Miller v. Illinois Cent. R. R.

* Corpus Juris-Cyc References: Appeal and Error, 4CJ, p. 649, n. 36; Commerce, 12CJ, p. 96, n. 98; Statutes, 36Cyc, p. 1128, n. 54; p. 1131, n. 75; p. 1189, n. 72, 75, 76, 77; Taxation, 37Cyc, p. 810, n. 13, 14. On power of state to tax interstate commerce, see annotation in 60 L.R.A. 649; 5 R.C.L. 796; 1 R.C.L. Supp 1528; 4 R.C.L. 359; 5 R.C.L. 306; 6 R.C.L. Supp. 331. Appellant filed his bill in the chancery court of the First district of Hinds county against appellee, under chapter 101, Laws of 1912, as amended by chapter 116, Laws of 1914, and chapter 132, Laws of 1924, to recover of the latter income taxes for the years 1918 to 1923, inclusive. The bill was demurred to by appellee, the demurrer sustained, and, appellant having declined leave to amend his bill, a final decree was entered dismissing the bill. From that decree appellant prosecutes this appeal. *Page 429 The following is deemed a sufficient statement of the case made by appellant's bill to develop the questions decided. The appellee is a foreign railroad corporation, a citizen of the state of Illinois, and is a common carrier railroad engaged in both intrastate and interstate commerce. Appellee paid no income taxes for each of the years ending February 1, 1918, to 1923, inclusive. If liable for an income tax, as the bill alleged appellee was, there would be due the state for those years forty-nine thousand three hundred forty-one dollars and sixty-six cents, plus an equal amount as damages because of appellee's failure to pay such taxes when due, and plus interest at the rate of one per cent. per month, as provided by the statute. The bill alleged that appellee was liable for income taxes for the period mentioned, under chapter 101, Laws of 1912, as amended by chapter 116 of the Laws of 1914 and chapter 132 of the Laws of 1924. One ground of appellee's demurrer was that, under the laws of this state, not until chapter 132 of the Laws of 1924 went into effect was a foreign railroad company, doing business in this state and engaged in both intrastate and interstate commerce, liable for an income tax. We decide that question alone, pretermitting the question of the jurisdiction of the chancery court to entertain the bill and other questions raised. We do this because the conclusion we have reached on the main question makes it unnecessary to decide the other questions. If appellee is liable for the income taxes sued for, it is by virtue of chapter 101 of the Laws of 1912, as amended by chapter 116 of the Laws of 1914. Appellee's contention is, and the court below so held, that the correct interpretation of the statute in question necessarily excludes from its operation foreign railroads doing business in this state and engaged in both intrastate and interstate commerce. It is true, as contended by appellant, that section 4 of the act is broad enough by its terms to cover all persons and corporations doing business in *Page 430 this state, including foreign railroad corporations engaged in both intrastate and interstate commerce in this state. That section provides that: "There is hereby levied for the benefit of the general fund of the state of Mississippi a tax on all incomes as follows: `On all annual incomes in excess of twenty-five hundred dollars and less a tax of five mills on the dollar.'" But section 4 of the act is to be construed in connection with all of its other provisions. So construing it, we are of opinion that it was not the purpose of the act to impose an income tax on foreign railroad companies engaged in intrastate and interstate commerce in this state, for the reason that every other provision of the act, except section 4, dealing with the question, necessarily excludes from its operation such railroad corporations. Section 1 of the act provides, among other things, that at the time of the making of the assessment rolls of personal property for taxation: "The assessor of each county shall each year demand of each person liable to assessment in his county a list of his income for the year ending February 1st of the year in which such assessment is made, in excess of twenty-five hundred dollars." (Italics ours.) Section 2 of the act provides that persons liable for income taxes shall be furnished by the assessor with blank forms and that such persons shall fill out, sign, and swear to their returns before the assessor, or other officer authorized by law to administer oaths: "And such assessor shall forward the same to the state auditor not later than July 1st of that year, and said state auditor shall certify the amount of tax due upon such income so reportedto the tax collector of the county in which such person resides, on or before the 1st day of October of each year, and it shall be the duty of such tax collector to collect such income tax so imposed upon the person so assessed at the same time and in the same manner as is prescribed by law for the collection *Page 431 of other taxes, and to cover the same into the state treasury as prescribed by law for other taxes." (Italics ours.) Among other provisions in section 3 is: "It shall be the duty of the assessor of each county tofurnish the state auditor a list of all persons whom he may find who are subject to the above tax and who filled out the list above required, together with the names of other persons in his county not appearing thereon." (Italics ours.) Section 8 of the act provides that: "Any assessor who shall fail or refuse to perform the duties herein imposed shall be guilty of malfeasance in office." The act makes no provision whatever for the separation of income derived from domestic business and income derived from interstate commerce by foreign railroads engaged in both of those kinds of business in this state, although section 4 of the act is broad enough to cover such railroad corporations. It is unquestioned that the state cannot lay a tax on interstate commerce in any form whatever, whether the tax be on the transportation of the subjects of commerce, the receipts derived therefrom, or the occupation or business of carrying on the commerce. The imposition of such a tax would be violative of the commerce clause of the federal Constitution, subsection 3, section 8, of article 1. Postal Telegraph Co. v. Adams,155 U.S. 688, 695, 15 S.Ct. 268, 360, 39 L.Ed. 311, 315; Crew LevickCo. v. Pennsylvania, 245 U.S. 292, 38 S.Ct. 126, 62 L.Ed. 295. Tax laws are to be strictly construed against the taxing power. If the right to tax is not plain, it cannot be implied. Doubts are resolved in favor of the taxpayer. Before one is liable for taxes he must come within the express provisions of the taxing statute, 25 R.C.L. 1092, section 307 (and cases in notes). In this state railroad corporations are assessed for taxes by the state tax commission. The scheme provided *Page 432 by the statute involved, if the statute applied, for the assessment by the county assessors of foreign railroad corporations, engaged in this state in both domestic and interstate commerce, of their taxable incomes in each county through which they run, it seems, would be impossible of accomplishment. The whole plan of the statute for the assessment of those liable for income taxes and the making of returns thereof seems to demonstrate that the legislature did not have in mind foreign railroads of the character of appellee. And especially is this true when taken in connection with the fact that, by the act, the legislature provided no means for the separation of the taxable income of such railroads from their nontaxable income. If the act applies to such railroads, then clearly, its purpose was to tax their income derived from interstate as well as intrastate commerce, and that could not be done, under the commerce clause of the Constitution. We think that is an additional and a strong reason for interpreting the statute as not applying to such railroads. If appellee was due any income taxes, under chapter 101 of the Laws of 1912, as amended by chapter 116 of the Laws of 1914, then chapter 132 of the Laws of 1924 laid down the plan for the enforcement and collection of such taxes. But we are of opinion that no income taxes were imposed by our statutes on railroads of the character of appellee until chapter 312 of the Laws of 1924. Affirmed.