dissenting.
On December 28,1970, the City of Kansas City filed suit against John Deere Company for collection of Occupational License Tax deficiencies for the years 1966 to 1970, inclusive, pursuant to Chapter 21 of the Code of General Ordinances of Kansas City. John Deere Company is classified, for the purposes of this appeal, as a merchant doing business in Kansas City. On February 25, 1976, John Deere filed a motion for summary judgment on the ground that Kansas City’s taxing ordinance, as applied to defendant’s class, imposed non-uniform rates of tax on the class, thus violating Mo.Const. Art. X, § 3. On April 2, 1976, plaintiff moved for summary judgment on this issue. The trial court granted summary judgment for defendant, and plaintiff appealed.
The alleged unconstitutionality of appellant’s taxing scheme arises out of § 21.8 of the Code of General Ordinances, which provided, during the period in question:
“Sec. 21.8. Classification, duration, pro-ration.
All licenses, except as otherwise specifically provided for by ordinance, shall be due on and issued as of January first of the current year and shall expire on December thirty-first of such year. They shall be known as annual licenses and no license shall be issued for more than one calendar year, provided that in the case of a business or occupation newly established at a particular location within the city after the first of a calendar year, a license, to be known as a preliminary license, may be issued as of the date of the beginning of such business or occupation and for the remainder of the current year, upon payment of the fee, or the original portion thereof as herein provided, and upon compliance with other re*638quirements of this chapter, provided that the annual fee, including minimum fees, shall be prorated and paid for the number of months remaining in such calendar year, including the month during which such business or occupation started operations; and provided further, that no such preliminary license may be prorated for less than two dollars ($2.00); and provided further, that in cases in which the preliminary license fee is based on gross annual receipts, or gross annual business, such preliminary license may be issued, as the licensee may elect, for the minimum preliminary license period, or the preliminary license fee may be estimated on the basis of anticipated business and adjusted at the end of the preliminary license period on the basis of the actual gross receipts, or gross business done during such period.”
Defendant-respondent asserts that the use of one tax base to calculate the tax due from a new merchant and a different base to calculate the tax due from an existing merchant violates Mo.Const. Art. X, § 3, which provides:
“Taxes may be levied and collected for public purposes only, and shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax. All taxes shall be levied and collected by general laws and shall be payable during the fiscal or calendar year in which the property is assessed. Except as otherwise provided in this constitution, the methods of determining the value of property for taxation shall be fixed by law.”
The trial court held § 21.8 violative of Art. X, § 3 because the tax was not uniform on all merchants within Kansas City’s territorial taxing jurisdiction, relying on City of Cape Girardeau v. Fred A. Groves Motor Co., 346 Mo. 762, 142 S.W.2d 1040 (1940), which held an almost identical taxing scheme unconstitutional.
Appellant maintains that § 21.8 does not violate Art. X, § 3 because § 21.8 subclassi-fied merchants into those which are new and those which have been in existence for more than one year. This subclassification is achieved, according to appellant, via the issuance of “preliminary” licenses to those merchants who have done business for less than one year and the issuance of “annual” licenses to those merchants with on-going businesses. Kansas City thus maintains that since the tax imposed on each of these separate classes is uniform, there is no constitutional violation.
The general rule regarding the classification of subjects for taxation is stated in 84 C.J.S. Taxation § 36:
“[WJithin constitutional limitations, the state has power to classify persons or property for purposes of taxation, and the exercise of such power is not forbidden by the constitutional requirement that taxation be uniform and equal. So the legislature may arrange and divide the various subjects of taxation into distinct classes and impose different rates on the several classes, or tax one class to the exclusion of the others, without violating the requirement of equality and uniformity, and it may exercise wide discretion in selecting and classifying the subjects of taxation, provided the tax is uniform on all members of the same class, and provided the classification of the subjects of taxation is reasonable and provided the classification of the subjects of the taxation, as has been held, is not arbitrary.”
While there is no precise method of determining the reasonableness of a classification, the classification cannot be “palpably arbitrary.” Barhorst v. City of St. Louis, 423 S.W.2d 843 (Mo. banc 1968). There can be no discrimination between taxable subjects which properly belong to the same class. State v. Metropolitan St. Louis Sewer District, 365 Mo. 1, 275 S.W.2d 225 (banc 1955).
Thus, the issue on this appeal is whether it is reasonable for § 21.8 to classify merchants into those doing business for less than one year and those conducting businesses for a longer period of time.
In Pratt & Whitney Aircraft Corp. v. Unemployment Compensation Commission, 354 Mo. 1017, 198 S.W.2d 1 (bane 1946), this Court upheld the constitutionality of an un*639employment compensation statute which provided for varying contributions by employers depending on the length of time each had been engaged in business. In Pratt, the statute in question provided for three classes of employers: (1) those employers who had payrolls in 1939, 1940 and 1941; (2) those employers who did not commence business prior to the 1939-1941 period, but who did commence business before 1941; and (3) those employers who had not been in business two full calendar years prior to 1943. Each of these groups was required to pay a different rate of unemployment compensation contribution. This Court upheld the classifications against an attack which alleged that the statute improperly used the time of commencing business as the sole basis for classification, because the classes were designed to carry out the entire purpose and scheme of the section, which was the assessment of contributions based on employment experience. The classifications were held to be fair and reasonable because:
“[T]he date fixed was not arbitrarily chosen without any just relation to the intended objects of this amendment; . the classifications were not based solely upon the time element; . . . the basis was the dividing line between normal prewar peacetime economy and abnormal war economy.”
Unlike the situation in Pratt, the basis here for Kansas City’s attempted classification of businesses into those which have been doing business for more than one year and those which have been doing business for less than one year is the time element and the administrative convenience which such classification based on time involves. A distinction based solely on length of time doing business is unreasonable where no other distinguishing feature separates a natural class. Cf. Elder v. Smith, 188 Ga. 65, 2 S.E.2d 670 (1939). As stated in City of Cape Girardeau v. Fred A. Groves Motor Co., supra, 346 Mo. at 771-72, 142 S.W.2d at 1045:
“[A]ll automobile dealers within the ordinance definition of automobile dealers are engaged in precisely the same business. There is no natural and substantial difference, inhering in the subject matter with respect to localities, persons, occupations or property, between the automobile dealers who have been engaged in business for a number of years and those who have been engaged in such business for less than a year within a given city justifying any distinction for the purposes of taxation for revenue. . . . Broadly put, constitutional class legislation must include all who belong and exclude all who do not belong to the class. Legislative departments of governmental authorities may not split a natural class and arbitrarily designate the dissevered factions of the original unit as distinct classes and enact different rules for the government of each.”
Since Kansas City’s attempted classification of merchants based on length of time in business is unreasonable as splitting a natural class, the classification fails. Section 21.8 is unconstitutional because the tax it imposes is not uniform on all subjects within the same class.
I respectfully dissent.