Columbia National Bank of Washington v. District of Columbia

D.C. Circuit

Columbia National Bank of Washington v. District of Columbia

195 F.2d 942, 89 U.S. App. D.C. 224

CourtCourt of Appeals for the D.C. Circuit

DecidedMarch 28, 1952

Docket10844 and 10854

StatusPublished

Cited by7 cases

This text of 195 F.2d 942 (Columbia National Bank of Washington v. District of Columbia) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Columbia National Bank of Washington v. District of Columbia, 195 F.2d 942, 89 U.S. App. D.C. 224 (D.C. Cir. 1952).

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EDGERTON, Circuit Judge.

On November 30, 1946 petitioner sold its assets, ceased business, and went into voluntary liquidation. It afterwards paid, under protest, taxes measured by its gross earnings for years ending June 30, 1946 and June 30, 1947. It contends it is taxable on only 5/12 of its earnings for the first of those years and not taxable at all on its earnings for the second. But the statute provides without qualification: “Incorporated savings banks paying interest to their depositors shall, through their president or cashier, make report under oath to the board of personal-tax appraisers on or before the 1st day of August in each year as to the amount of their gross earnings, less the amount paid as interest to their depositors for the preceding year ending June 30th, and shall pay thereon to the collector of taxes of the District of Columbia four per centum per annum.” 32 Stat. 619, as amended, 33 Stat. 564, D.C.Code (1940) § 47-1703. (Emphasis supplied.) It is undisputed that petitioner was an “incorporated savings bank” paying interest to its depositors. Hamilton National Bank of Washington v. District of Columbia, 85 U.S.App.D.C. 109, 176 F.2d 624.

Petitioner contends in effect that we should read into the statute, at the end of the sentence we have quoted, the following proviso: “Provided, however, that if a bank is in business during only part of a year it shall pay a tax on only a corresponding part of its gross earnings for the preceding year, and if it is not in business at all during a year it shall pay no tax on its earnings for the preceding year.” We [943]*943agree with the Board of Tax Appeals that the statute must be enforced as it is written. The point was involved though not discussed in Hazen v. Hardee, 64 App.D.C. 346, 78 F.2d 230.

We find no decision to the contrary. American Security & Trust Co. v. District of Columbia, 29 App.D.C. 265, on which petitioner relies, did not involve the point. That case dealt with a going concern and enforced the statute according to its terms by requiring payment at an increased rate which the statute established. The case followed District of Columbia v. Glass, 27 App.D.C. 576, which gave the taxpayer the benefit of a decreased rate established by a similar statute. In each case the court gave effect to the literal terms of the statute. In the American Security case the court expressly rejected a construction that would have led to a tax-free period. 29 App.D.C. at 268-269.

The gross-earnings tax has been declared to be a franchise tax on the privilege of doing business. We think this immaterial here, for petitioner was exercising that privilege when the taxed earnings were •realized. It is urged that tax officials and judges have referred to the tax as “for” the years in which it is assessed and collected ; that the words “franchise tax” and ■“for” have technical connotations in tax law; and that according to these connotations, the tax is to be paid only if business is done in the year in which it is to be assessed and collected. A sufficient answer to this argument is that Congress did not use the words on which petitioner relies.¹ If Congress had used them the question would arise whether Congress intended them to cut down the meaning of the words “shall * * * report * * * the amount of their gross earnings * * * for the preceding year * * * and shall pay thereon * * * four per centum * * * ”. Since Congress did not use them we see no problem.

Affirmed.

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EDGERTON, Circuit Judge.

On November 30, 1946 petitioner sold its assets, ceased business, and went into voluntary liquidation. It afterwards paid, under protest, taxes measured by its gross earnings for years ending June 30, 1946 and June 30, 1947. It contends it is taxable on only 5/12 of its earnings for the first of those years and not taxable at all on its earnings for the second. But the statute provides without qualification: “Incorporated savings banks paying interest to their depositors shall, through their president or cashier, make report under oath to the board of personal-tax appraisers on or before the 1st day of August in each year as to the amount of their gross earnings, less the amount paid as interest to their depositors for the preceding year ending June 30th, and shall pay thereon to the collector of taxes of the District of Columbia four per centum per annum.” 32 Stat. 619, as amended, 33 Stat. 564, D.C.Code (1940) § 47-1703. (Emphasis supplied.) It is undisputed that petitioner was an “incorporated savings bank” paying interest to its depositors. Hamilton National Bank of Washington v. District of Columbia, 85 U.S.App.D.C. 109, 176 F.2d 624.

Petitioner contends in effect that we should read into the statute, at the end of the sentence we have quoted, the following proviso: “Provided, however, that if a bank is in business during only part of a year it shall pay a tax on only a corresponding part of its gross earnings for the preceding year, and if it is not in business at all during a year it shall pay no tax on its earnings for the preceding year.” We [943]*943agree with the Board of Tax Appeals that the statute must be enforced as it is written. The point was involved though not discussed in Hazen v. Hardee, 64 App.D.C. 346, 78 F.2d 230.

We find no decision to the contrary. American Security & Trust Co. v. District of Columbia, 29 App.D.C. 265, on which petitioner relies, did not involve the point. That case dealt with a going concern and enforced the statute according to its terms by requiring payment at an increased rate which the statute established. The case followed District of Columbia v. Glass, 27 App.D.C. 576, which gave the taxpayer the benefit of a decreased rate established by a similar statute. In each case the court gave effect to the literal terms of the statute. In the American Security case the court expressly rejected a construction that would have led to a tax-free period. 29 App.D.C. at 268-269.

The gross-earnings tax has been declared to be a franchise tax on the privilege of doing business. We think this immaterial here, for petitioner was exercising that privilege when the taxed earnings were •realized. It is urged that tax officials and judges have referred to the tax as “for” the years in which it is assessed and collected ; that the words “franchise tax” and ■“for” have technical connotations in tax law; and that according to these connotations, the tax is to be paid only if business is done in the year in which it is to be assessed and collected. A sufficient answer to this argument is that Congress did not use the words on which petitioner relies.¹ If Congress had used them the question would arise whether Congress intended them to cut down the meaning of the words “shall * * * report * * * the amount of their gross earnings * * * for the preceding year * * * and shall pay thereon * * * four per centum * * * ”. Since Congress did not use them we see no problem.

Affirmed.

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195 F.2d 942, 89 U.S. App. D.C. 224, Counsel Stack Legal Research, https://law.counselstack.com/opinion/columbia-national-bank-of-washington-v-district-of-columbia-cadc-1952.

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