City & County of Denver v. Duffy Storage & Moving Co. , 168 Colo. 91 ( 1969 )

Mr. Justice Kelley

concurring in part and dissenting in part:

I agree with the majority in striking down. Ordinance No. 234 for the reasons stated in the majority opinion. I have joined in Mr. Justice Hodges’ dissenting opinion as to the invalidity of Ordinance No. 233. I would hold Ordinance No. 233 invalid for the additional reasons set forth in this dissent.

Mr. Justice Hodges would hold Ordinance No. 233 invalid because, irrespective of its label, it is an income tax and invalid by virtue of Denver v. Sweet, 138 Colo. 41, 329 P.2d 441. However, if it is an occupation tax its validity must be premised on the proposition that it is local and municipal in concept rather than of state-wide concern.

Denver attempts to justify the imposition of its tax on everyone employed in Denver who earns $250 per month, regardless of where he may reside and knowing that many are nonresidents, on the basis that it is the “Core City.”

There is no formal organization of the Core City, it has no fixed boundaries, nor is there any statutory or constitutional recognition of the concept. The very use of the term “core” suggests that it is only a part of a larger whole. The larger whole is what is known as “the metropolitan area,” the problems of which have been the subject of many legislative and constitutional proposals in the general assembly. :

The metropolitan area, at least for census purposes; in addition to Denver, consists of Arapahoe, Adams, Jefferson and Boulder Counties. It is common knowledge that residents of Douglas, Clear Creek, Park, Gilpin and Weld Counties commute to full-time jobs in Denver. Certain types of employment permit people to live át even greater distances and still work there to a “sufficient” extent to earn $250.00 per month.

The metropolitan area is inhabited by approximately fifty percent of the state’s population and Denver, in turn, has almost fifty percent of the area’s total.

In view of the magnitude of the area and the population, it is most difficult to escape the conclusion that the imposition of' the tax is not of purely local concern, but is of state-rwide concern. i

:■ When the legislature authorized cities to impose occupation taxes it must be assumed that it was thinking of occupation tax in the traditional sense — a tax on the owners of businesses for the privilege of conducting various classes of business within the boundaries of the city. We find classic examples of this type of tax .in the four cases cited in the majority opinion. Post v. Grand Junction, 118 Colo. 434, 195 P.2d 958; Jackson v. Glenwood Springs, 122 Colo. 323, 221 P.2d 1083; Ping v. City of Cortez, 139 Colo. 575, 342 P.2d 657; Englewood v. Wright, 147 Colo. 537, 364 P.2d 569. But it should be noted,that in none of those cases were employees as such taxed and in none of them were the businesses subject to the tax situated outside of the city. To me this suggests that when a city attempts to encompass the whole or even a substantial part of the state within its taxing program, it is of state-wide concern. In this connection it is interesting to note that Denver does not attempt to impose its sales tax on sales of merchandise made within Denver for delivery outside of Denver.

;-.Home rule cities, other than Denver, within the Denver Metropolitan area are Englewood, Littleton, Aurora, Boulder, Arvada, Golden. In addition, there are some twenty home rule cities which appeared here through the- Colorado Municipal League in support of Denver’s position. I daresay all of these cities have financial problems- almost .as acute as those which prompted Denver to enact the ordinances approved by this court. Each of those cities now has the same power as Denver to. enact the so-called occupational privilege tax.

- If, or perhaps more likely — when, .each of the home rule cities in the Denver metropolitan area enacts an identical ordinance those' same taxpayers who will now .be paying $2.00 per month to Denver will then be paying a like sum to six additional communities.' Undoubtedly, financial problems are not limited to the cities in the Denver area. It is conceivable that several other cities will follow suit. It is also conceivable that a. single.taxpayer, such as a salesman, could be..subjected to the taxes .of several cities. ’ :

1 .'.To those who suggest that the situation, depicted does not appear in the record before us, I say that we should not consider the constitutionality of legislation in a vacuum. Also, the assumed facts are set out solely to demonstrate the nonlocal effect of the application of the law. If the operation of an automobile upon a city’s streets by one under the influence of liquor is of statewide concern, Morris v. City of Canon City, 137 Colo. 169, 323 P.2d 614, the imposition of a tax on a nonresident of the city who enters in the course of his employment is likewise of state-wide concern.

Although the arguments advanced are almost as equally applicable to the tax on the employers, I have elected not to expand this dissent to include Ordinance No. 232 at this time because of other factors which might possibly lead me to a different conclusion. My concurrence in the majority opinion does not mean that I do not entertain serious doubts as to its validity too.

There is respectable authority for the proposition that a “head” tax, such as we have here, is invalid when the attempt is to impose it on nonresidents. A statement which appeals to my sense of reason is found in Danyluk v. Bethlehem Steel Company and the City of Johnstown, 406 Pa. 427, 178 A.2d 609. It reads:

“The tax bears none of the incidents of an occupation tax which is a flat rate levy measured by the assessed value of a man’s occupation. Consequently, in a true occupation tax the amount of the levy varies with the assessed value of a particular mode of employment. Here, no distinctions among occupations are made, a fixed ten dollar levy falling upon all nonresidents. The use of the word ‘occupational’ adds nothing to the levy and does not conceal its real nature as a capitation tax.

“ ‘Capitation or poll taxes are taxes of a fixed amount upon all persons, or upon all the persons of a certain class, within the jurisdiction of the taxing power, without regard to the amount of their property or the occupations or business in which they may be engaged.’ 51 A.L.R. § 38, p. 66, 1 COOLEY, TAXATION § 40, p. 122 (4th ed. 1924). The tax is imposed because of the protection which a governmental unit affords to persons residing therein, and is designed primarily to require contribution from all residents for the services rendered them by the taxing authority. Consequently, per capita, capitation or head taxes can be imposed only upon residents of the particular political subdivision since residence alone furnishes the contact necessary to render a person amenable to the direct levy.”

This case is still the law in Pennsylvania. Gaugler v. City of Allentown, 410 Pa. 315, 189 A.2d 264, cited by the majority distinguishes the Johnstown ordinance and the Allentown ordinance. It is significant, in my judgment, that in the Gaugler opinion, immediately following the quotation appearing in the majority opinion, this statement appears:

“* * * jn Subsection E of the act, the legislature specifically treated a head or poll tax separately and distinctly from an Occupation Privilege Tax and clearly expressed an intention that such distinct and separate taxes could be imposed. It is fundamental that every law is to be construed, if possible, to give effect to each and every provision, Act of May 28, 1937, P.L. 1019, § 51, 46 P.S. § 551, and Commonwealth v. McHugh, 406 Pa. 566, 178 A.2d 556 (1962). Moreover, the legislative intent is further clarified by the imposition of separate limitations on the amount of the levy that can be imposed in the various enumerated categories.”

The majority opinion states that “Colorado has a similar statute delegating like authority to statutory cities. C.R.S. 1963, 139-75-1(3) and 139-78-3(2).” These statutory provisions are identical, one referring to cities of the first class and the other to cities of the second class. The power is granted in this language:

“(3) Regulation of occupations and businesses. — To license, regulate and tax, subject to any law of the state now in force or hereafter to be enacted, any or all lawful occupations, business places, amusements or places of amusements.”

To me the differences between the Colorado statute and the Pennsylvania statute are sufficient to lead me to the conclusion that the reasoning and holding of Danyluk applies here rather than that of Gaugler.

For the foregoing reasons I would hold Ordinance No. 233 invalid.