Puget Sound Power & Light Co. v. Seattle - 291 U.S. 619 (1934)
U.S. Supreme Court
Puget Sound Power & Light Co. v. Seattle, 291 U.S. 619 (1934)
Puget Sound Power & Light Co. v. Seattle
Argued January 12, 15, 1934
Decided March 19, 1934
291 U.S. 619
1. A tax imposed by a city upon the gross receipts of a private corporation, engaged in the business of furnishing electric light and power to consumers for hire, cannot be adjudged violative of the equal protection clause of the Fourteenth Amendment merely because the city, under authority from the state, engages in the same kind of business, in active competition with the private corporation. P. 291 U. S. 623.
2. With respect to such business and its taxation, the city and the private corporation are clearly to be classed in different categories, for reasons that are in no way affected by calling the city's activity "proprietary," instead of "governmental." P. 291 U. S. 624.
3. The Fourteenth Amendment does not protect private business from the risk of competition with business carried on by the state in the exercise of its reserved power. P. 291 U. S. 625.
4. Objection to the vagueness and uncertainty of a tax as defined by a municipal ordinance held obviated by its practical construction in this case by a competent administrative officer with the approval of the state court. Pacific Telephone & Telegraph Co. v. Seattle, ante, p. 291 U. S. 300. P. 291 U. S. 626.
5. Surrender of the power of taxation is not implied in a contract by a city granting to a public utility the license or franchise to use the streets for a term of years, and a later ordinance exacting payment of an annual tax on the gross receipts of the utility company as a condition precedent to its use of the streets does not impair the obligation of the contract. P. 291 U. S. 627.
172 Wash. 668, 21 P. 2d 727, affirmed.
Appeal from the affirmance of a judgment dismissing the complaint of the Power & Light Company on demurrer, in a suit to recover the amount of a gross receipts tax paid to the state, and to enjoin future collections.