Wright v. Southern Bell Telephone & Telegraph Co. , 127 Ga. 227 ( 1906 )

Cobb, P. J.

(After stating the facts.) There is no controversy .as to the character of the tax involved in this case. Both the attorney-general and counsel for the plaintiff agree that the tax levied is not a property tax but an occupation tax. While the General Assembly has no power to classify property for taxation, it is authorized to classify occupations. McGhee v. State, 92 Ga. 25; Cutliff v. Albany, 60 Ga. 597. But when a classification is made, the tax levied must be uniform upon each member of that class. Mayor of Savannah v. Weed, 84 Ga. 685; Singer Manufacturing Co. v. Wright, 97 Ga. 114. In the opinion in the case last' cited there is a dictum to the effect that if the right to classify at all is conceded, an arbitrary classification would not violate the rule ■that all taxation should be uniform. The classification in that case was held, however, to be neither arbitrary nor unreasonable. The better view seems to be that a classification must be reasonable and ■natural. City of Atlanta v. Jacobs, 125 Ga. 523; Mutual Association v. Augusta, 109 Ga. 79. The grouping of express companies, telephone and telegraph companies, and persons engaged in the ■express, telephone, or telegraph business, into one class, for the purpose of levying an occupation tax, would not be an unreasonable ■or arbitrary classification. It is therefore to be determined whether this class, which the General Assembly has made, is subject to a uniform burden, within the meaning of the constitution, under the tax levied in the section of the act now in question. It is now settled in this State that an occupation tax may be lawfully created by imposing a tax upon the gross earnings of a business. Mutual Association v. Augusta, 109 Ga. 78; Atlanta Association v. Stewart, 109 Ga. 80. But when an occupation tax of this character is levied, uniformity is still required; and every member of the class having the gross earnings subject to taxation must pay the same rate on its gross receipts. The act in question does not levy a tax of two and' a half per cent, on the gross receipts of all the companies named in the class; but the tax levied on each company or person is ascertained by deducting the amount of the ad valorem tax paid by the company or person from the sum which would represent two and a half per cent, on its gross earnings. That is, if the ad valorem tax paid by the company is greater than the sum which would represent two and a half per cent, on its gross earnings, the company pays no occupation tax whatever. It may be said, that, properly construed, this act subdivided the companies and persons named into two classes; the first class consisting of those whose gross receipts were such that two and a half per cent, of the same would be less than the ad valorem tax paid by them, and the second class consisting of those whose gross earnings were such that two and a half per cent, on the same would make a sum greater than the ad valorem tax paid by them. Even if this subclassification can be properly derived from the act, it is not altogether clear that it would be reasonable; but for the purposes of this case, and for this occasion only, let this subclassification stand. The plaintiff belongs to the second class in this subclassification; and it must appear that the tax levied is uniform upon each member of the subclass, before it can be upheld. • There is- no uniformity whatever in the tax levied upon the class made up in this manner. A stated amount, as an occupation tax upon each member of the class, would be uniform. The same percentage upon the gross receipts, without abatement or deduction, would also be uniform. But when one company or person is allowed a deduction of one amount, and another of still another amount, the amount of deduction not being ■fixed by any uniform rule, but by merely ascertaining the amount of tax paid by such company or person on the property that it might own, the scheme is entirely lacking in that uniformity which the' constitution requires. The General Assembly could levy, an occupation tax upon a business of the character involved of a stated amount, and could, for reasons satisfactory, allow a uniform abatement of this occupation: tax, either in a given amount, or in a given percentage, or the like, and the tax would still be uniform; but if the General Assembly were to levy such a' tax and allow an abatement of one sum to' one company on account of the peculiar situation of that company, and still another sum to another company on account of its peculiar situation, it would seem that no one would contend that the companies would be taxed uniformly within the meaning of the constitution. So, in the present case, a tax of two and a half per cent, on the gross receipts of all companies embraced within the class would be uniform and valid. A' deduction, for satisfactory reasons, from this tax, of a given percentage, applicable alike to all members of the class, would not destroy its uniformity. But when the deduction provided by the act is due to the peculiar situation of each company, that is, the amount of property owned by it, something in which the members of the class as a whole do not participate, and is a matter of no concern to any one except each individual member of the class, thus imposing a large tax upon one member and a small tax upon another member, uniformity is destroyed, the constitutional scheme .is violated, and the General Assembly has passed beyond its legitimate bounds.

It may be said that that part of the act providing that the ad valorem tax shall be deducted from the gross receipts tax, in determining the amount of occupation tax, should be eliminated from the act if this renders the act invalid for the want of uniformity. An act may be valid in part and invalid in part; and if that which is invalid can be eliminated therefrom without destroying the legislative scheme, and when eliminated the remaining portion of the act would clearly carry out the intent of the lawmaking power, the courts are authorized to eliminate the invalid part and uphold the remaining portion of the act. But if that which is invalid is so interwoven into the scheme of the'act that if it be eliminated the legislative scheme, as indicated by the act, will entirely fail, then no elimination by the courts can be had, and the whole act must fall. Cain v. Smith, 117 Ga. 902(4). The purpose of the General Assembly was not to levy a uniform tax of two and a half per cent, on the gross receipts of all the persons within the class taxed. The' legislative purpose was to tax some one amount and some another; the amount to be determined by deducting the sum of the ad Valorem and franchise taxes of each company from a sum which would represent two and a half per cent, of its gross receipts. To eliminate the deduction which the General Assembly has provided for would destroy'altogether the legislative scheme. There is no way to determine whether, with this deduction 'eliminated, the General Assembly would have levied a uniform tax. upon all the persons within the class of two and a half per cent, upon their gross receipts. Such being the character of that part of the act which is invalid, no alternative is before us than to declare that the scheme of taxation in the section of the act under consideration, so far as it relates to an occupation tax, is in violation of the constitution; and that the trial judge correctly enjoined the enforcement of the tax.

Judgment affirmed.

All the Justices concur, except Beck, J., disqualified.