813, L. R. A. 1918A, 1114; People v. Wilson, 249 Ill. 195, 94 N. E. 141, 35 L. R. A. (N. S.) 1074; Louisville v. Pooley, 136 Ky. 286, 124 S. W. 315, 26 L. R. A. (N. S.) 582; Ex parte Stoddard, 35 Nev. 504, 131 P. 133; Sperry & Hutchinson Co. v. State, 188 Ind. 173, 122 N. E. 584; Owens v. State, 53 Tex. Cr. R. 105, 112 S. W. 1075, 126 Am. St. Rep. 772; Caswell & Smith v. State (Tex. Civ. App.), 148 S. W. 1159; Ex parte Hutchinson (C. C.), 137 F. 949, 950; Waters-Pierce Oil Co. v. Hot Springs, 85 Ark. 509, 109 S. W. 293, 16 L. R. A. (N. S.) 1035; Gulf, C. & S. F. Ry. Co. v. Ellis, 165 U. S. 150, 17 S. Ct. 255, 41 L, Ed. 666; Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 22 S. Ct. 431, 46 L. Ed. 679;, Bell’s Gap R. R. Co. v. Pennsylvania, 134 U. S. 232, 10 S. Ct. 533, 33 L. Ed. 892. The act being-void and the privilege tax laws having provided that “no law not in conflict herewith shall be repealed hereby, though not brought forward,” the annulment of chapter 118, Laws of 1926, reestablishes, in full force, chapter 111, Laws of 1912. The judgment of the lower court is affirmed. A/pnned. Smith, C. J., expressed no opinion.