Taxation, Police Power, and Eminent Domain Quiz

Study Notes

Exercising Authority - The government exercises all three powers: taxation, police power, and eminent domain. Private entities can also exercise eminent domain.
Necessity of Delegation - Delegation is not necessary for taxation, but it is required for both police power and eminent domain.
Purpose - Taxation is used to generate revenue to support the government. Police power is used to protect the public well-being. Eminent domain is used to take property for public use.
Persons Affected - Taxes affect a community or class of individuals. Police power also affects a community or class of individuals. Eminent domain affects the owner of the specific property.
Effect of Transfer of Property Rights - Taxation results in money paid as taxes becoming part of the public fund. Police Power does not transfer property rights, only restricts the use of the property. Eminent domain transfers ownership or lesser rights to property.
Amount of Imposition - Taxation can be unlimited. Police power is limited to covering the costs of regulation. Eminent domain requires fair market value payment to the property owner.

Power of Taxation - The government's inherent power to demand forced contributions for public purposes.
Power of Police Power - The power of the government to enact laws for the general welfare of the people.
Power of Eminent Domain - The power of the government to take private property for public use upon payment of just compensation.

All are necessary attributes of sovereignty and rest on necessity.
All are inherent powers of the state.
All are legislative in nature.
All interfere with private rights and property.
All exist independently of the Constitution, but their exercise may be limited by the Constitution.
All presuppose some form of compensation for those affected by the power's exercise.
The exercise of these powers by local governments may be limited by national legislatures.

Existence of government is a necessity
The government and people have reciprocal and mutual duties of support and protection.

Scope of Taxation: Supreme, comprehensive, unlimited, and plenary. It includes the power to destroy.
Objects of Taxation:
- Business
- Interests
- Transactions
- Rights
- Acts
- Persons
- Properties
- Privileges
Limitations of Taxation Power:
- Constitutional limitations
- Inherent limitations:
  - Territoriality of taxation
  - Subject to international comity or treaty
  - Tax exemption of the government
  - Tax is for a public purpose
  - Non-delegation of the power of taxation

Situs refers to the place of taxation.
Applications of Situs:
- Persons - Residence of the taxpayer.
- Community development tax - Residence or domicile of the taxpayer.
- Business taxes - Where the business is conducted or where the transaction takes place.
- Privilege or occupation tax - Where the privilege is exercised.
- Real property tax - Where the property is located.
- Personal property tax - The place of ownership.
- Income - The location where income is earned or residence or citizenship of the taxpayer.
- Transfer tax - Residence or citizenship of the taxpayer or the location of the property.
- Franchise tax - The state that grants the franchise.
- Corporate tax - The law of incorporation.

Definition: Taxing the same object or subject within the same jurisdiction, for the same period, involving the same kind of tax, by the same taxing authority.
Kinds of Double Taxation:
- Direct: Objectionable and prohibited.
- Indirect: No constitutional violation.