Reinhardt v. Anne Arundel County

Menchine, J., delivered the opinion of the Court. George P. Reinhardt (appellant) filed an amended bill for declaratory decree in the Circuit Court for Anne Arundel' County against Anne Arundel County; the County Executive of Anne Arundel County and the Mayor and Aldermen of the City of Annapolis. The bill of complaint mounted a. scattergun attack upon Code Article 81, § 411C (1975 Repl. Voh) and- an Anne Arundel' County Ordinance codified as § 17-710 of the Anne Arundel County Code on constitutional and other grounds.

The Statute Code Article 81, § 411C (1975 Repl. Vol.) is the tax enabling act upon which the ordinance depends for validity. ³⁵⁷ At the time of trial in the Circuit Court for Anne Arundel County the statute read as follows: “§ 4.11C. Additional taxing power in Anne Arundel County; disposition of revenues collected in City of Annapolis. la) The County Council for Anne Arundel is hereby empowered and authorized, by ordinance, enacted from time to time pursuant to its legislative procedure, to levy, impose, and collect a sales or use tax upon fuels and utilities used by commercial and industrial businesses; residential, commercial and industrial telephone service; and space rentals. The tax rate on fuels, utilities and telephone services shall not be greater than 8%.

The tax rates on, and classes of space rentals shall not be greater than those rates and classes in effect January 1, 1973, as specified by the ordinances of Anne Arundel County. The exemptions from the sales or use tax upon fuels and utilities used by commercial a.nd industrial businesses in effect January 1, 1973 as specified by the ordinances of Anne Arundel County shall not thereafter be revoked or reduced except by action of the General Assembly. fb) Any revenues collected under the authority of this section within the boundaries of the City of Annapolis shall be allocated and distributed in equal amounts to the City of Annapolis and to Anne A rundel County.” 1 ³⁵⁸ The Ordinance Section 17-710* 2 of the Anne Arundel County Code imposed a tax upon income derived from space rental for docking and storage of boats and reads as follows: “Sec. 17-710. Tax on docking and storing boats. (a) (1) There is hereby levied and imposed a tax of ten per cent (10%) of any charges or other consideration paid or received in exchange for the use of services or facilities (including, but not limited to, marina or boat slip facilities, space rentals, and docking and storage areas) for the purpose of docking or storing boats.

If said services or facilities are offered in conjunction with other services or facilities, said tax shall apply only to the portion of consideration derived from space rental, docking or storage. (2) Notwithstanding any provision to the contrary, said tax shall not be levied or imposed upon the following: (i) Community-owned pier facilities. (ii) Sales to the United States of America; provided, however, that nothing contained in this section shall be construed to exempt any instrumentality or agency of the United States of America which is subject to the taxing power of Anne Arundel County, Maryland, from taxation hereunder. (iii) Sales to embassies and diplomatic services as approved by the State Department of the United States of America. ³⁵⁹ (b) For purposes of this section, the below listed terms shall be defined as hereinafter set forth: (1) ‘Nonprofit, community-owned pier’ — Piers or recreational land which is held in common by every lot owner in a subdivision or community, excluding piers owned by an organization comprised of members not necessarily within a subdivision or community who each own an interest in the pier facility as a result of their membership in the organization.

(2) ‘Person’ — Any individual, partnership, firm, society, club, association, joint stock company, corporation, estate, receiver, trustee, assignee, referee or any other person acting in a fiduciary or representative capacity and any other group or combination of individuals acting as a unit. (3) ‘Taxpayer’ — Any person required by this section to make returns or to pay the tax. (4) ‘User’ — Any person making use of services and/or facilities for keeping, storing or docking boats. (c) (1) Every person who offers services or facilities for the storage or docking of boats shall collect said tax from the user of said services or facilities, and report and remit the same as hereinafter provided.

The person offering the use of said services or facilities shall have the same right against the user thereof for the collection of said tax as he has for the collection of charges for other services or facilities. (2) Every person required to collect said tax shall file a return thereof and the remittance with the controller by the twenty-fifth (25th) day of the month next succeeding said collection; any person who fails to collect or remit said tax shall become personally liable therefor. (3) Any taxpayer failing to file any return ³⁶⁰ and/or pay the tax imposed by this section within the time limited therefor, shall be assessed the amount of tax due, plus interest at the rate of one-half of one per centum (V2 of 1%) per month and a penalty of ten per centum (10%) of the tax due. (4) If any taxpayer has erroneously, illegally or unconstitutionally paid the tax imposed by this section, the controller shall refund said tax if, within three (3) years from the payment thereof, written application stating the grounds for such refund is filed with the controller.

(d) (1) Every owner, operator and user of such services and facilities shall keep complete and accurate records of all payments and receipts for such services and facilities together with a record of the tax collected thereon; and they shall keep all invoices and such other pertinent records and documents as are necessary to determine the amount of tax due. Such records and other documents shall be open at all times during business hours for inspection and examination by the controller or other duly authorized representatives, agents or employees of Anne Arundel County, Maryland. (2) If any taxpayer fails to keep records from which the tax imposed by this section may be accurately computed, the controller may make use of a factor developed by surveying other taxpayers of the same type or otherwise compute the amount of tax due and there shall be a rebuttable presumption that said computation is correct. (e) Any person who wilfully fails to collect the tax imposed by this section, who wilfully fails to pay over to the controller the tax imposed thereby, who wilfully fails to file a return required in connection with said tax, who wilfully makes any false statement or misleading omission in any such return or who wilfully fails to keep complete and ³⁶¹ proper records as required by law shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than one thousand dollars ($1,000.00) or be imprisoned for not more than six (6) months, or both, in the discretion of the court, for each and every such offense.” The Status of Appellant and the Proceedings Below The appellant alleged that he was the owner of a motorboat documented under United States Statutes that was docked in a slip at the White Rocks Marina on Rock Creek, a navigable body in Anne Arundel County, Maryland.

He alleged that he and all motor and sailboat owners who secure their boats at public or private facilities where a rental charge is collected have been required to pay the tax imposed upon such charges by § 17-710. Appellant sought: (a) a declaration that the statute and ordinance are unconstitutional, illegal and void and (b) injunctive relief forbidding their enforcement. The chancellor sustained demurrers by the appellees and declared the statute and ordinance to be valid and constitutional. 3 We shall affirm for the reasons hereafter stated. The Attack Under the Constitution of the United States (a) Attack upon Art. 81, § 411C The Fourteenth Amendment Appellant contends that § 411C “is void for vagueness under the Fourteenth Amendment,” in that “[t]he term space rentals is not defined in the Act.” ³⁶² Words used in statutes generally are not specially defined.

In such cases the words used should be construed as having their ordinary and accepted meaning. Scoville Service, Inc. v. Comptroller, 269 Md. 390, 393-94 , 306 A. 2d 534, 537 (1973). In Webster’s Third New International Dictionary, Unabridged (1971) the words are thus defined: “Space— 2a: a limited extension in one, two, or three dimensions: a part marked off or bounded in some way.” “Rental — 2: an amount paid or collected as rent: income from rent: . . . return (as a sum of money) given or received as rent.” In Richards Furniture Corp. v. Board of County Comm’rs of Anne Arundel County, 233 Md. 249, 264 , 196 A. 2d 621, 629 (1964), it was said: “ . .. [W]e do not find the statute vague or indefinite in a constitutional sense. It is unnecessary to elaborate upon this point in great detail.

The Act is couched in plain and simple language, which may be easily understood by persons of ordinary intelligence. This is all that is required of a statute in order to prevent it from being vague and indefinite in a constitutional sense. United States v. Alford, 274 U. S. 264 ; Connally v. General Const. Co., 269 U. S. 385 ; and the Note ‘The Void-For-Vagueness Doctrine in the Supreme Court,’ 109 Penn.

L. Rev. 67.” When the previously defined words are considered in the combined form in which they were used in the statute, the legislative purpose is plain. We see no unconstitutional vagueness in the subject statute. Article I Appellant contends that § 411C violated certain sections of Article I of the United States Constitution: Section 8, Clause 3 — “To regulate Commerce ³⁶³ with foreign Nations, and among the several States and with the Indian Tribes.” Section 9, Clause 6 — “No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.” Section 10, Clause 3 — “No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.” (Emphasis supplied to show part of clause upon which appellant relies.) Maryland Code Article 81, § 411C is simply a grant of power to Anne Arundel County. It impedes commerce in no respect.

It imposes no duty or tax. The statute does not infringe upon these provisions of the Constitution. With respect to Section 9, Clause 6, it should be noted, as the court below pointed out, the “provision operates only as a limitation of the powers of Congress, and in no respect affects the States in the regulation of their domestic affairs. Munn v. Illinois, 94 U.S. 113, 135 .” (b) Attack upon Anne Arundel Code § 17-710 ³⁶⁴ The Fourteenth Amendment Appellant contends that § 17-710 denies him equal protection of law in that the ordinance “by its express terms, exempts non-profit and/or community owned pier facilities.

This result clearly discriminates against both commercial pier facilities, and non-residents of Anne Arundel County.” In Allied American Co. v. Comm’r of Motor Vehicles, 219 Md. 607 , 150 A. 2d 421 (1959), it was said at 623 [431]: “The constitutional need for equal protection does not shackle the legislature. It has the widest discretion in classifying those who are to be regulated and taxed. Only if the grouping is without any reasonable basis, and so entirely arbitrary, is it forbidden. Abstract symmetry or mathematical nicety are not requisites.

The selection need not depend on scientific or marked differences in things or persons or their relations. If any state of facts reasonably can be conceived that would sustain a classification, the existence of that state of facts as a basis for the passage of the law must be assumed. The burden is on him who assails a classification to show chat it does not rest on any reasonable basis.” The Court added at 624 [432]: “If the classification made by the Legislature is otherwise justified, there can be no sound complaint that the legislative purpose might be better or more fully achieved by other or more expansive and inclusive classification.” In State Board of Tax Commissioners of Indiana v. Jackson, 283 U. S. 527 , 51 S. Ct. 540 , 75 L. Ed. 1248 (1931), it was said at 537 [543] [1255]: “ * * The power of taxation is fundamental to the very existence of the government of the States. The restriction that it shall not be so exercised as to deny to any the equal protection of the laws does ³⁶⁵ not compel the adoption of an iron rule of equal taxation, nor prevent variety or differences in taxation, or discretion in the selection of subjects, or the classification for taxation of properties, businesses, trades, callings, or occupations * * *.’ ” In Fair Lanes, Inc. v. Comptroller, 265 Md. 361 , 289 A. 2d 595 (1972), it was said at 367 [599]: “The trend in the opinions of the Supreme Court of the United States since the 1931 opinion in Jackson has been toward sustaining the power of the States to make valid classifications for purposes of taxation against attacks based upon the Fourteenth Amendment prohibition of a denial of equal protection of the laws.” (Citations omitted.) See also: National Can Corp. v. State Tax Comm’r of Md., 220 Md. 418 , 153 A. 2d 287 (1959), appeal dismissed 361 U. S. 534 , 80 S. Ct. 586 , 4 L.Ed.2d 538 (1960); Brown v. State, 177 Md. 321, 330 , 9 A. 2d 209, 213 (1939).

The classification made by the County Council in enacting § 17-710 was reasonable. Article I Although appellant had alleged in his bill of complaint that § 17-710 was in violation of Section 8, Clause 3; Section 9, Clause 6; and Section 10, Clause 3, supra, his attack in this Court under Article I is limited to a claim of unconstitutionality under Section 10, Clause 3, supra. Section 10, Clause 3 (Duty Upon Tonnage) Essentially, the appellant relies upon two Supreme Court cases: Cannon v. New Orleans, 87 U. S. 577 , 22 L. Ed. 417 (1874); and Clyde Mallory Lines v. Alabama, 296 U. S. 261 , 56 S. Ct. 194 , 80 L. Ed. 215 (1935). Both may be distinguished by limitations expressed in the opinions themselves.

In Cannon, supra, wher ein a tax was held unconstitutional as a tonnage tax it had been said at 581 [419]: “Whatever more general or more limited view may ³⁶⁶ be entertained of the true meaning of this clause, it is perfectly clear that a duty or tax or burden imposed under the authority of the State, which is, by the law imposing it, to be measured by the capacity of the vessel, and is in its essence a contribution claimed for the privilege of arriving and departing from a port of the United States, is within the prohibition.” This language must be considered in the light of the facts to which it was applied. The Supreme Court had preceded the quoted words by saying at 580-81 [419]: “It is in proof that of the twenty miles and more of the levee and banks of the Mississippi within the City, not more than one tenth has any wharf, and that vessels land at various places where no such accommodations exist. The language of the ordinance covers landing anywhere within the city limits. The tax is, therefore, collectible for vessels which land at any point on the banks of the river, without regard to the existence of the wharves.

The tax is also the same for a vessel which is moored in any part of the Port of New Orleans, whether she ties up to a wharf or not, or is located at the shore or in the middle of the river. A tax which is, by its terms, due from all vessels arriving and stopping in a port, without regard to the place where they may stop, whether it be in the channel of the stream, or out in the bay, or landed at a natural river bank, cannot be treated as a compensation for the use of a wharf This view is additionally enforced if, as stated by counsel for the plaintiff, in their argument, the Supreme Court of the State has decided that under the Act of 1843, of the Louisiana Legislature, no wharfage tax or duty can be levied or collected by the City. “We are of opinion that, upon the face of the ordinance itself, as applied to the recognized condition of the river and its banks within the City, ³⁶⁷ the dues here claimed cannot be supported as a compensation for the use of the City’s wharves, but that it is a tax upon every vessel which stops, either by landing