Thomas v. City of Elizabethtown , 1965 Ky. LEXIS 8 ( 1965 )

WILLIAMS, Judge

(dissenting).

Section 170 of the Kentucky Constitution exempts from taxation public property used for public purposes. Unfortunately for cities, in this instance, that exemption relates to property taxes and not to excise taxes. City of Louisville v. Cromwell, 233 Ky. 828, 27 S.W.2d 377 (1930).

The tax levied by KRS 138.460 is to be calculated by multiplying ninety percent of the retail price of the motor vehicle by three percent. The tax is based on the use of the motor vehicle and the statute says so. It is purely and simply a use tax.

By statute (KRS 138.470), motor vehicles sold to the United States or the Commonwealth of Kentucky are exempt from the use tax. Cities are not included.

The case of Marcum v. City of Louisville Municipal Housing Commission, Ky., 374 S.W.2d 865 (1964), stands only for the proposition that institutions of purely public charity are exempt from payment of the use tax. A city is not an institution of purely public charity. Charitable institutions are exempt from payment of taxes of every class by Section 170 of the Kentucky Constitution. Board of Education of Kenton County v. Talbott, 286 Ky. 543, 151 S.W.2d 42 (1941).

Use taxes are turned over to the State Treasurer for the benefit of the State Road Fund. KRS 138.460 and 186.260, and Kentucky Constitution, Section 230. It follows the same reasoning applies to a consideration of use taxes as was applied to the consideration of gasoline taxes in City of Louisville v. Cromwell, supra.

A general statement of the prevailing law is found in 51 Am.Jur., Taxation, Section 558:

“While generally it is assumed, in the absence of expression of clear intent to the contrary in the taxing statutes, that property of municipal corporations and other subdivisions of the state is exempt from property taxes, such exemption does not, according to many courts, exist with reference to excise and privilege taxes, and as to such taxes municipal corporations are liable unless there is an express exemption in the tax statute. Moreover, when there is an express constitutional or statutory provision for the exemption of municipal corporations from taxation, such provision will be construed to apply only to ad valorem taxes on specific property, and not to exempt such bodies from license and excise taxes. * * * ”

I recognize the need of cities for financial relief, but, under the law, they are not exempt from payment of the use tax. I therefore respectfully dissent from the majority opinion.

Judge MILLIKEN joins in this dissent.