Opinion
No. 32000
Decided March 8, 1950.
Taxation — Dayton income tax ordinance No. 16614 invalid — Ordinance not approved by voters at referendum — As required by Amended Section 171 of Dayton charter.
APPEAL from the Court of Appeals for Montgomery county.
On February 2, 1949, the City Commission of the City of Dayton adopted Ordinance No. 16614 providing for the levying of an income tax for the purpose of general municipal operation and permanent improvements of the city; one-half of one per cent on all the net profits, on and after April 1, 1949, of all unincorporated businesses, professions and other activities conducted by residents of the city of Dayton; on all the net profits, on and after April 1, 1949, of all unincorporated businesses, professions or other activities conducted in the city of Dayton by nonresidents; on all salaries, wages, commissions and other personal service compensation earned and received on and after April 1, 1949. The ordinance was not submitted to a referendum of the voters as provided in the amendment to the charter of the city of Dayton, Ohio, approved November 6, 1945.
Plaintiffs challenged the validity of the ordinance on several grounds, principally that it had not been approved by the voters of Dayton.
The Court of Common Pleas sustained a demurrer to the petition. Plaintiffs not desiring to plead further, judgment was rendered against them and the case was appealed to the Court of Appeals for Montgomery county, which court affirmed the judgment of the Court of Common Pleas.
The case is in this court pursuant to an allowance of a motion to certify the record.
Mr. H.P. Williamson, for appellants.
Mr. Herbert S. Beane, city attorney, Mr. M.J. Gilbert and Mr. Cecil E. Edwards, for appellees.
The decision in this case would follow the decision in the case of Angell v. City of Toledo, ante, 179, decided this day, were it not for the amendment to the charter of the city of Dayton whereby in Section 171 thereof such charter was supplemented and amended.
Under Section 1 of the Dayton charter it is provided in part:
"The inhabitants of the city of Dayton * * * as such shall have perpetual succession; * * * may assess, levy and collect taxes for general and special purposes on all the subjects or objects which the city may lawfully tax * * *."
Section 171 of the charter, approved by the voters of the city of Dayton on November 6, 1945, provides as follows:
"The City Commission is hereby granted the authority, without a vote of the people, to levy taxes upon the tax lists or duplicates of property assessed and listed for taxation according to value for all the purposes of the city of Dayton, its boards, departments and institutions, in amounts not in excess of the following total maximum levies for the years specified, to wit:
"Eight and one-half (8 1/2) mills on each dollar of assessed valuation on the tax list or duplicate for the years 1945 to 1950, both inclusive (for the purposes of the fiscal years 1946 to 1951, both inclusive);
"Nine (9) mills on each dollar of assessed valuation on the tax list or duplicate for the years 1951 and 1952 (for the purposes of the fiscal years 1952 and 1953);
"Ten (10) mills on each dollar of assessed valuation on the tax list or duplicate for the year 1953 and all years thereafter (for the purposes of the fiscal year 1954 and all years thereafter).
"Out of said total maximum levy for each of said years, an amount shall annually be levied sufficient to pay the interest, sinking fund and retirement charges on all bonds and notes of the city of Dayton heretofore or hereafter authorized to be issued without the authority of the electors, which levy shall be placed before and in preference to all other levies and for the full amount thereof. Of the remaining portion of said total maximum levy, commencing with the levy against the tax list or duplicate for the year 1945 and continuing thereafter, an amount not exceeding five (5) mills may be levied annually for the general fund of said city.
"The City Commission, without a vote of the people, may not authorize any tax levy or levies for permanent improvements other than those which may be made within the five (5) mills levy for the general fund, as set forth in the fifth paragraph of this section, if such levy or levies will increase the total levies for all city purposes, inclusive of all levies to pay the interest, sinking fund and retirement charges on all unvoted bonds and notes of the city of Dayton and those voted bonds heretofore or hereafter issued pursuant to vote of the electors at any election held prior to November 15, 1945, beyond eight and one-half (8 1/2) mills for the tax years 1945 to 1950, nine (9) mills for the tax years 1951 and 1952, and ten (10) mills for the tax year 1953 and all years thereafter.
"Unless authorized and approved by a vote of the electors conformably with the general laws of this state, the City Commission shall levy no tax outside of the limitations set forth in this section. Provided, however, that the City Commission shall annually levy, to the extent necessary, outside the limitations provided in this charter and by general law a sufficient sum to pay the interest, sinking fund and retirement charges on all bonds and notes of the city of Dayton heretofore or hereafter lawfully issued, the tax for which by general law or by this charter has been or shall be authorized to be levied outside of tax limitations.
"This section shall take effect and be in force as of the date of the certification to the Secretary of State by the board of elections, for the purpose of fixing the tax rate upon the tax list or duplicate for the year 1945 and all years thereafter."
On behalf of the city it is argued that this amendment pertains solely and is applicable only to ad valorem taxes. It is true that most of the amendment does apply to ad valorem taxes, but the language, "unless authorized and approved by a vote of the electors conformably with the general laws of this state, the City Commission shall levy no tax outside of the limitations set forth in this section," is broad and we are of the opinion that a court should construe strictly the charter powers conferred upon a municipality to levy taxes. In other words, where the authority of the municipality is ambiguous it is our duty to construe it strictly against the taxing authorities and in favor of the taxpayer.
We have carefully examined the claimed authorities submitted on behalf of the city of Dayton and are of the opinion that none of them can be accepted as showing the way to holding Ordinance No. 16614, in question, valid, as it has not been approved by a vote of the people of the city of Dayton.
Therefore, the judgment of the Court of Appeals is reversed and final judgment rendered for appellants.
Judgment reversed.
WEYGANDT, C.J., MATTHIAS, HART, ZIMMERMAN, STEWART, TURNER and TAFT, JJ., concur.