Midterms

• Taxation


  Raises income to defray the necessary expenses of the government
• Taxation


  Symbiotic relationship with the government
• Taxes


  • Enforced proportional contributions from person, property, and sale of goods and services
  • For the use and service of the state
  • Lifeblood of the Government
  • Not a debt
• Characteristics of Taxes


  • Forced charge, imposition or contribution
  • Pecuniary burden payable in money
  • Levied by the legislative body of the state
  • Assessed in accordance with some reasonable rule of apportionment and should be based on the ability to pay
  • Imposed by the State on persons, property or services within its jurisdiction
  • Levied for public purpose
• Tax


  • Civil liability
  • Non-payment creates a criminal liability for the taxpayer's willful failure or refusal to pay
• Characteristics of Tax


  • Only by legislature
  • Only based on the ability to pay
  • Only to persons, property or services within its jurisdiction or territory
• Theoretical Basis of Taxation

  • Necessity Theory - existence of government is a necessity; that it cannot continue without the means to pay its expenses
  • Benefits-Protection Theory - give rise to the right to protection; both are enjoyed as well by those members of a State who do not pay taxes because they have no means or ability to pay
• Three State Powers (inherent)

  • Taxation - raises revenue to defray the necessary expenses of the government
  • Eminent Domain - to take private property for public use upon the payment of just compensation
  • Police Power - to enact laws to promote public health, public/ morals, public safety and general welfare of the people
• Limitations on the Power of Taxation

  • Purpose - public purpose
  • Territoriality - under its jurisdictions or within its territory
  • International comity - The property of a foreign State may not be taxed by another (embassies)
  • Exemption - Governmental agencies performing governmental functions are exempt from taxation
  • Non-delegation - The power to tax being legislative in nature may not be delegated (Congress and senate)
• Situs of Taxation


  • Persons - residence of the taxpayer
  • Real property or tangible personal property - location of the property
  • Intangible personal property - domicile or residence of the owner unless he has acquired a situs elsewhere
  • Income - taxpayer's residence and citizenship, or place where the income was earned
  • Business, occupation and transaction - place where business is being operated, occupation being practiced and transaction completed
  • Gratuitous transfer of property - taxpayer's residence or citizenship, or location of the property
• Double Taxation


  • Direct double taxation - taxed twice by the same authority within the same jurisdiction for the same purpose and during the same period (Unconstitutional)
  • Indirect double taxation - not unconstitutional