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Melof v. James5/28/1999
lic allowances, pensions or annuities for the years 1985 through the present." Melof v. James, [Ms. 2970056, May 8, 1998] So. 2d , (Ala. Civ. App. 1998).
The representatives of the four subclasses described above ("representatives") filed an amended complaint that restated the allegations of equal-protection violations, but added the further allegation that Alabama's retirement-tax structure violated the provisions of Amendment 25 of the Alabama Constitution, which requires that " n the event the legislature levies an income tax, such tax must be levied upon the salaries, income, fees, or other compensation of state, county and municipal officers and employees, on the same basis as such income taxes are levied upon other persons." The representatives sought a refund of all taxes determined by the court to have been collected from class members in violation of constitutional principles within the statutory three-year period of limitations.
The representatives and the State moved for summary judgments. The trial court entered a summary judgment for the State, holding that, "for Alabama tax purposes, Alabama's pre-1991 and post-1991 classification of retirement benefits is not in violation of the provisions of Amendment 25 to the Alabama Constitution, the Equal Protection Clause or the equal protection provisions of the Alabama Constitution," and it thus denied the representatives' requests for refund of taxes paid on their retirement benefits. The Court of Civil Appeals affirmed. Melof v. James, So. 2d . We granted the representatives' petition for certiorari review and heard oral arguments. We now affirm.
Issue I
Whether Alabama's retirement-tax structure violates Amendment 25 to the Alabama Constitution of 1901.
The exemptions and constitutional amendments at issue were adequately recounted in their historical context by the Court of Civil Appeals:
"Amendment 25 to the Alabama Constitution of 1901 was ratified in 1933. It authorized the State to levy an income tax on Alabama citizens, but prohibited any special income tax treatment of the income of public officers and employees. Subsequent to the ratification of Amendment 25, the Legislature enacted an Alabama income tax in 1935. 1935 Ala. Acts No. 194.
"The Legislature created the Teachers Retirement System of Alabama ('TRS') and the State Employees Retirement System of Alabama ('ERS') in 1939 and 1945, respectively. 1939 Ala. Acts, Act No. 419, and 1945 Ala. Acts, Act No. 515. Each of the acts creating the two retirement systems contains a provision exempting the systems' retirement benefits from any state or municipal tax. These exemptions remain in effect today. § 16-25-23 and § 36-27-28, Ala. Code 1975.
"Amendment 61 to the Alabama Constitution of 1901 was ratified in 1947. Section C. of that Amendment provides:
"'All laws relating to the income tax, not in conflict herewith and valid on the date of the ratification of this amendment, are hereby validated and confirmed.'
"In 1958, the Legislature codified the previously granted exemptions to retirement benefits of TRS and ERS members into the income tax statutes. 1959 Ala. Acts, Act No. 112.
"Pursuant to § 36-27-6(a), Ala. Code 1975, counties, municipalities, and public or quasi-public boards of the state may join the ERS and thereby qualify their retirees for the exemption of retirement benefits from Alabama income tax.
"Beginning with the tax year 1991, the Legislature exempted from income tax the retirement benefits received by Alabama taxpayers from: 1) the TRS, 2) the ERS, 3) political subdivisions of the State for employment as firefighters or
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