Opinion
No. 30220
Decided May 2, 1945.
Taxation — Personal property — Sections 5325 and 5328, General Code — Slot machines — Tangible things and subject to ownership, when — Equal protection and benefits — Section 2, Article 1, and Section 2, Article XII, Constitution — Article XIV, Amendments, U.S. Constitution.
APPEAL from the Board of Tax Appeals.
Appellant taxpayer, a limited partnership, is engaged in the business of "operating and selling coin machines," as is stated in the balance sheet accompanying one of its personal property tax returns.
In its personal property returns for the years 1938, 1939 and 1940, the taxpayer included $3,995, $3,160 and $5,680 for those respective years, representing the listed value of slot machines which were in the building of the partnership and in its protection or, as stated by a partner, which "had any protection in a court of law."
The Tax Commissioner issued amended preliminary assessments increasing the personal property assessments by $16,076 in 1938, $17,082 in 1939 and $15,041 in 1940, representing taxes on slot machines which "were in various locations being exhibited to the public," according to the testimony of a partner.
Three separate appeals were perfected to the Board of Tax Appeals, which consolidated the appeals and affirmed the action of the Tax Commissioner.
Thereafter the taxpayer appealed to this court.
It appears from the transcript of testimony before the Board of Tax Appeals that some of the machines were placed by employees of the taxpayer, but more were placed by so-called "contract agents" who would take the machines, would supposedly do certain things and in turn then keep a certain amount of the money that he took away from the location; and it could be considered either way, that he paid out some money or that we paid him some money." Those machines which "were out in play" were not included in the tax returns of the taxpayer.
There is testimony in the record that when machines broke down, they either could be returned to the partnership shop and be repaired or exchanged for a repaired one, but there is no testimony as to when such machines changed from a claimed nontaxable to a taxable status.
Messrs. McGhee, Rowe Evans, for appellant.
Mr. Thomas J. Herbert and Mr. Hugh S. Jenkins, attorneys general, and Mr. Aubrey A. Wendt, for appellee.
The taxpayer challenges the right of the state of Ohio to tax gambling devices. Such right was upheld by this court in Ellery v. Evatt, Tax Commr., 140 Ohio St. 249, 42 N.E.2d 979. We adhere to our former view that slot machines are personal property subject to ownership and taxation, within the meaning and under Sections 5325 and 5328, General Code.
The taxpayer contends that all taxpayers should receive equal benefits from the government of Ohio, by virtue of Section 2, Article I of the Constitution, which provides that "government is instituted for their equal protection and benefit," and Section 2, Article XII, of that Constitution, which contains the limitation that "no property, taxed according to value, shall be taxed in excess of one per cent of its true value in money for all state and local purposes." It is claimed that "the appellants' [ sic] interest or ownership in slot machines in Ohio is without benefit and not recognized and for the state of Ohio to compel appellant to pay taxes without in turn granting benefits similar to the benefits granted like taxpayers is a denial of the appellants' [ sic] rights as guaranteed by the Fourteenth Amendment to the United States Constitution."
We are in accord with the following view expressed in the brief of counsel for the Tax Commissioner:
"If the measure of protection given to the appellant with respect to such slot machines is less than that afforded other property owners, it is because the appellant itself has chosen to use its property in an illegal manner. It should not be permitted to secure immunity from taxation solely because of its own violations of our laws."
The taxpayer's contentions as to benefits were answered, as follows, by the Supreme Court of the United States in Carmichael, Atty. Genl., v. Southern Coal Coke Co., 301 U.S. 495, 522, 81 L.Ed., 1245, 57 S.Ct., 868, 109 A.L.R., 1327:
"A tax is not an assessment of benefits. It is, as we have said, a means of distributing the burden of the cost of government. The only benefit to which the taxpayer is constitutionally entitled is that derived from his enjoyment of the privileges of living in an organized society, established and safeguarded by the devotion of taxes to public purposes. See Cincinnati Soap Co. v. United States [ 301 U.S. 308], supra. Any other view would preclude the levying of taxes except as they are used to compensate for the burden on those who pay them, and would involve the abandonment of the most fundamental principle of government — that it exists primarily to provide for the common good. A corporation cannot object to the use of the taxes which it pays for the maintenance of schools because it has no children. Thomas v. Gay, 169 U.S. 264, 280. This court has repudiated the suggestion, whenever made, that the Constitution requires the benefits derived from the expenditure of public moneys to be apportioned to the burdens of the taxpayer, or that he can resist the payment of the tax because it is not expended for purposes which are peculiarly beneficial to him. Cincinnati Soap Co. v. United States, supra; Carley Hamilton v. Snook [ 281 U.S. 66], supra, 72; Nashville, C. St. L. Ry. Co. v. Wallace, 288 U.S. 249, 268; see Union Refrigerator Transit Co. v. Kentucky, 199 U.S. 194, 203."
The decision of the Board of Tax Appeals is affirmed.
Decision affirmed.
WEYGANDT, C.J., ZIMMERMAN, BELL, WILLIAMS, TURNER, MATTHIAS and HART, JJ., concur.