Stalcup v. City of Gatlinburg

BROCK, Justice,

dissenting.

I respectfully dissent from the opinion and decision of the majority upon two grounds.

First, in my opinion, Chapter 387 of the Public Acts of 1971, the Business Tax Act, repealed by implication Chapter 328 of the Private Acts of 1955 upon the authority of which the 1% Gatlinburg gross receipts tax is based. Both taxes are levied upon gross receipts from sales by retail businesses, so that, the private act is inconsistent with the later general act which provides that municipalities of the State “. . . may levy a privilege tax in an amount not to exceed the rates hereinafter fixed and provided.” If Gatlinburg is allowed to levy the 1% gross receipts tax, which was authorized under the private act prior to the enactment of the general statute, it obviously is levying a privilege tax in an amount which does exceed the rates authorized by the general statute. In my view, this is a classic case of an implied repeal of a private act by a later general act covering the same subject. Trotter v. City of Maryville, 191 Tenn. 510, 235 S.W.2d 13 (1950).

I am of the further opinion that since the enactment of the 1971 public act the private act of 1955 is in violation of Article XI, Section 8, of the Constitution of Tennessee, as construed and applied in the recent decision of this Court in Brentwood Liquors Corporation of Williamson County v. Fox, Tenn., 496 S.W.2d 454 (1973). It was held in Brentwood that an earlier private act, enacted in 1957, which authorized Williamson County to levy and collect a privilege tax on retail liquor dealers of the county was in conflict with the same general statute here involved, Chapter 387 of the Public Acts of 1971, the Business Tax Act, and thus violated the provisions of Article XI, Section 8, of the Constitution of Tennessee, even though the private act be considered to affect Williamson County in its “governmental” capacity, as opposed to a private act which primarily affects the individual citizens of a county in their “private” capac*444ity. In an opinion by Chief Justice Dyer, the Court reviewed the pertinent decisions of this Court respecting the issue whether Article XI, Section 8, applies to special legislation which affects counties and municipalities in their “governmental” capacity only and concluded:

“We hold Article 11, Section 8 of the Constitution of Tennessee is applicable to private or special legislation affecting a county or municipality in the exercise of its governmental function, and where such legislation operates to suspend the general law on the same subject, the validity of such legislation is determined upon the issue of whether there is a reasonable basis for the discrimination.
“Chapter 276 of the Private Acts of 1957 recites no reasonable basis, nor can we conceive of any reasonable basis why a particular business in Williamson County should be subject to a different and higher tax than are similar businesses in all of the counties in the State.” Brentwood Liquors Corporation of Williamson County v. Fox, 496 S.W.2d at 457.

Applying the decision in the Brentwood case to the case at bar, I reach the same result reached by the Court in Brentwood. The Court of Appeals in the instant case agrees that Brentwood is controlling and that the Gatlinburg gross receipts tax authorized by the 1955 private act is inconsistent with the Business Tax Act, Chapter 387 of the Public Acts of 1971. Thus, the Court of Appeals states in its opinion that:

“We agree with the plaintiff that the Brentwood decision controls the case at bar on the issue that the private act which authorized the Gatlinburg gross receipts tax is inconsistent with the Business Tax Act because it imposes on the businesses of that city a ‘different and higher’ tax.”

However, the Court of Appeals upheld the validity of the private act upon the ground that the dominant business activity in Gat-linburg is that of tourist attractions and resort facilities and that this constituted “a reasonable basis for the discrimination.”

The private act itself does not recite any “reasonable basis for the discrimination” and, indeed, none was required at the time of its enactment because the Business Tax Act had not then been enacted. Moreover, I am aware of no fact which may be considered a reasonable basis for this discrimination in favor of the City of Gatlinburg. There is no evidence whatever that those means of taxation, to which all other cities in the state are restricted, are inadequate to furnish needed revenues to Gatlinburg. Instead, the record shows that the property tax rate per $100 assessed valuation is only $0.85 in Gatlinburg, a rate which certainly would be the envy of the great majority of other municipalities in this state. Moreover, Gatlinburg does not even impose a sales tax although the vast majority of Tennessee municipalities find it necessary to impose such a tax.

Accordingly, I would reverse the judgment of the Court of Appeals and that of the trial court and hold that Chapter 328 of the Private Acts of 1955 is invalid and that the ordinance enacted pursuant thereto is likewise of no effect.