Article Text
White As Bank Receiver Attacks Rental Sections Of Revenue Act
Attacking the validity of rental sections of the state excise revenue act of 1935, counsel for Y. C. White, state bank superintendent and ex-officio receiver of the United Bank and Trust Company of Tucson, an insolvent banking corporation, filed suit yesterday in Judge G. A. Rodgers' division of the Maricopa County Superior Court, asking for a declaratory judgment.
The suit is directed against Thad M. Moore, Frank Luke and D. C. O'Neil, members of the Arizona tax commission, and asks the court to uphold White's contention that sections of the excise revenue act relating to taxation of rentals do not apply to White in his capacity as receiver of an insolvent bank, collecting rentals on properties solely for the benefit of the bank estate and its creditors.
Seeks Meaning
The bank superintendent asks Judge Rodgers to settle a controversy existing between him and the tax commission members as to the validity, constitutionality, meaning and applicability of certain sections of the excise revenue act.
White sets forth that he is engaged in liquidation of assets of the United Bank and Trust Company under orders of the Pima County Superior Court. As receiver, he is owner of numerous real property which is rented to various persons; rents derived being used for benefit of the bank estate and its creditors, his action states.
Among such properties is the United bank building in Tucson, containing several store rooms and offices which he rents for stores and business offices.
Commission's Ruling
The tax commissioners insist that White, as receiver, in renting property, is engaged in the rental business within the meaning and intent of the statute and is required to pay a two per cent tax on gross income from such rental, and that the act is valid and enforceable against the state bank superintendent.
They have demanded, the action states, that White make to them a return showing the amount of rental he has received, and pay two per cent of the gross rental as a tax.
White asks the superior court to uphold his contentions:
1—That he is not a person engaged in the business of "hotels, guest houses, dude ranches and resorts, rooming houses, apartment houses, automobile rental services, automobile storage garages, parking lots, tourist camps or any other business or occupation, charging storage fees or rents."
For Creditors' Benefit
2—That sections of the act relating to taxation of rentals do not apply to him in his capacity as receiver of an insolvent bank, collecting rentals on properties solely for the benefit of the bank estate and its creditors.
3—That rentals received from office and store rooms are not taxable under provisions of the act.
4—That provisions of the act relating to taxation of rentals received from real property are:
(a)—In contravention and violative of provisions of section nine, article nine, of the Arizona constitution, in that the title of the act does not state the object for which the tax imposed shall be applied.
(b)—In contravention and violative of provisions of section one of article nine of the state constitution, in that taxes sought to be imposed are not uniform on the same class of property within the territorial limits of the authority levying the tax, but on the contrary are unreasonable and discriminatory.
White is represented in the suit by Allan K. Perry, Evo De Concini and Lloyd J. Andrews, attorneys.