Appellant, a private corporation organized under the laws of the State of New York for the purpose of carrying on the business of fire, marine and inland navigation insurance, filed its bill against appellee as county treasurer and collector of Cook county, praying for an injunction to restrain the collection of a certain tax hereinafter referred to. A temporary injunction was granted as prayed, and on final hearing a stipulation of facts was entered into, and the court entered a decree making the injunction permanent as to a certain amount of the tax not in dispute here and dismissed the bill of complaint as to the remainder for want of equity.
The tax complained of was that assessed under section 30 of the Fire and Marine Insurance act of 1869 as amended. (Cahill's Stat. par. 169, p. 73.) It is shown by the stipulation of facts that from May 1, 1922, to April 30, 1923, and for some years prior thereto, appellant conducted the business of fire insurance in the town of South Chicago, in Cook county, through agencies which it maintained there. It regularly procured the license issued by the Department of Trade and Commerce, and has annually paid the tax of two per cent on its gross premium receipts to the State under an act in relation to the taxation of nonresident corporations, etc., approved June 28, 1919. (Laws *Page 368 of 1919, p, 628.) In 1923 the agents of appellant in the town of South Chicago made no return of net receipts to the board of assessors of Cook county. That board therefore entered as appellant's net receipts the sum of $90,000, added thereto a penalty of $45,000, and took one-half of this total amount, or $67,500, upon which to assess the tax required. The board of review fixed the net receipts of appellant at the sum of $90,824 and took the same at its full amount for assessment purposes. All personal property in Cook county except the net receipts of foreign fire insurance companies was scaled and debased in value, one-half the "full value" being taken for assessment purposes.
It is contended by appellant that section 30 of the Fire, Marine and Inland Navigation Insurance act is unconstitutional and void for the reason that it violates section 1 of article 9 of the constitution of Illinois by imposing a tax which is not imposed on domestic fire insurance companies or casualty companies; that such tax is not a privilege tax but is either a tax on property or a tax on business, and that, as either, it violates the constitutional provision as to uniformity. It is also said this section is void in that it violates the equal protection and due process clauses of the fourteenth amendment to the constitution of the United States. The further contention is made that even though the statute be held valid, the tax on net receipts must be assessed as personal property and scaled and debased as such.
Section 30 is as follows: "Every agent of any insurance company, incorporated by the authority of any other State or government, shall return to the proper officer of the county, town or municipality in which the agency is established, in the month of May, annually, the amount of the net receipts of such agency for the preceding year, which shall be entered on the tax lists of the county, town and municipality, and subject to the same rate of taxation, for all purposes — State, county, town and municipal — that other personal property is subject to at the place where located; *Page 369 said tax to be in lieu of all town and municipal licenses; and all laws and parts of laws inconsistent herewith are hereby repealed: Provided, that the provisions of this section shall not be construed to prohibit cities having an organized fire department from levying a tax or a license fee, not exceeding two per cent, in accordance with the provisions of their respective charters, on the gross receipts of such agency, to be applied exclusively to the support of the fire department of such city."
Section 1 of article 9 of the State constitution is as follows: "The General Assembly shall provide such revenue as may be needful by levying a tax, by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her or its property — such value to be ascertained by some person or persons, to be elected or appointed in such manner as the General Assembly shall direct, and not otherwise; but the General Assembly shall have power to tax peddlers, auctioneers, brokers, hawkers, merchants, commission merchants, showmen, jugglers, innkeepers, grocery keepers, liquor dealers, toll bridges, ferries, insurance, telegraph and express interests or business, vendors of patents, and persons or corporations owning or using franchises and privileges, in such manner as it shall from time to time direct by general law, uniform as to the class upon which it operates."
Some of the questions involved here were before this court inPeople v. Kent, 300 Ill. 324, and People v. Barrett, 309 id. 53, and were there decided against appellant's contentions here. Appellant argues, however, that what was said in the Kentcase pertaining to the questions involved here was not necessary to the decision of the case and was wrong and should not be adhered to, and that the Barrett case, having been based on the Kent case, is wrong and should be overruled. In that case, as in the case at bar, extended briefs were filed by able counsel, some of whom *Page 370 appear here, and the points involved were fully argued. An examination of the briefs filed in the Barrett case shows that counsel for various foreign insurance companies, appearing either as representing parties or as amici curiae, there attacked this act on the ground that it is unconstitutional as violating section 2 of article 4 and sections 9 and 10 of article 9 of the State constitution and the fourteenth amendment of the United States constitution. It was there also contended that if the statute was valid the net receipts must be taxed as personal property, to be scaled and debased as in other cases of personal property taxed. It was argued in theBarrett case, as here, that contemporaneous construction on the part of the executive department of the State has continued for a sufficient length of time to be of controlling force.
People v. Kent, supra, was an action in mandamus against the respondent, as agent for various foreign fire insurance companies, to require him to make return of net receipts to the board of review in accordance with section 30 of the Fire, Marine and Inland Navigation Insurance act. In awarding the writ of mandamus it was held as a basis of that decision, and not as obiter dictum, as is argued, that the tax levied on the net receipts of such foreign insurance companies was not a property tax but was assessed on the business of insurance done; that the regulations relating to personal property tax had no application to the tax there provided. It was also held that there existed in the legislature power and authority to adopt the methods prescribed by which the amount of the tax is to be determined. In People v. Barrett, supra, it was again held that the tax on net receipts of foreign insurance companies is not a personal property tax and not entitled to be scaled or reduced. It was also there held that section 30 is not unconstitutional as violating section 10 of article 9 of the Illinois constitution, requiring uniformity of taxation, and that since the tax was not a property tax but a tax on the business of insurance *Page 371 done, it does not violate section 1 of article 9 of the constitution.
Appellant contends that if the Barrett case is right in holding that the tax in question in that case is a tax on insurance business done in the State, then such tax is a property tax and not an excise tax, and that since this is so, the act, which requires foreign fire insurance companies to pay this tax while foreign casualty companies and domestic fire insurance companies are not required to pay the same, is void as against the uniformity clause of section 1 of article 9 of the State constitution and in violation of the equal protection clause of the fourteenth amendment to the constitution of the United States. It is said that this court having held that this is a tax on business, either a logical or legal possibility of its being considered a privilege tax is precluded; that a privilege tax was by the act of 1919, hereinbefore referred to, levied as the consideration for the privilege of coming into the State to do business, while a tax on business is that levied after the insurance company has been allowed to do business in the State and is therefore levied on the property of a person within the State, and whether it be considered a property tax or a business tax, it is under either view subject to the constitutional requirement of uniformity, and is not in any view a privilege tax such as is authorized by the latter clause of section 1 of article 9 of our constitution, empowering the legislature to tax "insurance, telegraph and express interests or business."
The General Assembly has power to prescribe the terms and conditions upon which foreign corporations, other than corporations engaged in interstate commerce and those constituting instrumentalities of the United States government, shall be allowed to do business in this State. The legislature has, if it desires to use it, power to prevent foreign corporations from entering or transacting any business within the borders of this State. Alpena Cement Co. v. Jenkins *Page 372 Reynolds Co. 244 Ill. 354; Raymond v. Hartford Fire Ins. Co. 196 id. 329; Hartford Fire Ins. Co. v. City of Peoria, 156 id. 420; Walker v. City of Springfield, 94 id. 364;Western Union Telegraph Co. v. Lieb, 76 id. 172; Ducat v. Cityof Chicago, 48 id. 172; People v. Thurber, 13 id. 554; WesternUnion Telegraph Co. v. Kansas, 216 U.S. I; Paul v. Virginia, 8 Wall. 168.
It is not contended that the legislature of this State may not levy such privilege tax as it chooses without regard to the constitutional provisions compelling uniformity and equal protection of the laws, but it is said that the tax here involved, having been held to be a tax on business, cannot be considered a privilege tax. This is a misconception of the term "tax on business." Having a right to prohibit a foreign corporation from entering the State to do business, it follows that the legislature may exact such compensation for that privilege as it sees fit and levy the same in any manner or by any method it chooses. The tax provided by section 30 does not purport to be a property tax. Net receipts, of course, are personal property. The right given to the legislature to provide for the levying of taxes on property requires that the property be valued by an assessor or some person provided by the law to fix the valuation thereof. The Revenue act, in compliance with this mandate, provides that the assessor fix the value of such personal property as of the first day of April. It will be noted that under section 30 complained of, the net receipts of foreign insurance companies such as appellant are not to be valued by an assessor or other authority, nor is the assessment to be based on property having a situs in this State on April 1. In fact, it is not required that the net receipts acquire or retain a situs in this State at any time. It is a tax on the amount of business done and for the privilege of continuing in such business, and the net receipts of such business are used as the basis of determining that tax. Such net receipts and the method prescribed *Page 373 constitute the thing and the means by which is to be determined the amount which foreign fire, marine and inland navigation insurance companies shall pay to the State, and to the various municipalities included in the act, as compensation for the right to do business in the State and in such municipalities. Section 30 provides that this tax shall be "in lieu of all town and municipal licenses," except for the support of organized fire departments. No constitutional prohibition exists against such a tax as a condition to the right to do business. A tax on business as provided in this act, is not, as argued, to be distinguished from a privilege tax. Considered as either, it is a tax on the right to do business in this State and is subject to no constitutional limitations, except that it be "uniform as to the class on which it operates." Walker v. City ofSpringfield, supra; People v. Thurber, supra; Pembina MiningCo. v. Pennsylvania, 125 U.S. 181; Scottish U. M. Ins. Co. v.Herriott, 109 Iowa, 606.
The fact that a tax is a privilege tax does not necessarily require that it be paid as a condition precedent to entering the State. Such a condition, being precedent, could, of course, be met but once. However, the greatest financial benefit to such a company flows from the continuation of the privilege to do business. Compensation for that privilege should be based on the benefits actually derived from the business done under such privilege, and such compensation must necessarily be assessed in some manner after the business is done and the benefits thereof received. Section 30 provides the method by which the amount of this compensation shall be determined and assessed.
Counsel for appellant argue that the fact that the act requires that these net receipts shall be entered on the same tax lists and be subject to the same rate of taxation, for all purposes, as other personal property is entered and is subject, shows that it is a personal property tax; that its payment is not made a condition to the right to do business *Page 374 in the State, and that it therefore cannot be considered a privilege tax. This is a misconception of the provisions of the statute pertaining to this tax.
Section 22 of the act relating to fire, marine and inland navigation insurance, aside from specifying certain requirements imposed upon foreign insurance companies seeking to do business in this State and specifying what shall be necessary to secure the right of entry, further provides: "Nor shall it be lawful for any agent or agents to act for any company or companies referred to in this section, directly or indirectly, in taking risks or transacting the business of fire and inland navigation insurance in this State, without procuring annually from the Insurance Superintendent a certificate of authority, stating that such company has complied with all the requisitions of this act which apply to such companies and the name of the attorney appointed to act for the company." The provisions of section 30 requiring the return of net receipts of this tax are a part of the "requisitions of this act." It is evident, therefore, from the language of section 22 quoted, that before appellant may continue in business in this State its agent shall procure annually from the Insurance Superintendent of the State or his successor in law, a certificate showing that it has complied with the requirements of section 30 with reference to this tax. Such certificate cannot be lawfully issued without such showing. This act provides no other means of collecting such tax and no reference is made for its collection.
That it was the intention of the legislature that the payment of this tax be made a condition upon which the business of fire insurance may be continued in this State by a foreign insurance company is further shown by an act entitled "An act providing a penalty for a violation of section 30 of an Act entitled: 'An Act to incorporate and govern fire, marine and inland navigation insurance companies doing business in the State of Illinois,' approved and *Page 375 in force March 11, 1869," approved June 22, 1893. (Smith's Stat. 1923, p. 1157.) The first section of that act declares that any foreign insurance company coming under the provisions of the act of 1869, authorized to do insurance business in this State, which places risks or policies of indemnity upon property located in this State in any other manner except through its regularly authorized agents, shall be deemed to have violated section 30 of the Fire, Marine, etc., act herein referred to. By section 2 of that act any company so violating section 30 shall have its authority to transact business in the State revoked by the Auditor of Public Accounts for a period of not less than ninety days, and when so revoked it shall not be re-issued until such insurance company has shown "complete compliance with the laws of this State governing fire, marine and inland navigation insurance companies," and has shown that all taxes and penalties and expenses due thereunder have been paid. It seems clear, therefore, that this tax is levied as compensation for the privilege of continuing their business in the State.
While the act of 1919, entitled "An Act in relation to the taxation of non-resident corporations, companies and associations for the privilege of doing an insurance business in this State," approved June 28, 1919, (Laws of 1919, p. 628,) imposes an annual State tax equal to two per cent on the gross amount of premiums received by any foreign insurance company during the preceding year, less certain specified deductions, for the privilege of doing business in this State, that fact does not show that the tax imposed on the business of fire insurance by section 30 is not likewise a tax for the privilege of doing business. The act of 1919 requires that the tax there levied be paid to the State. Section 30 requires that the tax be apportioned among the State and the different municipalities of the situs of the agency. A valid reason is seen for this distribution of the tax. The foreign fire insurance company takes its net proceeds largely from the vicinity of its agencies, and it is but just that it *Page 376 return to the municipality in which its agency is located something in lieu of the taxes that would otherwise be realized from such net receipts as are taken away.
The power to tax insurance interests or business is expressly conferred by the second clause of section 1 of article 9 of the constitution. That section also requires that the act of the General Assembly creating such tax shall operate uniformly as to the class to which it applies, and appellant argues that since domestic fire insurance companies make the same sort of contract, transact the same sort of business and are likewise doing business within the State, they belong to the same class as foreign fire insurance companies which have been permitted to come into the State, and that therefore a tax levied against the latter which the domestic fire insurance companies do not have to pay is not uniform, as required by the section of the constitution referred to. Counsel are in error in supposing that for purposes of taxation under this section of the constitution foreign and domestic insurance companies belong to the same class because they are doing the same kind of business within this State. There is no reason why insurance companies may not be divided into classes, the very point of distinction in which shall be the domicile of such companies, — i. e., whether foreign or domestic. The levying of taxes upon foreign fire insurance companies and not upon domestic companies of the same character, as compensation for the right to do business, is not, therefore, an infraction of this provision of the constitution. Hughes v. City of Cairo, 92 Ill. 339; Ducat v.City of Chicago, supra; Walker v. City of Stringfield, supra;People v. Thurber, supra; Insurance Co. v. Bradley,83 S.C. 418.
In Home Ins. Co. v. Swigert, 104 Ill. 653, it was held that not only can the legislature classify insurance companies into domestic and foreign but may likewise divide foreign insurance companies into classes for purposes of taxation; that such companies cannot complain of a classification *Page 377 which is made the basis for admitting them into this State even though such insurance companies are put in different classes, for the reason that the State may exclude them entirely, and, therefore, in permitting them to enter may impose whatever conditions it chooses. Nor is there in this any injustice. Foreign insurance companies have or may have in this State on April 1, when assessments on personal property are made, practically nothing of value, while domestic fire insurance companies are assessed for all of their holdings, both real and personal, including their choses in action, little, if any, of which tax is paid by foreign insurance companies. If it were to be said that section 30 violates the uniformity clause of the constitution for the reason that foreign fire insurance companies, when admitted to this State, should not be required to pay any tax which domestic insurance companies do not pay, by the same token domestic insurance companies, who pay on all of their property, could justly complain that the Revenue law as applied to them is invalid for the reason that it, in effect, does not apply to foreign insurance companies doing a like business in the State, because such companies, by reason of the withdrawal of their net receipts, are able to escape all, or practically all, property taxation.
The contention of appellant that this tax is void for want of uniformity cannot be sustained.
Nor is section 30 open to the objection that it violates the equal protection clause of the fourteenth amendment to the constitution of the United States. The portion of the fourteenth amendment referred to provides: "No State shall make or enforce any law which shall abridge the privileges or immunities of the citizens of the United States, nor shall any State deprive any person of life, liberty or property, without due process of law, nor deny to any person within its jurisdiction, the equal protection of the laws." While a foreign insurance company may be a citizen, it is not a citizen of the State entitled to the equal protection of *Page 378 the laws of that State, as contemplated by the fourteenth amendment to the constitution of the United States, until it has complied with the conditions which entitle it to come and remain within the State. The only limitation upon the power of the State to prevent a foreign corporation from doing business within its limits, or to exact conditions for allowing a corporation to do business in the State, arises where the corporation is an instrumentality of the Federal government or where its business is strictly commerce, interstate or foreign.Pembina Mining Co. v. Pennsylvania, supra; Paul v. Virginia,supra; Pensacola Telegraph Co. v. Western Union Telegraph Co. 96 U.S. I; Missouri v. Lewis, 101 id. 22; HornSilver Mining Co. v. New York, 143 id. 305; Home Ins. Co. v.New York, 134 id. 594.
We are of the opinion that there is no equity in this portion of the bill of appellant and the superior court did not err in dismissing the same. The decree of that court will therefore be affirmed.
Decree affirmed.