Northwestern Improvement Co. v. Henneford

It is with much reluctance that I enter a dissent in this case, for it cannot be denied that it falls within the principle of State ex rel. State Tax Commission v. Redd, 166 Wn. 132,6 P.2d 619. I am impelled to do so, however, because I believe the decision in that case is fundamentally unsound, in that it fails to distinguish between assessment for taxation and thelevy of taxes.

As I understand it, the Redd case holds that the fixing of the valuation of property for purposes of taxation is an imposition of taxes in contemplation of Art. XI, § 12, of the constitution, which provides:

"The legislature shall have no power to impose taxes upon counties, cities, towns, or other municipal corporations, or upon the inhabitants or property thereof, for county, city, town, or other municipal purposes, but may by general laws vest in the corporate authorities thereof the power to assess and collect taxes for such purposes."

The term "assessment" is all too frequently loosely used with respect to the processes of taxation. It is sometimes used, as in chapter 123, Laws of 1935, p. 356, Rem. 1935 Sup., § 11156-1 [P.C. § 7088-31] et seq., with respect to the determination of the value of property for purposes of taxation. In other instances, as in the opinion in this case and that in the Redd case, it is conceived to be the equivalent of levy. Now, if we forget for a moment the term "assessment" and look only to what chapter 123, Laws of 1935, p. 356, seeks to accomplish, it seems to me that it must be apparent that the act has nothing whatever to do with the imposition of taxes, in the sense contemplated by § 12, Art. XI, of the constitution. It is clear that the act has no such intent or purpose. Section 16 of the act provides:

"When the state board of equalization shall have determined the equalized assessed value of the operating property of each company in each of the respective counties and in the taxing districts thereof, as hereinabove provided, the commission shall certify such equalized assessed value to the county assessor of the proper county. The county assessor shall enter the company's real operating property upon the real property tax rolls and the company's personal operating property upon the personal property tax rolls of his county, together with the values so apportioned, and the same shall be and constitute the assessed valuation of the operating property of the company in such county and the taxing districts therein for that year, upon which taxes shallbe levied and collected in the same manner as on the generalproperty of such county." (Italics mine.)

Now, all that this authorizes the state tax commission to do is to fix the valuation of property as a basis for taxation — not to levy taxes for local purposes.

It is recognized by all the text writers and by most of the cases that the fixing of the valuation of property for purposes of taxation does not constitute the levy of taxes. Cooley defines assessment as follows:

"An assessment, strictly speaking, is an official estimate of the sums which are to constitute the basis of an apportionment of a tax between the individual subjects of taxation within the district." 3 Cooley on Taxation (4th ed.), § 1044.

And of levy, he says:

"Strictly speaking, a levy is the legislative act, whether state or local, which determines that a tax shall be laid, andfixes its amount . . ." 3 Cooley on Taxation (4th ed.), § 1012.

Now, it is clear that chapter 123, Laws of 1935, does not attempt to lay or fix the amount of any tax. It merely provides amethod of fixing an "estimate of the sums which are to constitute the basis of an apportionment of a tax between the individual subjects of taxation."

Neither § 12, Art. XI, nor any other provision of the constitution, prescribes or limits the method or manner in which this shall be done. In the absence of such a constitutional limitation, the legislature itself may fix the valuations (Faustv. Building Association, 84 Md. 186, 35 A. 890); or it may delegate the authority to a state board (State v. State Board ofEqualization, 56 Mont. 413, 185 P. 708, 186 P. 697); or it may delegate the authority to any other agency or agencies, such as county assessors (Shippen Bros. Lumber Co. v. Elliott,134 Ga. 699, 68 S.E. 509).

Of course, in those states where assessors are constitutional officers, the legislature can neither exercise the power itself nor authorize its exercise by any but the officers designated by the constitution. Hawkins v. Mangum, 78 Miss. 97, 28 So. 872. County assessors, however, are not constitutional officers in this state. See Const. Art. XI, § 5. They derive their existence, powers and functions solely through legislative enactment. They are agents of the legislature, and their very existence is dependent on its will. There is no constitutional limitation that I can find which would prevent the doing away with county assessors entirely and delegating their functions to some other agency.

I am not so much concerned over the result of this litigation. From a practical standpoint, so far as this particular case is concerned, I think it matters little whether the valuation of respondent's properties is fixed by the state tax commission or the county assessor (although it would seem apparent that the former is much better equipped to perform the function than the latter). But I am deeply concerned over what I conceive to be the judicial limitation (wholly unwarranted by any provision of the constitution) which this decision imposes upon a legislative power — a power which, if we are to approach anything like equality and uniformity in taxation, must be left untrammeled, so long as it is not used in violation of any constitutional right of the taxpayer.

Neither the taxpayer nor the municipal corporation has any interest, guaranteed by the constitution, in the method of evaluating property for purposes of taxation. So long as there is equality and uniformity, the taxpayer cannot complain. The municipality can readily adjust its levy to any valuation fixed by any agency the legislature may designate. For a ten mill levy on a thousand dollar valuation will produce the same revenue as a five mill levy on a valuation of two thousand dollars.

In any event, Kittitas county is not here questioning the power of the legislature to designate the state tax commission, rather than the county assessor, as the agency to evaluate respondent's properties. And I do not believe any authority can be found, under any state constitution, holding that a taxpayer has a constitutional right to have the valuation of his property fixed by one agency of the state rather than another, unless the constitution itself designates the agency.

The respondent can have no cause for complaint until it can show that valuations placed on its property are greater than valuations placed upon property of like kind and character. It would have that right whether the valuation is fixed by the same or different agencies.

I think the judgment should be reversed.