State ex rel. American Manufacturing Co. v. Koeln , 278 Mo. 28 ( 1919 )

WILLIAMS, J.

The American Manufacturing Company, a corporation, seeks by mandamus to compel the Collector of the Revenue of the City of St. Louis to allow certain credits upon said corporation’s income tax bill.

The suit was originally instituted in the .Circuit Court of the City of St. Louis. Upon a trial in the circuit court a peremptory writ of mandamus was awarded, commanding said collector to allow the credits claimed by the corporation in its petition. The collector duly appealed to this court, and will hereinafter be referred to as appellant. The corporation will hereinafter be referred to as respondent. The facts necessary to an understanding of the issues are undisputed and may be summarized as follows:

Respondent is a foreign business corporation, duly licensed to do business in this State, and is located in the City of, St. Louis. Appellant is the Collector of the Revenue- of the City of St. Louis. During the year 19-18, the respondent corporation made due return of its taxable income for taxation by the State, to the assessor of said city, pursuant to the terms of the Income Tax Act, Laws 1917, pp. 524 et seq.

Thereupon the assessor duly made an assessment of income taxes against said corporation, for which an income tax bill was later issued and placed in the hands of appellant as collector of said city. The income tax bill by its terms was due and payable on or before December 31, 1918, without penalty. During the year 1918 the respondent paid taxes which became due and payable in said year as follows, to-wit:

Manufacturer’s tax on its material, machinery, etc., under the provisions of Art. XVI and Art.v XV. of Chap. 117, Revised Statutes 1909:

Paid Aug. 1, 1918,

State Property Tax ................ $818.25.

State Interest Tax . /............... 54.55.

State Capitol Building Fund Tax---- 109.10.

School Fund Tax ................ 3,273.00.

Also taxes which became due and payable in said year on real and personal property other than above: Paid Dec. 3, 1918,

Ueneral State Revenue Interest and

Capitol Fund Tax ..................$511.23.

Tax for public school purposes...... 1,789.32.

After the payment of the above taxes and on December 3, 1918, the respondent, in an attempt to comply with Section 32 of the Income Tax Act (See Laws 1917, page 538), exhibited the paid tax receipts for all the above taxes to the Assessor of the City of St. Louis, to the Comptroller of the City of St. Louis, and to appellant as collector of said city and requested each of them that respondent be allowed credit on its said income tax bill to the full amount of said tax receipts.

Each of the three officials refused to allow said credits and this proceeding was instituted against the collector.

The determination of the questions presented by this appeal involves the construction of the Income Tax Act and more especially Section 32' thereof, which is as follows:

“See. 32. Taxes paid on real and personal property to be deducted, etc. when. — Any person, corporation, joint-stock company, association or insurance company who shall'have paid a tax assessed upon his real or personal property to "the State during any year shall be permitted to exhibit the receipt or receipts thereof to the assessor to the full amount in the payment of income taxes assessed against such person, corporation, joint-stock company, association dr insurance company during said year.”

More specifically stated there are but two questions presented, which questions, stripped of unnecessary verbiage, are as follows:

1. Should the word “assessor” in said section be construed to read “collector”?

2. Does the phrase, “who shall have paid a tax assessed upon his real or personal property to the State” as used in said section include the taxes which respondent paid for school purposes?

These will be discussed in their order.

I. Should the word “assessor” in Section. 321 of said Act (Laws 1917, p. 538) be construed to read “collector”?

In ascertaining the legislative intent in this regard it will be helpful to call attention to, other provisions of the act as well as- some of the general revenue laws.

Accuracies. Section 11 of the Income Tax Act provides that “every person who has a taxable income shall on the first day of January of each year, or as soon thereafter as practicable, apply in person or by mail, to the assessor of the district in which such person resides, for a proper blank on which to make a return, which said return shall be filed with the assessor on or before the first day of March next following.”

Section 14 of the act provides that “the assessor shall complete the assessment of incomes on or before the first day of March of each year and shall thereupon forthwith certify the result to the county clerk or city auditor who shall compute the taxes thereon, and said clerk shall enter such ‘income tax’ upon the tax books of the year and it shall be collected and paid as personal property taxes are now collected and paid.”

Section 22 of the act provides that “income taxes shall become delinquent on the first day of January following the day when said bills are placed in the hands of the collector.”

From the foregoing it appears - that after March 1st of each year the assessor- has nothing further to do with the income tax theretofore assessed by him except to forthwith certify such assessment to the proper authorities.

Under the general law (Chap. 117, R. S. 1909) pertaining to the assessment and collection of taxes due and payable in any given year on real and personal property, the tax books are not required to be delivered into the hands of the collector until long after March 1st of each year, the date upon which the assessor is required to forthwith certify his income tax assessment lists to the proper officials.

It is therefore evident that a person or corporation against whom an income tax is assessed in any given year could not possibly procure a tax receipt for his real and personal taxes due and payable in that year in time to exhibit the same to the assessor before the assessor’s duties in connection with such assessed income tax had entirely terminated.

To whom did the General Assembly intend such tax receipts should be exhibited? To the collector, who from the time such tax receipts could first possibly come into existence, was the only official authorized by law to collect such income taxes, or to the assessor,' who at such time had nothing further whatever to do with the asessment or the collection of. said income taxes ?

The act says that the receipts shall be exhibited to the full amount, not for the purpose of affecting the assessment of the income tax, but uin the payment of income taxes.”

The payment of the income tax is required to be made to the collector and not to the assessor.

To hold that the General Assembly intended that the tax receipts should be exhibited to the assessor would be to hold that it “intended to enact an absurd law incapable of being intelligently enforced.” The presumption is that the General Assembly did not intend to enact an absurd law. [Bingham v. Birmingham, 103 Mo. 234, l. c. 352.]

When the entire ■ act is read and considered in the light of the entire scheme of - revenue assessment and collection we are satisfied that it was the intention of the General Assembly that such receipts should be exhibited to the collector whose duty it is to collect the income tax and that the word “assessor” in Section 32 of the act is the result of a clerical error and should be construed to read “collector,” in harmony with the true legislative intent.

The correct rule here applicable is stated in 36 Oyc. 1126 as follows:

“Mere verbal inaccuracies, or clerical errors in statutes in the use of words, or numbers, or in grammar, spelling, or punctuation, will be corrected by the court whenever necessary to carry- out the intention of the Legislature as gathered from the entire act.”

To the same effect are the following authorities: Endlich on Interpretation of Statutes, par. 319 and numerous cases therein cited; 2 Lewis-Sutherland on Statutory Construction (2 Ed.), par. 410 and cases therein cited; Frazier et al. v. Gibson, 7 Mo. 271 (wherein the word “judgment” was construed to read “assignment”) ; Ellis v. Whitlock, 10 Mo. 781 (wherein the word “section” was construed to read “sections”).

II. The next question presented is, what tax receipts are permitted by said Section 32 to be exhibited in the payment of income taxes?

Taxes! All the parties to this record and also the learned Attorney-General, appearing amicus curiae by leave of court, concede that it must be receipts for taxes which become due and payable during the same year in which the income tax in question also becomes due and payable. In this we think the parties are correct.

The appellant, and the learned Attorney General likewise, insist, however, that the circuit court erred in including in the peremptory writ the items showing receipts for the payment of school taxes.. These items include the school fund tax of $3,273 paid August 1, 1918, under the Manufacturer’s Tax Law, and the tax for public school purposes in the sum of $1789.92 paid December 3, 1918, under the general revenue laws. No objection is raised concerning the other items which were all allowed by the trial court. Respondent contends that the court properly included the taxes paid for public school purposes.

The act provides that “any person . . . who shall have paid a tax assessed upon real or personal property to the State during any year shall be permitted to exhibit^the receipt or receipts thereof to the “collector” (see construction given in paragraph one above) to the full amount in the payment of income taxes assessed against such person . . . during said year. ” It will be noticed that the act uses the phrase “paid . . . to the State.”

Under the law the only taxes on real and personal property which the State itself is permitted to levy and collect are as follows: (a) A tax of fifteen cents on each one hundred dollars’ valuation for State revenue and one cent on each one hundred dollars’ valuation to pay the interest on the certificates of indebtedness of the State to the Public School Fund and the Seminary Fund (Laws 1915, p. 393); (b) A tax of two cents on the one hundred dollars’ valuation for the payment of the interest and to create a sinking fund for the payment of the State Capitol' building bonds. [Laws 1911, p. 416-417.]

The school taxes allowed by the trial court were not taxes paid to the State under levies made by the State for any of the above purposes, but evidently were taxes levied by and collected for the benefit of the local school district.

It is contended by the respondent that the provisions of Section 32 were inserted in the act to avoid a charge of “double taxation” being made against the tax. Whether or not that was" the legislative purpose it is not necessary now to determine. But even, though such should be conceded to have been the purpose we are unable to see wherein the argument can be of use to respondent in the present case.

On# of the elements of illegal double taxation is that “the subject of taxation shall directly contribute twice to the same burden while other subjects of taxation belonging to the same class aré required to contribute but once.” [Cooley on Taxation (3 Ed.), vol. 1, p. 394.] A tax levied and collected by and for a “school district” is entirely a different burden from the tax levied and collected for State purposes, even though a part of the State taxes so collected is in fact afterwards distributed by the State to school districts to be used in helping maintain the public school system. So even if the Legislature, by the provision, made an attempt to avoid double taxation it was not at all necessary to that end that school taxes (levied by local school authorities) should be allowed as an offset to any part of the income tax, levied and collected as a State tax.

Neither can the fact that a school tax is levied for a public purpose and one in which the State is greatly concerned be of any compelling force in adding words which would enlarge the statute to the extent of including tax receipts for school taxes.

- ’ All taxes levied in this State whether levied by the State itself or by the school district, county or other taxing authority, must under the clear mandate of the Constitution (Art. 10, sec. 3, Mo. Constitution) be levied and collected for “public* purposes” only. The State then may be said to be greatly concerned with each purpose for which a tax may under the Constitution be levied. Rut the intention clearly appears from the language of Section 32 of the Income Tax Act that a limit was intended to be placed upon the tax receipts which might be exhibited in payment of the income tax. The language used is that it must be a tax “paid to the State.” The language is clear and unambiguous and we are unable to construe the language to include the tax receipts for school purposes which were exhibited ■by the respondent corporation in the case at bar.

We are of the opinion that the court erroneously included the school tax items, and that therefore the judgment should be reversed and the cause remanded.

It is so ordered.

All concur except Woodson, J., who dissents; Bond, G. J., and Graves, J., each concur in separate opinion.