ÿWPCA  ;# JUNU %£ 0(©w@Ñ4% 0l4 0D Œä 0Jp 0Tº 0^ 0hlÆÔÆš 0r` ÆÒ Ƙ Æ^ 0|$ 0†  0& 1u¶ UF+ 0dqU>ÕU6D;I AO„oUÓ B(@EfM³ 0@Î]fkv~ÑvÓO A©" D+Ë 0Kö˜HP LaserJet 5/5M - StandardHPPCL5G,,,,0nL¦Î(ÖÃ9 Z ‹6Times New Roman RegularX($¡¡ stDuvDwx{yz{I|¬|r"3|x|((3üÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  ÚóóLalumioFasseasN.E.2dHempfieldCommwStalcup Carr2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  ÔLevel 1Level 2Level 3Level 4Level 5‚Level 1Level 2Level 3Level 4Level 52@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  ÔƒLevel 1Level 2Level 3Level 4Level 5„Level 1Level 2Level 3Level 4Level 5…Level 1Level 2Level 3Level 4Level 52J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)<à09Z ‹.Courier New RegularP ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman< Œ 9p`(Courier New7Border 1dd2:+C << GÿÿÿWPC'°°VUïÿ¾Sïÿ~§<c‰VUïÿ¾Sïÿ~§<c‰  ÿÿÿÿÿÿÿÿ*  !5!.&(ÿÿÿÿÿÿ2 4ÿÿÿÿÿÿ,   !h8*  !ÿÿÿÿÿÿÿÿ5!&ÿÿÿÿÿÿ:€ªªUUïÿY¸x|š–Ðÿ d- \Ñ\R AØ'\Ñ Ý ƒ!ÝÑ#€d#ÑÔ€)ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ€*ÔÔ€*ôÔà àThe€Court€quoted€with€approval€a€decision€of€the€Supreme€Court€ofÏIllinois€which€stated€as€follows:ÌÌÒ  ÒÒ  ÒÌ"It€is€true,€as€a€general€proposition,€that€a€regulatory€licenseÏfee€must€bear€'some€reasonable€relation'€to€the€expenses€involvedÏin€the€supervision€and€inspection€of€the€licensed€business.€Ï(citations€omitted.)€€But€this€general€proposition€'does€not€applyÏwhere€the€license€charge€is€imposed€on€those€occupations€which,Ïwhile€they€are€tolerated,€are€recognized€as€being€hurtful€toÏpublic€morals,€productive€of€disorder,€or€injuries€to€the€publicÏsuch€as€the€liquor€traffic'€.€.€.€the€amount€of€the€license€feeÏmay€itself€have€a€permissible€regulatory€effect."ÌÌÒ ° ÒÒ ° ÒòòMemphis€Retail€Liquor€Dealersðð€Associationóó€at€page€246,€quoting€òòLalumio€v.ÏFasseasóó,€171€N.E.2d€43,€44€(Ill.€1960).Ì("ÿÿ$££Ò  ÒÒ  Ò SÝ ƒ!ÝÑ#€d#ÑÔ€)ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ€*ÔÔ€*ôÔà àWe€do€not€find€it€necessary€to€decide€whether€the€above€discussedÏordinance€is€an€ad€valorem€tax€or€a€privilege€tax€on€advertising€companies.Ì \Ñ\R AØ'\ÑPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'hStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  h HD: Geneva ÒÒ  h HD: Geneva Ò2:9›&OLE 2.0 Box <=8ÿÿÿÿÿÿÿÿÿÿCÿÿ HKKKK'ÈÈÈÈdxd( ±þ$’’ò òFigure€Ú  Ú1Ú  Úó óÝ ƒ!ÝÔ . ÔÔ€)ÔÝ  Ý›Ñ ` ÑÑ\R AØ'\ÑÑ  ÑÔ€*ÔÑ\R AØ'\ÑÑ7€"[XdðdÈ7ÑÙ€ÙßP€,/+?/+h|ßáA©© `À0*x€PßÞ ÞÌà@ àIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌÌà@ àEASTERN€SECTIONÌÌÌÌÌÌÌLAMAR€ADVERTISING€OFà@ àà@ à)à àKNOX€COUNTYÌTENNESSEE,€INC.à@ à)à à03A01„9609„CH„00294Ìà àà àà@ à)Ìà àPlaintiff„Appellantà àà@ à)Ìà@ à)Ìà àà àà@ à)à àHON.€FREDERICK€D.€McDONALD,Ìà àv.€€€€€€€€€€€€€€€€€€€€€€€à@ à)à àà@ à)à à€€€€€€€€€€€€€€€€€€€à@ à€à àCHANCELLORÌà@ à)Ìà@ à)ÌCITY€OF€KNOXVILLEà@ à)Ìà@ à)Ìà àDefendant„Appelleeà@ à)à àREVERSED€AND€REMANDEDÌÌÌÌÌÌLAWRENCE€P.€LEIBOWITZ€OF€KNOXVILLE€FOR€APPELLANTÌÌSHARON€E.€BOYCE€OF€KNOXVILLE€FOR€APPELLEEÌÌÌÌÌÌà àà àà àà à€€òòO€P€I€N€I€O€NóóÌÌÌÌÌà àà àà àà àà àà à€€à àà àà à€€Goddard,€P.J.€ÌÌÌÌÌÓÓà àà àLamar€Advertising€of€Tennessee€(Lamar)€appeals€from€anÏorder€of€the€Chancery€Court€of€Knox€County€that€upheld€theÍvalidity€of€a€provision€of€the€Knoxville€City€Code,€Article€V,ÏSection€10„N€(Ordinance)€that€assesses€a€license€fee€per€annum€forÏthe€inspection€of€all€existing€ground€and€portable€signs€withinÏthe€City€of€Knoxville.€€Lamar€owns€and€maintains€350€Ñ7€}«XXdðXdð7ÑoutdoorÏadvertising€structures€within€the€City€of€Knoxville€and€hasÏchallenged€the€validity€of€the€ordinance.ÌÌà àà àLamarððs€challenge€raises€numerous€issues.€€Lamar€claimsÏthat€the€ordinance€is€in€reality€a€tax€and,€as€such,€results€inÏimpermissible€double€taxation€as€to€it;€that€the€ordinance€is€notÏuniform€and€equal€as€required€by€the€Tennessee€Constitution;€thatÏthe€ordinance€is€in€violation€of€the€Equal€Protection€Clause€ofÏthe€Fourteenth€Amendment€of€the€Constitution€of€the€United€States;Ïand€that€the€ordinance€is€in€violation€of€the€First€Amendment€ofÏthe€Constitution€of€the€United€States.€€As€already€noted,€theÏTrial€Court€upheld€the€validity€of€the€ordinance.ÌÌà àà àIn€June€1986,€the€City€of€Knoxville€passed€an€ordinanceÏrequiring€an€annual€inspection€of€all€existing€ground€and€portableÏsigns€for€compliance€with€zoning,€electrical,€mechanical€and€anyÏother€applicable€codes.€€œArticle›€V,€Section€10„N€of€the€KnoxvilleÏCity€Code€reads€as€follows:ÌÌÒ  ÒÒ ° ÒÒ  ÒÒ  ÒÓÓœN.›à àAnnual€inspection€fees.ÌÌ1.€à àIn€addition€to€the€permit€fees€set€forth€in€SectionÏM,€and€œcommencing›€on€July€1,€1987,€an€annual€inspectionÏfee€shall€be€assessed€for€any€existing€ground€sign€orÏportable€sign€as€follows:ÌÌà0 àa.à àSigns€of€fifty€(50)€square€feet€and€œÌà à€€€€€less.›€œà àà àà àà àà à$12.00€Ìà àb.›à àSigns€fifty„one€(51)€to€one€œÌà àà àhundred›€œ(100)€square›€œfeet.....›€œ25.00›Ìà0 àc.à àSigns€one€hundred€one€(101)€œto€Ìà àà àfour€hundred›€fifty€(450)€square€œÌà àà àfeet..........................›€œ50.00ÌÇ›à0 àd.à àSigns€larger€than€four€hundred€œÌà àà àfifty€(450)›€square€œfeet.....€€100.00Ìà àÌ2.›à àà0 àThese€inspection€fees€shall€not€apply€to€anyÏon„premises€sign€owned€by€an€organization€ifÏsaid€organization€is€exempt€from€taxationÏpursuant€to€paragraph€(3)€of€subsection€(C)€ofÏSection€501€of€the€Internal€Revenue€Code€ofÏ1954€as€amended,€if€said€organization€submitsÏproof€of€its€tax„exempt€status€to€the€signÏinspector.ÌÌ3.à àà0 àThe€sign€inspector€shall€make€an€annualÏinspection€of€existing€ground€and€portableÏsigns€for€compliance€with€the€provisions€ofÏzoning,€electrical,€and€other€city€codes.€€TheÏinspector€shall€attach€a€permanent€numberedÏtag€to€each€inspected€sign€and€shall€maintainÏrecords€of€all€inspected€œsigns.›ÌÌÌÌÒ ° ÒÒ  ÒÒ ° ÒÒ ° ÒÓÓà àà àIn€preparation€for€the€administration€and€enforcement€ofÏthe€ordinance,€a€1987€contract€was€entered€into€between€the€CityÏof€Knoxville€and€the€Metropolitan€Planning€Commission€(MPC),Ïwhereby€the€MPC,€as€agent€for€the€City€of€Knoxville,€was€toÏperform€the€inspection€duties€outlined€in€the€ordinance.€€EwingÏJohnson,€director€of€long€range€planning€for€the€MPC,€was€asked€toÏsupervise€the€survey€of€the€signs€for€the€City€of€Knoxville.ÌÌà àà àThe€MPC€employees€who€carried€out€the€duties€under€theÏordinance,€and€who€were€supervised€by€Mr.€Johnson,€did€not€conductÏelectrical,€mechanical€or€code€inspections€œof›€the€signs€œ€€€asÏdirected›€by€the€ordinance,€but€only€inventoried€the€signs.€€TheseÍindividuals€had€no€tools€or€equipment€for€use€in€the€inventory,Ïhad€no€training€in€engineering€and€most€had€only€a€high€schoolÏeducation.€€The€forms€completed€by€the€survey€teamÑ€0ÑÇcontained€an€entry€for€the€content€of€the€sign€and€if€the€signððsÏpurpose€was€to€advertise,€a€notation€was€made€on€the€form.ÌÌà àà àSteve€Ellis€was€then€hired€as€the€City€Sign€Inspector€Ïto€inspect€the€signs€after€they€were€initially€inventoried.€€HeÏhad€no€experience€or€training€in€electrical€or€mechanicalÏinspections€and€was€not€trained€in€the€city€electrical€code.€€InÏfact,€Mr.€Ellis€testified€that€he€did€not€know€what€requirementsÏare€contained€in€the€city€electrical€code€relating€to€groundÏsigns.€€Mr.€Ellis€conducts€these€sign€inspections€by€driving€toÏthe€sign€location,€visually€inspecting€the€sign,€often€from€hisÏcar,€and€noting€on€a€form€the€date€of€the€inspection€and€whetherÏthe€structure€was€approved€or€disapproved€by€himself.€€Mr.€EllisÏconducts€strictly€a€visual€inspection.ÌÌà àà àAt€trial,€Lamar€called€Steve€Harb,€a€certified€publicÏaccountant,€to€testify€as€an€expert€witness.€€Mr.€Harb€preparedÏcharts€concerning€the€amount€of€time€that€Mr.€Ellis€routinelyÏspent€performing€his€job€of€inspecting€signs.€€Based€upon€Mr.ÏEllisðð€reports€and€deposition€testimony,€Mr.€Harb€came€to€theÏconclusion€that€Mr.€Ellis€spends€an€average€of€5.478€minutes€onÏeach€individual€sign€inspection.€€Mr.€Harb€also€determined€thatÍthe€average€cost€for€the€City€for€this€inspection€service€was€Ï$1.59€per€sign.ÌÌà àà àAll€funds€generated€by€this€sign€inspection€process€areÏplaced€into€the€general€account€of€the€City€of€Knoxville.€€TheÏÑ7€=ÅXXdðXXdð7Ñsign€inspection€fees€are€not€segregated.€€The€form€which€the€CityÏsign€inspection€bills€are€printed€on€is€the€same€form€that€is€usedÏfor€the€ad€valorem€taxes€the€City€levies€on€business.€€The€CityÏFinance€Department€has€responsibility€for€collecting€delinquentÏsign€inspection€fees€and€the€Tax€Collection€Division€of€the€CityÏFinance€Department€pursues€the€collection€of€these€fees€in€theÏsame€manner€as€they€collect€delinquent€taxes.ÌÌà àà àWe€must€first€determine€whether€the€inspection€fee€isÏactually€what€it€purports€to€be€or€whether€it€is€in€reality€a€tax.€ÏIn€Tennessee,€taxes€are€distinguished€from€fees€by€the€objectivesÏfor€which€they€are€imposed.€€If€it€is€primarily€for€the€purpose€ofÏraising€revenue,€it€is€a€tax.€€However,€if€its€purpose€is€for€theÏregulation€of€some€activity€under€the€police€power€of€theÏgoverning€authority,€it€is€a€fee.€€òòMemphis€Retail€Liquor€DealersððÏAssociation,€Inc.€v.€City€of€Memphisóó,€547€S.W.2d€244€(Tenn.1977);ÏòòS€&€P€Enterprises,€Inc.€v.€City€of€Memphisóó,€672€S.W.2d€213Ï(Tenn.App.1983).€€ÌÌà àà àSince€a€municipality€incurs€costs€in€discharging€certainÏduties€created€by€this€type€of€ordinance,€it€is€only€reasonable€toÏrequire€those€benefiting€from€the€service€to€defray€the€costsÏcommensurate€with€the€expenses€incurred€by€the€€municipality.€€ItÏis€only€required€that€the€fees€bear€some€reasonable€relation€toÏthe€expense€involved€and€it€is€no€objection€to€a€regulatoryÏlicense€that€it€produces€more€income€than€is€required€for€itsÏadministration€and€enforcement.€€òòS€&€P€Enterprises,€Inc.€v.€CityÏof€Memphisóó,€supra.ÌÌà àà àThe€City€of€Knoxville€argues€that€although€the€fee€perÏsign€is€more€than€the€actual€expense€incurred€by€the€inspection,Ïthe€fee€must€only€bear€some€reasonable€relationship€to€theÏexpenses€involved.€€The€City€of€Knoxville€asserts€that€a€charge€ofÏ$100€for€a€sign€inspection€of€a€sign€larger€than€450€square€feetÏis€reasonable.€€This€argument€is€made€despite€the€fact€that€theÏCity€Sign€Inspector€admits€that€his€inspections€are€only€visual€Ïinspections€and€often€involves€never€leaving€his€car.€€In€supportÏof€this€argument,€the€City€of€Knoxville€relies€upon€òòMemphis€RetailÏLiquor€Dealers'óó,€supra.ÌÌà àà àIn€òòMemphis€Retail€Liquor€Dealers'óó,€the€Supreme€CourtÏupheld€a€City€of€Memphis€ordinance€that€imposed€an€inspection€feeÏupon€wholesalers€and€retailers€of€alcoholic€beverages.€€TheÏTennessee€Legislature€passed€a€statue€that€allowed€municipalitiesÏto€charge€a€fee€for€liquor€inspection€of€no€more€than€five€percentÏof€the€wholesale€price€of€alcoholic€beverages.€€Pursuant€to€theÏpreceding€granted€authority,€the€City€of€Memphis€passed€anÏordinance€which€implemented€the€five€percent€inspection€fee.€€TheÏliquor€dealers€challenged€the€ordinance€because€the€revenueÏgenerated€by€the€ordinance€is€200€times€the€cost€of€regulation.Ìà àÌà àà àIn€upholding€the€ordinance,€the€Court€conceded€that€aÏchallenge€based€upon€the€disparity€in€the€fee€charged€and€cost€ofÏregulation€in€this€case€might€be€valid€if€the€activity€regulatedÏwas€anything€other€than€the€liquor€business.€€The€Court€reliedÏupon€the€State's€inherent€police€power€to€subject€the€liquorÏtraffic€to€strict€supervision€or€prohibition€because€it€isÏpotentially,€if€not€actually,€dangerous€to€the€public€health,Ïmorality€and€welfare.× ƒ1 ××  ×€€Furthermore,€the€State€LegislatureÍauthorized€a€five€percent€inspection€fee€on€alcoholic€beveragesÏwith€no€requirement€that€the€fee€bear€any€relationship€to€the€costÏof€the€inspection.€ÌÌà àà àWe€find€that€the€decision€in€òòMemphis€Retail€LiquorÏDealersððóó€is€distinguishable€from€the€case€at€bar.€€The€signsÏcannot€be€considered€harmful€to€the€public€health,€morality€andÏwelfare.€€As€a€result,€we€hold€that€outdoor€advertising€signÏinspection€fees€must€bear€a€reasonable€relationship€to€theÏservices€rendered€by€the€municipalities.€€€€ÌÌà àà àWe€find€the€decision€in€òòMartin€Media€v.€HempfieldÏTownship€Zoning€Hearing€Boardóó,€671€A.2d€1211€(Pa.€Commw.€Ct.Ï1996),€persuasive€on€the€issue€of€whether€the€fee€charged€bears€a€Ïreasonable€relationship€to€the€services€rendered€by€theÏmunicipalities.€€The€ordinance€challenged€in€òòMartin€Mediaóó€assessedÏa€$100€license€fee€per€annum€for€the€inspection€and€regulation€ofÍbillboards€with€Hempfield€Township.€€At€trial,€the€sign€inspectorÏtestified€that€he€conducted€visual€inspections€only.€€He€alsoÏadmitted€that€for€some€inspections,€no€one€got€out€of€the€car€andÏin€some€cases€the€car€did€not€stop€moving.€€An€expert€testifiedÏfor€the€plaintiff€and€opined€that€the€inspection€cost€was€muchÏless€than€the€fee€charged.€€Based€upon€these€facts,€the€courtÏstruck€down€the€ordinance.€€ÌÌà àà àThe€Court€is€mindful€that€there€is€a€presumption€inÏfavor€of€validity€of€an€ordinance,€and€the€one€questioning€theÏvalidity€of€the€ordinance€has€the€burden€of€proof€to€show€itsÏinvalidity.€€òòS€&€P€Enterprisesóó,€supra.€€We€find€that€Lamar€hasÏsatisfied€that€burden€and€that€the€ordinance€is€in€reality€a€tax.€ÏAs€previously€stated,€the€sign€inspector€did€not€conductÏelectrical€or€mechanical€inspections€of€the€signs€as€instructed€byÏthe€statute.€€The€sign€inspector€conducted€only€visual€inspectionsÏof€the€signs,€often€from€his€car.€€Furthermore,€Lamar€put€on€proofÏdemonstrating€the€disparity€in€the€actual€cost€of€the€signÏinspections€and€the€fees€charged.€€The€record€clearly€demonstratesÏthat€the€sign€inspection€fees€did€not€bear€a€reasonableÏrelationship€to€the€services€rendered€by€the€sign€inspector.ÌÌà àà àAfter€determining€that€the€sign€inspection€fees€are€inÏreality€a€tax,€we€must€next€determine€whether€the€ordinance€is€anÏimpermissible€double€taxation.€€Double€taxation€is€prohibited€byÏthe€Tennessee€Constitution€unless€it€is€plain€that€the€legislatureÏintended€to€tax€the€same€property€twice.€€òòStalcup€v.€City€ofÏGatlinburgóó,€577€S.W.2d€439€(Tenn.1978).€€If€a€statute€is€enactedÏby€the€Tennessee€Legislature,€which€allows€for€double€taxation,Ïthe€statute€must€contain€language€which€plainly€indicates€such€anÏintention€and€there€is€also€a€presumption€against€such€anÏintention.€€òòWilliams€v.€Massachusetts€Mutual€Life€Insurance€Co.óó,Ï221€Tenn.€508,€427€S.W.2d€845€(1968).€€ÌÌà àà àLamar€pays€a€gross€receipts€tax€to€the€City€on€revenueÏgenerated€from€leasing€outdoor€advertising€signs.€€The€aboveÏdiscussed€ordinance€is€a€second€tax€that€Lamar€must€pay€the€CityÏof€Knoxville.× ƒ3 ××  ×€€Thus,€Lamar€is€subject€to€double€taxation.€€TheÏCity€of€Knoxville€points€to€no€language€that€indicates€theÏLegislature€intended€to€double€tax€advertising€companies.€ÏTherefore,€we€hold€that€the€above€discussed€ordinance€results€inÏimpermissible€double€taxation.ÌÌà àà àSince€we€find€the€first€issue€to€be€dispositive,€we€doÏnot€address€the€other€issues€raised€by€Lamar.€€Furthermore,€it€isÏwell€established€that€a€court€will€not€pass€on€the€issue€of€theÏconstitutionality€of€a€statute€unless€it€is€absolutely€necessaryÑ€4ÑÇfor€the€determination€of€the€case€and€of€the€present€rights€of€theÏparties€to€the€litigation.€€òòWest€v.€Carróó,€212€Tenn.€367,€370ÏS.W.2d€469€(1963).€€Courts€should€avoid€dealing€withÏconstitutional€questions€abstractly€or€issuing€advisory€opinions.€ÏòòState€v.€Kingóó,€635€S.W.2d€113€(Tenn.1982).€€ÌÌà àà àFor€the€reasons€stated€above,€the€judgment€of€the€TrialÏCourt€is€reversed.€€The€$19,577€paid€into€the€Registry€of€theÏCourt,€plus€accrued€interest,€is€directed€to€be€paid€to€Lamar,€andÏthe€cause€is€remanded€to€the€Trial€Court€for€such€furtherÏproceedings€as€may€be€necessary€and€collection€of€costs€belowÏwhich€are,€as€are€costs€of€appeal,€adjudged€against€the€City.ÌÌÓÓà àà àà àà àà àà à_______________________________Ìà àà àà àà àà àà àHouston€M.€Goddard,€P.J.€ÌÌÌCONCUR:ÌÌÌÌ________________________________ÌœCharles€D.€Susano,€Jr.,€J.ÌÌÌÌ________________________________ÌWilliam€H.€Inman,€Sr.J.Ìà àà à