Opinion
No. 34741.
November 24, 1941.
1. MUNICIPAL CORPORATIONS.
Passenger motorbuses owned by a foreign corporation and operated in and through Mississippi on schedules submitted to and approved by the Public Service Commission of Mississippi had no situs in Mississippi for assessment for ad valorem taxes, and hence could not be taxed by the City of Jackson, where buses only stopped to discharge and take on passengers at corporation's station in Jackson, buses were repaired and overhauled at headquarters in Memphis, Tenn., and no repair work of any kind was done in Mississippi (Const. 1890, sec. 112).
2. MUNICIPAL CORPORATIONS.
Whether passenger motorbus kept in the City of Jackson by a foreign corporation and used for emergency purposes only was subject to ad valorem tax by Jackson on the valuation of $1,000 was for the trial court.
APPEAL from the circuit court of Hinds county, HON. J.F. BARBOUR, Judge.
Morse, Bacon Shands, of Jackson, for appellant.
The court erred in holding that the City of Jackson was without authority to levy and collect ad valorem tax on the personal property in question.
See Section 3200 of the Mississippi Code of 1930; Chapter 148 of the Laws of 1938; Chapter 19 of the Extraordinary session of the legislature in 1938.
The theory of the appellees and the court below was that the situs of all of this property was in Memphis, Tennessee, and that the appellees herein could not be required to pay ad valorem taxes; that the only tax that they had been paying was franchise tax and that they were specifically exempted under the statute from the ad valorem tax.
There is no exemption from ad valorem tax for bus companies. The bus company had its property here in Jackson. This corporation has its principal place of doing business in the City of Jackson, has its resident agent here, and can sue and be sued here, and do everything except pay taxes here.
So far as the place within the state where rolling stock may be taxed is concerned, it is taxable, unless it is otherwise provided by statute, at the principal office or place of business of the corporation. Cooley on Taxation, p. 1003.
The Supreme Court of the United States, in Pullman's Palace Car Co. v. Pa., 141 U.S. 18, 35 L.Ed. 613, and in the cases of American Refrigeration Co. v. Hall, 43 L.Ed. 899; Maye v. B. O.R.R., 32 L.Ed. 93, and a line of authorities on the question of the power to tax rolling stock in a state other than where the company owning it was incorporated, has generally held that such property may acquire a taxable situs in such a state where it is more or less continuously used. The buses in the case at bar were continuously used in the State of Mississippi, and, as appears from the record, the buses between Memphis and Jackson travel over one hundred ninety-seven miles in the State of Mississippi and only ten miles in the State of Tennessee.
Watkins Eager, of Jackson, and Shepherd, Owen Heiskell, of Memphis, Tennessee, for appellee.
If the assessment complained of shall be upheld and enforced, Chapter 19, Mississippi Laws, Extraordinary Session, 1938, as well as any municipal ordinances of the City of Jackson made in pursuance thereof and the order of the municipal authorities of the City of Jackson approving said assessment, will violate Section 112 of the Mississippi State Constitution, the Commerce Clause of the Constitution of the United States and the Fourteenth Amendment to the Constitution of the United States as well as the Fourteenth Section of the Bill of Rights of the State of Mississippi.
It is apparent that neither of the eleven buses owned or controlled by the appellee had any domicile in or were assessable for ad valorem taxes by the municipal authorities of the City of Jackson.
There was one bus, constituting the twelfth, which was kept in the City of Jackson and used for emergency purposes. If there should be a break-down or any emergency happen along the appellee's line, an employee in the City of Jackson kept for such purpose would use this emergency bus to reach the trouble and remedy the same if possible. The appellee concedes that such bus may be taxable by the municipal authorities of the City of Jackson, and has returned the same at a valuation of $1,000.
The property sought to be assessed here was not only situated upon the first of January 1940, in numerous counties in the State of Mississippi, but for a large part of the time in three states, and we submit that the municipal authorities of the City of Jackson could not assess the property for ad valorem taxes except and unless the legislature of the State of Mississippi fixed a situs for taxation of such property in the City of Jackson and provided appropriate machinery therefor.
See State ex rel. Knox v. Union Tank Car Company, 151 Miss. 797, 119 So. 310. See, also, Tennessee Coal Iron Company v. Jefferson County, Alabama (C.C.A. 5th), 80 F.2d 9307; Arkansas Tax Commission v. Crittenden County, 38 S.W.2d 318; G.C., etc., Railroad Co. v. City of Dallas (Tex.), 16 S.W.2d 292; 37 Cyc. 963; 26 R.C.L. 280, Sec. 246; State v. Houston, etc., R.R. Co. (Tex.), 209 S.W. 820; Atlantic Coast Line Railroad Co. v. Amos (Fla.), 115 So. 315; Union Tank Line v. Day (La.), 79 So. 335; Johnson Oil Refinery v. Oklahoma, 78 L.Ed. 238; City of Bessemer v. Southern Railroad Company (Ala.), 48 So. 103.
There is an exhaustive note in 49 A.L.R. 1099, upon the power of a state to tax foreign owned railroads' rolling stock within the state. The authorities seem to uphold the power of the state to so tax upon the basis of the average number of cars used within the state at all times. Clearly this right to tax rolling stock, however, is due to the sovereignty of the state and no such power would exist in a municipality unless specifically given by the sovereign state.
This is an appeal by the City of Jackson from a judgment of the Circuit Court of Hinds County setting aside and holding for naught the order of the Mayor and Commissioners of that city approving an assessment by the City Tax Assessor for city taxes for the year 1940 of certain motor buses owned and operated by the appellee, Dixie Greyhound Lines, Inc., a foreign corporation.
The property assessed is 15 buses at $5,000 each, aggregating $75,000, and another bus kept at Jackson for emergency purposes at $1,000. There is no controversy as to the emergency bus except as to the assessed value. In addition the company was assessed with certain furniture, fixtures and equipment in its offices at Jackson at $2,700. That assessment is unquestioned and is, therefore, not involved in this cause.
There is no real controversy in reference to the facts of the case; they are in substance as follows: The bus company holds certificates of public convenience from the Public Service Commission of the State. It has for some years operated as common carrier of passengers by motor bus transportation over some of the public highways of the State. The latter part of December 1939 it constructed a new bus station on Lamar Street in the City of Jackson where its buses have since stopped for the purpose of discharging and taking on passengers. Its buses are operated in and through the State of Mississippi on schedules submitted to and approved by the Mississippi Public Service Commission. The buses, other than one extra which will be referred to hereafter, have no domicile in the City of Jackson; their headquarters are in Memphis, Tennessee, where they are repaired and overhauled. The company has headquarters there for the State of Mississippi. No repair work of any kind is done in this State. No tools or equipment of any kind are kept for repair in Jackson. In Memphis the company has a complete repair shop where the buses are "overhauled on a 50,000 mile basis." There they are inspected for every trip out.
At its depot in Jackson it has employed three agents who sell tickets, two porters and one baggage man. In addition it keeps one man for emergency work. His duties are performed more outside of the city than in the city. He services broken down buses on trips outside of the city. It has and maintains a depot building at each of the following towns in this State, Clarksdale, Greenwood, Columbus, Tupelo, Greenville and Vicksburg; at which places it has ticket agents. Buses out of Memphis stop for meals in Clarksdale and in some other points between Memphis and that place. The company deposits in local banks in Jackson, but they are checked out alone from the Memphis office. It has a warehouse on Mill Street in Jackson, where the buses are stored when they have to remain overnight, as happens sometimes.
The buses are all numbered. The schedule of buses out of and into the City of Jackson on January 1st, 1940, was as follows:
Bus Numbers:
No. 842 — Departed Clarksdale 10:10 a.m., passing through Coahoma, Tallahatchie, Leflore, Holmes, Madison, and Hinds Counties. Arrived at Jackson 2:10 p.m. Leaving Jackson 2:40 p.m., passing through same counties arriving at Clarksdale 6:40 p.m. (R. 69).
No. 853 — Departed Memphis 11:15 p.m., December 31, 1939, arrived Jackson 4:25 a.m., January 1, 1940. Passed through DeSoto, Tate, Panola, Yalobusha, Grenada, Montgomery, Carroll, Holmes, Madison, and Hinds Counties; that is to say, every County on Highway No. 51. Left Jackson for New Orleans 4:30 a.m. (R. 76-77).
No. 859 — Arrived Jackson from New Orleans January 1, 1940, 6:25 p.m. Departed for Memphis 7 p.m., arriving 11:45 p.m., passing through all counties Highway No. 51 (R. 77-78).
No. 603 — Departed Memphis 8 a.m., January 1, 1940, arriving Jackson 3:25 p.m., passing through every county on Highway No. 51. Left Jackson, Mississippi, for Greenville 4:45 p.m., arriving Greenville 8:15 p.m., passing through Hinds, Madison, Yazoo, Humphreys, Sunflower, Washington Counties (R. 82-85).
No. 845 — Arrived from New Orleans, Louisiana, 12:45 p.m., January 1, 1940. Departed for Memphis 1:30 p.m., passing through every county on Highway No. 51 (R. 87-90).
No. 843 — Departed Jackson January 1, 1940, 8:15 a.m., for Clarksdale, passing through all counties on Highway No. 49-E, arriving 12:25 p.m.; departed Clarksdale 2:40 p.m., for Jackson, Highway 49-E, arriving at Jackson 6:50 p.m. (R. 90-94).
No. 841 — Departed Greenville January 1, 1940, 6:30 a.m., arriving Jackson 10 a.m., passing through six counties. Departed Jackson same date 1:30 p.m., for Memphis, arriving 8:55 p.m., passing through each and every county on Highway No. 51 (R. 95-96).
No. 604 — Arrived at Jackson from Memphis over Highway No. 51 at 8:15 p.m., December 31, 1939; departed for Memphis on return trip at 7:30 a.m., passing through every county on Highway No. 51, arriving 2:55 p.m. (R. 96-100).
No. 844 — Departed Memphis 12:30 p.m., January 1, 1940; arrived in Jackson 7:40 p.m., passing through every county on Highway No. 51, departing for New Orleans. (R. 103-105).
No. 469 — Arrived Jackson from New Orleans 12:45 a.m.; departed 1 a.m., for Memphis, passing through every county on Highway No. 51. (R. 110).
No. 468 — Arrived in Jackson from Memphis, over Highway No. 51, at 12:15 p.m., departing for New Orleans 5:30 p.m. (R. 111).
It will be observed from the schedule above that bus No. 842 came into Jackson from Clarksdale and remained only 30 minutes. That on the 1st day of January, 1940, it was in Clarksdale and passed through six counties, including Hinds, arriving in Jackson and returning to Clarksdale. In doing so it passed through a number of municipalities. It will be observed that bus No. 853 running from Memphis, Tennessee, to New Orleans, Louisiana, passed through every county and municipality on Highway 51 from the former to the latter city. It will be observed that bus No. 603 travelled through every county and municipality on Highway 51 between Memphis, Tennessee, and Jackson, reaching the latter place at 3:25 p.m., remaining one hour and twenty minutes, and then left for Greenville, passing through six counties and several municipalities, all in one day. It will be observed that bus No. 844 reached Jackson on January 1st, 1940, at 7:40 p.m., and after a few minutes left for New Orleans, passing through every county and municipality on Highway 51; and that bus No. 649 passed through every county and municipality on Highway 51, stopping at Jackson fifteen minutes.
The company keeps in the city, however, one old bus, No. 303, which was used for emergency purposes alone and which was given in for taxation at $1,000 value. The court held that this bus was taxable upon the valuation of $1,000.
We are of the opinion that the assessment is void under the principles laid down in the case of State v. Union Tank Car Co., 151 Miss. 797, 119 So. 310, 312. The buses are without situs for ad valorem taxation unless the Legislature has laid down a method of taxation. In that case the court used this language:
"It seems that such property as is here involved has been the subject of much discussion and litigation. Assuming, but finding it unnecessary to decide, that chapter 129, Laws of 1926, is free from constitutional objections, we think it may be safely stated that before the state can tax such property as here in question, it must, by proper legislation, fix a taxable situs for such property, and provide a method and basis for its assessment. This the state has sought to do by chapter 129, Laws of 1926, with prospective operation only.
"As the situs of the Union Tank Car Co., appellee, is in the State of New Jersey, that state, as a general rule, would be considered as the situs of all its personal property, until this state enacted a statute fixing its taxable situs in Mississippi. In 56 Am. Dec. 535, we find a helpful note, as follows:
"`This peculiar property, which has furnished the topic of so much discussion, is held to be situated, in the absence of a special statute, in the town where the principal office of the corporation is; that is, at the corporate residence. Without the help of a statute, it is incapable of acquiring a permanent locality or situs separated from the owner's residence' citing: `Mohawk, etc., R.R. Co. v. Clute, 4 Paige (N.Y.) 384; Appeal Tax Court v. Western Md. R.R. Co., 50 Md. 274; Philadelphia, Wilmington, etc., R. Co. v. Appeal Tax Court, 50 Md. 397; Appeal Tax Court v. Northern Cent. Ry. Co., 50 Md. 417; Appeal Tax Court v. Pullman Palace Car Co., 50 Md. 452; [State ex rel.] Kansas City, etc., R. Co. v. Severance, 55 Mo. 378; City of Dubuque v. Illinois Cent. R. Co., 39 Iowa 56; Orange, etc., R.R. Co. v. Alexandria, 17 Grat. [176] 58 Va. 176.'"
The authorities cited in that opinion amply support it.
Whether there is a method laid down in Section 3200 of the Code of 1930 for assessment of property of this character by the Tax Commission for state, county and municipal taxes we do not decide, because the question is not presented. If there be such a method it would be exclusive. The City Tax Assessor would be without authority in that respect.
These buses under the present law have no situs in this State for assessment for ad valorem taxes. If Jackson has authority to assess them at their value every municipality through which they run would have equal authority. If that were done surely it would violate Section 112 of the Constitution providing that taxation shall be uniform and equal throughout the State.
The court found that a reasonable valuation for taxes of the emergency bus kept in Jackson was $1,000. We see no reason to disturb that finding.
Affirmed.