delivered the opinion of the Court.
*152Mrs. Edith. Tolies Sanborn, appellant here, filed a bill in the Chancery Conrt of Davidson County, to have a determination of the legality of the action of the defendant Commissioner in assessing for taxation under the Hall Income Tax Law, certain property of the appellant. The Attorney General was made a party under the direction of the Declaratory Judgments Statute. The Chan-c ell or held that the assessment was legal and proper and from this action the appeal has been perfected.
Appellant is the beneficiary of the following Connecticut Trust, created by the will of her father:
“I give and bequeath to said The Naugatuck National Bank, its successors and assigns, the equivalent of Fifty •Thousand ($50,000) Dollars in real and personal property, in trust and upon the following uses and trusts:
“ ‘(a) To hold, manage and care for the same and collect the income therefrom.
“ ‘ (b) To pay over to my said daughter, Edith Tolies Sanborn, from the principle and income therefrom, a sum of money not in excess of Twenty-four Hundred ($2400.00) Dollars, in each year, so long as my said daughter shall live.’ ”
• During the year 1938, which is the year for which the attempted assessment is made, appellant received a total income from this trust of $2,400, of which amount it is admitted, $1,739.74 was derived from income on stocks and bonds. The balance of $660.26 was derived from encroachment on the corpus of the trust and no tax is attempted to be levied on that amount.
It is insisted by the Commissioner that his authority to make the assessment and collect the tax on $1,739.74 is to be found in section 1123(28) of Michie’s Code, 1123.-29 of Williams’ Code, which is as follows:
*153“Besidents of Tennessee who receive income from trnst estates located without the State of Tennessee, any portion of which is invested in securities, the income from which is taxable under this law whether said trust estate be revocable or irrevocable, shall file with the commissioner of finance and taxation, as part of his income tax return a sworn statement of the trustee, executor or other administrator of said trust estate showing what portion of the total income received by such Tennessee resident from such estates was derived from securities, the income from which is taxable under this law. And if such resident of Tennessee fails to file such sworn statement from the trustee, executor or other administrator, then he shall report for income taxation in the manner otherwise provided in the law the entire amount of income received by him from such trust estate.” (Emphasis ours.)
In upholding- the validity of the Hall Income Tax Law and particularly the section quoted above, this Court has said:
“This statute by.plain and unambiguous language imposes a tax on incomes received from stocks and bonds by each natural person residing within the state. This applies to complainant. The fact that the income is received through the medium of a trustee rather than direct from the obligor is immaterial. The person who enjoys the benefits of the income is the party against whom the statute is directed.” Ross v. McCabe, 166 Tenn., 314, 317, 61 S. W. (2d), 479, 480.
In the case of Ross v. McCabe, the trust was created under the laws of New York, and the facts are identical with those of the case before us, except that it appears from the opinion that the legacy there subjected to taxation was not an annuity but income derived from property *154held'in trust. In that case, Mrs. Lida M. Ross had received varying amounts for the years of the assessment; $8,452.40' for the year 1929, $8,388.40 for the year 1930, and $7,041.14 for the year 1931.
The appellant here is, under the provisions of the will above quoted, to receive $2,400 per year for life, without contingency or condition, and if the income from the trust property is insufficient, the trustee is directed to encroach upon the corpus to make up the fixed amount. Clearly this provision of the will creates an annuity.
“ ‘Income’ is distinguished from ‘annuity’ in that ‘income ’ means profits to be earned, the amount of which is not fixed or certain but is contingent on the amount of •earnings, whereas an ‘annuity’ is a fixed amount directed to be paid absolutely and without contingency.” 3 C. J. S., Annuities, Sec. 1, p. 1374.
If, therefore, income is to be distinguished from annuity, income is not an annuity, and an annuity is not taxable as income. “Annuities are taxable as personal property,” 2 Cooley Taxation (4th Ed.), section 571, and upon assessment ad valorem. Wilkin v. Board of Com’rs, 77 Okl., 88, 186 P., 474; Chisholm v. Shields, 21 Ohio Cir. Ct. R., 231; Wetmore v. State, 18 Ohio, 77.
Denying the right to tax an annuity as income, the Supreme Court of the United States said:
“As held below, the bequest to Mrs. Whitehouse was not one to be paid from income, but of a sum certain, payable at all events during each year so long as she should live. It would be an anomaly to tax the receipts for one year and exempt them for another simply because executors paid the first from income received and the second out of the. corpus. The will directed payment without reference to the existence or absence of income.” *155Burnet v. Whitehouse, 283 U. S., 148, 151, 51 S. Ct., 374, 375, 75 L. Ed., 916, 918, 73 A. L. R., 1534.
Tli'e distinction was drawn in Massachusetts, where there is one rate of taxation on annuities as such, and another on income generally, in a case which involved a trust providing for the payment of $250 per month out of income, and it was there held that the levy was to be made at the rate of the income tax, rather than that for annuities, the lesser rate, since the trust was payable on condition that profits were made on a principal sum and it was not payable in a fixed amount in any event. Tirrell v. Commissioner of Corporations and Taxation, 287 Mass., 464, 192 N. E., 77.
This distinction is clearly recognized and discussed with the citation of numerous authorities in our case of Overton v. Lea, 108 Tenn., 505, 526-538, 68 S. W., 250.
In passing the Hall Income Tax Law, which has to do solely with income from stocks and bonds, there was no reason for the Legislature to make a specific exemption of annuities, because annuities as such, have no necessary connection with income from stocks and' bonds. Such income, when the stocks and bonds are not taxed ad valorem, is the limit placed by the Constitution on the authority of the Legislature to levy an income tax in Tennessee. Many annuities, besides the most numerous kind which are a by-product of insurance, have no relation to stocks and bonds. They are payable out of the corpus of an estate, from rents on real estate, or from the profits of a business, and would not be within legislative contemplation when passing an income tax law under limits fixed by the Constitution of Tennessee.
We have held that Appellant received an annuity under the will of her father as quoted above, and we think that *156when this annuity comes into the jurisdiction of the taxing authorities of Tennessee, it is an entity and has lost the characteristics of the property from which it is derived. This is effectually the holding in the opinion of Burnet v. Whitehouse, supra. There is no authority under the provisions of our Constitution for the taxation of annuities as income.
It results that the decree of the Chancellor must he reversed and the assignments of error sustained. The case is remanded to the Chancery Court of D'avidson County for the entry of a decree in accord with the prayers of the Original Bill.