Summary
In State v. Brown, 121 Ohio St. 73, 166 N.E. 903, 904, the Supreme Court stated that "It has been held in this state that `administrative interpretation of a given law, while not conclusive, is, if long continued, to be reckoned with most seriously and is not to be disregarded and set aside unless judicial construction makes it imperative so to do.' Industrial Commission v. Brown, 92 Ohio St. 309, 311, 110 N.E. 744, 745, (L.R.A. 1916B, 1277)."
Summary of this case from Sachs v. Ohio Nat. Life Ins. Co.Opinion
Nos. 21650 and 21651
Decided June 5, 1929.
Taxation — Corporation franchise tax for entire year — Not payable where corporation dissolves or retires before March 31st — Sections 5521 and 8623-80, General Code (112 O. L., 41).
IN MANDAMUS.
The above-entitled cases involve the same point, and were submitted and will be considered together. Both are original proceedings in mandamus in this court, by which writs are sought to compel the secretary of state to perform certain duties. A demurrer is interposed to the petition, which raises the question involved.
In the Chandler Motor Car Company case, No. 21651, a domestic corporation seeks to dissolve, alleging that the statutory steps incident to securing a certificate of dissolution have been fulfilled, but avers that the defendant refuses to issue the certificate, for the reason that the relator did not file with the tax commission of Ohio its franchise report for the year 1929, and has not paid, or secured to be paid, any franchise tax which may become due from the relator for the year 1929, it being claimed that that corporation is entitled to dissolve without payment of any franchise fee for 1929. The action of the corporation was taken on March 26, 1929, it being provided by Section 5495-2, General Code (112 Ohio Laws, 411), that each corporation shall file a report between the 1st day of January and the 31st day of March of each year.
In the Automobile Machine Company case, No. 21650, a foreign corporation seeks to withdraw and retire from doing business in this state; the certificate of retirement being tendered as of March 26, 1929, and no franchise fee for such year being paid.
The sections of the General Code having chiefly to do with this subject are as follows:
Section 5521: "In case of dissolution or revocation of its charter on the part of a domestic corporation, or of the retirement from business in this state, on the part of a foreign corporation, the secretary of state shall not permit a certificate of such action to be filed with him unless the commission shall certify that all reports required to be made to it, have been filed in pursuance of law, and that all taxes or fees and penalties thereon due from such corporation have been paid, and unless such corporation shall produce a certificate from the treasurer of the county wherein the property of such corporation, both tangible and intangible is or was located, showing that all personal property taxes assessed against such corporation, for the then current and previous years, have been paid."
Section 8623-80: "Upon the filing of any such certificate together with receipts showing the payment of all franchise and other taxes to the date of such filing or the giving of security therefor satisfactory to the tax commission, the corporation shall be dissolved and shall cease to carry on its business, but it shall continue for the purpose of paying, satisfying and discharging any existing liabilities or obligations, collecting and distributing its assets and doing all other acts required to adjust, settle and wind up its business and affairs, and it may do all such acts and may sue and be sued in its corporate name."
It is the claim of the state that any domestic corporation in existence during any part of the year incurs a liability for the tax, and that any foreign corporation privileged to do business in this state for any part of the year is likewise liable for the tax.
The relators deny any liability for a franchise tax for the year 1929.
Messrs. Holliday, Grossman McAfee, for relators.
Mr. Gilbert Bettman, attorney general, and Mr. Lewis F. Laylin, for defendant.
The foregoing quoted sections of the General Code have been upon the statute books for some time, sufficient to have received the construction of the administrative officers of the state, Section 5521 being enacted in 1911 (102 O. L., 254) and Section 8623-80 enacted in 1927 (112 O. L., 41). The interpretation placed by the Attorney General, the tax commission, and the secretary of state upon Section 5521 since its enactment in 1911 down to the beginning of this year, and upon Section 8623-80 since its enactment in 1927 down to the beginning of this year, has been to the effect that corporations were permitted to dissolve or retire from the state between January 1st and the last day for the filing of their franchise tax reports, to wit, March 31st, without making any report or paying any franchise tax for the year of dissolution or retirement.
It has been held in this state that "administrative interpretation of a given law, while not conclusive, is, if long continued, to be reckoned with most seriously and is not to be disregarded and set aside unless judicial construction makes it imperative so to do." Industrial Commission v. Brown, 92 Ohio St. 309, 311, 110 N.E. 744, 745 (L.R.A., 1916B, 1277). See, also, 36 Cyc., 1140, and 25 Ruling Case Law, 1043, and cases cited.
This is a well-recognized principle of statutory construction, and we deem it applicable in the present instance. There is no provision for apportionment of taxes in cases of voluntary dissolution or retirement from the state by a corporation. The tax must be paid for the whole year. In cases of bankruptcy and receivership and like matters, apportionment may be allowed. Section 5521, General Code, having received the construction that it has, and Section 8623-80 being passed by the Legislature many years after the construction given Section 5521 was established, it is to be presumed that the Legislature intended the exemption, or would have plainly provided otherwise. We think that the taxes provided for in Sections 5521 and 8623-80, General Code, are those which have been actually assessed, charged, or imposed, and are not included in a tax for a future period such as this franchise tax. Our conclusion, therefore, is that the corporations which are parties to this action are entitled to dissolve or retire from this state without payment of the franchise tax for the year 1929, such retirement or dissolution taking place between the 1st day of January and the 31st day of March. Entertaining this view, it follows that the demurrer to the petition must be overruled, and, it being understood that the matter was submitted as a finality, the writ prayed for will be allowed.
Writs allowed.
MARSHALL, C.J., KINKADE, JONES, DAY and ALLEN, JJ., concur.