(concurring).
The sole issue presented by this opinion revolves around the proper interpretation of Section 181 of the Kentucky Constitution as it relates to the imposition of a license tax by municipalities. For ease of interpretation, the section should be divided into four parts. Kentucky Constitution, Section 181, provides:
“(1) The General Assembly shall not impose taxes for the purpose of any county, city, town or other municipal corporation, but may, by general laws, confer on the proper authorities thereof, respectively, the power to assess and collect such taxes.
*260(2) The General Assembly may, by general laws only, provide for the payment of license fees on franchises, stock used for breeding purposes, the various trades, occupations and professions, or a special or excise tax, and
(3) may, by general laws, delegate the power to counties, towns, cities and other municipal corporations, to impose and collect license fees on stock used for breeding purposes, on franchises, trades, occupations and professions, and
(4) the ' General Assembly may, by general laws only, authorize cities or towns of any class to provide for taxation for municipal purposes on personal property, tangible and intangible, based on income, licenses or franchises, in lieu of an ad valorem tax thereon.”
Pursuant to Section 181 the General Assembly enacted KRS 92.280 and 92.281 which granted municipalities the authority to levy all those taxes which were permissible under Section 181.
The question now arises as to what taxes are permissible under Section 181. There can be no doubt that a municipality can levy a license tax, since under Section 181 (3) that right is specifically designated. However, the authority of cities to levy the much broader excise tax is not nearly so clear. Under Section 181(2) it is specified that the General Assembly can, by general power, levy excise taxes. But, in designating what authority the General Assembly could delegate to municipalities, the power to levy an excise tax is omitted. Whether the omission was intended, or merely an oversight, is not clear. In any event, the question has long been settled by this court. It has consistently held that municipalities with delegated authority from the General Assembly cannot levy an excise tax. George Wiedemann Brewing Co. v. City of Newport, Ky., 321 S.W.2d 404 (1959); see also City of Louisville v. Sebree, 308 Ky. 420, 214 S.W.2d 248 (1948).
The problem which now faces us arises because a license tax is, according to most authorities, a form of an excise tax. Thus, the municipality is always faced with the problem when enacting a license tax that it might be enacting some other form of excise tax which in fact is unconstitutional. The courts in determining whether or not a city has acted within its constitutional boundaries must first determine what distinguishes a license tax from other excise taxes. An excise has been defined as a species of tax consisting generally of duties laid upon the manufacture, sale or consumption of commodities within the state, or upon certain callings or occupations, often taking the form of exactions for licenses to pursue them. In a more modern sense an excise is any tax which does not fall within the classification of a poll tax or a property tax and embraces every form of burden not laid directly upon persons or property. Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 15 S.Ct. 673, 39 L.Ed. 759; Booth Ex’r v. Commonwealth, 130 Ky. 88, 113 S.W. 61, 65 (1908); see also 51 Am.Jur. Taxation, § 36, p. 65.
As for what is a license tax it would seem that it is that portion of an excise tax which is imposed on the privilege of exercising certain callings, professions, or vocations. Shanks v. Kentucky Independent Oil Co., 225 Ky. 303, 8 S.W.2d 383 (1929); Levi v. City of Louisville, 97 Ky. 394, 30 S.W. 973 (1895). This tax is generally measured by a flat rate or by such bases as capital stock, capital surplus, number of units or capacity. Usually excluded are taxes measured directly by transactions, gross or net income, or value of property except to those to which only nominal rates apply.
This court on occasion has attempted to make a distinction between the two taxes. In Shanks v. Kentucky Independent Oil Co., supra, the state enacted a corporate license tax which the appellant had paid. Subsequent thereto the state passed a three-cent gasoline tax under which the *261Appellant was required to pay three cents on each gallon of gasoline. The appellant contended that this was merely a second license tax and amounted to double taxation. This court affirmed on the theory that the gasoline tax was not a license tax, but by its nature was an excise tax. In making the distinction the court stated as follows:
“A license tax or tax for the privilege of doing business is sometimes referred to as an excise, as are all forms of taxation which are not burdens laid directly upon persons or property. The three-cent tax on gasoline imposed by the 1924 act, however, is an excise in the original and limited sense, being something cut off from the price paid on a sale of goods, as a contribution to the support of the government. A careful reading of the act convinces us that the tax imposed was not intended as a license tax or a tax for the privilege of engaging in the business of selling gasoline in the state. What is taxed is the-thing itself as an article of consumption and the tax is an excise on consumption or use and not on the act of selling.
⅝ ⅝ ⅝ ⅜ ⅝ ⅜
“The distinction between an excise tax on the use of a thing and a direct tax upon the thing itself is, of course, fundamental, and a license tax for the privilege of engaging in a particular business is essentially different from each of these forms of taxation. * * * Under this section the Legislature, in addition to the ad valorem tax provided for by section 171, may provide that a license tax shall be paid by any person, firm, or corporation for the privilege of engaging in a specified occupation, and also an excise on the consumption or use of articles sold by such person, firm or corporation. The fact that the seller is required to collect and account for the last-named tax does not alter its character or convert it into a license tax.”
It would thus appear from this case that for an enactment to be a license tax it must be levied upon the privilege of engaging in a specific occupation, trade or business. It cannot be levied in such a manner that it in effect is a tax on consumption, use or sale.
This court has said that a municipality cannot levy a license tax unless the authority has specifically been delegated by the legislature. City of Harrodsburg v. Devine, Ky., 418 S.W.2d 426 (1967); City of Louisville v. Sebree, supra; West v. City of Mount Sterling, Ky., 65 S.W. 120 (1901); Baker v. City of Lexington, Ky., 53 S.W. 16 (1899). If the municipality has that authority, then it can classify certain occupations in order to tax them, but that classification must be reasonable and not arbitrary. Great Atlantic and Pacific Tea Co. v. Kentucky Commission, et al., 278 Ky. 367, 128 S.W.2d 581 (1939); Karnes v. City of Benton, 258 Ky. 425, 80 S.W.2d 558 (1935). In addition, any license tax that is levied must be uniform as to the occupation and if there is a classification then uniform as to the class. Hager, Auditor v. Walker, 128 Ky. 1, 107 S.W. 254 (1908); George Schuston & Co. v. City of Louisville, 124 Ky. 189, 89 S.W. 689 (1905).
It appears from our reported cases that we recognize as valid the imposition of a license tax based upon three theories: (1) A uniform tax upon all persons engaged in the same business without reference to the amount of business done; (2) One that levies a uniform tax upon the volume of business done without changing it in the proportion that the business increases, the percent being the same; and (3) a division of a general class according to the volume of business done, and the imposition of a different tax upon each division into which the class is divided. Gordon v. City of Louisville, 138 Ky. 442, 128 S.W. 327 (1910).
The municipal license tax in its inception was a regulatory tax which was levied *262across the hoard at a flat or even rate regardless of the amount of business done. Thus, all who were engaged in advertising or bill posting, Loges v. City of Louisville, 141 Ky. 367, 132 S.W. 565 (1910); contractors doing work within the city limits, City of Winchester v. King, Ky., 266 S.W.2d 343 (1954); those who engaged in the practice of law, Woodruff v. City of Louisville, Ky., 6 Ky.Opin. 230 (1872); Baker v. City of Lexington, Ky., 53 S.W. 16 (1899); all exchange, loan, and broker’s offices, Simrall v. City of Covington, 90 Ky. 444, 14 S.W. 369 (1890); all hawkers and peddlers, City of Carlisle v. Hechinger, 103 Ky. 381, 45 S.W. 358 (1898); those doing business as insurance companies, German Washington Mut. Fire Ins. Co. v. Louisville, 117 Ky. 593, 78 S.W. 472 (1904), are all subject to municipal license taxes. This tax, levied directly on the privilege of doing business within a city, based on a flat rate, is the pure license tax and is easily distinguished from the remaining excise taxes.
However, soon the imposition of a license tax became one of the important means by which municipalities sought to raise revenue. Pursuant to this thesis the cities began to levy a uniform tax based upon the volume of business done. It is in this area where municipalities link the so-called license tax to volume of business done that the distinction between a license and an excise tax becomes nebulous at best. This type tax was early upheld in Southern Building and Loan Ass’n of Knoxville v. Norman, 94 Ky. 294, 32 S.W. 952. Here a tax of 2% of the gross receipts of all foreign corporations was imposed by the state and upheld as a valid license tax. Likewise, in Fidelity & Casualty Co. v. City of Louisville, 106 Ky. 207, 50 S.W. 35 (1899), a 2% tax imposed on every insurance premium paid in the city was upheld as a valid license tax. In Brown-Forman Co. v. Commonwealth, Ky., 101 S.W. 321 (1907), a tax of one and one-fourth cents per gallon of distilled spirits manufactured was upheld as a valid license tax. See also Greene v. Taylor, Jr., 184 Ky. 739, 212 S.W. 925 (1919). This line of cases is hard to distinguish from other cases where this court has said that such taxation on volume or gross receipts is an excise. In Shanks v. Kentucky Independent Oil Co., supra, the state passed a gasoline act requiring a three-cent tax on each gallon of gasoline. There the court said that such a tax on volume was an excise in its original or limited sense. A similar decision was handed down in City of Louisville v. Churchill Downs, 267 Ky. 339, 102 S.W.2d 10. In that case it was contended that the imposition of a tax on gross receipts derived from the operation of a race track as a place of amusement or entertainment was the duplication of a daily license tax for the privilege of engaging in that business. In that case the court noted that the original tax was a license tax. However, it declared that the tax on the gross receipts was purely an excise tax.
Perhaps it is clear to those more adept in legal gymnastics than I why in one instance a tax on volume or gross receipts is a license tax, and in the next is purely an excise.
If the reader up to this point thinks the law is in a state of utter confusion, behold the next series of encounters. The City of Louisville enacted Ordinance 83, Series 1950, providing:
“On or after July 1, 1950, every person, association, corporation or other entity engaged in any occupation, trade, profession, or other activity in the City shall pay into the Sinking Fund of the City for the purposes set forth under Section 91.200 of the Kentucky Revised Statutes as amended by an Act of the General Assembly of 1950, an annual license fee for the privilege of engaging in said activities, which license fee shall be measured by one per centum of (a)all salaries, wages, commissions and other compensations earned by every person in the City for work done or services performed or rendered in the City; and *263(b) the net pofits of all businesses, professions, or occupations from activities conducted in the City.”
The Ordinance further made provisions for the withholding by employers of the tax from salaries of employees and provided that the term net income from operation of business or enterprise shall be determined by the same method used for reporting federal income tax. There can no longer be any doubt but what this Ordinance imposed an income tax practically identical to that imposed by the federal government. It was attacked in the courts and this court in a lengthy, utterly confusing, opinion held the tax to be a license tax. See City of Louisville v. Se-bree, supra. The substance of the court’s opinion is contained in the following paragraph.
“This Louisville ordinance lays the tax upon the privilege of working and conducting a business within the city, and only measures the value of the privilege by the amount of earnings or net profits. It is contended that this is but a subterfuge to avoid the absence of power and that, looking beyond the matter of form to the matter of substance, it is but an income tax. The definition or classification may be a matter of approach or point of view. Sometimes one may not see the woods for the nearby trees. The psychological impact loses force when emphasis is placed on what is made subject to taxation rather than on the measure of the tax and the basis of computation. Or if the word ‘receipts,’ which, in truth, is the more appropriate term, be used instead of ‘income.’ If graduated stated sums had been provided instead of a percentum of receipts or net profits, the source of such sums would in all probability have been the same. And that way of fixing the tax could scarcely be regarded as illegal. Cf. George Schuster & Co. v. City of Louisville, 124 Ky. 189, 89 S.W. 689. The sting of feeling that an unlawful tax has been imposed would then be eased by the recognition of certain legitimacy.” (Emphasis added).
In substance the court held that a city council might have levied this tax in another way and it would have been valid, therefore, it was going to hold the tax valid notwithstanding its obvious invalidity. It is my opinion this type of reasoning thoroughly brands itself for what it really is, without comment from me. But the history does not stop here. In 1952 the tax was attacked by the employees of the Naval Ordinance Plant located in Louisville, Kentucky, contending that they were not subject to the tax since it was in fact a license tax as this court had held and federal employees were not subject to license tax. This court in one of the most beautiful pieces of legal gymnastics ever exhibited held the employees to be wrong in their contention that they were subject to the tax as the tax was an income tax. See Commissioners of Sinking Fund of City of Louisville v. Howard, Ky., 248 S.W.2d 340, wherein the court’s ruling upon this point reads as follows:
“The appellees point out that the Congressional Act of 1940 authorizes only the levy of an ‘income tax,’ and that in City of Louisville v. Sebree, 308 Ky. 420, 214 S.W.2d 248, 253, this court specifically held the Louisville occupational tax was not an income tax. It is true we held in the Sebree case that the tax was not an„income tax within the meaning of the Kentucky Constitution, but the question here is whether it is an income tax as that term is defined in the Act of Congress. As previously pointed out in this opinion, the Act of Congress defines ‘income tax’ to include any tax ‘measured by’ net income, gross income or gross receipts. We said in the Sebree case that the Louisville tax is a license tax which ‘measures the value of the privilege by the amount of earnings or net profits.’ The tax clearly falls within the definition made by the Act of Congress.”
*264This holding was appealed to the Supreme Court of the United States. That court in Howard, et al. v. Commissioners of the Sinking Fund of Louisville, et al., 344 U.S. 624, 73 S.Ct. 465, 97 L.Ed. 617, agreed with the Kentucky Court of Appeals that the tax was in fact an income tax. Mr. Justice Black and Mr. Justice Douglas dissented, saying:
“I have not been able to follow the argument that this tax is an ‘income tax’ within the meaning of the Buck Act. It is by its terms a ‘license fee’ levied on ‘the privilege’ of engaging in certain activities. The tax is narrowly confined to salaries, wages, commissions and to the net profits of businesses, professions, and occupations. Many kinds of income are excluded, e. g., dividends, interest, capital gains. The exclusions emphasize that the tax is on the privilege of working or doing business in Louisville. That is the kind of a tax the Kentucky Court of Appeals held it to be. Louisville v. Sebree, 308 Ky. 420, 214 S.W.2d 248. The Congress has not yet granted local authorities the right to tax the privilege of working for or doing business with the United States.”
I wholeheartedly agree with these two Honorable Justices. I am also unable to follow the argument. I cannot see how a tax can on one hand be a license tax and on the other be an income tax, which is absolutely forbidden under "the Constitution. Nowhere else in the law is a party litigant permitted to have it both ways as the City of Louisville did in this instance.
Most recently in Second Street Properties v. Fiscal Court of Jefferson County, Ky., 445 S.W.2d 709 (1969), we had a tax very similar to the one here before us and approved it. However, no contention was made by the parties that it violated Section 181 of the Kentucky Constitution, therefore, that question was not considered. The majority opinion in discussing this states that the court is inclined to believe that the question was not presented because it was lacking in merit. I will not presume to ascribe motives to the parties litigant in that case. Suffice it to say that it was not presented and, therefore, was not considered. Had it been presented my position in that case would be the same as in this.
Admittedly there are fuzzy areas existing between what is a license and what is a purely excise tax. It would be impossible to clear up these areas in one opinion, therefore, I leave that task to other days and other cases. There are a few things that are definite and certain. First, Section 181 of the Kentucky Constitution only permits cities to levy license tax upon franchises, trades, occupations and professions. Before any person may be taxed his endeavors must fit one of these qualifications, otherwise the tax is clearly void.
Second, sales taxes and income taxes are admittedly by all authority excise taxes and cannot be levied by cities.
Third, where a tax has all of the attributes of either a sales tax or an income tax and no real earmarks of the ancient license tax, it cannot be reasonably called a license tax. To do so only confuses the law and confounds those who must operate under it.
In retrospect it now appears that there is little doubt but what the occupational tax as was enacted by the City of Louisville in Ordinance 83, Series 1950, was in violation of Section 181. However, this court found otherwise. Based upon that decision, many other cities have adopted either highly similar or identical taxes. For us to recant at this time and declare that type ordinance invalid would be to invalidate practically all occupational license taxes in this Commonwealth. I do not believe this is a course that is practical nor would it demonstrate the degree of wisdom that the people have a right to expect from their judicial officials. The die is now cast and I will not disturb *265these taxes. However, by the same token, I am convinced that we cannot permit the adoption by the cities of an outright sales tax under the guise of a license tax.
It is my opinion that the tax here under consideration is clearly a sales tax on the rental of motel rooms, therefore, an excise tax in violation of Section 181 of the Constitution of this Commonwealth. I would affirm the action of the trial court in this case.
REED and NEIKIRK, JJ., join in this concurring opinion.