LOCATION: United States District Court for the Eastern District of Louisiana
DOCKET NO.: 96
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: State appellate court
CITATION: 380 US 258 (1965)
ARGUED: Mar 04, 1965
DECIDED: Mar 15, 1965
Facts of the case
Media for Reserve Life Insurance Co. v. Bowers
Audio Transcription for Oral Argument - March 04, 1965 in Reserve Life Insurance Co. v. Bowers
Number 96, Reserve Life Insurance Company, Appellant, versus Stanley J. Bowers, Tax Commissioner of Ohio.
Harris K. Weston:
Mr. Chief Justice, may it please the Court, Mr. Lindley.
This case comes to this Court on an appeal from a decision of the Supreme Court of Ohio, which in effect upheld certain taxing statutes of the State of Ohio against the claim that they were invalid under the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution.
The facts in this case are not in dispute and they were stipulated in the lower proceedings.
Appellant, Reserve Life Insurance Company, is a Texas Insurance Company, a stock insurance company, a legal reserve company incorporated under the laws of Texas.
It has been doing business in Ohio ever since 1947.
And during that time, it has fully complied with the statutes and all of the rules and requirements of the Department of Insurance.
During this period of time, it has also paid annually the franchise tax which the State of Ohio requires of it.
It has never paid a personal property tax and no request of it was made to pay such a tax until 1959.
At that time, a reserve -- a promptly raised the objection of the Equal Protection Clause of the constitution and has pressed out objection at every stage of the proceedings.
The law in question before this Court is the Ohio Personal Property Tax Law.
It is applied generally on all tangible personal property used in business.
As applied to this case, it applies to furniture, fixtures, office equipment owned by Reserve Life Insurance Company.
A foreign life insurance company in Ohio is subject to this personal property tax, probably by the definition of the statute itself.
In addition to that, the tax commissioner has issued a rule under -- acting under the statute which gives him the right to designate additional taxpayers not included in the definition and he has issued a specific rule stating that foreign life insurance companies are taxpayers under the Ohio Personal Property Tax Law.
In any event, the Courts of Ohio have construed the law to apply to a foreign life insurance company.
The Court of Appeals in this case said that the foreign insurance company was included in the statute itself and that the rule of the tax commissioner was really of no effect.
In any case, by the statute, the rule of the tax commissioner and the Court, in other words by the legislative executive and judicial branches of the Government of Ohio of foreign insurance company is required to pay this personal property tax.
It is equally clear that a domestic -- in other words, an Ohio insurance company does not pay this personal property tax.
This comes about through two statutes; the first is the definition statute Section 5701 in subparagraph (b) (3), excludes a domestic insurance company from the definition of a taxpayer.
It says, “Taxpayer excludes all individuals, partnerships, corporations, associations and joint stock companies, their executors, administrators and receivers who are defined in Title 57 as financial institutions, dealers and intangibles domestic insurance companies or public utilities”.
So a domestic insurance company is excluded from a definition of taxpayer.
In addition to that, the Section of the Ohio Code that imposes a franchise tax on -- an Ohio insurance company has a provision that reads in this way, “The real estate of a domestic insurance company shall be taxed in a place where it is located the same as the real estate of other person is taxed”.
But the tax provided for by Section 5725 (0) (1) to 26 includes even -- those are the franchise tax sections shall be in lieu of all other taxes on the other property and assets of such domestic insurance company.
So that both by definition section and by this in lieu of provision a -- an Ohio insurance company does not pay this personal property tax.
Now, to complete the picture in regard to Ohio taxes as applied to these two types of companies because this may be important to the Court.
I would like to say briefly that both of these types of companies do pay the real estate tax, obviously at the same rate.
Neither pays an intangible personal property tax and both pay a franchise tax.
The franchise tax is not the same, however for the two companies.