Rayle Electric Membership Corporation v. Cook, revenue commissioner

Supreme Court of Georgia1943-04-15No. No. 14432

195 Ga. 734

Summary · law.co

Holding. The court reversed the dismissal on demurrer, holding that the constitutional exemption for rural electrification cooperatives applies to properties where the taxation process had begun but was not fully consummated before the amendment's ratification date.

A constitutional amendment ratified on June 3, 1941, exempted cooperative nonprofit membership corporations organized for rural electrification from all state and local taxation, along with their real and personal property used for that purpose. The exemption was set to expire twenty years from January 1, 1942. The question arose whether this exemption applied to properties that had been assessed for ad valorem taxation as of January 1, 1941, and returned for taxation between February and May 1941, but came within the exemption's terms before the governor and comptroller-general completed the tax levy.

The court held that tax exemptions must be strictly construed in favor of the state, but only reasonably so. The court determined that "taxation" ordinarily includes both the rate determination and imposition of the levy as essential parts of the sovereign taxing power. Because the taxation process had begun but not been fully completed at the time the amendment took effect, the amendment's language exempting properties from "all taxation" must be understood to cover properties where the taxation process remained incomplete. Therefore, the lower court erred in dismissing the challenge to the tax on demurrer.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Scope of constitutional tax exemption for rural electrification cooperatives
Timing of when property becomes "taxed" under the exemption
Proper interpretation of exemption language in relation to ongoing tax assessments

Procedural posture

The case came before the court on appeal from a lower court's dismissal on demurrer of an affidavit of illegality challenging a tax levy.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Jenkins, Justice.

1. The constitutional amendment, ratified June 3, 1941 (Supp. Ga. Code Ann. § 2-5002; Ga. L. 1941, p. 84), provides that “There is hereby exempted from all taxation, State, county, municipal, school district, and political or territorial subdivision of the State having the authority to levy taxes, all co-operative, nonprofit, membership corporations organized under the laws of this State for the purpose of engaging in rural electrification, . . and all of the real and personal property owned or held by such corporations for such purposes. The exemption herein provided for shall expire twenty years from January, 1, 1942.”

2. In determining whether this constitutional exemption from taxation must be given application with respect to properties which had become subject to ad valorem taxation as of January 1, 1941, and had been returned for taxation between February 1 and May 1, 1941, but had come within the terms of the constitutional exemption ratified June 3, 1941, which latter date was previous to the date on which the Governor with the assistance of the comptroller-general had made his levy of the tax under the Code, §§ 92-5703 et seq., it is the rule that all grants of exemptions must be strictly construed in favor of the State, and that “nothing passes by implication; but this rule must not be pushed to unreasonableness.” City of Columbus v. Muscogee Mfg. Co.. 165 Ga. 259, 261 (140 S. E. 860); Campbell v. Red Bud School District, 186 Ga. 541 (2), 546 (198 S. E. 225); Mundy v. Van Hoose, 104 Ga. 292, 297 (30 S. E. 783), and cit. In interpreting such a constitutional exemption, it is to be presumed that the words therein used were employed in their natural and ordinary meaning (Epping v. Columbus, 117 Ga. 263, 267, 43 S. E. 803); and where a constitutional provision or statute is plain and susceptible of but one natural and reasonable construction, the court has no authority to place a different construction upon it, but must construe it according to its terms. State Revenue Commission v. Brandon, 184 Ga. 225, 228 (190 S. E. 660), and cit.; Barnes v. Carter, 120 Ga. 895, 898 (48 S. E. 387); Ezekiel v. Dixon, 3 Ga. 146 (1, 2), 158.

No. 14432.

April 15, 1943.

3. Since the word “taxation” ordinarily includes a determination of the rate of levy and the imposition of the levy, as an essential part of the sovereign power and process (Hilger v. Moore, 56 Mont. 146, 182 Pac. 477, 480; Morton v. Comptroller-General, 4 S. C. 430, 453; Southern Ry. Co. v. Kay, 62 S. C. 28, 39 S. E. 785, 787; Des Moines Union Ry. Co. v. Chicago Great Western Ry. Co., 188 Iowa, 1019, 177 N. W. 90, 9 A. L. R. 1557, 1560; 61 C. J. 67, and cit.; 41 Words & Phrases, 116), it follows that property will not ordinarily be deemed as taxed until the tax has been levied. Thus, even if it be assumed that the language of the amendment as and when adopted, “hereby” exempting certain properties from “all taxation,” would not have been effective if the process of “taxation” had already been fully consummated, it appears reasonably plain and certain that the language “hereby” exempting certain properties from “all taxation” must be taken to include all such properties where the process of taxation, though begun, had not been fully consummated. Therefore it was error to dismiss on demurrer the affidavit of illegality.

Judgment reversed.

All the Justices concur.

W. A. Slaton, for plaintiff in error.

T. Grady Head, attorney-general, Claude Shaw, Andrew J. Tuten, J. H. Hyman, and Hawes Claud, contra.