determining the value of a certain class of property may if reasonable be established by statute, such as deducting the value of the tangible property of a corporation from the aggregate market value of its capital stock to determine the value of its intangible property." 37. Procedural Rights Notice and a Hearing It is a fundamental principle of the law of taxation that before the validity and amount of a tax are finally and conclusively established against the person assessed he must be given an opportunity to be heard in opposition to the tax, and as a necessary corollary must be given notice of the assessment so that he may be able to seasonably claim his right to a hearing.1 A statute will be construed as requiring notice and a hearing if such construction is reasonably possible; but if a statute makes no provision whatever for notice it is unconstitutional even if notice of the assessment proposed to be made under the statute has actually been given.3 What constitutes sufficient notice to satisfy the constitution depends to a great extent upon the character of the tax. In the case of the annual property tax, the statute itself which provides for the time and manner of the levy is sufficient, and if such 6 Copper Queen Consolidated Mining Co. v. Arizona, 206 U. S. 474 (1907). 7 Adams Express Co. v. Ohio State Auditor, 165 U. S. 194 (1897); American Express Co. v. Indiana, 165 U. S. 255 (1897). 1 Davidson v. New Orleans, 96 U. S. 97 (1877); Santa Clara County v. Southern Pacific R. R. Co., 118 U. S. 394 (1868); Pittsburgh etc. R. R. Co. v. Backus, 154 U S. 346 (1894); Fallbrook Irrigation District v. Bradley, 164 U. S. 112 (1896); Security Trust etc. Co. v. Lexington, 203 U. S. 323 (1906); Central of Georgia R. R. Co. v. Wright, 207 U. S. 127 (1907); Londoner v. Denver, 210 U. S. 373 (1908); Turner v. Wade, 254 U. S. 64 (1920). A taxpayer is not entitled to a hearing at every step in the proceedings; one hearing before the tax is finally established is sufficient, Weyerhauser v. Minnesota, 176 U. S. 550 (1900). A taxpayer has no right to notice of the legislative action by which it is determined that a tax shall be assessed, and the form of taxation. the area to be included in the assessment, the sum to be raised, the rate of the tax and the method of apportionment decided upon, Spencer v. Merchant, 125 U. S. 345 (1888); Parsons v. District of Columbia, 170 U. S. 45 (1898); Williams v. Eggleston, 170 U. S. 304 (1898). 2 Kentucky Railroad Tax Cases, 115 U. S. 321 (1885). 3 Security Trust etc. Co. v. Lexington, 203 U. S. 323 (1906). A taxpayer who was duly notified in accordance with the requirements of the statute cannot be heard to complain because no provision was made for notifying others dissimilarly situated. Gallup v. Schmidt, 183 U. S. 300 (1902). statute makes adequate provision for a hearing it will be constitutional. In the case of special assessments, or of taxes levied under a special statute, a more particular notice is required; but personal notice on all owners is impracticable, and personal service on all owners known and in reach of process and notice by publication to all others is clearly sufficient. In fact notice of an assessment given entirely by publication and posting in some public place has been held sufficient. When a corporation is made agent to collect and pay over a tax on its shareholders, notice of the assessment may be given to the corporation." 8 The right to notice and a hearing extends only to such taxes as involve the exercise of a quasi judicial power in the determination of the amount, such as a general property tax dependent upon valuation, or an excise the amount of which is dependent upon the valuation of the property in connection with the use of which the excise is imposed.10 In the case of an excise not dependent upon the valuation of property and in respect to which there is no exercise of judgment as to the amount," and in the case of poll taxes and other taxes of fixed amounts,12 there is no occasion for notice and a hearing, although if no opportunity for a hearing is afforded, the person assessed may contest his liability to the tax in proceedings for its enforcement. The right to a hearing necessarily denotes an opportunity to offer evidence and to present arguments and is not satisfied. Hagar v. Reclamation District No. 108, 111 U. S. 701 (1884); Kentucky Railroad Tax Cases, 115 U. S. 331 (1888); Pittsburgh etc. R. R. Co. v. Backus, 154 U. S. 346 (1894); Merchant's etc. Bank v. Pennsylvania, 167 U. S. 461 (1897); Lander v. Mercantile National Bank, 186 U. S. 458 (1902); Michigan Central R. R. Co. v. Powers, 201 U. S. 245 (1906). The statute is not sufficient notice of an omitted assessment actually made in a subsequent year, Security Trust etc. Co. v. Lexington, 203 U. S. 323 (1906). 5 Davidson v. New Orleans, 96 U. S. 97 (1877). 6 Castillo v. McConnico, 168 U. S. 674 (1898); Leigh v. Green, 193 U. S. 79 (1904); Ballard v. Hunter, 204 U. S. 241 (1907); Hunter v. Johnson, 209 U. S. 541 (1908). Corry v. Baltimore, 196 U. S. 466, 478 (1905). 8 Carson v. Brockton Sewerage Commissioners, 182 U. S. 398 (1901); sustaining 175 Mass. 242 (1900). 9 Londoner v. Denver, 210 U. S. 373 (1908). 10 Auffmordt v. Hedden, 137 U. S. 310 (1890); Passavant v. United States, 148 U. S. 214 (1893); Origet v. Hedden, 155 U. S. 228 (1894). 11 McMillen v. Anderson, 95 U. S. 37 (1877); Hagar v. Reclamation District No. 108, 111 U. S. 701 (1884); Lent v. Tillson, 140 U. S. 316 (1891); Hodge v. Muscatine County, 196 U. S. 276 (1905). 12 Hagar v. Reclamation District No. 108, 111 U. S. 701 (1884); Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S. 232 (1890); Lent v. Tillson, 140 U. S. 316 (1891). 13 by an opportunity to file written objections. Although it is customary to allow the taxpayer an opportunity to apply to the board which levied the assessment for an abatement thereof, or to allow an appeal to some higher administrative tribunal, there is no constitutional right to a hearing before any administrative board. The right to contest the validity and amount of a tax in the ordinary civil courts is sufficient to satisfy the constitution, and this right may be in the form of a statutory petition to the court in which the validity and amount of the tax are in issue,15 or a right recognized in the judicial practice of the state to maintain a bill in equity to enjoin the collection of a tax alleged to be illegal or excessive.16 So also when the statutes of a state provide as the only means of enforcing payment of a tax a judicial proceeding in which an opportunity is afforded for a full hearing in which the validity and amount of the tax can be contested, and only after there is a judgment sustaining the tax is payment enforced, the requirements of due process of law are satisfied.17 There is however no constitutional right to a hearing in the ordinary civil courts as to the validity and amount of a tax. A statute which provides an opportunity for a hearing before an impartial administrative tribunal upon application for abatement or review may authorize the collection of the tax by summary proceedings such as the sale of real estate, distress of goods, or arrest of the person without affording the taxpayer any opportunity to be heard in court, in proceedings either to enforce or to resist the payment of the tax.18 Due process in matters of taxation does not necessarily mean a judicial proceeding.1 It 13 Londoner v. Denver, 210 U. S. 373 (1908). 15 Watson v. Nevin, 128 U. S. 578 (1888); Pittsburgh etc. R. R. Co. v. Board of Public Works, 172 U. S. 32 (1898). 16 Security Trust etc. Co. v. Lexington, 203 U. S. 323 (1906). 17 Hagar v. Reclamation District No. 108, 111 U. S. 701 (1884); Kentucky Railroad Tax Cases, 115 U. S. 321 (1885); Winona etc. Land Co. v. Minnesota, 159 U. S. 526 (1895); Weyerhaueser v. Minnesota, 176 U. S. 550 (1900); Clement National Bank v. Vermont 231 U. S. 120 (1913); Wells, Fargo & Co. v. Nevada, 248 U. S. 165 (1918). 18 Palmer v. McMahon, 133 U. S. 660. 669 (1890); Harrington v. Glidden, 189 U. S. 255 (1903); Hibben v. Smith, 191 U. S. 310 (1903); Hodge v. Muscatine County, 196 U. S. 276 (1905); Michigan Central R. R. Co. v. Powers, 201 U. S. 245 (1906). When the only hearing provided is before a board of arbitrators, and no provision is made for further proceedings if the arbitrators disagree, the remedy is nugatory, and the statute is unconstitutional. Turner v. Wade, 254 U. S. 64 (1920). 19 McMillen v. Anderson, 95 U. S. 37, 41 (1877). is not even necessary that the taxpayer be given an opportunity to be heard upon an application for abatement or review, if he has a right to a hearing before the assessors at the time the assessment is being made.20 38. Procedural Rights Lists and Returns A taxpayer may be required to assist in the assessment of his own tax by filing a sworn list or return of his taxable property or income, and may be subjected to a fine or other penalty if he fails to comply with this requirement or if he knowingly files a false list or return; but if the law makes the filing of a false list a criminal offense, a person who has filed a list cannot be compelled to submit his books and papers to the inspection of the taxing officials as he would thereby be compelled to become a witness against himself in violation of the Fifth Amendment to the federal constitution.1 It has often been provided that failure of a person liable to taxation to bring in a list of taxable property shall subject the delinquent to the "doom" of the assessors; that is the assessors may lawfully estimate the aggregate value of the property of a person liable to taxation who has filed no list, according to their best judgment and belief. If such a statute goes so far as to make such an assessment final, and to deny the taxpayer all opportunity to demonstrate that the tax so assessed is excessive, even if his failure to file a list was due to a belief based on reasonable grounds that he held no taxable property, it is unconstitutional; but statutes which provide that one who without reasonable excuse fails to file a list shall be subject to the doom of the assessors and shall have no redress if overassessed are 20 State Railroad Tax Cases, 92 U. S. 575 (1875); Kentucky Railroad Tax Cases, 115 U. S. 321 (1885); Pittsburgh etc. R. R. Co. v. Backus, 154 U. S. 421 (1894); Lander v. Mercantile National Bank, 186 U. S. 458 (1902). Conversely the taxpayer need not be given an opportunty for a hearing while the assessment is being made, if he has a right to a hearing on review, McMillen v. Anderson, 95 U. S. 37 (1877). When a state board of equalization orders the raising of the valuation of all the property in a county a certain fixed proportion, there is no right to a hearing. Bi-Metallic Investment Co. v. State Board of Equalization, 239 U. S. 441 (1915). 1 Boyd v. United States, 116 U. S. 616 (1886). This provision is applicable only to the United States, but there is a similar provision in the Massachusetts Constitution. Declaration of Rights, Article XII. 2 Central of Georgia R. R. Co. v. Wright, 207 U. S. 127 (1907). 3 clearly constitutional. It has even been held that a statute providing that failure to enter land upon the tax list for five successive years shall result in the forfeiture of the land is constitutional.* A person or corporation may be constitutionally required to assist in the assessment or collection of taxes of others. Thus a tenant, bailee or agent in possession of the property of another may be compelled to pay the taxes on the property. Other common instances are the statutes requiring employers to file lists of their salaried employees, with the amounts paid to each, and statutes which require corporations to deduct from interest on their bonds or dividends on their stock taxes assessed against the bondholders or stockholders and to pay such taxes to the state, or which make the corporation agent to collect taxes against the shareholders on shares of its own stock.' It would seem however that there must be some limit on the power of a state to require an individual to perform work of this character for its benefit without compensation. 6 39. Retroactive and Omitted Assessments A taxpayer has no constitutional right to immunity from taxation merely because he owned property, received income or performed acts at a time when such property, income or acts were not subject to taxation. There is no analogy between the levy of a tax and the execution of a contract, and a tax is not invalid because the consideration is past. In other words laws relating to the assessment of taxes may have a retroactive effect,1 3 Harrington v. Glidden, 179 Mass. 486, 495 (1901), affirmed sub nom. Glidden v. Harrington, 189 U. S. 258 (1903); Sears v. Assessors of Nahant, 208 Mass. 208 (1911); Sears v. Nahant, 221 Mass. 437 (1915), affirmed 248 U. S. 542 (1918). 4 King v. Mullins, 171 U. S. 436 (1898); Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911). In these cases the forfeiture was enforced by judicial process of which the owner had notice and an opportunity was given him to relieve his land of the forfeiture by paying the delinquent taxes. It is open to question whether forfeiture could be enforced without judicial process. Bennett v. Hunter, 9 Wall. 326 (1869); Hatfield v. King, 184 U. S. 162 (1902). 5 Carstairs v. Cochran, 193 U. S. 10 (1904); Illinois Central R. R. Co. v. Kentucky, 218 U. S. 550 (1910). Bell's Gap R. R Co. v. Pennsylvania, 134 U. S. 232 (1890); Aberdeen etc. Bank v. Chehalis County, 166 U. S. 440 (1897); Brushaber v. Union Pacific R. R. Co., 240 U. S. 1 (1916), 7 Corry v. Baltimore, 196 U. S. 466 (1905). 1 Kentucky Union Co. v. Kentucky, 219 U. S. 140 (1911). |