CITIES ‑‑ BUSINESS TAX ‑‑MUNICIPAL CORPORATIONS --LIQUOR ‑‑TAVERNS AND "H" LICENSED PREMISES ‑‑ POWER TO TAX ‑‑ PREEMPTION BY STATE -- POWER TO IMPOSE UPON TAVERNS AND "H" LICENSED PREMISES.
Municipal corporations do not have the power to impose a business tax upon taverns and "H" licensed premises.
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April 7, 1953
HonorableDelbert R. Scoles
Colville, Washington Cite as: AGO 53-55 No. 2
We acknowledge receipt of your letter of March 20, 1953, in which you present the question: Have municipal corporations the right to impose a business tax upon taverns and "H" licensed premises?
We conclude that a city may not legally impose a business tax upon taverns and "H" licensed premises.
By the enactment of RCW 66.08.120, the state preempted the field with respect to the licensing of "any premises which may be licensed under this section." Therefore, if class "H" licensed premises and taverns are premises that "may be licensed under this section," and if a business tax amounts to a license, such a tax would be unlawful.
[Orig. Op. Page 2]
RCW 66.08.120, in which the word "section" appears, has nothing to do with the actual licensing of premises. That matter is governed by several other sections. However, since the word "section" may mean an entire act [Groves v. Meyers, 35 Wn. (2d) 406, 213 P. (2d) 483], it should here be so construed. Both taverns and class "H" premises are licensed under this act. See RCW 66.24.330 providing for licensing of taverns and RCW 66.24.410 providing for licensing of class "H" premises. Ultimately, then, the question is whether the business tax imposed by the city amounts to a license. If so, it would be in direct violation of RCW 68.08.120 which expressly deprives cities of any such power.
[Orig. Op. Page 2]
A "business tax" is a levy upon the privilege of doing business. Without payment of the tax, the conduct of the business is illegal.
The object of a "license" is to confer a right or power which does not exist without it and the exercise of which, without the license, would be illegal. SeeInter‑City Coach Lines v. Harrison, 172 Ga. 390, 157 S.E. 673, 676.
Manifestly, the imposition of a business tax contemplates the issuance of a license, or permit, without which the conduct of the business would be illegal. The issuance of such license or permit by a city is an exercise of the very power which RCW 66.08.120 takes away. The only exception under the statute is that municipalities still have the power to adopt police ordinances not in conflict with the act or with the regulations of the board.
The business tax here proposed is a revenue measure enacted pursuant to the taxing power, and is not an exercise of the police power. The ordinance cannot be sustained under the statutory exception.
It is our conclusion that municipal corporations do not have the power to impose a business tax upon taverns and "H" licensed premises.
Very truly yours,
RALPH M. DAVIS
Assistant Attorney General