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CRS Annotated Constitution

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Collection of Taxes.—To reach property which has escaped taxation, a State may tax estates of decedents for a period prior to death and grant proportionate deductions for all prior taxes which the personal representative can prove to have been paid.154 Collection of an inheritance tax also may be expedited by a statute requiring the sealing of safe deposit boxes for at least ten days after the death of the renter and obliging the lessor to retain assets found therein sufficient to pay the tax that may be due the State.155 Moreover, with a view to achieving a like result in the case of gasoline taxes, a State may compel retailers to collect such taxes from consumers and, under penalty of a fine for delinquency, to remit monthly the amounts thus collected.156 Likewise, a tax on the tangible personal property of a nonresident owner may be collected from the custodian or possessor of such property, and the latter, as an assurance of reimbursement, may be granted a lien on such property.157 In collecting personal income taxes, however, most States require employers to deduct and withhold the tax from the wages of employees, but the duty thereby imposed on the employer has never been viewed as depriving him of property without due process of law, nor has the adjustment of his system of accounting and paying salaries which withholding entails been viewed as an unreasonable regulation of the conduct of his business.158


Moreover, no unconstitutional deprivation of the property rights of vendors of trucks, sold under conditional sales contract to a carrier, results when a State asserts against such trucks a prior lien for highway use taxes levied against the carrier and (1) accruing from the operation by the carrier of trucks, other than those sold by the vendors, either before or during the time the carrier operated the vendors’ trucks, or (2) arising from assessments against the carrier, after vendors repossessed their trucks, and based upon the carrier’s operations preceding such repossession. A vendor is not privileged to contend that the lien asserted must be limited to taxes attributable solely to operation of its own trucks; for the wear on the highways occasioned by the carrier’s operation is in no way altered by the vendor’s retention of title.159

As a State may provide in advance that taxes shall bear interest from the time they become due, it may with equal validity stipulate that taxes which have become delinquent shall bear interest from the time the delinquency commenced. A State may adopt new remedies for the collection of taxes and apply these remedies to taxes already delinquent.160 After liability of a taxpayer has been fixed by appropriate procedure, collection of a tax by distress and seizure of his person does not deprive him of liberty without due process of law.161 Nor is a foreign insurance company denied due process of law when its personal property is distrained to satisfy unpaid taxes.162

The requirements of due process are fulfilled by a statute which, in conjunction with affording an opportunity to be heard, provides for the forfeiture of titles to land for failure to list and pay taxes thereon for certain specified years.163 No less constitutional, as a means of facilitating collection, is an in rem proceeding, to which the land alone is made a party, whereby tax liens on land are foreclosed and all preexisting rights or liens are eliminated by a sale under a decree.164 On the other hand, while the conversion of an unpaid special assessment into both a personal judgment against the owner as well as a charge on the land is consistent with the Fourteenth Amendment,165 a judgment imposing personal liability against a nonresident taxpayer over whom the state court acquired no jurisdiction is void.166 Apart from such restraints,[p.1664]however, a State is free to adopt new remedies for the collection of taxes and even to apply new remedies to taxes already delinquent.167

Sufficiency and Manner of Giving Notice.—Notice, insofar as it is required, may be either personal, or by publication, or by statute fixing the time and place of hearing.168 A state statute, consistent with due process, may designate a corporation as the agent of a nonresident stockholder to receive notice and to represent him in proceedings for correcting assessment.169 Also “where the State . . . [desires] to sell land for taxes upon proceedings to enforce a lien for the payment thereof, it may proceed directly against the land within the jurisdiction of the court, and a notice which permits all interested, who are ‘so minded,’ to ascertain that it is to be subjected to sale to answer for taxes, and to appear and be heard, whether to be found within the jurisdiction or not, is due process of law within the Fourteenth Amendment. . .”170 A description, even though it not be technically correct, which identifies the land will sustain an assessment for taxes and a notice of sale therefor when delinquent. If the owner knows that the property so described is his, he is not, by reason of the insufficient description, deprived of his property without due process. Where tax proceedings are in rem, owners are bound to take notice thereof, and to pay taxes on their property, even if assessed to unknown or other persons, and if an owner stands by and sees his property sold for delinquent taxes, he is not thereby wrongfully deprived of his property.171

However, due process was deemed not to have been accorded an incompetent taxpayer, for whom a guardian had not yet been appointed, but who was well known to town officials to be financially responsible, when, in accordance with statutory procedure, notice of a real property tax delinquency was mailed to her and published in local papers as well as posted in the town post office, and thereafter, without appearance on her part, the property was foreclosed and deeded to the town.172 On the other hand, due process was not denied to appellants when, through dereliction of their[p.1665]bookkeeper, they were not apprised of the receipt of mailed notices, and thus were unable to avert foreclosure of liens for unpaid water charges outstanding against two parcels of land held by them in trust; this conclusion is unaffected by the disparity between the value of the land taken and the amount owed nor by the fact that the city, in one instance, retained the proceeds of sale after lapse of time to redeem. Having issued appropriate notices, the city cannot be held responsible for the negligence of the bookkeeper and the managing trustee in overlooking arrearages on tax bills, nor is it obligated to inquire why appellants regularly paid real estate taxes on their property.173

Sufficiency of Remedy.—When no other remedy is available, due process is denied by a judgment of a state court withholding a decree in equity to enjoin collection of a discriminatory tax.174 Requirements of due process are similarly violated by a statute which limits a taxpayer’s right to challenge an assessment to cases of fraud or corruption,175 and by a state tribunal which prevents a recovery of taxes imposed in violation of the Constitution and laws of the United States by invoking a state law limiting suits to recover taxes alleged to have been assessed illegally to taxes paid at the time and in the manner provided by said law.176 In this as in other areas, the state must provide procedural safeguards against imposition of an unconstitutional tax. These procedures need not apply predeprivation, but a state that denies predeprivation remedy by requiring that tax payments be made before objections are heard must provide a postdeprivation remedy.177 In the case of a tax held unconstitutional as a discrimination against interstate commerce and not invalidated in its entirety, the state has several alternatives for equalizing incidence of the tax: it may pay a refund equal to the difference between the tax paid and the tax that would have been due under rates afforded to in–state competitors; it may assess and collect back taxes from those competitors; or it may combine the two approaches.178

Laches.—Persons failing to avail themselves of an opportunity to object and be heard cannot thereafter complain of assessments as arbitrary and unconstitutional.179 Likewise a car company, which failed to report its gross receipts as required by statute, has[p.1666]no further right to contest the state comptroller’s estimate of those receipts and his adding thereto the 10 percent penalty permitted by law.180


154 Bankers Trust Co. v. Blodgett, 260 U.S. 647 (1923) .
155 National Safe Deposit Co. v. Stead, 232 U.S. 58 (1914) .
156 Pierce Oil Corp. v. Hopkins, 264 U.S. 137 (1924) .
157 Carstairs v. Cochran, 193 U.S. 10 (1904) ; Hannis Distilling Co. v. Baltimore, 216 U.S. 285 (1910) .
158 Travis v. Yale & Towne Mfg. Co., 252 U.S. 60, 75, 76 (1920) .
159 International Harvester Corp. v. Goodrich, 350 U.S. 537 (1956) .
160 League v. Texas, 184 U.S. 156 (1902) .
161 Palmer v. McMahon, 133 U.S. 660, 669 (1890) .
162 Scottish Union & Nat’l Ins. Co. v. Bowland, 196 U.S. 611 (1905) .
163 King v. Mullins, 171 U.S. 404 (1898) ; Chapman v. Zobelein, 237 U.S. 135 (1915) .
164 Leigh v. Green, 193 U.S. 79 (1904) .
165 Davidson v. City of New Orleans, 96 U.S. 97, 107 (1878) .
166 Dewey v. Des Moines, 173 U.S. 193 (1899) .
167 League v. Texas, 184 U.S. 156, 158 (1902) . See also Straus v. Foxworth, 231 U.S. 162 (1913) .
168 Londoner v. Denver, 210 U.S. 373 (1908) . See also Kentucky Railroad Tax Cases, 115 U.S. 321, 331 (1885) ; Winona & St. Peter Land Co. v. Minnesota, 159 U.S. 526, 537 (1895) ; Merchants Bank v. Pennsylvania, 167 U.S. 461, 466 (1897) ; Glidden v. Harrington, 189 U.S. 255 (1903) .
169 Corry v. Baltimore, 196 U.S. 466, 478 (1905) .
170 Leigh v. Green, 193 U.S. 79, 92–93 (1904) .
171 Ontario Land Co. v. Yordy, 212 U.S. 152 (1909) . See also Longyear v. Toolan, 209 U.S. 414 (1908) .
172 Covey v. Town of Somers, 351 U.S. 141 (1956) .
173 Nelson v. New York City, 352 U.S. 103 (1956) .
174 Brinkerhoff–Faris Co. v. Hill, 281 U.S. 673 (1930) .
175 Central of Georgia Ry. v. Wright, 207 U.S. 127 (1907) .
176 Carpenter v. Shaw, 280 U.S. 363 (1930) . See also Ward v. Love County, 253 U.S. 17 (1920) .
177 McKesson Corp. v. Florida Alcohol & Tobacco Div., 496 U.S. 18 (1990) .

Supplement: [P. 1665, add to n.177:]

See also Reich v. Collins, 513 U.S. 106 (1994) (violation of due process to hold out a post–deprivation remedy for unconstitutional taxation and then, after the disputed taxes had been paid, to declare that no such remedy exists); Newsweek, Inc. v. Florida Dep’t of Revenue, 522 U.S. 442 (1998) (per curiam) (violation of due process to limit remedy to one who pursued pre–payment of tax, where litigant reasonably relied on apparent availability of post– payment remedy).

178 Id.
179 Farncomb v. Denver, 252 U.S. 7 (1920) .
180 Pullman Co. v. Knott, 235 U.S. 23 (1914) .
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