Sinclair Refining Co. v. State Tax Commission

LARSON, Justice. Should taxes on the tank cars, owned by plaintiff and used exclusively by it for transporting its products from refineries and bulk plants to distribution points in the State of Utah, be assessed, levied and collected by the defendant, State Tax Commission, or by the county taxing officials? Plaintiff is engaged in the State of Utah and elsewhere in the oil and gasoline business. In connection therewith it owns and operates in the State of Utah bulk plants, service stations, pumps, tanks, trucks, the tank cars in question, and other facilities for the handling, delivery and sale of said products. In 1941, plaintiff owned and used in the State of Utah seventeen tank cars for the purpose of transporting its petroleum products from refineries to its distribution plants and centers. The cars are moved from point to point over and by the railroads operated in the State of Utah, at plaintiff’s request and direction and for its sole use and *342 benefit. The railroads have no connection with the cars except to move the same over their tracks as directed by plaintiff. The tank cars are not loaned or leased to, or used by any other persons or corporations, nor does plaintiff carry or transport persons or property for hire; and it is not a public utility. The State Tax Commission assumed to assess for taxation purposes said tank cars, and to levy and collect taxes thereon. Plaintiff sought prohibition, contending such property should be assessed by the county assessor and the taxes collected by the county treasurer. There is thus brought before us for construction and interpretation Section 80-5-3, R. S. U. 1933, reading as follows: “Pipe lines, power lines and plants, canals and irrigation works, bridges and ferries, and the property of car and transportation companies, when they are operated as a unit in more than one county; all property of public utilities whether operated within one county or more; all mines and mining claims, and the value of metaliferous mines * * *; must be assessed by the state tax commission as hereinafter provided. All taxable property not required by the constitution or by law to be assessed by the'state tax commission must be assessed by the county assessor of the several counties in which the same is situated.” This section deals with three classes or types of property— (a) Property which by its situs or nature is operated as a unit in more than one county; (b) Public utilities; and (c) mines and mining claims. The nub of the case is as to whether plaintiff, as far as its tank cars are concerned comes within the term “car company” as used in the section quoted. The general terms, “car company” and “transportation company” are nowhere defined in the taxing statutes, but we are given a few leads to aid in determining what the legislature meant to include within the terms as used. As to . what may be included within such term in a statute depends upon its legislative environment. State of Ohio v. Helvering, 292 U. S. 360, 370, 54 S. Ct. 725, 78 L. Ed. 1307. *343 “The purpose, the subject matter, the context, the legislative history, and the executive interpretation of the statute are aids to construction which may indicate an intent, by the use of the term, to bring state or nation [or other body or person] within the scope of the law.” United States v. Cooper Corporation, 312 U. S. 600, at 604, 605, 61 S. Ct. 742, 743, 85 L. Ed. 1071. So we must look to the entire context of the taxing structure with special notice of the places where and when the term has been used. Section 80-6-1, R. S. U. 1933, provides that the Tax Commission shall apportion to the several counties the total assessment of all property assessed by it according to five groups or classes therein set forth as follows: (1) Public utilities, except rolling stock, and all power, canal, and irrigation companies; (2) The rolling stock of railroads and street railroads, except motor driven stock not operated on rails; (3) Automobile and motor driven vehicles not operated on rail, and employed in common carrier business by public utility; (4) Property of car companies; (5) Mines and mining claims. So within these five groups must be found all the types or classes of property in Section 80-5-3, supra. The tank cars in question come within the purview of what we referred to as class (a) of property under Section 80-5-3, which by its situs or nature is operated as a unit in more than one county. But they do not come within subdivisions 1, 2, 3, or 5, of Section 80-6-1, as just set out. If the tank cars are within the assessing power of the Tax Commission it must be under subhead 4, property of a car company, the valuation of which is prorated to the counties in which there is railroad trackage in the proportion that the total trackage in the county bears to the total trackage in the state. This is admitted by the parties, but plaintiff contends that the term car company should be applied only to companies engaged in common carrier business, or as a dispenser and provider of car service to the public. However, the term must mean something different from common carriers, because all such would come under what we have listed as class (b) under *344 Section 80-5-3, and under subdivision (1) and (2) of Section 80-6-1. It is also noteworthy that subdivision (3), dealing with automobiles and motor transports specifically limits it to common carriers, while subdivision (4), car companies, makes no reference to public service or common carrier or utility. Furthermore Section 80-5-3, expressly lists “car and transportation companies” in a separate class or group from public utilities. It is evident therefore that “car company” means one, not a railroad company, which owns and operates cars used and moved on and over the rails and tracks of railroads or street railways. Such meaning as plaintiff ascribes to the term “car company” would limit it to those furnishing such cars for use of the public generally. We will explore it somewhat. Prior to statehood, all assessments for tax purposes were made by the county assessors. At statehood the legislature created the State Board of Equalization, and gave it the duty of assessing “all property and franchises owned by railroad, street railway, car, railway depot, telegraph and telephone companies in the State.” Section 12 of Chapter CXXIX, Laws of Utah 1896, p. 428, and subdivision 5 of Section 81, p. 447. The assessment record was to show the miles used or available for use in each company in each county. Section 60, p. 441, Laws of Utah 1896. The Board was also to equalize the assessment of each mortgage, etc., securing a debt affecting property in more than one county. Subdivision 6 of Section 81. The Board apportioned the total assessment of all such property as was assessed by it to the several counties in proportion to the value of such property in each county. Section 56 and Subdivision 6 of Section 81, of Chapter CXXIX, supra. In 1898, the legislature definitely limited the assessing power of the State Board to companies operating in more than one county. Section 2513, R. S. U. 1898. The properties above enumerated at that time were probably the only ones of appreciable value operating in more than one county. Thus *345 from the first the state established a policy of having a state body assess property and business franchises that were inter county; and apportioned the value thereof to the several counties affected. In 1907 the legislature further emphasized and clarified this policy by amending the statute so as to include as additional property to be assessed by the state board, electric light, pipe line, power and express companies. Section 2513, C. L. U. 1907. In 1909 the state board’s power was extended to include canal and irrigating companies operating in more than one county, and mining claims. Chapter 63 Laws of Utah 1909, c. 63, p. 93. In 1931 by constitutional amendment, Const, art. 13 § 11, the State Board of Equalization was abolished and the State Tax Commission was created. In addition to all duties and powers theretofore vested in and exercised by the State Board of Equalization, the assessing power of the state body was extended to all property of public utilities, and the statutes giving rise to this action were enacted. Chapter 53 Laws of Utah 1931. It is evident that the state policy has been to vest in the state body the assessment of companies regularly operating over or through fixed properties in one or more counties; properties which from their nature or business draw their revenue from more than one county; properties which from their nature require special facilities or knowledge in assessment; and the taxes of which should be prorated or divided among two or more counties. In addition, if such properties were assessed by the county assessors each assessing his portion, different standards may be used, and the total of the various county assessments may be out of all proportion to the value of the property as a whole. Again the counties may be disputing over the .amount of property, especially rolling stock subject to tax in each county, and render equalizations impracticable, and the condition of the tax payer impossible. The policy underlying the taxing setup, above referred to, was noted by this court in Salt Lake County v. Board of Equalization, 18 Utah 172, 55 P. 378, 379, where this court said: *346 “This section imposes upon the state board of equalization the duty of assessing all property and franchises of railroads and other companies operated in more than one county. Had the legislature intended property operated in more than one county to be assessed at the principal place of business of such companies, doubtless it would have-authorized the county authorities of the county in which such place of business might be situated to make the assessment. “This section requires the state board to assess the property of railroads and other corporations mentioned operating their lines in more than one county. ♦ * * “These provisions manifest an intent to give to each county through which a railroad is operated a tax upon the per cent of its rolling stock used within it, in the operation of such road, though its principal place of business may be located in another county. “The assessment in question is upon the engines and cars of the respective railroads. The tax in ¡question is a property tax, not a tax on business, or for the privilege of operating the railways through the counties; nor is it a tax on the capital stock of the. railroad companies. “The legislature assumed a railway company operating its road in more than one county would use a certain per cent of its engines and cars in each. The number of its engines and cars so used must vary from time to time, but it is the duty of the board of equalization to ascertain or approximate the average number. On that basis the whole assessment on the rolling stock of the respective roads should be apportioned to the various counties. Portions of the entire assessment equal to the assessment upon the average per cent of rolling stock used in the respective counties should be apportioned to each of them.” While that case involved directly the rolling stock of the railroad company, we think the reasons therein stated apply with equal cogency to the cars here involved. That the plaintiff here is a company operating rail cars as a unit in more than one county in its general business is admitted. That such cars are for tax purposes no different from railroad rolling stock is evident. That its value, inseparably connected with its use and business is derived from all counties in which it is used, or may be used, is equally evident. No county can legally be entitled to the benefits of any portion of an assessment on the property *347 used in another county. Salt Lake County v. Board of Equalization, supra. Also the assessment by the Tax Commission of such property, situated as it were by its use in more than one county, or operated in more than one county, may fairly be regarded as an act or method of equalizing and adjusting the valuation of property between different counties. State ex rel. v. Eldredge, 27 Utah 477, 76 P. 337. We conclude, therefor that the term “car company” as used in the statute in question is broad enough, and was intended to include such situations and property as are involved in the tank cars in question; and they are properly assessable by the State Tax Commission. The alternative writ is recalled and quashed. Costs to defendant. MOFFAT, C. J., and McDONOUGH, J., and WADE, District Judge, concur.