City of Waycross v. Bell

Russell, C. J. In January, 1928, the City of Waycross adopted an ordinance to levy and collect specific and occupation taxes for thé city for the year ending January 15, 1929. This ordinance was the general tax ordinance of the city for the year 1928, and included the levy of ad valorem taxes on real estate and personal property. The ordinance provides that no person shall engage in or carry on any business therein described, without first making application for a license and paying for the same and receiving a license to carry on the specified business, and provides a penalty of punishment by fine or imprisonment for failure to pay the tax and receive the license, for the issuance of an execution to collect the tax, and for an increase in the amount of tax by 25 per cent, if the same iá not paid on or before February 15, 1928. In this ordinance a tax upon “automobile bus lines conveying persons and parcels into and out of the City of Waycross” is levied according to the capacity of the bus, as follows: “1 to 5 passengers, $50; 5 to 10 passengers, $100; 10 to 20 passengers, $150; above 20 passengers, $200.” The plaintiffs filed a petition in which they alleged the foregoing facts, and further set up that they are engaged in the operation of motor-buses for the transportation of passengers upon regular fixed routes into and out of the City of Waycross, and that the municipality has demanded of plaintiffs payment of the “license or occupation taxes on the motor-buses operated by them” at the rate fixed by the ordinance; that if petitioners fail to pay such taxes they will be arrested and punished by fine or imprisonment, and executions will be issued against them for the amounts claimed; that the .municipality is without any power or authority to impose or collect said taxes from petitioners, for the reason that by express provision of the law of Georgia petitioners are exempt from any local municipal license tax. Unless the City of Waycross is restrained from attempting to enforce the terms of the ordinance against petitioners, they will be subjected to repeated arrests and prosecutions; their property will be levied upon, and they will be subjected to great expense and inconvenience of defending numerous criminal prosecutions [59] and of defending themselves and their property in the courts against sales under executions. Petitioners have large amounts of money invested in the motor-buses which they operate, and the effect of said prosecutions and levy of executions will injure and destroy their said property, and will prevent them from pursuing a useful and legitimate occupation and business. They pray that the city be enjoined from making any effort to collect the tax from them and from interfering in any way with them in the operation of their motor-buses. By amendment the plaintiffs set up that the ordinance levying the tax in question is void, because it is in violation of art. 7, sec. 2, par. 1, of the constitution of Georgia, providing that taxation shall be uniform on the same class of subjects; that there are three steam-railroad lines engaged in conveying persons into and out of the City of Waycross, the same business in which plaintiffs are engaged; that no occupation tax is imposed by the city on the railroads, and the tax imposed on plaintiffs is discriminatory against them and in favor of the railroads; that one of the plaintiffs is engaged in interstate commerce, and as to that plaintiff the ordinance is void because it violates the interstate-commerce provision of the Federal constitution, art. 1, sec. 8, par. 3. The defendant municipality filed a demurrer to the petition, moving to dismiss the action, because (1) No cause of action is set forth. (2) The petition does not set out any matter or thing of equity or equity jurisdiction. (3) The petition sets out no cause of action or matter for equitable relief against the defendant. In its answer the defendant admits the allegations of fact contained in the petition, but denies that the municipality is without power to levy and collect the taxes in question; and sets up that the tax it is undertaking to collect from the petitioners is a legal occupation or business tax which it is entitled to assess and collect. At the hearing before the trial .judge it was agreed by counsel for the parties that no question of fact was involved, and that the only question for the court to determine was whether the tax sought to be imposed upon the petitioners by the ordinance was legal. The judge overruled the demurrer, and enjoined the City of Waycross from attempting to collect “the license or occupation taxes upon automobile bus lines operated by petitioners into and out of Way-cross, Georgia, under the terms of the present ordinance of said [60] city, either by arrest or issuance of executions.” The defendant excepted. Paragraph 75 of section 2 of the general tax act of 1927 (Ga. L. 1927, pp. 56, 80) imposes a tax “Upon every person, firm, or corporation, operating a motor-bus for the transportation of passengers upon a regular or fixed route, [of] $25 for each bus of a passenger capacity of seven or less, and on each bus of more than said capacity the sum of $50; provided, that they shall be exempt from local municipal license tax; provided further, that this-section shall not apply to passenger buses transporting school children exclusively.” Counsel for the City of Waycross contends that the exemption contained in the general tax act, supra, extends no further than to prevent municipalities of Georgia from collecting a fee for the licensing of the bus business, and does not prevent the assessment and collection of an occupation tax upon “bus lines.” Based upon this assumption, the argument is made that as the municipal tax in question is plainly a revenue measure, and not a matter of regulation, therefore the tax is not a “license tax” imposed by the municipality in contravention' of the general tax act. The first question to be considered is whether the City of Waycross, which is admitted to possess authority to assess and collect occupational taxes in general, was prohibited by the general tax act of 1927, supra, from assessing and collecting a business or occupational tax upon automobile bus lines carrying passengers into or out of the city. The municipality contends that the tax in question is not prohibited by the terms of the general tax act, while the defendants in error rely upon the proviso contained in paragraph 75 of such act as an exemption from the municipal tax sought to be imposed. The exemption provided by section 75 of the tax act for the “person, firm, or corporation, operating a motor-bus for the transportation of passengers upon a regular or fixed route” is from “local municipal license tax.” Though there is a clear distinction between a license granted or required as a condition precedent before a certain business or occupation can be carried on and a tax assessed on the occupation or business in which such license may authorize one to engage (Home Ins. Co. v. Augusta, 50 Ga. 530; see also Peginis v. Atlanta, 132 Ga. 303, 63 S. E. 857, 35 L. R. A. 716), the term “license tax,” as employed in the tax act of 1927, is sufficiently broad to include [61] both a charge imposed under the police power for the privilege of obtaining a license to conduct a particular business, and a tax imposed upon a business for the sole purpose of raising revenue. “Every ‘license tax’ is imposed for raising revenue or as a police regulation, or for both purposes.” Johnson v. Great Falls, 38 Mont. 369. (99 Pac. 1059, 16 Ann. Cas. 974). “A ‘license tax’ is ‘either a license strictly so called, imposed in the exercise of the ordinary police power of the State, or it is a tax laid in the exercise of the power of taxation.'” ,City of Montgomery v. Kelley, 142 Ala. 552 (38 So. 67, 70 L. R. A. 209, 110 Am. St. E. 43), citing Tiedeman on Police Power. The term “license tax,” as employed in the authority granted by the charter of the City of Macon, empowering the city “to levy and collect a license tax upon all persons exercising any profession, trade, or calling in said city, was held by this court to “have relation strictly to the power of taxation, and not to that of police regulation, the court adopting the view of the Supreme Court of Kansas in Fretwell v. Troy, 18 Kan. 271, “in which it was held that power to levy and collect a ‘ license tax' on specified occupations ‘ was designed for purposes of revenue rather than of police *regulation.' " Morton v. Macon, 111 Ga. 162, 164 (36 S. E. 627, 50 L. R. A. 485). A similar ruling is contained in the decision in Daus v. Macon, 103 Ga. 774, 778 (30 S. E. 670). In Brown-Forman Co. v. Kentucky, 217 U. S. 563 (30 Sup. Ct. 578, 54 L. ed. 883), the term “license tax" is treated as synonymous with “occupation tax." “A ‘license tax' is one imposed on the privilege of exercising certain callings, professions, and avocations . . " State v. Berryman, 142 Mo. App. 373 (127 S. W. 129). It is stated by Tiedeman (Limitation on Police Power, 271), that “When the power is exercised by municipal corporations, a license is the requirement, by the municipality, of the payment of a certain sum by a person for the privilege of pursuing Ms profession or calling, whether harmful or innocent, for the general purpose of producing a reliable source of revenue." If the occupation is harmful, the sum paid for its prosecution may be said to be a license fee; but if innocent, it is a license tax. St. Paul v. Traeger, 25 Minn. 248, 33 Am. E. 462; Chilvers v. People, 11 Mich. 49. See also City of New York v. E. Co., 32 N. Y. 261. “A ‘license fee' or as it is otherwise called a ‘license tax,' the two terms generally being regarded as [62] synonymous, since the requirement of payment for a license is only a mode of imposing a tax on the licensed business, is a sum exacted for the privilege of carrying on a particular occupation or business.” 37 C. J. 168, § 3. Construed in the light of the foregoing rulings, it is evident that the General Assembly intended to relieve those engaged in the specified business or occupation from “municipal license tax,” and thereby the municipality was forbidden to impose either a license fee or license or occupation tax upon the business of the defendants in error; and that portion of the tax ordinance of the municipality attempting to impose a tax upon the businesses exempted from municipal taxation by the. General Assembly was ineffectual and invalid. The ordinance of the municipality must yield to the higher authority of the legislature of the State. Having held that the plaintiffs were not subject to the provisions of the tax ordinance, by reason of the exemption contained in the general tax act of the legislature, under the well-settled rule that this court will abstain from passing on constitutional questions where such decision is not necessary in the adjudication, we shall not deal with the attacks made by the defendants in error upon the constitutionality of the tax ordinance now in question. McGill v. Osborne, 131 Ga. 541 (2) (62 S. E. 811), and cit.; Carter v. Dominey, 157 Ga. 167 (121 S. E. 236); Hoover v. Pate, 162 Ga. 206 (132 S. E. 763); Case-Fowler Lumber Co. v. Winslett, 168 Ga. 808 (149 S. E. 211). It follows from the foregoing rulings that the trial judge did not err in enjoining the municipality from proceeding to collect the tax in question. Judgment affirmed. All the Justices concur, except