(dissenting) :
Under § 14 of the Oklahoma Turnpike Act (69 O.S.1971, § 1714) “* * * the bonds issued under the provisions of this Article, their transfer and the income therefrom (including any profit made on the sale thereof) shall at all times be free from taxation within the State.”
The word “taxation” in this section is not qualified or limited in any way, and there can be no doubt as to what it means. In First Nat. Bk. & Tr. Co. of Tulsa v. Oklahoma Tax Commission, Okl., 447 P.2d 441 (1968) we said that § 14 creates “an exemption from all forms of taxation, without any limitation as to the type or character of the taxes, for three separate and distinct things: (a) the bonds themselves, and (b) income from the bonds, including (but not limited to) any profit made on the sale thereof, and (c) any ‘transfer’ of the bonds.” (Emphasis supplied).
In my view, the particular name given to the tax herein, classifying' it as to form or type or character, is immaterial, and the paramount consideration is that the tax is “measured” by the value of the bonds. That being true, it can no longer be said that these turnpike bonds are “free from taxation within the State.” Rather, it is felt they are specifically, even if indirectly, taxed.
Similarly, it is viewed as immaterial that 68 O.S.1971, § 1203 levies the franchise or excise tax upon “every corporation * * * ” instead of upon the bonds. As a practical matter, the ultimate fact is that every tax is levied upon the taxpayer. Note that in First National, quoted above, we said that § 14 creates an exemption from taxation “for three * * * things” and not upon three things. The difference in choice of prepositions is a matter of semantics. It was immaterial in First National and is believed to be immaterial here.
In connection with the suggested conclusion in this case that the franchise tax is levied upon the organization itself and not upon “the assets constituting the ‘capital’ ”, it is believed a more realistic appraisal of § 1203 is to be found in Personal Loan & Finance Co. v. Oklahoma Tax Commission, Okl., 437 P.2d 1015, 1019 (1968). In that case (not precisely in point) we said of § 1203 of the Franchise Tax Code at pg. 1019 “ * * * the evident intent of the Legislature being that capital used, invested or employed within this State be subjected to the tax.” At another place on the same page we said “Under the provisions of § 1203, supra, the Legislature levied a franchise tax on the amount of capital used, invested and employed by domestic corporations in Oklahoma.” I am unable to reconcile the statements in Personal Loan that “capital * * * invested * * * be subjected to the tax” and that the franchise tax is “on the amount of capital * * * invested” with the conclusion here suggested that the tax “is not levied upon assets constituting the ‘capital’.”
*214Further, it is believed to be immaterial that the stated purpose of § 1203 is to require the payment of a franchise tax “for the right granted by the laws of this State to exist * * as a corporation with corporate rights, privileges and immunities. The exemption granted by § 14 of the Turnpike Act is not conditioned upon the purpose for which the tax is levied. In view of the clear and unambiguous language of § 14, it can hardly be said that an exemption from taxation for one purpose was intended but that an exemption from taxation for another purpose was not.
There is another, and perhaps moré basic, reason why I must respectfully dissent. In my view, § 14 of the Turnpike Act, and § 1203 of the Franchise Tax Code, when construed together, as herein suggested, amount to a violation of the second sentence of Article 10, Section 5, of the Oklahoma Constitution, which provides that “Taxes shall be uniform upon the same class of subjects.”
In Power, Inc. v. Huntley, 39 Wash.2d 191, 23S P.2d 173 (1951) the Washington Supreme Court considered attacks upon the constitutionality of a strikingly similar statute and held that it violated the uniformity clause of the Washington Constitution, which provides that “All taxes shall be uniform upon the same class of property * * Note that the Oklahoma uniformity clause is even broader than the Washington clause, not being limited to property taxes.
In that case, the Washington Supreme Court considered “An Act * * * imposing an excise tax upon corporations * * *” which provided in § 7 that the' affected corporation “* * * for the privilege of exercising its corporate franchise in this state or for the privilege of doing business in this state, shall annually pay to the state, in addition to annual license fees, an excise tax according to, or measured by, its net income equal to four per cent of such net income * *
One of the attacks made upon the constitutionality of the tax was that, since it was not levied upon competing businesses of the same kind owned by individuals or partnerships, the uniformity clause was violated. Because the Washington uniformity clause is limited to property taxes the court first held that “income” is “property”. As to the argument that the tax was a franchise or excise tax and not a property tax, the court quoted language from an earlier decision to the effect that “ * * * the legislative body cannot change the real nature and purpose of an act by giving it a different title or by declaring its nature and purpose to be otherwise, any more than a man can transform his character by changing his attire or assuming a different name.” The court then said “We have no hesitancy in saying that an analysis of the present act convinces us that the tax is a mere property tax ‘masquerading as an excise’.”
In summarizing its holding near the end of the opinion, the Washington Court said:
“The so-called ‘corporate excise tax’ is in truth and fact not an excise tax but a tax on property, i. e., income, and, as the property of corporations may not be subjected to a tax not imposed upon the property of competing copartners and individuals, it violates the uniformity provision of our state constitution.”
Keeping in mind that the Oklahoma uniformity clause is not limited to ad valorem or property taxes, and paraphrasing the language of the Washington court, it is my view that the franchise tax of construction suggested in this case is in truth and fact a tax upon turnpike bonds and, as the same tax is not imposed upon turnpike bonds in the hands of individuals or copartnerships, the uniformity clause of the Oklahoma Constitution is violated.
Of course if the value of the turnpike bonds is deducted from the “amount of capital * * * invested” before the tax is computed, there is no violation of the uniformity clause. On a related question this Court said in In re Assessment of First *215Nat. Bank, 58 Okl. 508, 160 P. 469 (1916), L.R.A.1917B, 294:
“Where the tax is in fact laid upon the franchise of a corporation, although measured by the amount of its capital stock, the manner in which the capital is invested is not material. But if the tax is really upon the property or assets of the corporation, as represented by its capital, allowance must be made for such portion of the capital as is invested in nontaxable property.”
In my view, these sections of the statutes, construed as suggested, also amount to a violation of the clauses of state and federal constitutions prohibiting the state from impairing the obligation of contracts. In 1916 in In re Assessment of First Nat. Bank, supra, this Court considered certain public building bonds declared by the statute to be “non-taxable for any purpose.” In paragraphs 7, 8 and 9 of the syllabus, this Court held:
“The intention of the Legislature to exempt the bonds from taxation being indubitable, the right to tax such bonds, whether directly or in legal effect, can be exercised under no circumstances, and is not therefore dependent upon the character of the owner or the statute under which the tax is assessed.
“State public building bonds issued and sold pursuant to the act of March 15, 1911, and which by the terms of the act, as well as by express recital in the bonds, are made nontaxable, constitute a binding contract between the holder of such bonds and the state, which the latter under the guise of taxation may not constitutionally impair.
“The constitutional inhibition, both state and federal, against impairing contract obligations, is a limitation upon the taxing power, as well as all legislation, whatever form it may take.”
I believe that the phrase “free from taxation”, as applied to turnpike bonds in § 14 of the Oklahoma Turnpike Act, is just as broad and comprehensive as the phrase “nontaxable for any purpose” in the statute considered in the above case, and that the legislative intention is just as “indubitable”. If this is true, the bonds cannot be constitutionally taxed regardless of “the character of the owner or the statute under which the tax is assessed.”
•In my view, any tax law of this state which has the effect of increasing the tax burden of any taxpayer because he owns turnpike bonds is unconstitutional as an impairment of the obligation of the purchase contract.
The holding of the United States Supreme Court in Macallen Co. v. Massachusetts, 279 U.S. 620, 49 S.Ct. 432, 73 L.Ed. 874, 65 A.L.R. 866, appears to me to be controlling in the situation now before us, at least as regards the impairment clause of the United States Constitution.
The controversy in that case concerned the state’s right to tax the interest received on both federal and state bonds. The Massachusetts statute in effect when the bonds were sold did not tax the interest, or income, from the bonds. After they were sold, Massachusetts enacted, or amended, a statute taxing domestic corporations “with respect to the carrying on or doing of business”. Under that statute, similar to the franchise tax involved in the case now before us, the tax was “measured” by a formula which included net income; and “net income” was defined in such a way as to include the interest on the federal and state bonds.
Obviously, with regard to the federal bonds involved, the “subject” of the tax in that case — the interest or income from the bonds — was not the same as the “subject” in this case — the turnpike bonds themselves. Nevertheless, the principal argument raised by the Attorney General of Massachusetts with regard to the taxability of the “subject” there involved was substantially the same as the principal argument here, with regard to the “subject” here involved. It was to the general effect that the tax in question was not a tax on a nontaxable subject — income from the bonds • — but was merely “ * * ' * an excise laid *216upon Massachusetts business corporations for the privilege of doing business, measured * * * in part by the net income of each such corporation for the year preceding that during which the privilege was enjoyed.” (Emphasis supplied). He made the same argument specifically with respect to the state bonds involved. See the summary of the arguments at 73 L.Ed., page 876, or 65 A.L.R. page 868.
In evaluating that argument, the United States Supreme Court used language that is particularly appropriate here. After noting the “carefully drawn” opinion of the Supreme Judicial Court of Massachusetts holding that the tax was not a tax upon income but an excise “ ‘with respect to the carrying on or doing of business’ ” (264 Mass. 396, 163 N.E. 75), the United States Supreme Court said:
“ * * * neither state courts nor Legislatures, by giving a tax a particular name, or by using some form of words, can take away our duty to consider its nature and effect, [citations]. And this court must determine for itself by independent inquiry whether the tax here is what, in form and by the decision of the state court, it is declared to be, namely, an excise tax on the privilege of doing business, or, under the guise of that designation, is in substance and reality a tax on the income derived from tax-exempt securities. If by varying the form ■ — that is to say, if, by using one name for a tax instead of another, or imposing a tax in terms upon one subject when another is in reality aimed at — the substance and effect of the imposition may be changed, constitutional limitations upon powers of taxation would come to naught.”
After citing various cases in which the United States Supreme Court had held that a tax laid “in terms” upon one subject was in effect a tax upon another (nontaxable) subject and therefore unconstitutional, the Court in Macallen quoted the familiar statement of Justice Marshall in the historic case of McCulloch v. Maryland, 4 Wheat. 316, 431, 4 L.Ed. 579, 607, that “ ‘the power to tax involves the power to destroy,’ ” and said:
“ * * * These constitute compelling reasons why courts, in scrutinizing taxing acts like that here involved, should be acute to distinguish between an exaction which in substance and reality is what it pretends to be, and a scheme to lay a tax upon a nontaxable subject by a deceptive use of words. The fact that a tax ostensibly laid upon a taxable subject is to be measured by the value of a nontaxable subject at once suggests the probability that it was the latter rather than the former that the law-maker sought to reach.”
We have noted that in Macallen, both federal bonds (United States Liberty Bonds; Federal Farm Loan Bonds) and state, county and municipal bonds were involved. As to the federal bonds, other constitutional limitations, in addition to the impairment clause, were also applicable and discussed in the opinion of the Court. As to the state bonds, the Court noted that “The corporation also owned a large number of bonds of Massachusetts counties and municipalities which, when issued and acquired by the corporation, were exempt from taxation by the terms of a state statute.” The Court held the taxing statute unconstitutional as to both federal and state bonds, saying that “ * * * as to the latter, the act impairs the obligation of the statutory contract of the state by which such bonds were made exempt from taxation.” (Emphasis supplied).
The state bonds involved in Macallen were made tax exempt by virtue of Mass. Gen.Laws Ann., Ch. 59, § 5, paragraph 25, which extended the exemption to “Bonds or certificates of indebtedness of the commonwealth issued since January first, nineteen hundred and six, and bonds, notes and certificates of indebtedness of any county, city, town * * * in the commonwealth, *217issued on or after May first, nineteen hundred and eight, stating on their face that they are exempt from taxation in Massachusetts.” Note that as to the state bonds in Macollen, as in the case now before us, the “nontaxable subject” was the bonds themselves, and not merely the income therefrom. In my view, the language of the tax exemption in the Oklahoma Turnpike Act — “at all times free from taxation in the State” — is even stronger than the language in the Massachusetts statute.
It is fair to say. that the United States Supreme Court used some rather blunt language in Macollen with regard to the motives of. the Massachusetts Legislature. I most assuredly do not ascribe similar motives to our Legislature, or to the opinion of the majority in this case.
The basis of this dissent, as to the impairment question, goes to the ascertainment of the intention of our Legislature in enacting the Oklahoma Franchise Tax Code. I cannot believe that in enacting a general franchise tax code without repealing the very specific tax exemption contained in the Oklahoma Turnpike Act, our Legislature actually intended that tax exempt turnpike bonds should be used' as a basis to “measure” the amount of the tax.
A later United States Supreme Court decision is helpful in the situation now before us by way of illustration. See J. D. Adams Manufacturing Company v. Storen et al., 304 U.S. 307, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429. That case involved, among other things, the question of whether the application of a gross income tax to the interest received from municipal bonds amounted to a violation of the impairment clause of the United States Constitution. The bonds themselves had previously been exempt from taxation. In that case the Court concluded that there was no violation of the impairment clause and sustained the tax. The holding was plainly based upon a conclusion that the original exemption in that case extended only to ad valo-rem taxation, upon the bonds themselves, and this conclusion was supported by the fact that the exemption statute was an integral part of the tax code dealing with property or poll taxes.
The same cannot be said in the case now before us. The broad and comprehensive tax exemption in this case is contained in an entirely separate statute — the Oklahoma Turnpike Act — which has not been repealed. It is an exemption “from all forms of taxation without any limitation as to the type or character of the taxes.” I agree with the majority that the franchise tax here need not be denominated an ad valo-rem tax, but I think that circumstance is immaterial because of the broad language of the exemption in the Oklahoma Turnpike Act.
I cannot escape the conclusion that the opinion of the majority in this case necessarily rests upon an unrecognized premise that our Legislature, “by using one name for a tax instead of another,” intended to place a tax upon a nontaxable subject. I would not ascribe such an intention to our Legislature.
In a proper case, this Court has the same duty as the United States Supreme Court to enforce federal constitutional limitations. See Article 1, Section 1; and Article 15, Section 1, Oklahoma Constitution.
I respectfully dissent.
I am authorized to state that Mr. Justice JACKSON concurs in the views herein expressed.