JONES, J.
Plaintiff Multnomah Kennel Club questions the right of Multnomah County to impose a business income tax on pari-mutuel racing establishments. Multnomah County seeks to collect taxes from plaintiff for the years 1976 and 1977 totaling $17,885. Taxes for subsequent years are not as yet determined. Plaintiff questions the county’s right to impose the business income tax under the Oregon Constitution and under ORS chapter 462 which plaintiff claims results in a state preemption of the field of income taxation of pari-mutuel betting establishments. The Tax Court denied plaintiffs claim and plaintiff appeals. ORS 305.445.
The Multnomah Kennel Club owns and operates a track for racing with pari-mutuel wagering. Multnomah County taxes all business within the county, including the plaintiff, at the rate of six percent of net income. The Multnomah County Business Income Tax does not discriminate between income earned on concessions and income earned on pari-mutuel wagering; the tax is imposed upon all income of plaintiff regardless of its source.
Multnomah County is a constitutional home rule county and therefore has the power to exercise “authority over matters of county concern.” Or Const, Art VI, § 10. Multnomah County’s business income tax, Mult County Ord 121, § 12, codified at § 5.70.090, replaces its business license tax, Mult County Code ch 5.80. The purpose of this business income tax is expressly “to raise funds,” Mult County Ord § 3A, codified at § 5.70.040. This policy is further explained as follows:
“The tax prescribed herein is for revenue purposes and is not imposed for regulatory purposes. The payment of a tax required hereunder and the acceptance of such tax by the county shall not entitle a taxpayer to carry on any business not in compliance with all other legal requirements.” Mult County Ord 121, § 3B, codified as § 5.70.045(B).
The authority of a county to impose a business income tax is a matter of first impression for this court.
The first question for decision is whether Oregon’s constitutional grant of county home rule authority gives counties the power to levy income taxes. A half-century quest for
county home rule culminated in the adoption in 1958 of Article VI, Section 10, of the Oregon Constitution, extending to constitutional home rule counties the power to exercise “authority over matters of county concern.”
In 1959, the state legislature promptly provided a statute prescribing procedures for adoption of county home rule charters.
Multnomah County adopted its charter in 1966. Multnomah County, Or, Charter (1966, amended 1976, 1977, 1978,1980).
It is necessary to distinguish between the authority of the legislature and that of local governments when deciding home rule cases. We said in
LaGrande/Astoria v. PERB,
281 Or 137, 141-42, 576 P2d 1204 (1978):
“The relationship between the authority of the legislature and that of local governments under these provisions during the past 70 years has occupied this court in more than 75 cases. As might be expected, the court has employed a variety of formulations in explaining these decisions. This is only proper, since that relationship presents a number of distinct issues rather than a single issue. In any given case, it is necessary to distinguish whether it involves (1) the validity of a local act in the absence of a contrary state law; (2) the validity of a state law in the absence of a contrary local act; (3) the validity of a
local act said to conflict with a state law; or (4) the validity of a state law said to conflict with a local act. * * *“ (Footnotes omitted.)
Of the various forms of conflict possible between a state and local law, we deal here with “(3) the validity of a local act said to conflict with a state law.”
For the years in question, the power of statutory home rule counties to levy taxes was expressly granted by ORS 203.120(5) (repealed as unnecessary by Or Laws 1981, ch 140, § 5).
ORS 203.035(1)
states that a statutory home rule county has authority “over matters of county concern, to the fullest extent allowed by Constitutions and laws of the United States and of this state.” A more specific grant of taxing power is unnecessary. ORS 203.035(2) provides:
“The power granted by this section is in addition to other grants of power to counties, shall not be construed to limit or qualify any such grant and shall be liberally construed, to the end that counties have all powers over matters of county concern that it is possible for them to have under the Constitutions and laws of the United States and of this state.”
Former ORS 203.120(5) provided:
“In addition to other authority or powers, the county governing body has the authority and powers to transact county business, as follows:
(5) To estimate and determine the amount of revenue to be raised for county purposes, and to levy the rate necessary therefor, together with the rate required by law for any other purpose and cause the same to be placed in the hands of the proper office for collection.”
Although section 5 of 1981 Oregon Laws, chapter 140, repealed ORS 203.120(5), the power to tax was not repealed since it is a
“matter of county concern” generally granted. The preamble to the repealer specifically provided:
“Whereas the Fifty-seventh Legislative Assembly enacted ORS 203.035 in 1973 in order to grant to the governing body of each county power to exercise legislative authority within the county over matters of county concern, to the fullest extent allowed by Constitutions and laws of the United States and of this state; and
“Whereas many statutes relating to matters of county concern had previously been enacted by the Legislative Assembly; and
“Whereas such statutes are unnecessary since the governing body and voters in each county can now enact ordinances which treat the subject matter of the statutes in the manner deemed necessary or desirable in each county; and
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JONES, J.
Plaintiff Multnomah Kennel Club questions the right of Multnomah County to impose a business income tax on pari-mutuel racing establishments. Multnomah County seeks to collect taxes from plaintiff for the years 1976 and 1977 totaling $17,885. Taxes for subsequent years are not as yet determined. Plaintiff questions the county’s right to impose the business income tax under the Oregon Constitution and under ORS chapter 462 which plaintiff claims results in a state preemption of the field of income taxation of pari-mutuel betting establishments. The Tax Court denied plaintiffs claim and plaintiff appeals. ORS 305.445.
The Multnomah Kennel Club owns and operates a track for racing with pari-mutuel wagering. Multnomah County taxes all business within the county, including the plaintiff, at the rate of six percent of net income. The Multnomah County Business Income Tax does not discriminate between income earned on concessions and income earned on pari-mutuel wagering; the tax is imposed upon all income of plaintiff regardless of its source.
Multnomah County is a constitutional home rule county and therefore has the power to exercise “authority over matters of county concern.” Or Const, Art VI, § 10. Multnomah County’s business income tax, Mult County Ord 121, § 12, codified at § 5.70.090, replaces its business license tax, Mult County Code ch 5.80. The purpose of this business income tax is expressly “to raise funds,” Mult County Ord § 3A, codified at § 5.70.040. This policy is further explained as follows:
“The tax prescribed herein is for revenue purposes and is not imposed for regulatory purposes. The payment of a tax required hereunder and the acceptance of such tax by the county shall not entitle a taxpayer to carry on any business not in compliance with all other legal requirements.” Mult County Ord 121, § 3B, codified as § 5.70.045(B).
The authority of a county to impose a business income tax is a matter of first impression for this court.
The first question for decision is whether Oregon’s constitutional grant of county home rule authority gives counties the power to levy income taxes. A half-century quest for
county home rule culminated in the adoption in 1958 of Article VI, Section 10, of the Oregon Constitution, extending to constitutional home rule counties the power to exercise “authority over matters of county concern.”
In 1959, the state legislature promptly provided a statute prescribing procedures for adoption of county home rule charters.
Multnomah County adopted its charter in 1966. Multnomah County, Or, Charter (1966, amended 1976, 1977, 1978,1980).
It is necessary to distinguish between the authority of the legislature and that of local governments when deciding home rule cases. We said in
LaGrande/Astoria v. PERB,
281 Or 137, 141-42, 576 P2d 1204 (1978):
“The relationship between the authority of the legislature and that of local governments under these provisions during the past 70 years has occupied this court in more than 75 cases. As might be expected, the court has employed a variety of formulations in explaining these decisions. This is only proper, since that relationship presents a number of distinct issues rather than a single issue. In any given case, it is necessary to distinguish whether it involves (1) the validity of a local act in the absence of a contrary state law; (2) the validity of a state law in the absence of a contrary local act; (3) the validity of a
local act said to conflict with a state law; or (4) the validity of a state law said to conflict with a local act. * * *“ (Footnotes omitted.)
Of the various forms of conflict possible between a state and local law, we deal here with “(3) the validity of a local act said to conflict with a state law.”
For the years in question, the power of statutory home rule counties to levy taxes was expressly granted by ORS 203.120(5) (repealed as unnecessary by Or Laws 1981, ch 140, § 5).
ORS 203.035(1)
states that a statutory home rule county has authority “over matters of county concern, to the fullest extent allowed by Constitutions and laws of the United States and of this state.” A more specific grant of taxing power is unnecessary. ORS 203.035(2) provides:
“The power granted by this section is in addition to other grants of power to counties, shall not be construed to limit or qualify any such grant and shall be liberally construed, to the end that counties have all powers over matters of county concern that it is possible for them to have under the Constitutions and laws of the United States and of this state.”
Former ORS 203.120(5) provided:
“In addition to other authority or powers, the county governing body has the authority and powers to transact county business, as follows:
(5) To estimate and determine the amount of revenue to be raised for county purposes, and to levy the rate necessary therefor, together with the rate required by law for any other purpose and cause the same to be placed in the hands of the proper office for collection.”
Although section 5 of 1981 Oregon Laws, chapter 140, repealed ORS 203.120(5), the power to tax was not repealed since it is a
“matter of county concern” generally granted. The preamble to the repealer specifically provided:
“Whereas the Fifty-seventh Legislative Assembly enacted ORS 203.035 in 1973 in order to grant to the governing body of each county power to exercise legislative authority within the county over matters of county concern, to the fullest extent allowed by Constitutions and laws of the United States and of this state; and
“Whereas many statutes relating to matters of county concern had previously been enacted by the Legislative Assembly; and
“Whereas such statutes are unnecessary since the governing body and voters in each county can now enact ordinances which treat the subject matter of the statutes in the manner deemed necessary or desirable in each county; and
“Whereas repeal of statutes relating to matters of county concern, therefore, does not indicate a lack of power in the county governing bodies to act on the subject matter of such statutes nor express any judgment by the Legislative Assembly as to the policies established therein; and
“Whereas the Sixty-first Legislative Assembly supports the principle that matters of county concern should be left to the governing body and voters of each county to be regulated by county ordinance in the manner deemed necessary or desirable in the county * * Or Laws 1981, ch 140.
Since the legislature has granted the power to statutory home rule counties to levy taxes, it follows logically that constitutional home rule counties such as Multnomah County have a like power to levy taxes. So, even in the absence of an express statutory grant, we hold it is an implicit power of a constitutional home rule county to levy taxes. The Multnomah County Home Rule Charter implements a general grant of power “over matters of county concern to the fullest extent granted or allowed.”
Etter,
County Home Rule in Oregon Reaches Majority,
61 Or L Rev 3, 16 n 68 (1982).
Plaintiff contends the kind of tax selected is not a matter of county concern. Plaintiffs premise is that certain taxes
{e.g.,
on property, privileges, and occupations), are traditional local concerns while other taxes
(e.g.,
on sales and income), are traditional state concerns. That position is not an accurate generalization of municipal law, for local sales and income taxes have been widely used in other states since the 1930’s.
Although Oregon municipalities have typically imposed certain taxes while the state has imposed different
ones, this customary distinction between the “subjects” of state and local taxation does not create mutually exclusive constitutional authorities.
LaGrande,
281 Or at 153-55.
Plaintiff asks us to apply the balancing “test” of
State ex rel Heinig v. City of Milwaukie,
231 Or 473, 373 P2d 680 (1962), where we said:
“* * * Each case requires a weighing of the state’s interest against the interest of the municipality. In some instances the need for uniformity, or the benefit of a widespread application of the law, or the recognition that the matter dealt with is interrelated with other functions of the state and similar considerations will require that the statute have preference over the charter; on the other hand the charter will prevail when the advantages of local autonomy are paramount.”
Id.
at 488.
But we held in
State ex rel Haley v. City of Troutdale,
281 Or 203, 208, 576 P2d 1238 (1978):
“* * * [T]hat test expressly related to the validity of a state law concerning local modes of government, not to the validity of state and local regulations addressed to private persons. * *
The
Heinig
test does not extend to “all conflicts of state and local policy.”
LaGrande,
281 Or at 146. Because this is a county tax on private persons rather than a state law concerning county governance, the
Heinig
test does not apply.
As to plaintiffs first contention, we conclude that the constitutional grant of power to a home rule county includes the power to levy an income tax.
The second question raised by the plaintiff is whether the State of Oregon has pre-empted the field of income taxation of pari-mutuel betting establishments by enactment of ORS chapter 462.
ORS chapter 462 governs state licensing of race meets. ORS 462.067 provides for greyhound racing as follows:
“All licenses of race meets except those subject to ORS 462.057 and 462.062 shall make payments as follows:
“(1) License fee - $100 per racing day, payable to the commission.
“(2) Percentage of gross mutuel wagering payable to the commission * *
ORS 462.100 provides that the license fees and taxes imposed under chapter 462 “* * * shall be in lieu of all other
licenses and privilege taxes
or charges by the state or any county, city or other municipal corporation
for the privilege of conducting the race meet
* * *.” (Emphasis supplied.)
The tax described in ORS chapter 462 (“The license fee
and tax
* * *
for the privilege of conducting the race meet”
(emphasis supplied)), is payable to the state racing commission. It is collected in aid of a regulatory program, different from a tax imposed
solely
for revenue purposes.
The stated purpose of the Multnomah County Business Income Tax is the raising of revenue. It is not a “license” or “privilege” tax. As previously quoted, Section 3 of the ordinance directs that:
“The tax prescribed herein
is for revenue purposes
and
is not imposed for regulatory purposes.
The payment of a tax required hereunder and the acceptance of such tax by the county shall not entitle a taxpayer to carry on any business not in compliance with all other legal requirements.” (Emphasis supplied.)
We hold that ORS 462.100 only limits the county’s power to impose “licenses and privilege taxes,” “for the privilege of conducting the race meet * * The Multnomah County Business Income Tax is a tax imposed upon plaintiffs business income. Payment of the tax is in no way connected with the privilege of conducting a race meet.
The state is deemed to have exercised its power to preempt a field only where the intent to do so is apparent.
LaGrande,
281 Or at 148-49. Had the legislature intended to foreclose local income taxation of pari-mutuel racing establishments, it could and should have given explicit direction to that effect.
Multnomah County Ordinance No. 121 is not inconsistent with the taxing objectives of ORS chapter 462.
We conclude Multnomah County has the authority and power under its home rule charter to impose a business
income tax and that the tax does not conflict with the prohibition in ORS 462.100 against other privilege taxes for holding a race meet.
The Tax Court is affirmed.