Northern Commercial Co. v. Territory of Alaska

GILBERT, Circuit Judge (after stating the facts as above). The plaintiff in error contends that in levying the tax prescribed in- section 3, the Legislature imposed a tax upon each article of property handled by the fur dealer under his license, and that-it is therefore an ad valorem [168] tax on property, and void for the reason that it is not levied in accordance with the provisions of the Organic Act, section 9 of which provides that — “All taxes shall be uniform upon the same class of subjects and shall be levied and collected under general laws and the assessment shall be according to the actual value thereof. No tax shall be levied for territorial purposes in excess of one per cent, upon the assessed valuation of the property therein in any one year.” 48 U.S.C.A. §§ 78, 79. It is not disputed that the tax here involved ¿s valid, if it is an excise tax, as distinguished from a property tax.. In determining its nature, section 1 and section 3 must be construed together. Property taxes are taxes assessed on all property of a certain class in proportion to its value on a specified date. It is assessed at a stated period and collected at an appointed time. An excise tax, as the term itself indicates, is a sum cut out'of.that which is received or enjoyed by the person subjected thereto. It includes every tax imposed upon the privilege of performing an act or engaging in a business or occupation. Society for Savings v. Coite, 6 Wall. 594, 18 L.Ed. 897. Measured by these definitions the tax here in question is clearly an excise tax. The exaction thereof does not require the intervention of assessors or appraisers to estimate the value of the property. It does not become a property tax by reason of the fact that a certain prescribed sum is exacted upon the sale of each pelt. The fact that it establishes a schedule by which a specific sum is levied upon each article of commerce dealt in by the fur buyer does not change the nature of the tax. 26 R.C.L. 37. The plaintiff in error likens the present case to Thompson v. McLeod, 112 Miss. 383, 73 So. 193, L.R.A.1918C, 893, Ann.Cas.1918A, 674. In that case the Legislature levied what was designated a “privileg-e tax” or “occupational fee” upon persons pursuing the business of extracting turpentine from standing trees, amounting to. one-fourth of one cent each year for each cup or box. It was held to be in effect a property tax, for the reason that it was not a privilege of selling resin or the gum of the trees, but a tax on the privilege or right of the owner or licensee of pine trees to extract turpentine from standing trees. [169] The reasoning is not convincing, and we incline toward the views expressed in' the dissenting opinion in that case, that the tax was a tax on the'business and not on property. This conclusion is sustained by decisions of the Supreme Court and of this court. In Choctaw, O. & G. R. Co. v. Harrison, 235 U.S. 292, 35 S.Ct. 27, 59 L.Ed. 234, the tax under consideration was a tax upon the gross sales of coals dug from mines of which the taxpayer was the lessee, and was to be paid in addition to an ad valorem tax upon the mining property. The court said that the manifest purpose of the act was to— “reach all sales and secure a certain percentage thereof— a method commonly pursued in respect of license and occupation taxes. * * * A tax upon a merchant’s, manufacturer’s, or miner’s gross sales is not the same thing as one on his stock treated as property. Cooley on Taxation (3d Ed.) p. 1095. The former is upon his business. In effect, the Oklahoma act prescribes an occupation tax.” So in Ohio Tax Cases, 232 U.S. 576, 34 S.Ct. 372, 58 L.Ed. 737, the tax of 4 per cent, in the nature of an excise tax was placed upon the entire gross earnings of railroads for business done within the state, excluding all earnings derived from interstate business, for the privilege of carrying on intrastate, business. The court held that the tax was “in substance as well as in form an excise or privilege tax.” In line with the foregoing are Alaska Fish Co. v. Smith, 255 U.S. 44, 41 S.Ct. 219, 65 L.Ed. 489; Alaska Pacific Fisheries v. Alaska, 236 F. 52, 149 C.C.A. 262; Alaska Mexican Gold Min. Co. v. Territory of Alaska, 236 F. 64, 149 C.C.A. 274. The conclusion which we have reached in regard to the nature of the tax disposes of the contention that the act is void for failure to comply with that provision of the Organic Act which declares, “No law shall embrace more than one subject, which shall be expressed in its title;” the basis of the contention being that the act imposes a property tax, and therefore a tax which was not included in the title, “An act to impose a license tax on the business of fur farming,” etc. The judgment is affirmed.