RKO-Keith-Orpheum Theatres, Inc.
City of New York
APPEALS from an order and judgment (one paper) of the Supreme Court at Special Term (STODDART, J.), entered October 11, 1954, in Queens County, which, in an action for a declaratory judgment and injunction, (1) granted a motion by defendants
for summary judgment dismissing the complaint, (2) denied a cross motion by plaintiffs for summary judgment or judgment on the pleadings, (3) declared that the New York City Amusement Tax (Administrative Code of City of New York, ch. 46, tit. G) was valid and constitutional, and (4) dismissed the complaint on the merits. The notices of appeal excepted that portion of the order and judgment which provided for a stay during appeal.
Edward C. Raftery, Thomas Bress, Milton C. Weisman, Mitchell Klupt, Leopold Friedman, Cecelia A. Goetz, Herbert B. Lazarus, Louis Weber and William Gold for appellants.
Adrian P. Burke, Corporation Counsel (Stanley Buchsbaum, Morris L. Heath and Solomon Portnow of counsel), for respondents.
NOLAN, P. J.
Pursuant to an enabling act of the State Legislature (L. 1947, ch. 278, as amd.), the council of the City of New York enacted Local Law No. 37, for the year 1954. The law imposes a tax of 5% on charges for admission to places of amusement and provides for the payment of the tax by the patrons of such places. Plaintiffs, who are theatre owners or operators, are under the express duty to charge and collect the tax imposed from their patrons, and are personally liable to the city for taxes collected, or required to be collected by the law. They are also subject to certain penalties, civil and criminal, if they fail to comply with its provisions. It is not disputed that the taxes which plaintiffs have been and will be required to collect and pay over to the city, if the law is sustained, will amount to a considerable sum of money.
The enabling act authorizes the city to impose and to collect 'Taxes not in excess of five per cent' on admissions to specified places of amusement. (L. 1947, ch. 278, as amd. by L. 1948, ch. 651.) The local law provides that: 'Where the tax to be paid by a patron includes a fraction of one cent, the fraction shall not be paid where it is less than one-half cent and a full cent shall be paid when the fraction is one-half cent or more.' (Administrative Code of City of New York, § G 46-2.0, subd. d, as added by Local Laws, 1954, No. 37 of City of New York.) By virtue of this provision of the law, there is actually collected on admission charges which fall within certain brackets, a tax in excess of 5%. Plaintiffs, claiming that they would be irreparably damaged by the enforcement of the law, brought action for a judgment declaring the local law invalid and for injunctive
relief. The order and judgment appealed from granted a motion by defendants for summary judgment, denied a cross motion by plaintiffs for judgment pursuant to rules 112 and 113 of the Rules of Civil Practice and dismissed the complaint on the merits.
The learned Justice at Special Term, in reaching his conclusion, conceded that the local law 'does direct the collection of a tax which strictly speaking appears to be in excess of the 5% limitation imposed by the statute.' He took judicial notice, however, of the 'custom of business and banking, the teaching practices in our schools * * * and the administration of similar laws in this and other States', and concluded that it was 'not clear that the Legislature intended to prohibit the recognized practice of adding an additional cent wherever computation results in a fraction of one-half cent or more'. (206 Misc. 602, 604.) Since in his opinion the language of the statute did not reveal 'a clear intention to prohibit' such practice, he declared the local law to be a valid enactment.
We do not so construe the statute. The levy and collection of taxes by municipal corporations are purely statutory functions and the power to exercise them must be expressly conferred. The city is without power to collect the tax provided by the local law, except that expressly conferred by the enabling act, or such as is necessarily implied therefrom. (City
of Johnstown v. Wells, 242 App.Div. 103, affd. 275 N.Y. 623.) We find no ambiguity in the enabling act, which does not require the city to impose and collect a 5% tax, but merely permits the imposition of a tax not in excess of 5%. If it be assumed that this language does not reveal a clear intention to prohibit the practice adopted by the city, we are, nevertheless, unable to discover a clear intention to permit that practice. We assume that the Legislature was cognizant of the fact that some problems and complications might arise in the collection of a tax on admissions at the maximum rate permitted. If the legislators had foreseen the present difficulty and intended to permit the collection of a tax in excess of 5%, in certain instances, by the device of rounding fractions, they could have so provided in clear and unmistakable language. They did not so provide, and we read the enabling act, as we are required to, as it is written by the Legislature, and not as the court may think it should or would have been written if the Legislature had envisaged all the problems and complications which might arise in the course of its administration. (Saltser & Weinsier v. McGoldrick, 295 N.Y. 499, 506.)
Obviously, the enabling act does not expressly confer the power to collect a tax in excess of 5% in cases in which the tax, as computed, includes a fraction of a cent. Neither may it be read, in our opinion, as conferring that power by implication. "A power not expressly granted by statute is implied only where it is 'so essential to the exercise of some power expressly conferred as plainly to appear to have been within the intention of the legislature. The implied power must be necessary, not merely convenient, and the intention of the legislature must be free from doubt.' (Peo. ex rel. City of Olean v. W. N.Y. & P. ...