Opinion
Decided May 29, 1933.
Taxation — Intangible tax law, constitutional — Taxing domestic corporation stock to stockholders — Sections 5328 and 5328-1, General Code — Classification provisions equal in dignity to other constitutional provisions — Uniform taxation, uniform operation, taxation of corporate property and double taxation — Taking property without due process — Section 2, Article XII; Section 26, Article II; Section 4, Article XIII, Constitution — Section 1, Article XIV, Amendments to U.S. Constitution.
1. Classification for tax purposes and taxation of corporate stock to stockholders held not to violate constitutional provisions for uniformity of taxation, uniform operation of laws throughout state, and taxation of corporate property (Sections 5328 and 5328-1, General Code; Article II, Section 26, Article XII, Section 2, and Article XIII, Section 4, Constitution).
2. Classification for taxation purposes having been enacted pursuant to constitutional authorization, such authorization held equal in dignity to other constitutional provisions, and classification could, therefore, not invade taxpayers' rights under state constitution (Sections 5328 and 5328-1, General Code; Article XII, Section 2, Constitution).
3. Taxing stock in domestic corporation to stockholders held not unconstitutional as double taxation or as taking property without due process, though corporation's entire property was taxed also (Sections 5328 and 5328-1, General Code; Article XIV, Section 1, Amendments, U.S. Constitution).
ERROR: Court of Appeals for Hamilton county.
Messrs. Roettinger Roettinger and Mr. Sol Goodman, for plaintiffs in error.
Mr. Louis J. Schneider, prosecuting attorney, Mr. Walter M. Locke and Mr. Jack Martin, for defendants in error.
Plaintiffs below, Philip S. Ganson and others, who are plaintiffs in error here, filed their petition seeking to enjoin the defendants from enforcing or threatening to enforce the provisions of Sections 5328 and 5328-1 and related sections of the General Code of Ohio, requiring plaintiffs to file returns for taxation on certain shares of common stock in the Republic Light Company, a corporation under the laws of Ohio.
The petition alleges that the Republic Light Company returned to the auditor of Hamilton county all of its property for taxation. The petition alleges that the entire value of their shares of stock is in the property of the company so returned for taxation, but the defendants nevertheless require the plaintiffs to return in addition their shares of stock for taxation.
The petition further alleges that enforcement of the return of the shares of stock of the plaintiffs under Sections 5328 and 5328-1 and related sections would be a taking of property without due process of law, contrary to the provisions of the Constitution of the United States, Amendment XIV, Section 1, and the provisions of the Constitution of the State of Ohio, Article XII, Section 2, Article II, Section 26, and Article XIII, Section 4.
The prayer is for an order enjoining the defendants from enforcing or threatening to enforce the provisions of Sections 5328 and 5328-1 and related sections of the General Code of Ohio.
To this petition, the defendants demurred. The demurrer was sustained by the trial court. Plaintiffs not desiring to plead further, judgment was entered, and the question is now here as to whether or not the assessment of the shares of stock under the provisions of Sections 5328 and 5328-1, and related sections of the General Code, which sections are part of the new Intangible Tax Law, is constitutional.
The sections in question, which, as heretofore stated, are part of the new Intangible Tax Law of Ohio, were enacted under the powers given the Legislature by constitutional provision. These sections were a part of the classification authorized by the Constitution. The classification has already been upheld as constitutional in the case of Rowe v. Braden, 44 Ohio App. 397, 186 N.E. 20, decision by this court, and other appellate decisions cited therein. The classification having been enacted pursuant to constitutional authorization, that authorization is of equal dignity to any other constitutional provision. It, therefore, could not invade any of the constitutional rights of the plaintiffs.
It is claimed that the enforcement provision invades the federal Constitution, in that it is double taxation and the taking of property without due process of law. On this proposition it is enough to cite the case of Ft. Smith Lumber Co. v. Arkansas, 251 U.S. 532, 40 S. Ct., 304, 64 L. Ed., 396. In that case, in the opinion, Justice Holmes says at page 533: "The objection to the taxation as double may be laid on one side. That is a matter of state law alone. The Fourteenth Amendment no more forbids double taxation than it does doubling the amount of a tax."
On the question of double taxation, in the case of Lee, Treas., v. Sturges, 46 Ohio St. 153, at page 161, 19 N.E. 560, 2 L.R.A., 556, the Supreme Court of Ohio decided that "shares of stock constitute property distinct from the capital or property of the company."
These decisions and citations pronounce the law applicable to the case under consideration, and the trial court was correct in sustaining the demurrer to the petition.
Judgment affirmed.
CUSHING and ROSS, JJ., concur.