Opinion
Nos. 34218 and 34407
Decided July 27, 1955.
Taxation — Highway use tax — Motor transportation companies — Reciprocity agreements with other states — Effect of later enactment of axle-mile tax legislation — Tax Commissioner — Authority to refund taxes illegally or erroneously assessed — Section 5703.05, Revised Code — Constitutionality of statutory provisions not considered, when.
1. Where a statute creates a board of officers of a state with power and authority to enter into reciprocity agreements with the proper authorities of an adjoining state regulating the use on the roads and highways of the two states of trucks and automobiles and any other motor vehicles owned in such two adjoining states; and where such officers of the two adjoining states so authorized enter into a reciprocity agreement with respect to the operation of motor carriers operating between the two states whereby it is agreed that when outstate carriers as to either state secure reciprocity exemption cards or plates then such states shall severally waive and forego payment by their respective outstate motor carriers of license-plate taxes, including weight taxes for motor vehicles, and also mileage fees for their operation, which reciprocity agreement can be terminated by either state on written notice first to be given to the other of intent to terminate, and which agreement is not terminated but is in full force and effect between such states; and where one of such states at a later date enacts legislation whereby within its territorial limits a new and additional highway use tax is assessed on all motor carriers operating within such state, the rate of which tax is based on the number of the axles, and the amount of the tax is determined by the operation mileage of the motor carrier; the outstate motor carriers of the other state operating in interstate commerce through the state wherein such new highway use tax is imposed are exempted from such tax by reason of the terms of such reciprocity agreement still in force and effect between such states.
2. Where a case can be determined upon any other theory than that of the constitutionality of a challenged statute, no consideration will be given to the constitutional question.
3. Under the provisions of Section 1464-3, General Code (Section 5703.05, Revised Code), the Tax Commissioner of Ohio is authorized and empowered to remit or refund taxes or assessments illegally or erroneously assessed or collected or for any other reason overpaid, with certain exceptions therein noted which are not applicable to the facts in this case, and on written application of any person claiming to have overpaid to the Treasurer of State, where the commissioner finds there has been an overpayment, he may issue a certificate of abatement to the taxpayer for such overpayment.
APPEALS from the Board of Tax Appeals.
In case No. 34218, the appellant, Interstate Motor Freight System, has appealed from a decision of the Board of Tax Appeals affirming an order of the Tax Commissioner refusing a claim for refund for taxes (sometimes referred to as the axle-mile tax) levied against it under the Highway Use Tax Act, Sections 5728.01 to 5728.15, inclusive, Revised Code, which taxes were claimed to have been paid erroneously.
The appellant is a Delaware corporation having its principal place of business in the city of Grand Rapids, Michigan, and is engaged in the transportation of property for hire as a common carrier by motor vehicle in interstate commerce over highways located within the state of Ohio and 16 other states of the United States, under authority by the Interstate Commerce Commission.
The appellant claims that the highway use taxes paid to the state of Ohio from October 1, 1953, to March 31, 1954, in the amount of $29,533.59, were erroneously paid for the reason that there is presently in existence a reciprocity agreement between the state of Ohio and the state of Michigan, dated October 26, 1937, under which agreement those states agree to waive and forego "license plate taxes, including weight taxes for motor vehicles and also mileage fees for their operations including Ohio taxes levied under the provisions of Sections 614-94, 614-112, 6291, 6292 and 6293, and any connected provisions of the Ohio General Code, or which may be levied or payable in lieu of such provisions."
The matter was submitted to the Tax Commissioner who, in denying the refund, held in part as follows:
"The Tax Commissioner finds it unnecessary to ascertain the validity or existence of the alleged agreement of October 26, 1937, since by the provisions of Section 15 of the Highway Use Tax Act (Amended Substitute House Bill No. 619, Section 5728.15 of the Revised Code) the Legislature has provided the manner in which reciprocal agreements relating to the highway use tax law may be effected. The Tax Commissioner finds that said section is controlling over any existing reciprocal agreements that may be in effect between Ohio and her sister states and that no reciprocal agreements have been entered into between Ohio and Michigan under the above noted provisions of the highway use tax law.
"The Tax Commissioner further finds that the highway use tax law makes no provision for authorizing refunds except as provided in section 6 of the act (Section 5728.06 of the Revised Code) which section authorizes refunds on taxes paid for axles not actually used. There is no provision in the act which authorizes refunds on tax alleged to have been erroneously paid."
An appeal was prosecuted to the Board of Tax Appeals and that body affirmed the order of the Tax Commissioner, two of its members writing concurring opinions and one a dissenting opinion.
Case No. 34407 is the appeal of Geo. F. Alger Company and six other nonresident corporations from the Board of Tax Appeals, growing out of 10 separate final orders of the Tax Commissioner in which that officer refused to grant their petition for reassessment of highway use taxes.
It was stipulated that the appellant companies are nonresident motor carriers engaged in the business of transporting freight for hire in interstate commerce under certificates of public convenience and necessity issued to them by the Interstate Commerce Commission, and that such companies have registered the certificates with the Public Utilities Commission of Ohio and have been granted and hold authority to conduct motor carrier operations in interstate commerce over the public highways of Ohio.
The assessments, which are the subject of this appeal, were made by the Tax Commissioner for the first two quarter periods under the Highway Use Tax Act and cover the period from October 1, 1953, to March 31, 1954. Each assessment order provides that no penalty shall be added to the basic assessment if the assessment is paid within 30 days after final determination by the Board of Tax Appeals or the Supreme Court. Otherwise a 15 per cent penalty is to apply to the basic assessment.
An appeal was prosecuted from the assessment made by the Tax Commissioner to the Board of Tax Appeals by each of the appellant companies. Although each of the appeals was separately docketed, the ten cases were consolidated by the Board of Tax Appeals for hearing because the same questions were raised in each appeal.
In the appeal by the Geo. F. Alger Company the claim was made that the assessment of the Tax Commissioner imposed a tax which is illegal, excessive, discriminatory and in violation of constitutional guaranties.
The Board of Tax Appeals affirmed the orders of the Tax Commissioner, reciting with approval in its entry the following finding of the Tax Commissioner:
"The Tax Commissioner finds it unnecessary to ascertain the validity or the existence of the alleged agreement between said states since by the provisions of Section 15 of the Ohio Highway Use Tax Act (Amended Substitute House Bill No. 619, Section 5728.15 of the Revised Code), the Legislature has provided the manner in which reciprocal agreements relating to the highway use tax law may be effected. The Tax Commissioner finds that said section is controlling over any existing reciprocal agreements that may be in effect between Ohio and her sister states and that no reciprocal agreements have been entered into between Ohio and Michigan under the above noted provisions of the highway use tax law.
"As to the constitutional question raised by the petitioner, the Tax Commissioner finds that he is without jurisdiction to set aside acts of the Legislature on the grounds that they are unconstitutional."
One member of the Board of Tax Appeals wrote an opinion, concurred in by a second member, and the third member wrote a dissenting opinion.
The seven companies involved perfected an appeal to this court from the decision of the Board of Tax Appeals, assigning as error both the question as to the existence of a reciprocity agreement raised in the Interstate Motor Freight System appeal and the claims that the Highway Use Tax Act is unconstitutional.
Messrs. Calland, Stouffer Asher and Messrs. Warner, Norcross Judd, for appellant in case No. 34218.
Messrs. Matheson, Dixon Brady, Mr. Taylor C. Burneson and Mr. Thomas F. Chawke, for appellants in case No. 34407.
Mr. C. William O'Neill, attorney general, Mr. Joseph S. Gill and Mr. W.E. Herron, for appellee.
These are appeals from decisions of the Board of Tax Appeals affirming orders of the Tax Commissioner assessing highway use taxes against motor carriers of Michigan operating in Ohio.
The appellants attack the assessments made against them pursuant to the provisions of the Highway Use Tax Act (Sections 5728.01 to 5728.15, inclusive, Revised Code), and the decisions of the Board of Tax Appeals validating such tax, on the claimed ground that the tax is illegal, excessive, discriminatory and in violation of constitutional guaranties. Specifically, the appellants, among other things, variously claim:
That there is presently in force and effect a reciprocity agreement between the state of Ohio and the state of Michigan, under date of October 26, 1937, which provides that motor vehicles, trailers, or semitrailers owned and registered elsewhere and engaged in commercial transportation shall be operated in the state of Ohio without the payment of any highway use tax.
That the assessments by the Tax Commissioner and the collection of the taxes imposed thereby impair the obligation of the reciprocal agreements, hereinbefore referred to, between the state of Ohio and other states, in violation of Section 10 of Article I of the Constitution of the United States and Section 28 of Article II of the Constitution of Ohio.
That the Board of Tax Appeals erred in finding that the Tax Commissioner's jurisdiction and authority to refund highway use taxes is limited to the provisions of Section 5728.06, Revised Code.
Effective June 30, 1933, Section 6306-1, General Code, provided in part:
"The Attorney General, the Director of Highways and a member of the Public Utilities Commission, designated by the commission for that purpose, are hereby authorized and empowered to enter into such reciprocal contracts and agreements as they may deem proper or expedient with the proper authorities of adjoining states, regulating the use, on the roads and highways of this state, of trucks and automobiles and any other motor vehicles owned in such adjoining states, and duly licensed under the law thereof."
Pursuant to Act 185 of Michigan Public Acts of 1937, and pursuant to Sections 614-94, 614-112, 6306 and 6306-1, General Code, a reciprocity agreement with respect to the operation of motor carriers operating between the two states was entered into through their proper officers, Ohio being represented by the Attorney General, Director of Highways and a designated member of the Public Utilities Commission, such officials being hereinafter called the reciprocity board, as authorized by Section 6306-1, General Code, as of October 26, 1937, which agreement provides, among other things:
"In order to facilitate motor vehicle movements in interstate commerce between and through their combined geographical territories, the state of Ohio, with respect to the interstate commerce operations of Michigan motor carriers within Ohio territorial limits * * * agree that when such outstate carriers have secured reciprocity exemption cards or plates * * * then they, the said states, shall to the extent of granted exemptions, severally waive and forego * * * payment by their respective outstate motor carriers of the license plate taxes, including weight taxes for motor vehicles, and also mileage fees for their operations, including Ohio taxes levied under the provisions of Sections 614-94, 614-112, 6291, 6292 and 6293, and any connected provisions of the Ohio General Code, or which may be levied or payable in lieu of such provisions * * *." (Italics supplied.)
By the terms of the agreement it is to continue until December 31, 1937, and "thereafter until this * * * agreement shall be * * * terminated by either on written notice first to be given to the other, of intent to terminate." It is agreed by the parties that the agreement is still in force and effect between the two states. In fact, it is the only agreement by which the two states recognize each other's license plates up to the present time. Incidentally, it is conceded that the Michigan carriers involved in the instant cases are licensed by and have complied with the motor vehicle laws of the state of Michigan and no question is raised that the two states in question have the power to enter into such reciprocity agreements. It is also conceded that since the execution of the reciprocity agreement above referred to, Michigan residents operating motor vehicles in their own state have paid a third structure tax, to wit, mileage fees along with their license fees but Michigan has not imposed this tax on Ohio owners of motor vehicles operating them in the state of Michigan.
Section 5728.06, Revised Code, which levies the tax in question, provides:
"For the purpose of providing revenues to pay * * * the state's share of the cost of constructing or reconstructing highways and eliminating railway grade crossings on the major thoroughfares of the state highway system * * * there is hereby levied a highway use tax upon each commercial car with three or more axles, each commercial car used as part of a commercial tandem and each commercial tractor used as part of a commercial tractor combination or commercial tandem at the following rates, to wit: (1) one-half cent for each mile traveled in Ohio by each commercial car with three or more axles * * *; (2) one cent for each mile traveled in Ohio by a commercial tractor * * * with a maximum of three axles; (3) one and one-half cents for each mile traveled in Ohio by a commercial tractor * * * with a maximum of four axles; (4) two cents for each mile traveled in Ohio by a commercial tractor * * * with a total of five or more axles; (5) two and one-half cents for each mile traveled in Ohio by each commercial car or commercial tractor * * * as part of a commercial tandem with four or more axles."
The controversy before the court is whether the 1937 reciprocity agreement between Ohio and Michigan exempts Michigan commercial carriers operating in Ohio from the highway use tax. The appellants contend that such tax can not be the basis of valid assessments against them because they are protected by the exemption provided by the reciprocity agreement between Ohio and Michigan.
The Tax Commissioner took the position that it was unnecessary to determine the validity of the 1937 reciprocity agreement between Ohio and Michigan, since by the provisions of Section 5728.15, Revised Code, the Ohio General Assembly has provided an exclusive method by which reciprocity agreements relating to this type of tax may be effected and by which tax refunds may be made and that such statute supersedes any existing reciprocity agreements on the subject which may be in effect between Ohio and sister states.
In case No. 34218, Chairman Kirwin of the Board of Tax Appeals, after reciting in his opinion the facts leading up to the Tax Commissioner's refusal to refund the taxes demanded by appellant, said:
"Appellant's contention that the Tax Commissioner's refusal to rule that the October 26, 1937, reciprocity agreement exempted its Michigan licensed and certificated motor carriers from the highway use tax tends to impair the obligation of contracts, constitutes a denial of due process of law, and otherwise violates the Constitution of the United States is without merit. Such constitutional questions were not properly before the Tax Commissioner for determination, nor are they properly before us for determination. If the Tax Commissioner lacks jurisdiction and authority to issue the refund order requested by appellant he would be engaging in idle speculation if he attempted to decide such constitutional questions.
"In this connection it might be observed that the Tax Commissioner as a tax administrator and the Board of Tax Appeals as an administrative and quasi-judicial tribunal will not assume jurisdiction and authority to consider and determine such constitutional questions, even if seasonably raised by appellant. See National Distillers Products Corp. v. Glander, 49 Ohio Law Abs., 330, 337; Hillsborough Township v. Cromwell. 326 U.S. 620, 625, 90 L. Ed., 358, 364; Schwartz v. Essex County Board of Taxation, 120 N.J.L. 129, 132, affirmed 130 N.J.L. 177. * * *
"Appellant's contention that the provisions of the Revised Code Section 5728.15 make it mandatory that the Ohio Attorney General, Ohio Tax Commissioner and the designated member of the Public Utilities Commission of Ohio enter into a reciprocity agreement with the Reciprocity Board of the state of Michigan surely can not be resolved by the Tax Commissioner or the Board of Tax Appeals. If there has been any failure of the Ohio reciprocity board [to] perform an act made mandatory by statute the remedy of appellant is by way of a mandamus action in a court of competent jurisdiction."
Vice-Chairman Sherick of the Board of Tax Appeals in a concurring opinion said:
"The issue presented in this cause, as I see it, rests squarely upon one point. All other collateral matters are but incidental thereto and embodied therein. The question is: Does the Ohio highway use tax of 1953, as construed and applied by the Tax Commissioner, impair the obligation of the reciprocity agreement of 1937 still existing between the state of Ohio and the state of Michigan?
"* * *
"Appellant contends that `the interpretation which the Attorney General requests this board to adopt would be unconstitutional in that it would amount to the taking of property without due process of law.' Whether this act abridges and limits the jurisdiction of the Tax Commissioner theretofore conferred by General Code Section 1464-3 (now Revised Code Section 5703.05), whether the terms of the reciprocity agreement embrace therein the kind of tax imposed by the act, whether the reciprocity commission created by the act has acted or not, are all questions going to the matter of legality or illegality of the tax imposed, which is sought to be recovered by the appellant, all of which are embodied in the principal issue.
"Since the issue presents a constitutional question, and this board has no jurisdiction in such matters, the order complained of should be affirmed, and the way opened for an appeal to a tribunal possessed of such jurisdiction. For the reason noted the order appealed from should be affirmed."
Member Pickens of the Board of Tax Appeals dissented and, in an opinion, said:
"The facts are clear that with proper authority the state of Michigan and the state of Ohio entered into a valid reciprocal agreement on October 26, 1937 * * *.
"The Attorney General, representing the Tax Commissioner, the appellee herein, had this to say in his brief:
"`* * * the agreement of 1937 between Michigan and Ohio has no effect on reciprocity as to highway use taxes and since there have been no agreements executed under statutory reciprocity authorized in the Highway Use Tax Act, the appellant's claim that it is entitled to reciprocity of highway use taxes is without merit.'
"I cannot agree with this contention. The fact that a different reciprocity board is authorized by Section 5728.15, Revised Code, to extend reciprocity to adjoining states as it relates to highway use tax does not invalidate agreements made by a reciprocity board authorized under G.C. Section 6306-1 (R.C. 4503.37). If it was the intention and desire to invalidate and nullify the reciprocity agreement entered into on October 26, 1937, between Michigan and Ohio, this should have been accomplished by the terms and conditions of that agreement. I find no evidence to the effect that the agreement of October 26, 1937, was ever invalidated, nullified, cancelled or terminated and therefore, in my opinion, it is and was in full force and effect.
"This raises the question then as to whether or not the reciprocity agreement of October 26, 1937, embraces the tax imposed by Section 5728.06, R.C. To answer this question, the agreement itself must be consulted. * * *
"* * *
"In my opinion, the language `severally waive and forego, and do hereby so waive and forego payment by their respective outstate motor carriers of the license plate taxes, including weight taxes for motor vehicles, and also mileage fees for their operations' is adequate and sufficient to include the tax imposed by the highway use tax. * * *
"This being true, it follows that the Tax Commissioner was without authority to collect the taxes imposed on the Interstate Motor Freight System of Michigan of which complaint is made."
It is apparent from the foregoing that neither the Tax Commissioner nor the majority of the Board of Tax Appeals passed upon the validity or applicability of the reciprocity agreement of October 26, 1937, as affecting the power of the Tax Commissioner to assess and collect the taxes in question. The Tax Commissioner took the position that he had no authority to make any refund and the Board of Tax Appeals affirmed on the theory that since the controversy involved constitutional questions it had no jurisdiction to decide the question on the merits.
The Attorney General representing the appellee, Tax Commissioner, asserts with reference to the reciprocity agreement of 1937 that the Ohio highway use tax was not in existence in 1937, that, therefore, there could be no valid agreed exemption as to it, and that only license-plate taxes are involved in that agreement. He also maintains that reciprocity agreements can apply only to existing reciprocity legislation.
It is significant, however, that in the 1937 agreement Ohio specifically waives mileage fees for operation of motor vehicles, even though at the date of the agreement no such mileage fee or tax had been levied by the state of Ohio. A very possible reason for such conceded exemption of a possible future tax could be the fact that the state of Michigan already had in effect a mileage tax from which Ohio carriers are by the agreement exempted.
The Attorney General maintains that the agreement of 1937 could not survive subsequent legislation which changed the situation and made it inapplicable. But it is to be noted that the new Ohio Highway Use Tax Act (Sections 5728.01 to 5728.15, inclusive, Revised Code) not only does not amend or repeal Sections 6306 and 6306-1, General Code, now Sections 4503.36 and 4503.37, Revised Code, but in Section 5728.15 provides that designated Ohio state officers "are hereby authorized and empowered to enter into such reciprocal contracts and agreements with the proper authorities of any state * * * which levies a highway use tax in addition to motor vehicle registration fees exempting from the provisions * * * of this act the owner of every motor vehicle which is duly registered in any such state * * * provided such owner has complied with the laws of the state * * * of his residence pertaining to the registration and taxation of motor vehicles and complies with such laws while operating and driving such motor vehicle upon the public roads or highways of this state, and provided further, that the owners and operators of motor vehicles registered in this state shall be exempt from all obligations pertaining to the registration and taxation of motor vehicles in such other state."
It will be seen that the new act is not in conflict with the provisions of the reciprocity agreement of 1937 or with Sections 6306 and 6306-1, General Code, which authorized it, but, in fact, the new act carries the same or greater power to make such reciprocity agreements.
In case No. 34407, the Tax Commissioner argues that under Section 6306-1, General Code, the reciprocity board created by the provisions of such section in 1935 was authorized by the General Assembly to enter into reciprocity agreements pertaining only to license taxes referred to in Sections 6290 to 6310-37, General Code, under the title of "Motor Vehicles," and that the waiver authorized by Section 6306-1, General Code, related to them only as referred to in Section 6306, General Code. However, Section 6306-1, General Code, was originally enacted in 1925 (111 Ohio Laws, 233) as an independent section and was in no way associated with Section 6306, General Code. Four years later, in 1929, Section 6306 was amended (113 Ohio Laws, 475) so as to give agreement jurisdiction to the reciprocity board already established under Section 6306-1, General Code. As a result the reciprocity board had no function to perform with respect to motor vehicle registration fees until four years after the creation of the board by Section 6306-1, General Code.
The reciprocity agreement of 1937 clearly includes a waiver and exemption of "weight taxes for motor vehicles, and also mileage fees for their operations" in favor of Michigan's commercial motor vehicles operating in Ohio. It is also clear that the Ohio highway use tax is a mileage tax. The rate of tax is fixed by the character and capacity of the commercial carrier vehicles, taking into consideration the number of axles used as a determining factor, but the tax is computed according to the operation mileage.
To date, Ohio has not seen fit to secure a cancellation of its 1937 reciprocal agreement by mere notice of such cancellation. The fact is that Ohio is operating under that agreement so far as Michigan license taxes and Michigan mileage taxes are concerned. So long as it keeps that agreement in force it is not in position to impose the tax on commercial motor carriers operating out of Michigan in interstate commerce.
Having determined that the 1937 reciprocity agreement between the states of Ohio and Michigan is in force and effect, it will not be necessary to pass upon the constitutional questions raised by the appellants. It is a well established rule of law that where a case can be determined upon any other theory than that of the constitutionality of a challenged statute, no consideration will be given to the constitutional question. State, ex rel. Lieux, v. Village of Westlake, 154 Ohio St. 412, 96 N.E.2d 414; Village of Strongsville v. McPhee, 142 Ohio St. 534, 53 N.E.2d 522; State, ex rel. Herbert, v. Ferguson, Aud., 142 Ohio St. 496, 52 N.E.2d 980; Wiggins v. Babbitt, 130 Ohio St. 240, 198 N.E. 873; Rucker v. State, 119 Ohio St. 189, 162 N.E. 802; American Cancer Society, Inc., v. City of Dayton, 160 Ohio St. 114, 114 N.E.2d 219.
Finally, the Tax Commissioner claims that he has no power or authority to refund taxes paid by the appellants; that the only authority for the refund of highway use taxes is contained in Section 5728.06, Revised Code, which provides that in the event the owner of a commercial car or commercial tractor, "at the end of any calendar year, has paid a tax for axles not actually used in operation over a given number of miles he may file with the Tax Commissioner an application for a refund of the excess taxes paid"; and that the statute just referred to permits recovery of taxes paid only on axles not used in operation and does not extend to axle miles traveled in Ohio.
Under Section 5717.03, Revised Code, the Board of Tax Appeals is given jurisdiction and authority to affirm, reverse, vacate or modify the tax assessments, valuations, determinations, findings, computations or orders of the Tax Commissioner complained of, where appeals therefrom are perfected to the board within the period prescribed by statute. It would be utter futility to perfect such an appeal if, after the Board of Tax Appeals reversed the action of the Tax Commissioner as to taxes illegally collected, there was no remedy by which a refund could be required.
Section 5703.05, Revised Code, provides the remedy. It defines the powers, duties and functions of the Tax Commissioner, and the pertinent part of the section provides as follows:
"All other powers, duties, and functions of the Department of Taxation, except those mentioned in Sections 5703.02 and 5703.04 of the Revised Code, are vested in and shall be performed by the Tax Commissioner, which powers, duties, and functions shall include, but shall not be limited to the following:
"* * *
"(B) Exercising the authority provided by law relative to remitting or refunding taxes or assessments * * * illegally or erroneously assessed or collected, or for any other reason overpaid, except as provided in division (I) of Section 5703.02 of the Revised Code, and in addition, the commissioner has the authority on written application of any person, firm, or corporation claiming to have overpaid to the Treasurer of State at any time within five years prior to the making of such application any tax payable under any law which the Department of Taxation is required to administer, or on his own motion investigate the facts and make in triplicate a written statement of his findings, and * * * issue in triplicate a certificate of abatement payable to the taxpayer, his assigns, or legal representative which shows the amount of the overpayment and the kind of tax overpaid."
The decisions of the Board of Tax Appeals are reversed, and the Tax Commissioner is ordered, in accordance herewith, to make refunds of taxes erroneously paid.
Decisions reversed.
WEYGANDT, C.J., MATTHIAS and STEWART, JJ., concur.
ZIMMERMAN, BELL and TAFT, JJ., dissent.
By the words of the 1937 reciprocity agreement, Ohio and Michigan did each "severally waive and forego * * * payment by their respective outstate motor carriers of the license plate taxes, including weight taxes for motor vehicles, and also mileage fees for their operations, including Ohio taxes levied under the provisions of Sections 614-94, 614-112, 6291, 6292 and 6293, and any connected provisions of the Ohio General Code, or which may be levied or payable in lieu of such provisions, also including Michigan mileage fees under, or in lieu of Section (2) of Article IV of Act 254 of the Michigan Public Acts of 1933, as amended, and weight taxes under Act 302 of the Michigan Public Acts of 1915, as amended, but excluding in all cases the filing fees, if any, to either commission for filing and hearing of application for procurement of carriers operating authority, or permits for such; which said taxes and fees included within this waiver provision are sometimes herein described as exempted taxes and fees."
The words "license plate taxes, including weight taxes for motor vehicles, and also mileage fees for their operations" are general words. Standing alone, these words (especially in view of the portion, "including * * * mileage fees for their operations") might be broad enough to cover the Ohio axle-mile tax. However, these general words do not stand alone in the 1937 reciprocity agreement but are followed therein by references to "taxes" levied under specified Ohio statutes which are intended to be included and by references to "fees" and "taxes" under specified Michigan statutes. The tax involved in the instant cases is admittedly not "levied under the provisions of" any of the sections of the Ohio statutes specified in the 1937 reciprocity agreement or "any connected provisions of the Ohio General Code"; and the tax involved in the instant cases is also obviously not one "levied or payable in lieu of" any taxes or fees provided for in the Ohio statutory provisions specified in that 1937 reciprocity agreement. It may be observed also that, with regard to Ohio, reference is made only to "taxes," although, with regard to Michigan, reference is made to "fees" and "taxes," and the reference generally to "mileage fees" is not one to mileage taxes.
It may further be observed that the claim of appellants in the instant cases is for an interpretation of the 1937 reciprocity agreement which will provide them with an exemption from taxation. Although statutory provisions claimed to provide for exemption from taxation are to be reasonably construed, they are strictly construed against those claiming such tax exemption. In re Bond Hill-Roselawn Hebrew School, 151 Ohio St. 70, 84 N.E.2d 270. In my opinion, the same rule of construction should apply with respect to interpretation of this contract, since it is claimed that those acting on behalf of the state in making the contract have provided therein for exemption from taxation.
In my opinion, the 1937 reciprocity agreement between Ohio and Michigan can not reasonably be interpreted to cover the axle-mile tax, levied for the first time in 1953 as a consequence of the enactment of Sections 5728.01 to 5728.15, inclusive, Revised Code.
ZIMMERMAN and BELL, JJ., concur in the foregoing dissenting opinion.