I respectfully dissent.
The City Ordinance involved here contains nine sections and provides, in effect: (1) The business of (a) generating electro-magnetic waves for radio broadcasting purposes and/or (b) the business of intrastate radio broadcasting in Little Rock is a privilege and every person, etc., engaged therein shall pay to the City Collector an annual license fee of $250 beginning on or before April 30, 1948;
(2) That the business of soliciting intrastate radio advertising in Little Rock is a privilege and every person, etc., engaged therein shall pay to the City Collector an annual license fee of $50 beginning on or before April 30, 1948;
(3) Specifically declares the Council's intent not to levy the tax upon interstate radio broadcasting and/or advertising solicitation; and
(4) Provides a penalty of from $15 to $100 per day for each day's failure to pay said tax.
The trial court found that this Ordinance constituted a burden on interstate commerce and was therefore unconstitutional.
Appellees clearly and concisely state the questions presented in this language: "1. Is the business of producing electro-magnetic waves for broadcasting purposes such a separable incident of radio broadcasting as to permit a municipal government to levy a privilege tax thereon, or is such a tax in violation of the Commerce Clause of the United States Constitution? *Page 396
"2. May a municipal government levy a privilege tax upon those persons, etc., who solicit radio advertising within the corporate limits of the city, or is the solicitation of radio advertising `soliciting goods intended for interstate commerce' and hence within the purview of the Commerce Clause of the United States Constitution?"
The two broadcasting stations involved here — (as are all broadcasting stations throughout the Nation) — are licensed, controlled and regulated by the Federal Communications Commission.
Radio broadcasting, by its very nature, transcends State lines and is national in its scope. No method has as yet been devised by which the sound waves, which are generated and immediately transmitted through the ether, may be localized or stopped at State boundaries It is impossible to separate intrastate from interstate business since all broadcasting is interstate in scope. In this respect, radio broadcasting is entirely different from such businesses as that of telephone, telegraph and electric power companies, for obviously, you can separate, for tax purposes, gross receipts realized by telephone, telegraph or power companies done beyond the State's borders, or interstate from their intrastate business. In other words, these three latter companies could engage solely in intrastate business if they so desired, without even crossing State boundaries, but not so with radio broadcasting.
The generation of electro-magnetic waves and the transmission of those waves is, according to the evidence, practically a simultaneous operation, and neither can be singled out as a separate and distinct part and subjected to local taxation.
In the case of Station WBT v. Poulnot, (1931),46 F.2d 671, wherein the State of South Carolina enacted a law imposing all annual license tax upon the privilege of owning or operating a radio receiving set, the court in holding the law unconstitutional as a burden upon interstate commerce, said: "The only question remaining is whether the state has the right to lay a tax upon these *Page 397 instruments of interstate commerce. Under the numerous decisions of the Supreme Court there can be only one answer. Those decisions hold that Congress has the power to regulate interstate commerce; that that power is necessarily exclusive whenever the subjects are national in their character or admit only of one uniform system or plan of regulation; and that where the power of Congress to regulate is exclusive, the failure to regulate indicates the will that it shall be left free from any restrictions or impositions; and any regulation of the subject by a state, except in matters of local concern, is repugnant to such freedom; that no state can compel a party, individual, or corporation to pay for the privilege of engaging in interstate commerce, and that a state has no power to lay any burden in any form, by taxation or otherwise, upon interstate commerce or its instrumentalities. * * *
"There can be no doubt that communications by radio constitute interstate commerce. It has been so held by numerous courts, and the decisions of the Supreme Court of the United States defining interstate commerce lead to that conclusion. Gibbons v. Ogden, 9 Wheat. 1, 189, 6 L. Ed. 23; Pensacola Tel. Co. v. Western Union Telegraph Co., 96 U.S. 1, 24 L. Ed. 708; Blumenstock Bros. Adv. Agency v. Curtis Pub. Co., 252 U.S. 436,40 S. Ct. 385, 64 L. Ed. 649; Western Union Telegraph Co. v. Speight, 254 U.S. 17, 41 S. Ct. 11, 65 L. Ed. 104; Whitehurst v. Grimes (D.C.) 21 F.2d 787; Gen. Elect. Co. v. Fed. Radio Comm., 58 App. D.C. 386, 31 F.2d 630; U.S. v. American Bond Mortgage Co., (D.C.), 31 F.2d 448; Tech. Radio Lab. v. Fed. Radio Comm.,59 App. D.C. 125, 36 F.2d 111, 66 A.L.R. 1355; City of N.Y. v. Fed. Radio Comm., 59 App. D.C. 129, 36 F.2d 115."
"No state lines divide the radio waves, and national regulation is not only appropriate but essential to the efficient use of radio facilities." (Federal Radio Comm. v. Nelson Bros., 289 U.S. 266, 53 S. Ct. 627,77 L. Ed. 1166.)
In Whitehurst v. Grimes (1927), 21 F.2d 787, wherein a Kentucky city passed an ordinance requiring all *Page 398 persons operating a radio broadcasting station to pay a license tax, the court said: "The tax provided is not on the property of the radio operator, but on the business of radio broadcasting. Radio communications are all interstate. This is so though they may be intended only for intrastate transmission, and interstate transmission of such communications may be seriously affected by communications intended only for intrastate transmission. Such communications admit of and require a uniform system of regulation and control throughout the United States, and Congress has covered the field by appropriate legislation. It follows that the ordinance is void as a regulation of interstate commerce."
I think, however, that the Supreme Court of the United States, in the case of Fisher's Blend Station v. Tax Commission, (1936), 297 U.S. 650, 56 S. Ct. 608,80 L. Ed. 956, has definitely settled all issues presented here in favor of the appellees and the case should be affirmed. This latter case came to the U.S. Supreme Court from the State of Washington. The Washington Supreme Court had held a State statute levying an occupation tax on the gross receipts from broadcasting within the State to be constitutional. The U.S. Supreme Court reversed the Washington Court and held the tax to be an unconstitutional burden on interstate commerce. I quote rather extensively from the opinion written by the late Justice Stone: "Appellant is thus engaged in the business of transmitting advertising programs from its stations in Washington to those persons in other states who `listen in' through the use of receiving sets. In all essentials its procedure does not differ from that employed in sending telegraph or telephone messages across state lines, which is interstate commerce. (Citing many cases.) In each, transmission is effected by means of energy manifestations produced at the point of reception in one state which are generated and controlled at the sending point in another. Whether the transmission is effected by the aid of wires, or through a perhaps less well understood medium, `the ether,' is immaterial, in the light of those practical considerations which have dictated the conclusion that the transmission *Page 399 of information interstate is a form of `intercourse,' which is commerce. See Gibbons v. Ogden, 9 Wheat. 1, 189, 6 L. Ed. 23, 68.
"Similarly, we perceive no basis for the distinction urged by appellee, that appellant does not own or control the receiving mechanisms. The communications broadcasted are no less complete and effective, nor any the less effected by appellant, because it does not own or command the apparatus by which they are received. The essential purpose and indispensable effect of all broadcasting is the transmission of intelligence from the broadcasting station to distant listeners. It is that for which the customer pays. By its very nature broadcasting transcends state lines and is national in its scope and importance — characteristics which bring it within the purpose and protection, and subject it to the control, of the commerce clause. See Federal Radio Commission v. Nelson Bros. Bond Mortg. Co., 289 U.S. 266,53 S. Ct. 627, 77 L. Ed. 1166, 1175, 89 A.L.R. 406."
The majority opinion appears to lean rather heavily upon the following language (which was mere dicta) used in the Fisher's Blend case: "Whether the state could tax the generation of such energy, or other local activity of appellant, * * * it is unnecessary to decide. See Atlanta v. Oglethorpe University, 178 Ga. 379,173 S.E. 110."
It is interesting to note that the Georgia case cited in support, of the gratuitous language used, has been twice overruled since the Fisher's Blend decision. See Atlanta v. Southern Broadcasting Co. (Ga. 1937),184 Ga. 9, 190 S.E. 594 and Atlanta v. Atlanta Journal Co. (Ga. 1938), 186 Ga. 734, 198 S.E. 788.
We also must bear in mind the well established rule that where there is any doubt as to the validity of a tax, such doubt must be resolved in favor of the taxpayer. City of Little Rock v. Ark. Corp. Comm., 209 Ark. 18,189 S.W.2d 382, and McFeeley v. Comm., 296 U.S. 102,56 S. Ct. 54, 80 L. Ed. 83, 101 A.L.R. 304. *Page 400
In view of the authorities above cited, it seems to me that there could be no doubt but that the taxes imposed here are unconstitutional.
The decree should be affirmed.