Income Tax Declaratory Act of 1905

A selection of original provisions from the Income Tax Declaratory Act of 1905 as enacted on 20 December 1905.

'Be it enacted by the King’s Most Excellent Majesty, by and with the advice and consent of the Legislative Council and Legislative Assembly of Queensland in Parliament assembled, and by the authority of the same, as follows:

1.  This Act may be cited as “The Income Tax Declaratory Act of 1905,” and shall be read as one with “The Income Tax Act of 1902” and “The Income Tax Act Amendment Act of 1904.”

2.  It is hereby declared that each of the persons for the time being holding the following offices in the State of Queensland, namely, the office of
Chief Justice,
Judge of the Supreme Court,
Judge of District Courts,
Member of the Land Court,
Auditor-General,
Commissioner for Railways,
is and always has been chargeable with and liable to pay income tax in respect of his official salary under and in accordance with the provisions of the laws imposing a tax on income.'

The following are extracts from the Second Reading speech by the Treasurer, William Kidston, who introduced the Income Tax Declaratory Bill into the Legislative Assembly on 15 December 1905.

'This, as hon. members will see, is a very short Bill. It is simply a Bill of one clause, declaring the law with regard to this particular matter. But it involves a very grave and important principle—the principle that all citizens shall be equal before the law. As to whether some of the officers specified in the Bill have refused to pay income tax, hon. members must remember that the Commissioner is under the seal of secrecy, and it is impossible to specify any person who has not paid his tax. 

'But it involves a very grave and important principle—the principle that all citizens shall be equal before the law'

But the Commissioner assures me that certain of those officers named have refused to pay income tax—that while the great majority of the officers mentioned here have paid their income tax like other citizens, some of them have refused to pay, and that when taken before the court the judges refused to adjudicate, on the ground that they were interested.

Under those circumstances, the only thing to do—because if we refer the matter to the High Court it will be said that, directly or indirectly, the judges of that court are also interested parties—the only thing to do was to come to the High Court of Parliament, who have made the law, and ask them to declare what the law is. The point has been taken that certain officers are sheltered by the Constitution. I will not refer to the question of good taste.

They have to pay their local rates like other citizens, although that diminishes their salary just as much as an income tax. If they want whisky or tobacco, they have to pay Customs duties upon them just the same as other citizens, although that diminishes their income just as it diminishes the income of other citizens. And they must pay their income tax in the same way as the others do.

Yet although the judges there are just as much sheltered under the Constitution as the judges are here, they pay income tax just like other citizens. Under these circumstances, when this House passed the Income Tax Act I do not suppose that any member had any suspicions at all that the judges were likely to claim exemption.

'If they want whisky or tobacco, they have to pay Customs duties upon them just the same as other citizens'

I have stated the case as briefly as possible, and to do away with all ambiguity—to protect the Commissioner, and to give him to clearly understand what Parliament means in regard to this matter, I ask the House to declare the law.'

Sir Pope Cooper, Chief Justice of the Supreme Court of Queensland, initially made a complaint before a Police Magistrate, who decided that he was not liable. He lost all subsequent court decisions after the Commissioner appealed.

The following are extracts from judgments of the District Court and the High Court of Australia.

District Court

Miller DCJ

'The original claim was for ₤77:19:4 for the amount of income tax assessed as payable by the respondent, Sir Pope A. Cooper, Chief Justice of the Supreme Court of Queensland, on the income received by him for the year 1905, together with ₤7:15:11 as penalty for late payment.

The Income Tax Act specially declares the incomes which are exempt from the operation of the tax, and those of the judges are not among those exemptions.'

High Court of Australia

Cooper v Commissioner of Income Tax (Qld) [1907]

Griffith CJ

'The appellant’s counsel informed us that his client had paid income tax, including that claimed for the year 1904, under protest, and that he attached little importance to the mere question of liability to the tax as compared with the question of the asserted right of the legislature to disregard the Constitution, and to pass Acts inconsistent with it and injuriously affecting the tenure on which the Judges of the Supreme Court hold their office.'

Barton J

'But the ordinary taxation of the State stands on the different footing. It is imposed on all who come within the area prescribed for taxation, whatever their rank or occupation. It is raised for revenue purposes, and one does not think a Colonial Treasurer trying to levy a tax on the whole people, yielding many hundreds of thousands of pounds, for the mere purpose of vindictively obtaining a few pounds from one or half a dozen Judges. To reduce the salaries of officiating Judges is, or may be, an attack on their independence—a punishment for its exercise. To subject them, in common with all their fellow citizens, to a general tax, is not likely to be anything of the kind, and it is not in reason to suppose that Parliament, in imposing it, has thought of it in that light.'

'One does not think a Colonial Treasurer trying to levy a tax on the whole people, yielding many hundreds of thousands of pounds, for the mere purpose of vindictively obtaining a few pounds from one or half a dozen Judges'

O'Connor J

'The real meaning of the contention is that the appellant is not only entitled to be paid the full amount of his statutory salary, but that when it is paid he cannot be taxed in respect of it, even although the tax is imposed under a general law affecting every person in receipt of a certain income. In other words, that a Judge of the Supreme Court is entitled to have his salary exempted from any general scheme of taxation of incomes.

But it is said that, having regard to the necessity of preserving the independence of the Judges and the course of legislation which has secured that independence, the section must read as conferring the right claimed.

(I)t is difficult to conceive that Her Majesty in Council, while adopting the identical language of the Statute by which the independence of English Judges as to remuneration was then secured, intended to confer on the Judges of the Queensland Supreme Court an immunity from taxation which the British Parliament at that time did not consider necessary in the case of English Judges.'

The appeal was unanimously dismissed.