TAXATION PART 2

3 similaties of the 3 inherent powers of the state

• they are inherent in the state

• they exist independently of the constitution although the conditions for tgheir exercise may be prescribed by the constitution

• ways by which the state interfere with private rights and property

• legislative in nature and charater

• presuppose an equivalent compensation received, directly or inderectly, by the persons affected

means of avoiding or minimizing burden of taxation

1. shifting

2. transformation

3. evasion

4. tax avoidance

5. exemption

kinds of exemption

1. constitutional

2. statutory

3. express

4. implied

5. total

6. partial

constitutional

immunities from taxation which originate from the consitution

statutory

immunities from taxation which emanates from legislation

expres

exemptions expressly granted by statute

implied

when particular persons, property, or rights are deemed exempt as they fall outside the scope of the taxing provision itself

total

connotes absolute immunity

partial

one where a collection of a part of the tax is dispensed with

capitalization

the reduction in the selling price of income producing property by an amount equal to the capitaled value of future taxes that may be paid by the purchaser

construction of law

• public purpose is always presumed

• if the law is clear, apply the law in accordance to its plain and simple tenor

• a stature will not be construed most strongly against the government, and liberally in favor of the taxpayer

• provisions of a taxing act ar enot to be extended by implication

• tax laws operate prospectively unless the purpose of the legislature to give retrospective effect is expressly declared or may be implied from the language used

• tax laws are special laws and prevail over a general