Albuquerque Broadcasting Co. v. Bureau of Revenue , 51 N.M. 332 ( 1947 )

On Motion for Rehearing On motion for rehearing the appellant asserts that this Court's opinion "is erroneous in one respect, to-wit:

"The Court held:

"We are of the opinion that local advertising by radio for local business is subject to the tax, (1) because it is intrastate business, and (2) in any event the advertising of local business to secure local patronage is a `taxable event' open to the states."

The appellant contends first that the question of "whether a local advertising by radio can be segregated for the purpose of levying the tax assessed was not an issue below or in this court."

The legislature levied a tax equal to two percent of the gross receipts of the business of every person engaging or continuing in the business of conducting radio broadcasting stations (Sec. 76-1404, N.M.Sts. 1941); but it was specifically provided that "none of the taxes * * * shall be construed to * * * apply to any businesses or transactions exempted from taxation under the Constitution of the United States or the state of New Mexico," Sec. 76-1405, N.M. Sts. 1941.

This act segregated for taxation all broadcasting that did not come within the constitutional inhibition, from that which did. The legislature never attempted to tax the gross receipts of appellant obtained from all broadcasting; but only that business which did not unduly burden interstate commerce, or which was not otherwise constitutionally inhibited.

Appellant brought this action to recover back from appellee approximately $25,000 paid by it under protest, on account of taxes levied against its gross income as a corporation engaged in the business of radio broadcasting. The burden was upon appellant to prove that it was entitled to the return of this money; and to that end must have secured findings of fact from the trial court that would support a judgment therefor. If it failed to establish that it was entitled to any portion of the funds claimed, then its case to that extent failed.

The findings of the Court are very explicit regarding interstate broadcasting. The pleadings as well as the findings segregate the interstate business from the local business, except as to amount. It is admitted in the complaint, and found by the Court, that the appellant was engaged in "local advertising broadcasts which originate locally in the studio of KOB." There is nothing in the findings, or in the evidence for that matter to indicate that any of this local business is interstate. To that extent the appellant's case failed of proof, unless we must say that all broadcasting is interstate business, and to this we do not agree.

The appellant complains that this Court erred in its statement: "The third class of broadcasts is described in the findings as `Local advertising broadcasts which originate locally in the studio of KOB at Albuquerque but are heard in all sixteen states.' It is a matter of common knowledge that most, if not all of such broadcasts are local advertising of merchandise or other businesses that are of interest only to local people, notwithstanding such broadcasts may be heard by people in other states not interested in the advertising. Such also are broadcasts of local political parties and candidates, addressed to the state's electorate. It is only the fact that the range of radio, unlike communications by telegraph or telephone, is limited only by the power employed in broadcasting, that it may be heard by people to whom the message is of no interest. As a practical matter this business is intrastate."

It is said that the statement is erroneous; and purported facts not in the record are stated by appellant in an attempt to prove the interstate character of the local broadcasting. In justification of this procedure it is said that our statement, just quoted, was outside the record. We may assume for this motion that the statement was too broad, but that is beside the case. The appellant admitted, and the Court found, that a part of the business was local advertising broadcasts originating locally in the studio of KOB; and in the absence of any finding other than this regarding the "local" portion of appellant's business, it has not met the burden of proof. We have held, and still hold, that the mere fact that local advertising is heard in other states, does not necessarily establish that it is an interstate transaction. The trial court concluded that "the business in which plaintiff is engaged is in part interstate commerce and part intrastate commerce," and to this we agree.

The burden was on the appellant to show that the whole tax was void. It segregated the taxable from its non-taxable activities in its pleadings and briefs, and sufficiently presented the question, for our consideration. Under similar facts the Supreme Court of the United States reached the same conclusion. Ratterman v. Western Union Tel. Co., 127 U.S. 411, 8 S. Ct. 1127,

32 L. Ed. 229. We are of the opinion that appellant did not establish its right to the return of funds collected as taxes on local broadcasting.

Answering other contentions, we state:

The legislature did not levy a tax that would unduly burden interstate commerce. Whether the parties contended in this Court or the Court below that either Court had jurisdiction to apportion the taxes, is immaterial. No attempt is made to apportion taxes. The activities of appellant that are not local are interstate. The appellant by its pleadings and the Court by its findings have segregated the taxable from the non-taxable, except as to amount, and that may be determined upon a new trial, which will be limited to a determination of the amount paid on local broadcasting. All other funds collected by appellee must be returned to appellant.

The cases cited by appellant have reference to gross receipts taxes which impose an unconstitutional burden on interstate commerce. Such is not the law here involved. The cases cited are: Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S. Ct. 913,82 L. Ed. 1365, 117 A.L.R. 429; Freeman v. Hewit, 329 U.S. 249,67 S. Ct. 274, 91 L.Ed. ___; Fisher's Blend Station Inc., v. Tax Commission, 297 U.S. 650, 56 S. Ct. 608, 80 L. Ed. 956; Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S. Ct. 546,82 L. Ed. 823, 115 A.L.R. 944; International Harvester Co. v. Evatt,329 U.S. 416, 67 S. Ct. 444, 91 L.Ed. ___.

The motion for rehearing is denied, and it is so ordered.

LUJAN, SADLER, McGHEE, and COMPTON, JJ., concur.