I dissent. At the time the various things occurred that are involved in this controversy, the defendant corporation was operating under the authority of the laws of the state of Delaware and was authorized to do business in Montana April 6, 1934. It ceased to do business in Montana October 6, 1937, and on the following December 6th filed with the Secretary of State of the State of Montana documents evidencing the fact that its corporate existence had been voluntarily terminated in the state of Delaware. It failed to make any return of its income for that year. The State Board of Equalization of the State of Montana, by virtue of the provisions of section 2303.3 of Chapter 205, Revised Codes, demanded that the defendant make such return. The defendant complied with the demand under protest, but refused to pay the tax levied by the board upon such return. This action followed. The amount of the tax as levied, with interest, penalty and costs was recovered by the state in the action in the district court, and the defendants appealed.
The defendants' only contention is that the tax paid in 1937 entitled the corporation to carry on its business in the state for that year. When defendants began business in Montana in 1934 they were granted a license for which they paid nothing, and when at the close of business for the fiscal year of 1934 the corporation's books showed a net profit it was taxed on such net income and that tax was the consideration it paid for doing business in 1934. The tax could not be levied and collected until the following year for the simple reason that its net income could not be determined in advance; hence the license was issued for the current year and the tax was levied and collected in the following year; the net income being the basis of the levy.
This corporation license tax, in all its material provisions, is very similar to the Individual Income Tax Act, Chapter 204 of the Political Code, and likewise very similar to the Express Companies' License Tax, Chapter 206; the Sleeping Car License *Page 340 Tax, Chapter 207; the Coal Mines License Tax, Chapter 208; the Coal Retailers' License Tax, Chapter 209; the Electrical Energy Producers' License Tax, Chapter 210; the Metalliferous Mines License Tax, Chapter 211; the Telegraph License Tax, Chapter 212; the Cement Producers' License Tax, Chapter 213; the Cement Dealers' License Tax, Chapter 214; the Carbon Black Producers' License Tax, Chapter 215; the Gasoline License Tax, Chapter 216; the Oil Producers' License Tax, Chapter 217; and the Natural Gas Distributors' License Tax, Chapter 218. All these Acts are grouped in the Political Code, beginning with Chapter 204 and ending with Chapter 218, and the basis for the levy in each chapter is either the amount or the production had or income enjoyed, and all are made due and collectible after such production is had or income determined, and necessarily the basis in any case must be for some prior period. The production or income, as the case may be, in the particular enterprise is the yardstick that measures the amount of the license collected.
At the 1933 session of the legislature, Chapter 166 was enacted by which a number of sections were added to the old law, amongst which was section 2303.3. That section provides: "Every corporation which shall be dissolved or cease to do business in this state during any tax paying year, shall make its return and pay the tax due, for such period as it transacted business, on or before the date of such dissolution or cessation of business. The state board of equalization may grant a reasonable extension of time for filing a return upon good cause shown therefor." Section 2303.3 was obviously enacted for the specific purpose of taking care of such a contingency as is involved in the case at bar.
There is nothing strange or confusing about the Act under consideration. It expressly takes the income of the year prior to the year the tax is collected as the basis of the tax, and its provisions are similar to all other tax laws, both in this state and others, which are grounded on income or production. It is not retroactive in any particular. *Page 341
The records in the office of the State Board of Equalization of the State of Montana, of which we take judicial notice by virtue of subdivision 3 of section 10532, Revised Codes, show the facts as to the computation and collection of the license tax from the defendant corporation in such manner as amounts to a mathematical demonstration of the erroneous conclusions of the majority. Such facts are as follows:
"March 8, 1935 — tax collected on 1934 net income ________ $1,014.00 October 27, 1937 — additional tax do _____________________ 367.19 _________ Total tax collected on net income for 1934 _______________ $1,381.19
____
March 1, 1936 — tax collected on 1935 net income _________ $ 800.59 Oct. 27, 1937 — additional tax do ________________________ 131.30 _________ Total tax collected on net income for 1935 _______________ $ 931.89
____
March 10, 1937 — tax collected on 1936 net income ________ $1,155.56 June 11, 1937 — additional tax collected on 1936 net income _________________________________________________ 577.78 _________ Total tax collected on net income for 1936 _______________ $1,733.34"
____
It is difficult to understand how anyone is unable to grasp the essential fact that the defendant corporation paid no license tax on its net income for the year 1937 which tax was due and payable when it ceased to do business in the state, or at such time thereafter as may have been fixed by the State Board of Equalization, if good cause were shown why further time should be granted, as provided by statute. The majority clearly absolves this foreign corporation from a clear obligation to the state and deprives the state of money to which it is justly entitled.
Section 2303.3 does not impose any additional tax, but in cases where a corporation ceases to do business in the state *Page 342 the section merely becomes operative to bring to maturity the obligation to pay the tax for such part of the last fiscal year that the corporation carried on business in the state without deferring the date of return or date of payment which applies to those continuing in business. The necessity for such a law to meet such a contingency as exists in the case at bar is too manifest to require elucidation. A foreign corporation, such as the defendant, might cease to do business in the state, remove its assets from the state and compel the board to go into a foreign jurisdiction to collect the tax, if it were not for section 2303.3.
The judgment of the district court should be affirmed.
Rehearing denied May 16, 1942. *Page 343