State ex rel. Stiner v. Yelle, 174 Wash. 402, 25 P.2d 91 (1933).

 402    STATE EX REL. STINER v. YELLE.
                     Statement of Case.           174 Wash.

           [No. 24637. En Banc. September 8, 1933.]
     THE STATE OF WASHINGTON, On the Relation of Will T.
      Stiner, Plaintiff, v. CLIFF YELLE, as State
                Auditor, Respondent. 1

[1] LICENSES (3) - TAXATION (6, 13) - OCCUPATIONS AND PRIVILEGES
- CONSTITUTIONAL REQUIREMENTS - UNIFORMITY - EXCISE TAXES.
The privilege of engaging in business and gainful pursuit
under the protection of laws for the security of property
after it is acquired, is not property within the 14th
amendment of the constitution, defining property as
"everything tangible or intangible, subject to ownership;"
and Laws of 1933, p. 869 (Rem. 1933 Sup., SS 8326-1 et seq.),
levying a sales or occupation tax on such privilege and
specified classes of business activities, is an excise tax
not subject to the uniformity clause applicable to taxes on
property.

[2] LICENSES (3) - OCCUPATIONS - CONSTITUTIONALITY OF ACTS -
UNIFORMITY - REVIEW. The legislature has a very wide
discretion in classifying business activities for the purpose
of levying excise taxes, and the courts cannot interfere
therewith except for clear abuse of discretion.

[3] STATUTES (2-2) - ENACTMENT - VETO - DISAPPROVAL OF PORTION OF
BILL. In exercising the veto power, the governor acts as part
of the legislature, and a veto of parts of an act leaves the
balance to be considered as the only bill passed.

[4] LICENSES (3, 8) - OCCUPATIONS AND PRIVILEGES - UNIfORMITY AS
TO OCCUPATIONS - EXEMPTIONS. Laws of 1933, p. 869 (Rem. 1933
Sup., SS 8326-1 et seq.), levying a sales or occupation tax
on the gross income of certain classes of business and
defining "business" as including all activities engaged in
with the object of gain, is not unconstitutional by reason of
excluding those engaged in agriculture and those rendering
personal or professional services.

Application filed in the supreme court June 13, 1933,
for a writ of mandate to compel the state auditor to
honor a voucher for services rendered. Granted.


1 Reported in 25 P.2d 91.

                STATE EX REL. STINER v. YELLE.           403
 Sept. 1933              Opinion Per TOLMAN, J.

Yantis & Brodie, for relator.

The Attorney General and John W. Hanna, Assistant,
for respondent.

Wright, Jones & Bronson, Grinstead, Laube, Laughlin
& Meakim, and E.W. Anderson, amici curiae.

TOLMAN

STEINERT, MITCHELL, MAIN, and MILLARD, JJ., dissent.

TOLMAN, J. - This is an action instituted in this court
for the purpose of testing the constitutionality of
chapter 191, Laws of 1933, p. 869 [Rem. 1933 Sup.,
SS 8326-1 et seq.], imposing a tax on the privilege of
engaging in business in this state. Relator seeks a
writ of mandate to compel the respondent, as state
auditor, to honor a voucher duly presented for services
rendered by him at the behest of the state tax commission
in forwarding its preparations to administer the
act. The auditor refuses to recognize the voucher upon
the ground that the act is unconstitutional. Hence, we
have here only the one broad question as to the
constitutionality of the act as a whole. No lesser or minor
questions as to the reasonableness of the several
classifications, as to the difference in rates as between the
classes, or any other such question has been presented
to us, and no such question is to be pre-judged by
anything here said.

Without entering into a history of conditions giving
rise to this legislation, it is sufficient to say that the
legislature was confronted by a situation of the utmost
gravity requiring the prompt and effective raising of
much additional revenue and making necessary the
placing of a heavy tax burden upon every available
source from which taxes might legally be drawn, or
from which revenue might be derived, without causing
more harm and loss than the depressed state of industry
could bear. Faced with this situation, chapter 191
was enacted, which is entitled:

 404    STATE EX REL. STINER v. YELLE.
                    Opinion Per TOLMAN, J.           174 Wash.

"An Act relating to taxation; imposing taxes upon
the privilege of engaging in business activities and
providing for the ascertainment, assessment, collection
and distribution thereof; providing for the administration
and enforcement of this act; providing penalties;
making appropriations; and declaring that this act
shall take effect immediately."

Section one of the act contains definitions of certain
of its terms, one or two of which will be set out and
referred to as we proceed.

Section two (p: 871) provides:

"From and after the first day of August, 1933, and
until the thirty-first day of July, 1935, there is hereby
levied and there shall be collected from every person
an annual tax or excise for the privilege of engaging
in business activities. Such tax or excise shall be
measured by the application of rates against values,
gross proceeds of sales, or gross income, as the ease
may be, as follows: . . ." [Rem. 1933 Sup., SS 8326-2.]

Then follows the legislative classification of business
into some twenty general classes, several of which are
subdivided and subjected to different rates. The act,
by reason of the governor's veto, had eliminated from
it, when it finally became a law, those engaged in
agriculture, using the term in its broad sense, and also
those engaged in rendering services, professional or
otherwise, and it is upon the omission of those classes,
and others, if any such there be, from the act that the
argument as to its unconstitutionality is now based.

The Attorney General, and the friends of the court
appearing in defense of the action, appear to rely
primarily upon the 14th amendment to the Federal
constitution; SS 3 of Art. I of the state constitution,
which is to the same effect and provides, "No person
shall be deprived of life, liberty, or property without
due process of law ;" Art. I, SS 12, of the constitution,

                STATE EX REL. STINER v. YELLE.           405
 Sept. 1933              Opinion Per TOLMAN, J.

which forbids special privileges or immunities; and
Art. VII, SS 1, being the 14th amendment to the state
constitution, which provides:

"The power of taxation shall never be suspended,
surrendered or contracted away. All taxes shall be
uniform upon the same class of property within the
territorial liners of the authority levying the tax and
shall be levied and collected for public purposes only.
The word 'property' as used herein shall mean and
include everything, whether tangible or intangible,
subject to ownership. All real estate shall constitute one
class: Provided, That the legislature may tax mines
and mineral resources and lands devoted to reforestation
by either a yield tax or an ad valorem tax at
such rate as it may fix, or by both. Such property as
the legislature may by general laws provide shall be
exempt from taxation. Property of the United States
and of the state, counties, school districts and other
municipal corporations, and credits secured by property
actually taxed in this state, not exceeding in value
the value of such property, shall be exempt from
taxation. The legislature shall have power, by appropriate
legislation, to exempt personal property to the amount
of three hundred ($300.00) dollars for each head of a
family liable to assessment and taxation under the
provisions of the laws of this state of which the
individual is the actual bona fide owner."

[1] In the light of the constitutional provision, just
quoted, it seems necessary first to determine whether
the tax under consideration is a property tax or an
excise tax, because of the uniformity clause which
applies specifically to each class of property.

Relator, of course, bases his application upon the
idea that this is an excise tax pure and simple, while
the Attorney General and some of the friends of the
court defending, though not so conceding, appear by
the arguments presented to anticipate that we must so
hold. Yet another firm, appearing as amici curiae,
does argue this question extensively.

 406    STATE EX REL. STINER v. YELLE.
                    Opinion Per TOLMAN, J.           174 Wash.

Time and space will not permit a review of the
authorities on this question. Slight differences in the
terms of the acts considered, or in constitutional
provisions, have led to a maze of conflicting and
bewildering decisions. It may be that we have, in some prior
case, used language not wholly consistent with our
present views. After an exhaustive study of the cases,
we are well satisfied that this is not a property tax,
even under the broad and all inclusive terms of our
constitution. To hold otherwise would render it
exceedingly difficult if not impossible to sustain any
excise tax.

It is true that the constitution defines property as
anything subject to ownership and, in a sense, one's
business and its earnings are owned by him, but the
privilege of engaging in business and gainful pursuits
under the protection of our laws is something which
must and does exist before the business can be
established, and something far and away beyond and above
the mere ownership of a business. Man in a state of
nature gained his sustenance by his strength or cunning,
or both, and that which he so gained might, and
no doubt often was, taken from him before he could
use and enjoy it by someone stronger and more cunning.
Hence, the established state enacted laws for
the protection of human rights, the rights of property,
and to prevent the weak or the credulous from becoming
the helpless victims of the force or fraud of the
strong and the cunning.

Peace officers and courts, among many other things,
were established to this end, and every citizen is now
measurably safe in pursuing any gainful occupation
with the expectation that he will be by the state fully
protected and made secure in his property investment,
and also in his gains therefrom. This is the privilege,
far above mere property, which it is now sought to tax

                STATE EX REL. STINER v. YELLE.           407
 Sept. 1933              Opinion Per TOLMAN, J.

to the end that it may pay, in some part, its fair share
of the cost to the state of its creation and continuance.

Income may be acquired, but only in exceptional
cases, such as annuities and the like, is it susceptible
of ownership. When acquired, income immediately becomes
property in the hands of the acquirer, and it is,
of course, taxable with other property of the same
class.

This act does not concern itself with income which
has been acquired, but only with the privilege of
acquiring, and that the amount of the tax is measured
by the amount of the income in no way affects the purpose
of the act or the principle involved.

Among other authorities bearing upon the question
which support our view, we refer only to the following
few: Southern Railway Co. v. Watts, 260 U.S. 519;
Lawrence v. State Tax Commission, 286 U.S. 276, and
our own cases of Pacific Tel. & Tel. Co. v. Seattle,
172 Wash. 649, 21 P.2d 721; Puget Sound Power
& Light Co.v. Seattle, 172 Wash. 668, 21 P.2d
727; Bucoda v. Swaney, 163 Wash. 43, 299 Pac. 652;
Sumner v. Ward, 126 Wash. 75, 217 Pac. 502, and
prior cases therein cited. These seem sufficient to
decisively determine that we are now dealing with an
excise tax and not with a tax on property.

[2] This being an excise tax, the legislature, under
the 14th amendment to our state constitution, has very
broad power, and we cannot interfere with that power
except for arbitrary action, clear abuse, or constructive
fraud appearing on the face of the act or from
facts of which we may take judicial knowledge.

"A very wide discretion must be conceded to the
legislative power of the state in the classification of
trades, callings, businesses or occupations which may
be subjected to special forms of regulation or taxation
through an excise or license tax. If the selection or
classification is neither capricious nor arbitrary, and

 408    STATE EX REL. STINER v. YELLE.
                    Opinion Per TOLMAN, J.           174 Wash.

rests upon some reasonable consideration of difference
or policy, there is no denial of the equal protection of
the law." Brown-Forman Co. v. Kentucky, 217 U.S.
563.

See, also, Tax Commissioners v. Jackson, 283 U.S.
527, 73 A.L.R. 1464; Miethke v. Pierce County,
173 Wash. 381, 23 P.2d 405; and State v. Hart,
125 Wash. 520, 217 Pac. 45.

Having this rule at all times in mind, let us look at
the act for any evidence of capricious or arbitrary
action.

[3] In the first place, and to clear away immaterial
matters, it should be said that the governor's veto of
parts of the measure now means nothing whatsoever.
In exercising the veto power, the governor acts as a
part of the legislative bodies, and the act is to be
considered now just as it would have been if the vetoed
provisions had never been written into the bill at any
stage of the proceedings.

[4] We have, then, a measure which evidences the
purpose to tax the privilege of carrying on those
businesses which are, in a broad sense, commercial in their
nature, buying for resale at a profit, producing for
sale, transporting and financing for profit (which are
recognized as an important part of production), and
all like enterprises which look to the purpose of
bringing usable commodities of various sorts into the hands
of the ultimate consumer. These commercial businesses
are peculiarly dependent upon the state for protection
in order that they may be carried on successfully,
and they, more than all others, are responsible
for, and receive the benefit of, that which the state
expends in maintaining peace and order and the safety
of private property.

In the many classes and subclasses are included,
presumably, all occupations which, to the legislative

                STATE EX REL. STINER v. YELLE.           409
 Sept. 1933              Opinion Per TOLMAN, J.

knowledge, are so far motivated by the commercial
spirit as to make them properly taxable; and, in the
arguments addressed to this court, no omissions have
been suggested save only those engaged in agricultural
pursuits and those, rendering personal or professional
services.

To accent the argument that these omissions are
fatal to the act, great stress is laid upon the definition
of "business" contained in subdivision (7) of SS 1 of the
act. That definition is:

"The word 'business' shall include all activities
engaged in with the object of gain, benefit or advantage
either direct or indirect, and not excepting
sub-activities producing marketable commodities used or
consumed in the main business activity, each of which
subactivities shall be considered business engaged in
taxable in the class in which it falls." [Rem. 1933 Sup.,
SS 8326-1.]

But we see nothing in this definition which affects
the situation in any degree, or at all. The definition
is used to define "business" as the word is used in the
act; and wherever the word "business" is used in the
act, in all its several classes and subdivisions, it is
intended to include all activities engaged in for the
purpose of gain coming under each such class or
subdivision. Of course, the legislature was not engaged
in the idle task of defining words not used in the act
or for purposes not contemplated by the act. And
when the definition is applied to the act itself, it
broadens each class and subdivision so as to cover all
those activities which should come within that class or
subdivision. Consequently, as we see it, the legislative
definition has nothing whatever to do with any business
or occupation not made taxable by the act.

Keeping in mind, then, the broad purpose of the act
to tax those engaged commercially, it would seem that

 410    STATE EX REL. STINER v. YELLE.
                    Opinion Per TOLMAN, J.           174 Wash.

the exclusion of those engaged in agriculture is a most
proper one. Farming is not a commercial pursuit. It
is not a business in the sense used in this act. By
general knowledge and common consent, farming is classed
as a way of life by means of which, in more prosperous
times, the farmer gained a modest livelihood with
security and, perhaps, some financial gain from the rise
in land values which might enable him to provide a
measure of comfort for his old age. Except in the rare
instances of the so-called bonanza farms, no farmer
has ever been expected to amass a fortune or even any
considerable competency as a result of his productive
labors. If this state ever had anything approaching
the bonanza farm, recent years have annihilated it
completely and it is common knowledge that the
farmers of the state do not even earn laborer's wages
for the hours they are employed.

Moreover, the farmer's products, except some minor
items like fresh fruit and vegetables, do not enter
largely into the stream of commerce until after they
have left his hands and are processed in some manner.
The farmer's wheat goes to the mill to be made into
flour. His livestock goes to the packing house to be
turned into merchantable meat. All who buy from the
farmer for the purpose of processing and merchandising
come under the act and are properly taxed, because
the commercial element enters when they purchase
the farmer's product from him, and not until
then is that product in any fair sense within the spirit
of this act. Moreover, the farmer cannot pass the tax
to the ultimate consumer, while all those later dealing
with his products, like all others engaged in commercial
pursuits, may and probably will very largely do so.

Agriculture, therefore, lacking the commercial element
which is the very essence of the act, was properly
excluded.

                STATE EX REL. STINER v. YELLE.           411
 Sept. 1933              Opinion Per TOLMAN, J.

Much the same is true of those rendering services,
professional and otherwise. It needs no argument to
demonstrate that the wage earner is properly excluded,
and that upon no theory can he be classed with those
engaged in business. To tax him for the privilege of
being employed would be out of harmony with the
spirit of the act, and if such a tax would be collectible,
it would necessarily have to be deducted at the source,
and under present conditions, when the wage earner is
barely subsisting, the tax would have to be paid by the
employer and would thus subject him to double taxation
under the act.

To one who has long followed a profession, the
reason for the exclusion of professions seems equally
clear. While there may be those who commercialize
the professions, the rule to the contrary is very strict,
and it is, we trust and believe, generally obeyed by
those in the professions. A profession is not a money
getting business. It has no element of commercialism
in it. True, the professional man seeks to live by what
he earns, but his main purpose and desire is to be of
service to those who seek his aid and to the community
of which he is a necessary part. In some instances,
where the recipient is able to respond, seemingly
large fees may be paid, but to others unable to pay
adequately, or at all, the professional service is usually
cheerfully rendered. But whether so or not, the
commercial spirit which runs through this act is wholly
condemned by the ethics of every profession of which
we have judicial knowledge; and if there be violations
and abuses, those should be cured, rather than that the
whole of those engaged in professional service be
stamped with the brand of commercialism and taxed
accordingly.

The Attorney General relies very largely on a decision
by the supreme court of Illinois in the case of

 412    STATE EX REL. STINER v. YELLE.
                    Opinion Per TOLMAN, J.           174 Wash.

Winter v. Barrett, 186 N.E. (Ill.) 113, recently decided.
As we see it, the Illinois act there under consideration
greatly differs from our act. The title of the Illinois
act reads:

"An act in relation to a tax upon persons engaged
in the business of selling tangible personal property at
retail, the disposition thereof and making certain
appropriations in connection therewith."

The act was held bad by the Illinois court because it
excluded certain classes actually engaged in the
business of selling tangible personal property at retail.
Among other things, the Illinois court said:

"It will be observed, however, that this act does not
purport to be a tax upon the butcher, the baker, or like
occupations, as such, to the exclusion of those engaged
in other occupations. There is created but one class
to whom the tax is to be applied, and that class is
'persons engaged in the business of selling tangible
personal property at retail.' There is in this provision
no limitation upon the word 'persons,' and it must be
construed to include all persons engaged in such
business; the only exemption therefrom being inferred by
the above quoted language of the statute declaring that
certain property shall not be included within the
meaning of the term 'tangible personal property'."

The title of the act and this quotation seem to
indicate, to some extent, the difference between the
Illinois act and our own. This opinion is already
overlong, and cannot be extended by a detailed discussion
of the Illinois act and the Illinois decision. Suffice it
to say that we have carefully considered the decision
and the terms of the act as therein disclosed, and feel
quite confident that the Illinois decision is not
authority for holding our act to be unconstitutional. But,
even if it be, our confidence in the soundness of our
present views, even though inadequately expressed, is

                STATE EX REL. STINER v. YELLE.           413
 Sept. 1933     Dissenting Opinion Per STEINERT, J.

such that, greatly as we respect the Illinois court, we
must refuse to follow it.

The state is facing stark necessity. The legislature
has earnestly endeavored to meet this critical situation.
This law is, perhaps, not perfect. No tax law
yet devised has been entirely fair and just to all in its
practical workings. This is an emergency measure,
limited by its terms to a two-year period. If it works
injustice to some, it will be but temporary, and such
temporary injustice, if any, must be borne for the
common good.

The act does not offend against either the Federal or
the state constitution.

The permanent writ will issue as prayed for.

BEALS, C.J., HOLCOMB, BLAKE, and GERAGHTY, JJ., concur.

STEINERT, J. (dissenting) - The question before us
is whether the so-called "occupation tax" act, adopted
by the 1933 legislature, is constitutional or
unconstitutional.

The title of the act, chapter 191, Laws of 1933, p.
869 [Rem. 1933 Sup., SS 8326-1 et seq.], reads as follows:

"AN ACT relating to taxation; imposing taxes upon
the privilege of engaging in business activities and
providing for the ascertainment, assessment, collection
and distribution thereof; providing for the
administration and enforcement of this act; providing
penalties; making appropriations; and declaring that
this act shall take effect immediately."

It is conceded by all that the purpose of the act is
to raise additional revenue to meet the deficit
occasioned by the general economic depression. It is in
no sense a regulatory statute.

Inasmuch as any discussion of the matter must make
frequent reference to the terms "gross income,"

 414    STATE EX REL. STINER v. YELLE.
           Dissenting Opinion Per STEINERT, J.     174 Wash.

"business" and "gross proceeds of sales," we may as
well have before us the legislative definitions of those
terms.

Section 1 (6) of the act reads:

"The term 'gross income' means the value proceeding
or accruing from the *sale of tangible property, real
or personal, or service or both,* and all receipts,
actually received by reason of the investment of the capital
of the business engaged in, including interest, discount,
rentals, royalties, fees or other emoluments however
designated and without any deduction on account of the
cost of property sold, the cost of materials used, labor
costs, interest or discount paid or any other expenses
whatsoever and without any deduction on account of
losses: Provided, The term 'gross income' shall not
include any payments received on accounts or notes
outstanding at the time this act goes into effect."
(Italics mine.)

Section 1 (7) of the act reads:

"The word 'business' shall include *all activities
engaged in with the object of gain, benefit or advantage
either direct or indirect,* and not excepting
sub-activities producing marketable commodities used or
consumed in the main business activity, each of which
subactivities shall be considered business engaged in
taxable in the class in which it falls." (Italics mine.)

Section 1 (8) of the act reads:

"The term 'gross proceeds of sales' means the value
proceeding or accruing from the sale of property
without any deduction on account of the cost of property
sold, expenses of any kind, or losses."

Closely associated with the term "business" is the
correlative term "business activities."

Section 2 (1) of the act reads:

"Business activities, for the purpose of this act, are
hereby declared to consist of the five separate and
distinct functions, to wit:

(a) The extractive function;

(b) The manufacturing and/or producing function;

                STATE EX REL. STINER v. YELLE.           415
 Sept. 1933     Dissenting Opinion Per STEINERT, J.

(c) The wholesaling and/or jobbing function;

(d) The function of retail distribution;

(e) The function of performing and rendering services.

"The taxes hereinafter imposed shall apply to *all
business activities within the state and to each function
thereof,* whether carried on separately or in combinations
of two or more functions." (Italics mine.)

Section 2 (2) of the act reads:

"From and after the first day of August, 1933, and
until the thirty-first day of July, 1935, there is hereby
levied and there shall be collected *from every person
an annual tax or excise for the privilege of engaging
in business activities.* Such tax or excise shall be
measured by the application of rates against values, gross
proceeds of sales, or gross income, as the case may be,
as follows: . . ." (Italics mine.)

Then follow various sub-classifications of the five
main functions of business activities and the designation
of specific rates to be paid by each, measured by
their gross proceeds of sales or their gross income.
Included within the extractive function are the pursuits
devoted to agriculture and horticulture.

Section 2 (2) (a) VII (ba) reads as follows:

"Upon every person engaging or continuing within
this state in the business of growing or raising for
sale, profit or use, any article, substance, commodity,
product, or crop; as to such person, the amount of the
tax or excise shall be equal to the value of the articles,
substances, commodities, products or crops produced,
grown, or raised for sale, as shown by the proceeds
derived from the sale thereof by the grower, raiser or
producer (except as hereinafter provided) multiplied
by the rate of one-tenth of one per cent."

This section was vetoed by the governor of the state.

Section 2 (2) (b) of the act, which is the omnibus
provision, reads as follows:

"Upon *every person* engaging in or continuing
within this state in *any business not included in the*

 416    STATE EX REL. STINER v. YELLE.
           Dissenting Opinion Per STEINERT, J.     174 Wash.

*preceding subdivisions of this section and upon every
person engaging or continuing within this state in the
business of rendering, performing or selling services,
professional or otherwise;* as to such persons the
amount of the tax or excise shall be equal to the gross
income of the business multiplied by the rate of
six-tenths of one per cent." (Italics mine.)

This section was also vetoed by the governor.

From a reading of the foregoing sections it is apparent
that it was the intent that every person engaged
in any activity with the object of gain should be taxed
according to his gross income.

Inasmuch as the constitutionality of a particular
statute must depend upon the particular constitution
which it either observes or offends, we must needs have
before us the provisions of our own constitution which
affect the question.

The fourteenth amendment of our constitution,
adopted in November, 1930, so far as it is pertinent
here, reads as follows:

"All taxes shall be uniform upon the same class of
property within the territorial limits of the authority
levying the tax and shall be levied and collected for
public purposes only. The word. 'property' as used
herein shall mean and include *everything, whether
tangible or intangible, subject to ownership.*" (Italics
mine.)

There are, of course, many decisions by the courts
of other states touching the validity of income tax acts
passed by their respective legislatures. Those decisions
range themselves into two classes, one holding
that income is property within the meaning of the
statute, the other holding that it is not, but is rather a
tax on the privilege of earning an income. But in
order properly to evaluate any particular decision, it
is always necessary to have in mind the constitutional
provision behind it. The rock upon which the courts

                STATE EX REL. STINER v. YELLE.           417
 Sept. 1933     Dissenting Opinion Per STEINERT, J.

split, and upon which the members of a particular
court often divide, is, as already indicated, the
question whether income is, or is not, property. There is
no state, with the possible exception of Montana, that
has a constitution containing language comparable in
character to our constitution upon that specific phase
of the question. Art. XII, SS 17, of the Montana
constitution provides:

"The word property as used in this article is hereby
declared to include moneys, credits, bonds, stocks,
franchises and all matters and things (real, personal
and mixed) capable of private ownership, but this
shall not be construed so as to authorize the taxation
of the stocks of any company or corporation when the
property of such company or corporation represented
by such stocks is within the state and has been taxed."

Speaking of that provision, the Montana court said
in Cruse v. Fischl, 55 Mont. 258, 175 Pac. 878, at 880:

"We imagine that it would defy the ingenuity of the
most profound lexicographer to formulate a more
comprehensive definition . . ."

If this were a challenge to other states to formulate
a more comprehensive definition, it seems to me that
the state of Washington has met it when it declared
that "property" shall include everything, tangible or
intangible, subject to ownership. The constitution of
this state, so far as it bears upon the characterization
of property, is sui generis.

I am aware that, in a recent decision by the supreme
court of Montana, an income tax law passed by the
legislature of that state was held valid. O'Connell v.
State Board of Equalization, 25 P.2d (Mont.) 114.
This court, however, has recently criticized the holding
in that case, and has expressly refused to follow it.
Culliton v. Chase, ante p. 363, 25 P.2d 81.

If the question before us were simply whether

14 - 174 WASH.

 418    STATE EX REL. STINER v. YELLE.
           Dissenting Opinion Per STEINERT, J.     174 Wash.

income is, or is not, property, the answer has already
been definitely supplied by this court. In Aberdeen
Savings & Loan Assn. v. Chase,
157 Wash. 351, 289
Pac. 536, 290 Pac. 697, 71 A.L.R. 232, an En Banc
decision, we held that net income is property. In that
case, the respondents contended that the tax provided
for in the statute was an excise for the privilege of
doing business. Addressing itself to the recital of the
statute, the court in its opinion said:

"Such a legislative declaration is to be carefully
considered by the courts and due weight given thereto.
Courts should, however, in construing an act containing
such a declaration, consider the true operation and
effect of the law which must be dealt with' on the basis
of the practical results which follow its operation,
and not alone by legislative declarations contained
therein."

The particular case arose upon a net income tax
act, but the opinion stated that there was no distinction
in principle between a tax on gross receipts and a tax
on net income.

Upon a rehearing of the case, this court declared
itself as follows (p. 392):

"In order to clarify the situation, the court now
states that the opinions above cited were rendered with
a view to determining the questions presented by the
cases at bar, and those questions only; that the
majority of the court was of the opinion that the legislation
therein attacked must be held, under the decisions of
the supreme court of the United States, to attempt to
establish a property and not an excise or corporation
franchise tax;      "

In Burr, Conrad & Broom, Inc. v. Chase, 157 Wash. 393,
289 Pac. 551, which was a companion to the Aberdeen
Savings & Loan case, we said:

"We are convinced that, notwithstanding the legislative
declaration, the tax is not, in truth and in fact,

                STATE EX REL. STINER v. YELLE.           419
 Sept. 1933     Dissenting Opinion Per STEINERT, J.

an excise or corporate privilege tax, and, this being
the case, we find no justification for any such
discrimination between corporations and individuals or
copartnerships, which, under the circumstances presented
by the record in this case, must be held to be merely
an arbitrary classification."

In Spokane & Eastern, Trust Co. v. Spokane County,
70 Wash. 48, 126 Pac. 54, Ann. Cas. 1914-B 641, we
said:

"An excise tax is a tax upon a pursuit, trade or
occupation . . . 3 Words and Phrases, 2548. Where
the charge is imposed solely or primarily as a means
of raising revenue, it is a property tax."

Those cases are conclusive, so far as our decisions
are concerned, in establishing the nature of the tax
and also the nature of the subject of the tax. A tax
based upon gross income or gross proceeds of sales is
a property tax.

Subsequent to the decision of the Aberdeen Savings
& Loan Assn. case, our constitution was amended. The
amendment, however, fortifies the conclusion reached
in that case. Our present constitution, in providing
for a uniformity of tax upon the same class of property,
defines property as everything, tangible or intangible,
subject to ownership. So that the immediate
question now before us is whether "gross income" or
"gross proceeds of sales" is subject to ownership.

The relator contends that "income is capable of
acquisition, but except in a very limited number of
cases, is not capable of ownership." According to this
statement, income seems to partake of the nature of
a globule of mercury, which one can hold in his hand,
but on which he can never fasten his thumb. By this
formula, the grocer owns his stock of goods while it
is on the shelf, but when he converts it into cash he
does not own the proceeds; if he banks the moneys it

 420    STATE EX REL. STINER v. YELLE.
           Dissenting Opinion Per STEINERT, J.     174 Wash.

is not his money that he banks; if some one steals it,
he is not guilty of larceny.

I presume that the proponents of that theory would
draw a distinction between" gross income" or "gross
proceeds of sales" and the money equivalent thereof.
The distinction, however, seems to me to be too tenuous
and too barren of reason to be of any value in solving
so material and practical a matter as the ever-present
subject of taxation. In fact, it seems to me that any
such tenuous distinction, if it exists at all, is fully met
by the choice of language contained in our constitution.
Its framers avoided the possibility of income being
declared not to be property in its common acceptation,
by defining the word "property" as meaning and including
everything subject to ownership. If there are
any words more comprehensive than these, they do not
occur to me.

If I am correct thus far, then it must follow, and I
do not believe that the contrary is seriously contended,
that the act fails because it lacks the element of
uniformity prescribed by the constitution. Paraphrasing
the fourteenth amendment, its mandate is that when
anything subject to ownership is taxed, it must be
taxed at the same rate at which everything else of the
same class is taxed. "Gross income" or "gross proceeds
of sales" is a class of itself. Its sources may
vary, the net profits resulting therefrom may be large
in one instance and small in another, but, of itself, it is
a single classified concept. The "gross proceeds of
sales" of the manufacturer may exceed those of the
merchant; the" gross income" of either may result
from mathematical computations different from those
employed by the professional man; but the terms
themselves have one and an identical meaning when
applied to each. By the act itself, they mean the value
proceeding or accruing from the sale of property or

                STATE EX REL. STINER v. YELLE.           421
 Sept. 1933     Dissenting Opinion Per STEINERT, J.

services or both, without deduction of cost, expense
or loss.

I now approach the matter from another angle. Art.
I, SS 12, of our constitution provides:

"No law shall be passed granting to any citizen,
class of citizens, or corporation, other than municipal,
privileges or immunities which, upon the same terms,
shall not equally belong to all citizens or corporations."

By the governor's veto, there was written into the
act an exemption in favor of farmers, professional
men, salaried persons, wage-earners, landlords, mortgage
loan houses, and all others who would otherwise
have been classed under the omnibus clause. The act,
as it passed the legislature, expressly declared its
intent to tax all persons engaged in any activity with
the object of gain, benefit or advantage, direct or
indirect. The language used was broad and sweeping,
and its extent was all-inclusive. When the act finally
emerged with the gubernatorial veto attached to certain
portions of it, there had been deleted from it a
portion of its very vitals. The act as originally
adopted by the legislature indicates, on its face at
least, a conscientious effort to relieve the dire
necessities of the situation, by calling to the colors the
assistance of all persons in the raising of certain
revenues. As the act now stands, under the partial veto, we
have a draft upon a selective class, or classes, while
others are permitted not only to exempt themselves
from its burdens, but even to enjoy the sacrifice made
by those on whom the burden falls.

The purpose of the act is to enable government to
function. Government functions for all. Why should
some bear the burdens entailed by the limitation of the
forty-mill limit act, which the present act is designed
to supplement, and others merely enjoy that limitation?

 422    STATE EX REL. STINER v. YELLE.
           Dissenting Opinion Per STEINERT, J.     174 Wash.

Why should one class, or a series of classes, be
called upon to support our system of education, even
in part, while all others, who enjoy the full benefits of
the system, are relieved of the burden to a proportionate
extent? In my opinion, there is no valid reason.

Undoubtedly, the state has a wide latitude in
selecting the subjects of taxation and in making
classifications. Brown-Forman Co. v. Kentucky, 217 U.S. 563;
Tax Commissioners v. Jackson, 283 U.S. 527, 73 A.L.R.
1464; Miethke v. Pierce County,
173 Wash. 381,
23 P.2d 405. This rule is subject, however, to the
qualification that there must be a reasonable basis for
the classification, and all persons within the same class
must be taxed or exempted alike. State v. Hart,
125 Wash. 520, 217 Pac. 45, and cases therein cited. Stated
in another way, the classification must be reasonable
and germane to the objects and purposes of the
legislation. McKnight v. Hodge, 55 Wash. 289, 104 Pac.
504, 40 L.R.A. (N.S.) 1207; Maercker v. Milwaukee,
151 Wis. 324, 139 N.W. 199, L.R.A. 1915F 1196, Ann.
Cas. 1914B 199; Cooley on Taxation, p. 719.

The present tax is an "occupation tax." It assumes,
by its title and by its provisions, to enforce upon every
person an annual tax for the privilege of engaging in
business activities. Viewed from its profile, the act
has the appearance of being a complete entity; viewed
from its front, we see that half of it is gone. The veto
effected a mutilation of the act and robbed it of
sufficient of its vitality to prevent it from accomplishing
the purpose for which it was conceived. As it now
stands, the act presents a classification that is
unreasonable and arbitrary, discriminatory in its nature,
and taking no thought of relative ability to pay, or the
relative enjoyment of governmental privileges conferred.

                STATE EX REL. STINER v. YELLE.           423
 Sept. 1933     Dissenting Opinion Per STEINERT, J.

Coming now to the leading opinion, I have but one
or two things to say. I do not believe that either the
farmer or the professional man should be exempt from
the occupation tax, and certainly not the landlord, the
mortgage-loan company, or even the salaried person.

With respect to the farmer, it is undoubtedly true
that in recent years he has earned hardly more than
laborer's wages for the hours employed. But it seems
to me that the remedy for this is by other means, some
of which have already been employed, and others of
which our national government is even now endeavoring
to effect. The farmer is not a pensioner, and I do
not think that he desires to be considered as such. He
does not desire a mere sop to be thrown to him in
alleviation of a condition that he must otherwise
continue to bear. What he needs, and what he desires, is
that conditions be so radically changed that he may
justly receive that which he is entitled to for his labor
and his products. Until that is done, he will receive
but little aid, and small comfort, from a mere exemption
from some particular tax.

As to the professional man, there is even less reason
for exemption as to him. Granted that he sometimes
receives small fees, and at other times none, for the
service that he nevertheless cheerfully performs, that
is no answer to the question before us. Many a grocer,
butcher or baker has sold supplies from his shelf for
which he has never been paid, and is extending credit
to those who may never pay the bill. The fact that he
may at times contribute the necessities of life to the
hungry would offer no logical reason for exempting
him from the tax. When it comes to the question of
who is really affluent, or successful, in these times, I
doubt whether the merchant can show any better returns
than the professional man or the salaried class.
The purpose of the occupation tax act certainly is not

 424    STATE EX REL. STINER v. YELLE.
               Dissenting Opinion Per MAIN, J.      174 Wash.

to stigmatize those who are engaged in strictly
commercial pursuits, nor to exalt and exempt a profession
merely because it maintains a code of ethics.

What I have said with reference to the professional
man applies equally to the landlord, the mortgage-loan
company and even the salaried man. Taken as a whole,
those included in the exempted classes are numbered
by the thousands. They are all engaged in business
activities. They each have an occupation from which
a gross income may be realized. If, in fact, the gross
income of any be small, then the amount of tax to be
paid by them will likewise be small and its payment
will entail but a slight burden as to them. If, on the
other hand, the gross income of any be large, then it
furnishes not only a basis, but also a reason, for a
proportionate contribution by them to the revenue sought
to be raised.

We have here only a practical, every-day question,
one that, because of its necessity, we must recognize.
It is the question of taxation, the means provided for
the maintenance of government. It may be a rendering
"unto Caesar the things that are Caesar's," but
since, and so long as, the state is dependent thereon,
it must be rendered. The only amelioration that it can
have is that it be fairly and equally distributed and
borne.

I think that the act in question is clearly
unconstitutional, and therefore dissent.

MITCHELL, J., concurs with STEINERT, J.

-Dissenting_Opinion-

MAIN, J. (dissenting) - In my opinion, the tax in
question is an excise and not a property tax within
the contemplation of the fourteenth amendment to the
constitution of this state.

Judge Steinert's dissenting opinion may be said to
be divided into two parts. With the first, I do not

                FRANKLIN HOLDING CO. v. CLISE.           425
 Sept. 1933          Opinion Per MITCHELL, J.

agree. With the second, I am in accord. I concur in
that part of the opinion beginning with the sentence,
"I now approach the matter from another angle," and
continuing to the end thereof. For the reasons stated
in that part of the opinion, I dissent.

MILLARD, J. concurs with MAIN, J.