{ "id": 2481809, "name": "TOWN OF BEECH MOUNTAIN, ELLEN ANDERSON, CARL T. BROWNING and wife, MARTHA BROWNING, JOHN W. EARNHARDT and wife, PATRICIA W. EARNHARDT, GEORGE E. HANDLEY, JR. and wife, KATHLEEN HANDLEY, DOUGLAS W. JACKSON and wife, MARY LOU E. JACKSON, EDWARD L. McKINZIE and wife, JACQUELINE S. McKINZIE, and W. K. MIMS and wife, FRANCES G. MIMS v. COUNTY OF WATAUGA, JAMES G. COFFEY, CARL FIDLER, LARRY STANBERRY, JAY L. TEAMS, DAVID J. TRIPLETT, as Commissioners of Watauga County, and HELEN A. POWERS, Secretary, N.C. Department of Revenue, and C. C. CAMERON, Budget Officer for the State of North Carolina", "name_abbreviation": "Town of Beech Mountain v. County of Watauga", "decision_date": "1989-05-04", "docket_number": "No. 409A88", "first_page": "409", "last_page": "415", "citations": [ { "type": "official", "cite": "324 N.C. 409" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "370 S.E. 2d 453", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "opinion_index": -1 }, { "cite": "91 N.C. App. 87", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524492 ], "year": 1988, "opinion_index": -1, "case_paths": [ "/nc-app/91/0087-01" ] }, { "cite": "366 S.E. 2d 480", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "opinion_index": 0 }, { "cite": "322 N.C. 77", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2517981 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/322/0077-01" ] }, { "cite": "93 L.Ed. 389", "category": "reporters:federal", "reporter": "L. Ed.", "year": 1948, "opinion_index": 0 }, { "cite": "335 U.S. 837", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6181921, 6181540, 6182791, 6182251, 6182094, 6181367, 6181210, 6182619, 6181725, 6182430 ], "year": 1948, "opinion_index": 0, "case_paths": [ "/us/335/0837-05", "/us/335/0837-03", "/us/335/0837-10", "/us/335/0837-07", "/us/335/0837-06", "/us/335/0837-02", "/us/335/0837-01", "/us/335/0837-09", "/us/335/0837-04", "/us/335/0837-08" ] }, { "cite": "92 L.Ed. 1460", "category": "reporters:federal", "reporter": "L. Ed.", "year": 1948, "pin_cites": [ { "page": "1471" } ], "opinion_index": 0 }, { "cite": "334 U.S. 385", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6158252 ], "year": 1948, "pin_cites": [ { "page": "395" } ], "opinion_index": 0, "case_paths": [ "/us/334/0385-01" ] }, { "cite": "322 S.E. 2d 762", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 2166877 ], "year": 1984, "opinion_index": 0, "case_paths": [ "/sc/286/0070-01" ] }, { "cite": "312 N.C. 410", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4758734 ], "year": 1984, "opinion_index": 0, "case_paths": [ "/nc/312/0410-01" ] }, { "cite": "366 U.S. 420", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1285808 ], "weight": 2, "year": 1961, "pin_cites": [ { "page": "425-26" }, { "page": "399" } ], "opinion_index": 0, "case_paths": [ "/us/366/0420-01" ] }, { "cite": "86 L.Ed. 2d 710", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1985, "opinion_index": 0 }, { "cite": "472 U.S. 1001", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1512297, 1512555, 1512436 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/us/472/1001-03", "/us/472/1001-02", "/us/472/1001-01" ] }, { "cite": "322 S.E. 2d 155", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "opinion_index": 0 }, { "cite": "312 N.C. 211", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4749915 ], "year": 1984, "opinion_index": 0, "case_paths": [ "/nc/312/0211-01" ] }, { "cite": "405 U.S. 330", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11722480 ], "weight": 2, "year": 1972, "pin_cites": [ { "parenthetical": "one-year residency requirement to exercise right to vote" }, { "parenthetical": "one-year residency requirement to exercise right to vote" } ], "opinion_index": 0, "case_paths": [ "/us/405/0330-01" ] }, { "cite": "415 U.S. 250", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6174206 ], "weight": 4, "year": 1974, "opinion_index": 0, "case_paths": [ "/us/415/0250-01" ] }, { "cite": "452 U.S. 412", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1313916 ], "weight": 2, "year": 1981, "opinion_index": 0, "case_paths": [ "/us/452/0412-01" ] }, { "cite": "394 U.S. 618", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6177874 ], "weight": 4, "year": 1969, "opinion_index": 0, "case_paths": [ "/us/394/0618-01" ] }, { "cite": "36 L.Ed. 2d 418", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1973, "opinion_index": 0 }, { "cite": "411 U.S. 959", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 9713, 10116 ], "year": 1973, "opinion_index": 0, "case_paths": [ "/us/411/0959-01", "/us/411/0959-02" ] }, { "cite": "411 U.S. 1", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 10186 ], "weight": 2, "year": 1973, "pin_cites": [ { "page": "28" }, { "page": "40" } ], "opinion_index": 0, "case_paths": [ "/us/411/0001-01" ] }, { "cite": "269 S.E. 2d 142", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1980, "opinion_index": 0 }, { "cite": "301 N.C. 1", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561018 ], "year": 1980, "opinion_index": 0, "case_paths": [ "/nc/301/0001-01" ] }, { "cite": "370 S.E. 2d 453", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1988, "pin_cites": [ { "page": "455" } ], "opinion_index": 0 }, { "cite": "91 N.C. App. 87", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524492 ], "year": 1988, "pin_cites": [ { "page": "91" } ], "opinion_index": 0, "case_paths": [ "/nc-app/91/0087-01" ] } ], "analysis": { "cardinality": 737, "char_count": 13919, "ocr_confidence": 0.822, "pagerank": { "raw": 1.152128880448343e-07, "percentile": 0.5816595871033408 }, "sha256": "5849fb85b46b5970640935fd8a6c7ad64ed69008deda8fcc43514d8d42a71c01", "simhash": "1:a5a16de866218ce7", "word_count": 2163 }, "last_updated": "2023-07-14T20:39:53.264050+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "TOWN OF BEECH MOUNTAIN, ELLEN ANDERSON, CARL T. BROWNING and wife, MARTHA BROWNING, JOHN W. EARNHARDT and wife, PATRICIA W. EARNHARDT, GEORGE E. HANDLEY, JR. and wife, KATHLEEN HANDLEY, DOUGLAS W. JACKSON and wife, MARY LOU E. JACKSON, EDWARD L. McKINZIE and wife, JACQUELINE S. McKINZIE, and W. K. MIMS and wife, FRANCES G. MIMS v. COUNTY OF WATAUGA, JAMES G. COFFEY, CARL FIDLER, LARRY STANBERRY, JAY L. TEAMS, DAVID J. TRIPLETT, as Commissioners of Watauga County, and HELEN A. POWERS, Secretary, N.C. Department of Revenue, and C. C. CAMERON, Budget Officer for the State of North Carolina" ], "opinions": [ { "text": "MARTIN, Justice.\nOn this appeal plaintiffs raise various constitutional challenges to the per capita distribution under N.C.G.S. \u00a7 105-472 of Watauga County\u2019s sales and use tax revenues. We hold that per capita distribution offends neither the state constitution nor the federal constitution and, accordingly, we affirm the Court of Appeals.\nPlaintiffs in this action are the Town of Beech Mountain and certain individuals who own residential property within the town\u2019s boundaries. Plaintiff property owners include full-time residents of the town, and residents of other North Carolina counties and other states who own vacation property within the town. They filed this action seeking (1) an injunction to prohibit the county from distributing tax revenues on a per capita basis, and (2) a declaratory ruling determining that the per capita allocation of tax revenues is unconstitutional.\nThe trial court, pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, dismissed the complaint for failure to state a claim upon which relief could be granted. The Court of Appeals affirmed, unanimously holding that the per capita method of distribution did not violate plaintiffs\u2019 constitutional rights.\nThe statutory scheme at issue directs the board of county commissioners in each taxing county to determine in April of each year the method of distribution to be used for local sales and use tax revenues during the following fiscal year. N.C.G.S. \u00a7 105-472 (Cum. Supp. 1988). The statute lists two options: the ad valorem method and the per capita method.\nThe ad valorem method allocates revenues to each municipality based upon the percentage that the ad valorem taxes levied in a municipality bears to the total county ad valorem tax levy. Id. The per capita method, on the other hand, allocates to each municipality a percentage of the tax revenues equal to the percentage of the county population that the municipal population represents. Id.\nUnder the per capita method, a town\u2019s population is determined by calculating the number of individuals residing there for more than six months of the year. According to the complaint, 98 percent of Beech Mountain\u2019s property owners maintain their primary residence elsewhere. Thus, although plaintiffs allege that at the peak of the tourist season up to 15,000 people may actually dwell in Beech Mountain on any given day, only 239 of these individuals are considered residents for purposes of determining town population under the per capita distribution method.\nFor the fiscal years up to and including 1986-87, Watauga County distributed its tax revenues on an ad valorem basis. For the fiscal year 1987-88, however, the County shifted to the per capita method. Plaintiffs allege that this change resulted in a 93 percent decrease in the sales tax revenues distributed to Beech Mountain, forcing the municipality to raise city taxes and reduce services. For this reason they seek to overturn the authorizing statute on constitutional grounds.\nPlaintiffs first argue that the per capita or \u201cpopulation\u201d method of revenue distribution denies them equal protection under both the federal and state constitutions by creating an arbitrary distinction between those who reside in Watauga County more than six months of the year and those who reside primarily out-of-state or in other North Carolina counties. We find no merit to this assertion.\nCourts traditionally employ a two-tiered analysis to resolve equal protection claims. Texfi Industries v. City of Fayetteville, 301 N.C. 1, 269 S.E. 2d 142 (1980). When a legislative act operates to the disadvantage of a suspect class or interferes with the exercise of a fundamental right, the upper tier or \u201cstrict scrutiny\u201d standard is applied, requiring the government to demonstrate that the challenged statutory classification is necessary to promote a compelling governmental interest. When the claim involves neither a suspect class nor a fundamental right, the lower tier or \u201crationality\u201d standard is employed. Under this standard, the government need only show that the challenged classification bears some rational relationship to a legitimate governmental interest. Id.\nIn determining the appropriate standard of review in this particular case, we first consider whether the per capita method of revenue distribution operates to the disadvantage of a suspect class. The United States Supreme Court defines a suspect class as one which has been \u201csaddled with such disabilities, or subjected to such a history of purposeful unequal treatment, or relegated to such a position of political powerlessness as to command extraordinary protection from the majoritarian political process.\u201d San Antonio School District v. Rodriguez, 411 U.S. 1, 28, 36 L.Ed. 2d 16, 40, reh\u2019g denied, 411 U.S. 959, 36 L.Ed. 2d 418 (1973).\nPlaintiffs gamely attempt to characterize property owners primarily residing out-of-county or out-of-state as a politically powerless underclass. For obvious reasons, however, we decline to recognize nonresident individuals owning second homes in North Carolina resort areas as a downtrodden minority. Such a group has clearly suffered no oppression or disadvantage meriting particular consideration from the judiciary and displays none of the traditional indicia of a suspect class.\nNor do we find that plaintiffs have been denied the exercise of a fundamental right. Plaintiffs suggest that the increase in taxes and reduction in services occasioned by the per capita distribution method discourages citizens of other counties and states from purchasing property in Beech Mountain, thereby violating their right to travel.\nThe right to travel protects the federal interest in free interstate migration. Shapiro v. Thompson, 394 U.S. 618, 22 L.Ed. 2d 600 (1969). Although the right to travel is considered a fundamental right, Jones v. Helms, 452 U.S. 412, 69 L.Ed. 2d 118 (1981), restrictions based on residency do not warrant strict scrutiny merely because they impinge to some limited extent on its exercise. Memorial Hospital v. Maricopa County, 415 U.S. 250, 39 L.Ed. 2d 306 (1974). Only those statutory classifications which so burden the right to travel that they function, in effect, as penalties upon those migrating to a new state are subject to the strict scrutiny test. E.g., Memorial Hospital v. Maricopa County, 415 U.S. 250, 39 L.Ed. 2d 306 (one-year residency requirement to receive indigent medical care); Dunn v. Blumstein, 405 U.S. 330, 31 L.Ed. 2d 274 (1972) (one-year residency requirement to exercise right to vote); Shapiro v. Thompson, 394 U.S. 618, 22 L.Ed. 2d 600 (one-year residency requirement to receive welfare benefits).\nHere the per capita revenue distribution method authorized by the statute does not rise to the level of a penalty upon nonresidents. All Beech Mountain property owners \u2014 resident and nonresident alike \u2014are equally affected by this method of distribution. Nothing in the record indicates that Beech Mountain\u2019s nonresident property owners pay higher taxes, receive fewer services, or are otherwise treated differently from its resident property owners. Therefore, the statute cannot be said to inhibit free interstate migration or to significantly burden the right to travel.\nBecause we conclude that the statute neither operates to the disadvantage of a suspect class nor interferes with the exercise of a fundamental right, we need not apply the strict scrutiny test. Instead, we focus our inquiry on whether the statute bears a rational relationship to a conceivably legitimate governmental objective. Generally speaking, this rationality test is the appropriate standard to apply to purely economic regulations such as those governing the sales and use tax. In re Assessment of Taxes Against Village Publishing Corp., 312 N.C. 211, 322 S.E. 2d 155 (1984), appeal dismissed, 472 U.S. 1001, 86 L.Ed. 2d 710 (1985).\nUnder the rationality standard of review, \u201c[s]tate legislatures are presumed to have acted within their constitutional power despite the fact that, in practice, their laws result in some inequality.\u201d McGowan v. Maryland, 366 U.S. 420, 425-26, 6 L.Ed. 2d 393, 399 (1961). As long as there exists a reasonable basis for the disputed classification, this Court will not interfere with the legislature\u2019s decision. Powe v. Odell, 312 N.C. 410, 322 S.E. 2d 762 (1984).\nPlaintiffs insist that per capita revenue distribution is not rationally related to a legitimate state interest. We disagree. The legislature could reasonably have determined that individuals dwelling within a particular municipality for more than six months of the year would be likely to purchase more items of tangible personal property than would individuals primarily residing elsewhere. Thus, as the Court of Appeals aptly concluded, \u201c[t]he per capita method of distribution provides a reasonable means of returning revenues in an amount proportionate to those from whom they were collected.\u201d Town of Beech Mountain v. County of Watauga, 91 N.C. App. 87, 91, 370 S.E. 2d 453, 455 (1988). Providing a means of allocating revenues among the municipalities of a county is a legitimate governmental objective. Plaintiffs have failed to allege facts sufficient, if proven, to overcome the presumption of constitutionality.\nPlaintiffs next contend that per capita revenue distribution violates the privileges and immunities clause of the federal constitution. This argument, too, is meritless. The privileges and immunities clause \u201cwas designed to insure to a citizen of State A who ventures into State B the same privileges which the citizens of State B enjoy.\u201d Toomer v. Witsell, 334 U.S. 385, 395, 92 L.Ed. 1460, 1471, reh\u2019g denied, 335 U.S. 837, 93 L.Ed. 389 (1948). As previously noted, Beech Mountain property owners who maintain their primary residence elsewhere are treated no differently from property owners who reside in Beech Mountain year-round. The statute contains no impermissible distinction based on state citizenship. The privileges and immunities clause is simply not implicated in this case.\nBecause plaintiffs are not entitled to relief under any state of facts which could be proved in support of their claim, dismissal for failure to state a claim upon which relief could be granted was proper. St. Paul Fire & Marine Ins. Co. v. Freeman-White Assoc., Inc., 322 N.C. 77, 366 S.E. 2d 480 (1988).\nThe decision of the Court of Appeals is hereby\nAffirmed.", "type": "majority", "author": "MARTIN, Justice." } ], "attorneys": [ "Smith, Patterson, Follin, Curtis, James & Harkavy, by Michael K. Curtis, for plaintiff-appellants.", "Eggers, Eggers & Eggers, by Stacy C. Eggers III, and Womble Carlyle Sandridge & Rice, by Anthony H. Brett and Jean Schulte Scott, for Watauga County and Watauga County Board of Commissioners, defendant-appellees.", "Lacy H. Thornburg, Attorney General, by Newton G. Pritchett, Jr., Assistant Attorney General, for Helen A. Powers, Secretary N.C. Department of Revenue, and C. C. Cameron, Budget Officer of the State of North Carolina, defendantappellees." ], "corrections": "", "head_matter": "TOWN OF BEECH MOUNTAIN, ELLEN ANDERSON, CARL T. BROWNING and wife, MARTHA BROWNING, JOHN W. EARNHARDT and wife, PATRICIA W. EARNHARDT, GEORGE E. HANDLEY, JR. and wife, KATHLEEN HANDLEY, DOUGLAS W. JACKSON and wife, MARY LOU E. JACKSON, EDWARD L. McKINZIE and wife, JACQUELINE S. McKINZIE, and W. K. MIMS and wife, FRANCES G. MIMS v. COUNTY OF WATAUGA, JAMES G. COFFEY, CARL FIDLER, LARRY STANBERRY, JAY L. TEAMS, DAVID J. TRIPLETT, as Commissioners of Watauga County, and HELEN A. POWERS, Secretary, N.C. Department of Revenue, and C. C. CAMERON, Budget Officer for the State of North Carolina\nNo. 409A88\n(Filed 4 May 1989)\n1. Constitutional Law \u00a7 20\u2014 per capita distribution of sales and use tax \u2014 nonresident property owners \u2014 strict scrutiny test not appropriate\nThe strict scrutiny test for resolving equal protection claims was not applicable to an action in which plaintiffs alleged that per capita distribution of sales and use tax revenues created an arbitrary distinction between those who reside in Watauga County for more than six months of the year and those who reside primarily out of state or in other counties. Out-of-county and out-of-state property owners have clearly suffered no oppression or disadvantage meriting particular consideration from the judiciary and display none of the traditional indicia of a suspect class. There is no interference with a fundamental right in that the per capita revenue distribution method cannot be said to inhibit free interstate migration or to significantly burden the right to travel since all Beech Mountain property owners are equally affected.\n2. Constitutional Law \u00a7 20; Taxation \u00a7 15\u2014 per capita revenue distribution \u2014 rational relationship test \u2014 constitutional\nThe per capita distribution of sales and use tax revenues based on a six-month residence test did not violate equal protection under the rational relationship test in that the legislature could reasonably have determined that individuals dwelling within a particular municipality for more than six months of the year would be likely to purchase more items of tangible personal property than would individuals primarily residing elsewhere.\n3. Constitutional Law \u00a7 19.1\u2014 per capita revenue distribution \u2014 nonresident property owners \u2014 no violation of privileges and immunities clause\nPer capita distribution of sales and use tax revenues did not violate the privileges and immunities clause in the federal constitution in that Beech Mountain property owners who maintain their primary residence elsewhere are treated no differently from property owners who reside in Beech Mountain year-round.\nAPPEAL by plaintiffs pursuant to N.C.G.S. \u00a7 7A-30(1) from a decision of the Court of Appeals, 91 N.C. App. 87, 370 S.E. 2d 453 (1988), affirming order granting defendants\u2019 motion to dismiss by Lamm, J., at the 7 December 1987 session of Superior Court, WATAUGA County. Heard in the Supreme Court 14 February 1989.\nSmith, Patterson, Follin, Curtis, James & Harkavy, by Michael K. Curtis, for plaintiff-appellants.\nEggers, Eggers & Eggers, by Stacy C. Eggers III, and Womble Carlyle Sandridge & Rice, by Anthony H. Brett and Jean Schulte Scott, for Watauga County and Watauga County Board of Commissioners, defendant-appellees.\nLacy H. Thornburg, Attorney General, by Newton G. Pritchett, Jr., Assistant Attorney General, for Helen A. Powers, Secretary N.C. Department of Revenue, and C. C. Cameron, Budget Officer of the State of North Carolina, defendantappellees." }, "file_name": "0409-01", "first_page_order": 447, "last_page_order": 453 }