1989-03-27 Regular Meeting - Laserfiche WebLink

Browse Search

^ / , , ' • • f. _` The Honorable Bob Richardson February 16, 1988 . Page 2 the classification of income taxes. See: Cooley on Taxation Sec. 1743; cases cited at McQuillin, 16 Municipal Corporations (3rd Ed. Rev.), Sec. 44.193, footnote 4. There is no clear guidance on whether the specific objects of taxation listed in the city charter were intended to include an income tax. However, the list appears to be without limitations, granting full power to the city to tax anything not prohibited by other state law. If an income tax is not a tax on persons or property, it certainly can be considered a subject of taxation. In Reed v. Bjornson, 253 N.W. 102 (Minn. 1934), the Minnesota Supreme Court stated that "obviously incomes constitute a subject of taxation" for purposes of a state constitutional requirement of uniform taxation (emphasis added). On the ,other hand, there are arguments to be~made that the charter does not allow the city to impose an income tax. Since as a general rule an ambiguous grant of power to a municipality is construed strictly against the grant, particularly in the area of taxation, one may argue that the Austin charter is unclear on the subject of income taxes and so ought to be construed to exclude the power to impose an income tax. See 64 C.J.S. Municipal Corporations Sec. 1978 (Taxation; In General). Given that legal authorities are inconsistent about whether an income tax is included in a general category such as "taxes on persons," it may be argued that the drafters of the charter, if they wished to include income taxes, would have specifically mentioned them. In this context, it should be noted that Article I, Section 3, and Article XII, Section 13, of the charter contain general language of intent and construction to the effect that the charter should be construed as a_general grant to the city (that is, to the city council) of each an3 every power that the people of Austin could lawfully grant under Article XI, Section 5, of the Texas Constitution.- While Texas courts have held that such boilerplate language in a city charter is ineffective to grant powers not otherwise expressly granted by the charter, those provisions when read together with the broad grant of power to tax in Article VIII, Section 2, appear to strengthen the argument that the current Austin city charter authorizes the city council by ordinance to adopt a personal income tax. See Southwestern Telegraph and Telephone v. City of Dallas, 134 S.W. 321 (Tex. 1911). Texas case law generally limits the rule of construing a grant of power strictly against the city to cases involving implied powers.