Oklahoma Tax Commission v. Smith

HODGES, Justice,

concurring in part, dissenting in part.

I dissent to that part of the majority’s opinion which holds the enactment of G8 O.S.Supp.1979 § 2355(A) (HB 1484) did not infringe upon right of the Initiative Petition 309 (State Question 539).

Passage of State Question 539 would have provided a maximum income tax rate of 6% and a three year graduated deduction for federal income tax paid.

The legislative enactment of House Bill 1484 expressly provided that if State Question 539 was approved by the electorate, then the option given to the taxpayer under Method 2 shall cease and terminate. Also, the legislature enacted a surtax in the event State Question 539 was approved. 68 O.S.Supp.1979 § 2355.1. In my opinion this is a direct infringement upon the initiative process. The people in voting on State Question 589 had no real choice. In re Referendum Petition No. One, 203 Okl. 298, 220 P.2d 464 (1950). Therefore, I find that part of 68 O.S.Supp.1979 § 2856(A) under alternative Method 2 to be invalid and would affirm the trial court’s judgment to that extent.

I disagree, however, with the trial court s determination that enactment of 68 O.S. Supp.1979 § 2358(B)(8) was valid. By so holding the trial court judgment allows full deduction for federal income taxes paid. Such a judgment is inconsistent with its prior judgment of rendering invalid 68 O.S. Supp.1979 § 2355(A).

The amendment of Subparagraph 8 of Section 2358(B) was vitally connected with Section 2355(A) and is invalid for the same reasons. Both legislative enactments pertain to federal income tax deductions, which also was a part of State Question 539. The legislature cannot enact legislation optionally, which is conditional upon the passage of a State Question.

Inasmuch as both sections are invalid, the income tax structure prior to 1979 should be the current method of taxation. This, however, would not prevent the legislature from enacting a different tax structure this session.