Thomas D. Bailey, Superintendent Public Instruction, Tallahassee. for county and municipal purposes and for no other purposes...

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66 BIENNIAL REPORT OF THE ATTORNEY GENERAL ~-- 055-49-lVIarch 4, 1955 LEGISLATURE LEGISLATION-COUNTY SALES AND USE TAX CONSTRUCTION AND MAINTENANCE OF PUBLIC SCHOOLS To: Thomas D.

1 66 BIENNIAL REPORT OF THE ATTORNEY GENERAL ~ lVIarch 4, 1955 LEGISLATURE LEGISLATION-COUNTY SALES AND USE TAX CONSTRUCTION AND MAINTENANCE OF PUBLIC SCHOOLS To: Thomas D. Bailey, Superintendent Public Instruction, Tallahassee QUESTION: May the legislature, by either a general statute with a referendum or a special or local act, provide local additional sales and use taxes for individual counties, the proceeds of which would be used only for public school construction and maintenance, to become effective only in such of the counties as may by referendum vote the statute effective in such counties? Section 20, Art. III, State Const., provides in part that "the legislature shall not pass special or local laws,... for the assessment and collection of taxes for state and county purposes;" however, this constitutional inhibition "goes only to the manner or method of assessing taxes, and does not forbid the legislature to authorize by special or local law a county to levy a tax for a local or county purpose" pursuant to the provjsions of 5, Art. IX, State Const., which section provides in part that "the Legislature shall authorize the several counties and incorporated cities or towns in the state to assess and impose taxes for county and municipal purposes and for no other purposes... The Legislature may also provide for levying a special capitation and a tax on licenses...," (Kroegel v. Whyte, 62 Fla. 527, 56 So. 498; McMullen v. Pinellas County, 90 Fla. 398, 106 So. 73, text 74; Whitney v. Hillsborough County, 99 Fla. 628, 127 So. 486, text 491 ; State v. Cone, 130 Fla. 158, 177 So. 854, text 858). The above quoted language in 5, Art. IX, State Const., "precludes any other theory than that counties may by special or local law be empowered severally to assess and collect taxes for county purposes," so long as the assessment and collection of such taxes are directed and controlled by general statutes (McMullen v. Pinellas County, supra; see also Kroegel v. Whyte, supra); however, the taxes in issue in these cases appear to have been ad valorem and not excise or license taxes. (Emphasis supplied.) The court in State v. Lee, 122 Fla. 639, 166 So. 249, text 254, which considered the chain store tax of 1935, stated that "under the Florida d'ecisions a privilege tax is an excise tax and is authorized by 5, Art. IX, of the Constitution, as a license tax." Gasoline taxes (which are in the nature of sales taxes) imposed by Ch. 208, F. S., are excise taxes imposed upon the privilege of selling gasoline (United States v. Lee, 153 Fla. 94, 13 So. 2d 919, text 921; Orang-e State Oil Company v. Amos, 100 Fla. 884, 130 So. 707, text 709). The sales and use taxes imposed by Ch. 212, F. S., were f'omirlered hy thp court, in Gaulden v. Kirk, Fla., 47 So. 2d 567, Spencer v. Mero, Fla., 52 So. 2d 679; Thompson v. Inter-County Telephone and Telegraph Co., Fla., 62 So. 2d 16, and Gasson v. Gay,

2 BIENNIAL REPORT OF THE ATTORNEY GENERAL 67 LS llalat :01' 11' to lid vy,ns tat )1' :es on ~o. 4', 1, ed ry.ly he ed so se se ;4, er f le 8, 0 l', 7, re 7, e.y, Fla., 49 So. 2d 525, as being in the nature of privilege or license taxes, authorized under 5, Art. IX, State Const. Section , F. S., authorizes "the several cities and towns in this state" to levy an excise tax against the purchase of the public utilities therein named; however, there is nothing in said statute requiring that all cities and towns levy such a tax or that the tax imposed be the same in all cities levying the said tax. This act has been upheld by the court as a license tax under 5, Art. IX, State Const. (Tamiami Trail Tours v. City of Tampa, 159 Fla. 287, 31 So. 2d 468; Peninsular Telephone Co. v. Clearwater, Fla., 39 So. 2d 473; State v. City of Pensacola, Fla., 40 So. 2d 569; State v. Lakeland, Fla., 42 So. 2d 580; State v. Daytona Beach, Fla., 42 So. 2d 764; State v. Bartow, Fla., 48 So. 2d 747; and Orlando v. Natural Gas and Appliance Co., Fla., 57 So. 2d 853). Although the following cases struck down excise or license taxes attempted to be imposed by municipalities, they were struck down because the power attempted to be exercised had not been delegated to the municipality and not on the want of power in the legislature to authorize such a tax (DeLand v. Florida Public Service Company, 119 Fla. 804, 161 So. 735, municipality utility tax; Miami v. Kayfetz, 158 Fla. 735, 30 So. 2d 521, municipal tax on admissions; and Asbell v. Green, 159 Fla. 702, 32 So. 2d 593, text 600, municipal sales and use tax). In the last above case the court remarked "we do not mean to hold that the city of Panama City has not the power to levy an excise tax in the form of a Sa:es tax on businesses, occupations and privileges, but if such imposition of taxes is to be held valid it must apply to cases where the payer of the tax is engaged in a series of transactions and cannot be made to apply to casual, isolated or infrequent transactions..." (So. text 600). In Bentley-Gray Dry Goods Co. v. Tampa, 137 Fla. 641, 188 So. 758, text 760 and 763, the municipality had levied a tax of 60 cents upon each $1,000 of gross sales made by wholesalers in said municipality during each fiscal year, concerning which the court remarked that "we find that by the great weight of authority in both state and federal courts the tax here imposed is valid..." The power of a municipality to levy a sales tax must be granted by the legislature or by fundamental law (64 C. J. S. 721, 220). We are, therefore, of the opinion that under legislative authority a municipality may levy a sales tax, although no other municipality in the state may levy a like tax. We feel that a single municipality may by local or special act be granted authority to levy a sales tax. However, a municipality is not a county. The 2nd and 3rd gasoline taxes imposed by Ch , 1929, were held, in Amos v. Mathews, 99 Fla. 1, 126 So. 308, text 319, to have been county, and not state, excise taxes imposed pursuant to 5, Art. IX, State Const.; however, these taxes were imposed in all counties, and not in only a portion of them. Doubtless municipal excise or license taxes are imposed pursuant to the following authority in 5, Art. IX, State Const., to wit, "The Legislature may also provide for levying... a tax on licenses." County and municipal license taxes are imposed pursuant to this provision of the constitution by , F. S., in all of the counties. It, there- ;;! <,;.j!if d

68 BIENNIAL REPORT OF THE ATTORNEY GENERAL fore, seems that a county sales tax (license tax in the nature of an excise tax) might be imposed in all of the counties of the state as are license taxes

3 68 BIENNIAL REPORT OF THE ATTORNEY GENERAL fore, seems that a county sales tax (license tax in the nature of an excise tax) might be imposed in all of the counties of the state as are license taxes under said , F. S. There is but little applicable general case law on the question of county license taxes imposed by local acts applicable to a single or a small group of counties (American Digest System Key No. 5%; 53 C. J. S. 473, 9). The legislature of Florida may enact local or special laws in all cases not expressly enumerated in 20, Art. III, State Const. (State v. Pearson, 153 Fla. 314, 14 So. 2d 565, text 567; State v. Jacksonville, 157 Fla. 276, 25 So. 2d 569, text 570). An examination of said section of the constitution reveals no prohibition against the levy of a license tax or excise tax by local or special law; only local or special laws "for the assessment and collection of taxes for state and county purposes" are mentioned in this section and this provision has been construed to relate to the assessment and collection of taxes and not to the taxes themselves; legislative authorization to a county to levy a tax for local county purposes is not prohibited (McMullen v. Pinellas County, 90 Fla. 398, 106 So. 73, text 74). The levy of a county sales tax in a particular county does not appear to be prohibited by express provision in the state constitution. The above observations and authorities seem to indicate an affirmative answer to the above question, unless the levy and collection of a sales or use tax in a single or in a small group of counties would be violative of the equal protection provisions of the state and federal constitutions. In this connection it should be remembered that the constitutional provision found in 1, Art. IX, Fla. Const., relates to ad valorem taxation (Miami Beach College Corp. v. Tomlinson, 143 Fla. 57, 196 So. 608) and not to excise or license taxes (Jacksonville Gas Co. v. Lee, 110 Fla. 61, 148 So. 188, text 191; State v. Coleman, 122 Fla. 434, 165 So. 569, text 571; Florida Sugar Distributors v. Wood, 135 Fla. 126, 184 So. 641, text 643). The provision in 1, Art. IX, State Const. for equality and uniformity of taxation relates to the taxing units of the state. "The rates of state taxation must be equal and uniform throughout the entire state, though the rates of tax levies for county purposes may differ in the several counties, each county being a separate taxing unit." (State v. O'Quinn, 114 Fla. 222, 154 So. 166, text 168; see also W. J. Howey Company v. Williams, 142 Fla. 415, 195 So. 181, text 182). The tax rates to be assessed by the several counties for the several county funds provided in , F. S., may and actually do differ from county to county. For the county general fund, the county fine and forfeiture fund, the county school fund and the other funds provided in said section the rate in each of the several counties is not required by the equal and uniformity provision or the equal protection provision of the state constitution to be the same in each of the several counties. Although the taxes imposed pursuant to F. S. are ad valorem taxes imposed upon real estate according to its assessed value, we see little distinction between the levy of a sales tax upon sales made in the county according to the amount of the sales made. A gasoline tax has been upheld against the contention that it is violative of the equal protection clause of the federal constitution where it applies "alike to all domestic

-- ure of estate t little license small ~; 53 calor ), Art. d 565, ~, text eveals ;ax by ~ssess ;" are,trued to the ) levy len v. r of a to be Lte an rand up of isions hould, Art. 1 Col CO ex 1. 61,.

4 -- ure of estate t little license small ~; 53 calor ), Art. d 565, ~, text eveals ;ax by ~ssess ;" are,trued to the ) levy len v. r of a to be Lte an rand up of isions hould, Art. 1 Col CO ex 1. 61,. 569, 34 So. ;. for units I unilevies ounty ~, 154 iams, essed ed in 'unty. fund, said ed by pro! sev ng to vyof lount t the se of iestic BIENNIAL REPORT OF THE ATTORNEY GENERAL 69 sales within the state or taxing district" (16 C. J. S. 1074, 529). The equal protection clauses of the state and federal constitutions were "not intended to secure to all persons in the U. S. the benefit of the same laws and the same remedies, whether as between states or between different sections of the same state" (Sawyer v. State, 94 Fla. 60, 113 So. 736, text 740; see also 16 C. J. S. 1003, 506). Although the courts have held that the legislature may enact a general law and make it effective only in such counties as may by affirmative vote at a referendum election adopt it (Whitaker v. Parsons, 80 Fla. 352, 86 So. 247, text 252) many of such general laws have not presented questions of equal protection as would a statute such as the one here under consideration. The Whitaker v. Parsons case involved an enactment designed to control or eradicate -tick infestation in Florida, which control and eradication by the very nature of things could not be accomplished statewide in one operation. As a matter of fact eradication required many years of operation progressing from one group of counties to another until the entire state was covered. No such question of necessary progression is here required. _ Here we are asked to consider the constitutionality of two types of enactment: first, a general statute potentially applicable to all counties, but not to become effective in any county unless and until approved by a majority vote of the electors in said county, and second, a local or special statute made specifically applicable to a specified county or counties. Under either type of enactment some of the counties would impose a county sales tax while others would not. As a general state sales tax now exists, under which there is levied in all counties a state sales tax of 3% of the amount of the sale, the levy of a county sales tax in one or more, but less than all, of the counties of the state (say a 1% sales tax), when the general 3% tax is taken into consideration, would result in a sales tax of 3% in most of the counties and a 4% (or maybe more depending upon the special or local act) in other counties. The division between a 3% and a 4% sales tax would be a county line; a line which in many cases only a surveyor could locate with any degree of certainty. A 4% tax being charged on one side of this line and a 3% tax on the other side; which, where the places of business are located only a short distance apart, might and probably would result in the loss of business to one of the said businesses. (See discussion in 12 Am. Jur., pp. 236, 240 and 241; also 33 Am. JUl'. p. 357.) Although municipalities and counties appear to be treated substantially alike by 5, Art. IX, State Const., as to licenses and license taxes, a study of the entire constitution reveals a material difference between municipalities and counties. No powers are authorized for the counties similar to those that may be granted municipalities under 8, Art. VIII, State Const. Strictly speaking, a county is distinguishable from, and is not a municipality (20 C. J. S. 758, 3). Municipal boundaries are largely dependent upon the concentration of urban population; county boundaries are not. Business establishments in a county are usually located in or around the municipalities, with but few of them in the rural

5 70 BIENNIAL REPORT OF THE ATTORNEY GENERAḺ -- areas. Territorial discrimination, in the case of the imposition of a local sales tax, would be far more evident when imposed county-wide than when imposed in a single municipality. There the application of a statute, such as a statute imposing a local sales tax, is dependent upon a referendum to the electors of the locality its application of necessity is dependent upon the will of the electors voting, although they may be only a small portion of the persons residing in the community. In such a case the application of the statute may be determined by a minority group of the buying public. In its last analysis the making of a statute dependent upon a referendum delegates to the electors of the county the power to impose or not impose a sales tax. There is little if any distinction between the buying public in one county or in another county; or for that part in the entire state. It would be hard, if not impossible, to divide the buying public of this state into districts and distinguish one group of them from another. The main distinction between the buying public in a large county and in a small county is the total volume of the purchases; the items purchased and the nature of the purchases would largely be the same. Accordingly we entertain doubt that 5, Art. IX, State Const., when read and considered in connection with the provisions in the state and federal constitutions for equal protection, and the question of the delegation of legislative powers, authorizes or permits the imposition of a county sales tax applicable to only a few counties. It seems hard to justify a sales tax in one county and not in other counties, and especially the adjoining counties. Certainly it would present problems of tax inequality based on county residence and divided merely by county boundaries. As the subject is one not yet passed upon by our supreme court, and in which we entertain doubt as to the proper answer, we cannot at this time express an opinion upon the above mentioned question; however, we know of no reasonable reason why such an enactment might not go to the legislature which, if enacted into law, would lay the foundation for a court decision upon the question March 7, 1955 EDUCATION TEXTBOOKS-INSTRUCTIONAL AIDS AND MATERIALS STATE PURCHASING COUNCIL (2) AND CH. 233, F. S. To: Ralph R. Siller, Executi've Secretary, State Purchasing Council, Tallahassee QUESTION: Do textbool{s and all other instructional aids and materials covered by Ch. 233, F. S., come within the exception provided in (2). F. S.? Section (2), F. S., provides: "The word 'commodities' shall mean and include the

per-it report-he de-fined per-sonal per-sonal ANNUAL REPORT OF THE ATTORNEY GENERAL 73

per-it report-he de-fined per-sonal per-sonal ANNUAL REPORT OF THE ATTORNEY GENERAL 73 j tax period ANNUAL REPORT OF THE ATTORNEY GENERAL 73 AS TO QUESTION 4 Pursuant to 199.2023 created by Ch. 71-134 the Department of Revenue would appear to have the general power to waive any or all penalties