Anthony, Inc. v. City of Omaha

P er C uriam.
Having reviewed the briefs and record and having heard oral
argument, we conclude on further review that the decision of
the Nebraska Court of Appeals in In re Interest of David M. et
al., 19 Neb. App. 399, 808 N.W.2d 357 (2012), is correct, and
accordingly, we affirm the decision of the Nebraska Court of
Appeals that reversed and remanded the ruling of the county
court.
affirmed.
H eaviCan, C.J., not participating.
antHony, inC., a nebraska CorPoration, et al .,
aPPellants , v. C ity of omaHa , a nebraska
muniCiPal CorPoration, aPPellee .
813 N.W.2d 467
Filed May 18, 2012. 	No. S-11-421.
1. Constitutional Law: Ordinances: Appeal and Error. The constitutionality of
an ordinance presents a question of law, in which an appellate court is obligated
to reach a conclusion independent of the decision reached by the trial court.
2. Administrative Law: Statutes: Appeal and Error. The interpretation of statutes
and regulations presents questions of law, in connection with which an appellate
court has an obligation to reach an independent conclusion irrespective of the
decision made by the court below.
3. Municipal Corporations: Taxation: Statutes. Municipal corporations have no
power to impose taxes except such as is expressly conferred by or necessarily
implied from statute.
4. Taxation: Words and Phrases. An occupation tax is a tax upon the privilege of
doing business in a particular jurisdiction or upon the act of exercising, undertak-
ing, or operating a given occupation, trade, or profession.
5. ____: ____. A sales tax is a tax upon the sale, lease, rental, use, storage, dis-
tribution, or other consumption of all tangible personal property in the chain
of commerce.
6. Taxation: Proof. The legal incidence test requires a determination of who the law
declares has the ultimate burden of the tax.
7. Taxation. The legal incidence of a sales tax falls upon the purchaser, because it
is a tax upon the privilege of buying tangible personal property.
8. ____. The legal incidence of an occupation tax falls upon the retailer, because it
is a tax upon the act or privilege of engaging in business activities.
868 	283 NebrASkA reporTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:42 AM CST

9. ____. both occupation taxes and sales taxes can be calculated upon gross
receipts.
10. ____. It is not objectionable for there to be two or more occupation taxes imposed
upon the same retailer.
11. ____. The same person or entity may engage in several different businesses or
activities and be taxed on each.
12. Statutes: Legislature: Intent. In the exposition of statutes, the reason and inten-
tion of the lawgiver will control the strict letter of the law when the latter would
lead to palpable injustice or absurdity.
13. ____: ____: ____. When words of a particular clause, taken literally, would
plainly contradict other clauses of the same statute, or lead to some manifest
absurdity or to some consequences which a court sees plainly could not have
been intended, or to result manifestly against the general term, scope, and pur-
pose of the law, then the court may apply the rules of construction to ascertain
the meaning and intent of the lawgiver, and bring the whole statute into harmony
if possible.
14. Taxation: Liquor Licenses. The monetary limit for an occupation tax on the
business of any person, firm, or corporation licensed under the Nebraska Liquor
Control Act is a specific limitation on an occupation tax on the type of business
or activity licensed under the act.
15. Administrative Law: Taxation: Legislature. A state legislature, in fixing a
license tax on a certain subject, may limit taxes against the same subject by other
branches of government.
16. Constitutional Law: Ordinances: Presumptions: Proof: Appeal and Error.
When passing on the constitutionality of an ordinance, an appellate court begins
with a presumption of validity. Therefore, the burden of demonstrating the consti-
tutional defect rests with the challenger.
17. Constitutional Law: Statutes: Special Legislation. When a law confers privi-
leges on a class arbitrarily selected from a large number of persons standing in
the same relation to the privileges, then the law in question has resulted in the
kind of improper “special favors” prohibited by the special legislation clause.
18. Special Legislation. A legislative act constitutes special legislation if (1) it cre-
ates an arbitrary and unreasonable method of classification or (2) it creates a
permanently closed class.
19. Municipal Corporations: Taxation: Ordinances. To be valid, a municipal ordi-
nance classifying an occupation for the purpose of levying a tax thereon must not
be arbitrary in its classification.
20. Taxation: Public Policy. A classification for tax purposes must rest on some rea-
son of public policy or some substantial difference of situation or circumstances
that would naturally suggest the justice or expediency of diverse legislation with
respect to the objects or individuals classified.
21. Municipal Corporations: Taxation: Ordinances. Municipal authorities may by
ordinance classify the different occupations for taxation, and impose different
taxation in different amounts upon the different classes; and a classification made
by such authorities will not be interfered with by the courts, unless it manifestly
appears that it is unreasonable and arbitrary.
ANTHoNy, INC. v. CITy oF oMAHA 	869
Cite as 283 Neb. 868

Appeal from the District Court for Douglas County: marlon
a. Polk, Judge. Affirmed.
D.C. bradford, ryan J. Dougherty, and Justin D. eichmann,
of bradford & Coenen, L.L.C., for appellants.
Thomas Mumgaard, Deputy omaha City Attorney, for appel-
lee City of omaha.
rodney M. Confer, Lincoln City Attorney, and Jocelyn W.
Golden for amicus curiae City of Lincoln.
H eaviCan, 	C.J., 	C onnolly, 	stePHan, 	mCC ormaCk , 	and
miller-lerman, JJ., and irwin and moore , Judges.
mCC ormaCk , J.
NATUre oF CASe
Anthony, Inc.; Anthony J. Fucinaro, Jr.; La Casa pizzaria
Inc.; and members of the omaha restaurant Association (col-
lectively the restaurants) operate restaurants in the City of
omaha (the City) subject to a municipal ordinance which
became effective on october 1, 2010. The ordinance declares
itself to be an “occupation tax” on restaurants and drink-
ing places in the City in the amount of 21⁄2 percent of gross
receipts. The restaurants argue that the tax is actually a
“sales tax” which exceeds the sales tax limits authorized
by law. Alternatively, the restaurants argue that if the ordi-
nance imposes an occupation tax, it violates limitations in
the Nebraska Liquor Control Act (Liquor Control Act)1 on
the amount of occupation tax for liquor licensees. Finally, the
restaurants argue that the ordinance is unconstitutional special
legislation. We find no merit to the restaurants’ challenges to
the ordinance.
bACkGroUND
tHe restaurant ordinanCe
In response to budget shortfalls, the omaha City Council
passed 	ordinance 	No. 	38791 	(the 	restaurant 	ordinance),2
1 Neb. rev. Stat. §§ 53-101 to 53-1,122 (reissue 2010).
2 omaha Mun. Code, ch. 19, art. XVI, §§ 19-800 through 19-813 (2010).
870 	283 NebrASkA reporTS

which imposes “an occupation tax on persons operating restau-
rants and drinking places within the City” (the restaurant Tax).
A restaurant is defined by the ordinance as “any place that is
kept, used, maintained, advertised, or held out to the public as
a place where food is prepared and sold for immediate con-
sumption either on the premises or elsewhere.”3 A “drinking
place” is defined as “any establishment or business offering
the public on-premises consumption of alcoholic and/or non-
alcoholic beverages.”4
The amount of the restaurant ordinance is 21⁄2 percent “of
all gross receipts for each calendar month derived from the
sale of food or beverages subject to this tax.”5 The restaurant
ordinance provides that a taxable restaurant or drinking place
“may itemize the tax levied on a bill, receipt, or other invoice
provided to the purchaser but each person engaged in the res-
taurant or drinking place business shall remain liable for the
tax imposed by this section.”6 The tax “is for revenue purposes
to support the government of the city” and is “in addition to
all other fees, taxes, excises, and licenses levied and imposed
under any contract or any other provisions of this code or ordi-
nances of the city and in addition to any fee, tax, excise, or
license imposed by the state.”7
The stated intent and purposes of the restaurant ordinance
are as follows:
(a) The city council determines that persons engaging
in restaurant and drinking place businesses are benefited
from tourism and recreational activity that places unique
demands on the city’s resources but which is activity that
should be promoted and encouraged. Further, residents
and non-residents who patronize these businesses are
enjoying a discretionary activity that is dependent upon,
and generating revenue from, the business’s location
3 Id., § 19-800(h).
4 Id., § 19-800(c).
5 Id., § 19-802(a).
6 Id., § 19-802(b).
7 Id., § 19-803(a).
ANTHoNy, INC. v. CITy oF oMAHA 	871
Cite as 283 Neb. 868

within the city and the business’s access to the services
provided by the city. Subjecting the business’s revenue
to taxation for general city purposes is fair, reasonable,
and just.
(b) 	pursuant 	to 	the 	authority 	of 	Neb. 	rev. 	Stat.
§ 14-109, the city council finds, determines, and declares
that restaurant and drinking place businesses form a
discrete class of occupation engaged in within the city
and it is appropriate that a tax be imposed on this class
of businesses for the purpose of raising revenue to sup-
port and further general city activities and services. This
determination is made with due recognition of the inher-
ent value of business conducted within the city and the
relation business has to the municipal welfare and the
expenditures required of the city, and with consideration
of the just, proper and equitable distribution of tax bur-
dens within the city.8
The restaurant ordinance contains a severability clause
stating that if any provision “or the application thereof to
any person or circumstances” is held invalid, then “that
invalidity shall not affect the other provisions of this article
which can be given effect without the invalid provision or
application.”9
The City’s finance department sent letters to restaurants,
drinking places, 	and 	caterers 	identified 	as subject to the
restaurant ordinance. Those letters informed the businesses
as to various matters concerning the restaurant Tax, includ-
ing how it related to the calculation of state and city sales and
use taxes.
The letter stated that the state and local sales and use taxes
are “calculated on the gross receipts plus the restaurant tax.”
In the event restaurants chose to itemize the restaurant Tax on
their customers’ bills, the City sent the following example as to
how the sales tax would be calculated and listed:
8 Id., § 19-801.
9 Id., § 19-813.
872 	283 NebrASkA reporTS

Example: 	Meal and beverage cost: 	$100.00
2.5% restaurant tax 	2.50(a)
Total cost of the meal 	$102.50
Total cost of the meal 	$102.50
7% sales tax 	7.18(b)
Total cost to the customer 	$109.68
Amount remitted to the State of Nebraska 	$7.18(b)
Calculation of amount sent to the City
2.5% food and beverage tax 	$2.50(a)
Less: collection fee of 2% 	.05
Amount remitted to the City of Omaha 	$2.45
This method of calculation followed the recommended method
by the Nebraska Department of revenue, based on its inter-
pretation of sales tax regulation 316 Neb. Admin. Code,
ch. 1, § 007.01 (2010), and Neb. rev. Stat. § 77-2701.35(3)(c)
(reissue 2009). The department considers occupation taxes
as simply another cost of doing business, no different than
income, property, or other business or license taxes and fees.
As such, occupation taxes are considered part of the gross
receipts upon which the sales tax is calculated.
P roCeedings below
The restaurants filed an action for declaratory judgment
and injunctive relief against the City. The restaurants alleged
that the restaurant ordinance is invalid because it imposes an
unauthorized sales tax, violates the provisions of § 53-132(4),
and constitutes special legislation affording special or exclusive
immunity to persons operating businesses other than restau-
rants and drinking places.
The restaurants asked that the district court declare the
restaurant ordinance unconstitutional, invalid, illegal, and
unenforceable and that it enjoin the City from imposing and
collecting the restaurant Tax imposed by the ordinance. The
restaurants did not seek declaratory judgment or injunctive
relief concerning the state or local sales tax calculations.
In particular, they did not challenge regulation § 007.01 or
§ 77-2701.35(3)(c) and the recommended method of comput-
ing the total sales tax when the restaurant Tax is itemized on
the customers’ bills.
ANTHoNy, INC. v. CITy oF oMAHA 	873
Cite as 283 Neb. 868

At a hearing on cross-motions for summary judgment,
Anthony, Inc., presented evidence that it had elected to itemize
the restaurant Tax on its customers’ bills. La Casa pizzaria, in
contrast, apparently did not specifically itemize the restaurant
Tax, but charged a combined total of 9 percent tax to its cus-
tomers’ bills. La Casa pizzaria paid the additional 0.68 per-
cent of its restaurant Tax obligation from its general revenue.
Anthony, Inc., presented evidence that it paid $26,707.89 to the
City under the restaurant ordinance in 2010. La Casa pizzaria
paid a total of $12,053.29 in 2010.
The district court denied the restaurants’ motion for sum-
mary judgment and granted summary judgment in favor of the
City. The restaurants appeal.
ASSIGNMeNTS oF error
The restaurants assign that the district court erred in granting
summary judgment upon the determination that the restaurant
ordinance (1) does not constitute an illegal sales tax, (2) does
not constitute an illegal occupation tax, and (3) does not con-
stitute unconstitutional special legislation.
STANDArD oF reVIeW
[1] The constitutionality of an ordinance presents a ques-
tion of law, in which an appellate court is obligated to reach
a conclusion independent of the decision reached by the
trial court.10
[2] The interpretation of statutes and regulations presents
questions of law, in connection with which an appellate court
has an obligation to reach an independent conclusion irrespec-
tive of the decision made by the court below.11
ANALySIS
[3] Municipal corporations have no power to impose taxes
except such as is expressly conferred by or necessarily implied
from statute.12 pursuant to Neb. rev. Stat. § 14-109 (reissue
10 Waste Connections of Neb. v. City of Lincoln, 269 Neb. 855, 697 N.W.2d
256 (2005).
11 Berrington Corp. v. State, 277 Neb. 765, 765 N.W.2d 448 (2009).
12 See Caldwell v. City of Lincoln, 19 Neb. 569, 27 N.W. 647 (1886).
874 	283 NebrASkA reporTS

2007), city councils of cities of the metropolitan class have the
power to “raise revenue by levying and collecting a tax on any
occupation or business within the limits of the city,” so long as
they are “uniform in respect to the class upon which they are
imposed.” There are no statutory limits on the amount of such
occupation taxes.
The restaurants’ principal argument is that the restaurant
ordinance really imposes a sales tax instead of an occupa-
tion tax. The restaurants argue that the restaurant ordinance
is therefore invalid because it exceeds statutory limits on
the amount of sales and use taxes that may be imposed.
Alternatively, the restaurants argue that if the restaurant
ordinance imposes an occupation tax, it violates the Liquor
Control Act.13 Finally, the restaurants argue that the restaurant
Tax is unconstitutional special legislation. We address each of
these arguments in turn.
tHe restaurant ordinanCe does not
imPose illegal sales tax
While there is no statutory limit on the amount of municipal
occupation taxes, there are limits on the amount of munici-
pal sales and use taxes. Neb. rev. Stat. § 77-27,142 (reissue
2009) authorizes any municipality to impose a sales and use
tax, but currently imposes a limit of 11⁄2 percent for such taxes.
A municipal ordinance already imposes a sales tax of 11⁄2 per-
cent for City residents.14 Thus, if the restaurant ordinance
were a sales tax and not an occupation tax, it would violate
§ 77-27,142.
The Nebraska statutes do not define the terms “sales tax” or
“occupation tax.” Municipal occupation taxes are not described
by statute other than the requirements of uniformity as stated
in § 14-109.
The state sales tax is described in more detail. Neb. rev.
Stat. § 77-2701.02(4) (reissue 2009) sets the current state sales
tax rate at 51⁄2 percent. Under Neb. rev. Stat. § 77-2703(1)
(reissue 2009), the sales and use tax is imposed “upon the
13 §§ 53-101 to 53-1,122.
14 omaha Mun. Code, ch. 35, art. II, § 35-21 (1995).
ANTHoNy, INC. v. CITy oF oMAHA 	875
Cite as 283 Neb. 868

gross receipts from all sales of tangible personal property sold
at retail in this state.”
Section 77-2703(1) states further as follows:
(a) The tax imposed by this section shall be collected
by the retailer from the consumer. It shall constitute a
part of the purchase price and until collected shall be
a debt from the consumer to the retailer and shall be
recoverable at law in the same manner as other debts.
The tax required to be collected by the retailer from
the consumer constitutes a debt owed by the retailer to
this state.
(b) It is unlawful for any retailer to advertise, hold
out, or state to the public or to any customer, directly or
indirectly, that the tax or part thereof will be assumed
or absorbed by the retailer, that it will not be added to
the selling, renting, or leasing price of the property sold,
rented, or leased, or that, if added, it or any part thereof
will be refunded. The provisions of this subdivision shall
not apply to a public utility.
(c) The tax required to be collected by the retailer
from the purchaser, unless otherwise provided by statute
or by rule and regulation of the Tax Commissioner, shall
be displayed separately from the list price, the price
advertised in the premises, the marked price, or other
price on the sales check or other proof of sales, rentals,
or leases.
The restaurants believe that because the restaurant Tax
shares some of the attributes of the sales tax, as described by
§ 77-2703(1), it is also a sales tax. We disagree.
both occupation taxes and sales taxes are “excise taxes” for
the purpose of raising revenue.15 An excise tax is a tax imposed
on the manufacture, sale, or use of goods or on an occupation
15 See Kiplinger v. Nebraska Dept. of Nat. Resources, 282 Neb. 237, 803
N.W.2d 28 (2011). See, also, Town of Eagle v. Scheibe, 10 p.3d 648 (Colo.
2000); Callaway v. City of Overland Park, 211 kan. 646, 508 p.2d 902
(1973); Reed v. City of New Orleans, 593 So. 2d 368 (La. 1992); Eugene
Theatre et al. v. Eugene et al., 194 or. 603, 243 p.2d 1060 (1952); Ford
Motor Co. v. City of Seattle, 160 Wash. 2d 32, 156 p.3d 185 (2007).
876 	283 NebrASkA reporTS

or activity,16 and is measured by the extent to which a privilege
is exercised by the taxpayer, without regard to the nature or
value of the taxpayer’s assets.17 An excise tax is imposed upon
the performance of an act.18
[4,5] but sales taxes and occupation taxes tax different
kinds of acts.19 An occupation tax is a tax upon the privilege
of doing business in a particular jurisdiction20 or upon the act
of exercising, undertaking, or operating a given occupation,
trade, or profession.21 A sales tax, on the other hand, is a tax
upon the sale, lease, rental, use, storage, distribution, or other
consumption of all tangible personal property in the chain
of commerce.22
[6-8] The most fundamental distinction between a sales
tax and an occupation tax is the “legal incidence” of the tax.
The legal incidence test requires a determination of who the
law declares has the ultimate burden of the tax.23 The legal
incidence of a sales tax falls upon the purchaser, because it
is a tax upon the privilege of buying tangible personal prop-
erty.24 The legal incidence of an occupation tax falls upon the
16 Waste Connections of Neb. v. City of Lincoln, supra note 10.
17 71 Am. Jur. 2d State and Local Taxation § 22 (2001).
18 See Kiplinger v. Nebraska Dept. of Nat. Resources, supra note 15.
19 Ford Motor Co. v. City of Seattle, supra note 15. See, also, Archer Daniels
Midland Co. v. Chicago, 294 Ill. App. 3d 186, 689 N.e.2d 392, 228 Ill.
Dec. 520 (1997).
20 See Ford Motor Co. v. City of Seattle, supra note 15.
21 See Wellington v. City of Chicago, 144 Ill. App. 3d 774, 494 N.e.2d 603,
98 Ill. Dec. 481 (1986).
22 Intralot, Inc. v. Nebraska Dept. of Rev., 276 Neb. 708, 757 N.W.2d 182
(2008).
23 See, American Beverage Ass’n v. City of Chicago, 404 Ill. App. 3d 682,
937 N.e.2d 261, 344 Ill. Dec. 555 (2010); Marcum v. City of Louisville
Municipal Housing Com’n, 374 S.W.2d 865 (ky. 1963); Keystone Auto
Leasing, Inc. v. Norberg, 486 A.2d 613 (r.I. 1985); South Cent. Bell
Telephone Co. v. Olsen, 669 S.W.2d 649 (Tenn. 1984).
24 See id. See, also, P & S Grain, LLC v. County of Williamson, 399 Ill. App.
3d 836, 926 N.e.2d 466, 339 Ill. Dec. 234 (2010); Ford Motor Co. v. City
of Seattle, supra note 15.
ANTHoNy, INC. v. CITy oF oMAHA 	877
Cite as 283 Neb. 868

retailer, because it is a tax upon the act or privilege of engag-
ing in business activities.25 While sales taxes and occupation
taxes often have “a similar appearance and effect,” they are
“substantively distinct,” because of the distinct identities of the
taxpayers upon whom the tax is levied.26
[9] both occupation taxes and sales taxes can be “gross
receipts taxes.”27 A “gross receipts tax” is any tax law that
provides for calculation or computation of the amount of
taxes due with reference to total revenues arising out of the
subject matter taxed.28 The method of computation of a tax
is generally considered to be “of no significance in deter-
mining the nature of the exaction imposed in any particular
tax legislation.”29
Several other jurisdictions have accordingly rejected argu-
ments that a tax must be a sales tax rather than an occupa-
tion tax because it is calculated on gross receipts. In Short
Bros. v. Arlington County,30 for instance, the court rejected the
plaintiff’s argument that an occupation tax calculated based
on revenue generated by the sale or lease of property was
thereby transformed into a tax on the sale or lease of property.
The court explained that “revenue is merely an element in the
formula used to determine the taxpayer’s liability for the tax
at issue, just as it also may serve to determine the taxpayer’s
25 See, American Beverage Ass’n v. City of Chicago, supra note 23; Ford
Motor Co. v. City of Seattle, supra note 15. See, also, e.g., Governors
of Ak-Sar-Ben v. Department of Rev., 217 Neb. 518, 349 N.W.2d 385
(1984).
26 See Southern Pacific Transp. Co. v. State, 202 Ariz. 326, 333, 44 p.3d
1006, 1013 (Ariz. App. 2002). See, also, Ryder Truck Rental, Inc. v.
Bryant, 170 So. 2d 822 (Fla. 1964).
27 16 eugene McQuillin, The Law of Municipal Corporations § 44.192 (rev.
3d ed. 2003).
28 Id.
29 Town of Fenwick Island v. Sussex Sands, Inc., No. Civ. A. 89C-My14,
1990 WL 161177 at *3 (Del. Super. Sept. 18, 1990) (unpublished opin-
ion). See, also, American Beverage Ass’n v. City of Chicago, supra note
23; Eugene Theatre et al. v. Eugene et al., supra note 15. but see Town of
Eagle v. Scheibe, supra note 15.
30 Short Bros. v. Arlington County, 244 Va. 520, 423 S.e.2d 172 (1992).
878 	283 NebrASkA reporTS

liability for income taxes, sales taxes, use taxes, or value-
added taxes.”31
The court explained that although gross receipts may form
the same basis of calculation for all these kinds of taxes, “the
taxes are different taxes, based upon different underlying phi-
losophies, different taxing jurisdictions, and different taxpay-
ers.”32 Similarly, in Eugene Theatre et al. v. Eugene et al.,33
the court said that a true occupation tax “is no less an occupa-
tion tax because the amount thereof is measured by the gross
receipts from sales or services.”
Nebraska has a history of occupation taxes calculated on
gross receipts. In Lincoln Traction Co. v. City of Lincoln,34
for example, we recognized the authority and right of the city
to impose an occupation tax for the use and occupation of its
streets by street railway companies and the authority and right
to measure the amount of such occupation tax by the gross
earnings of the corporation enjoying and making use of that
privilege. And, in Nebraska Telephone Co. v. City of Lincoln,35
we said, “A business tax measured by gross earnings is a tax
upon the business which is actually performed, and is not a tax
upon property in any sense . . . .”
Currently, several statutes expressly contemplate occupa-
tion taxes calculated upon gross receipts. Neb. rev. Stat.
§ 15-202 (reissue 2007) provides that a city of the primary
class may impose an occupation tax on public service property
31 Id. at 523, 423 S.e.2d at 174.
32 Id.
33 Eugene Theatre et al. v. Eugene et al., supra note 15, 194 or. at 630, 243
p.2d at 1072. See, Acme Brick & Supply v. Dep’t of Revenue, 133 Ill. App.
3d 757, 478 N.e.2d 1380, 88 Ill. Dec. 654 (1985); Ford Motor Co. v. City
of Seattle, supra note 15. See, also, McPheeter v. City of Auburn, 288 Ala.
286, 259 So. 2d 833 (1972). but see, Bd. of Trustees v. Foster Lumber, 190
Colo. 479, 548 p.2d 1276 (1976); Svithiod Singing Club v. McKibbin, 381
Ill. 194, 44 N.e.2d 904 (1942).
34 Lincoln Traction Co. v. City of Lincoln, 84 Neb. 327, 121 N.W. 435
(1909).
35 Nebraska Telephone Co. v. City of Lincoln, 82 Neb. 59, 63, 117 N.W. 284,
286 (1908).
ANTHoNy, INC. v. CITy oF oMAHA 	879
Cite as 283 Neb. 868

or corporations “based upon a certain percentage of the gross
receipts . . . or upon such other basis as may be determined
upon by the mayor and council.” Neb. rev. Stat. § 86-704
(reissue 2009) allows municipalities to impose an occupation
tax on telecommunications businesses based on a percent-
age of customer sales receipts. Neb. rev. Stat. § 77-27,223
(reissue 2009) allows counties to impose an occupation tax on
businesses engaged in the sale of admissions to recreational,
cultural, entertainment, or concert events and states that such
tax “shall be based upon a certain percentage of gross receipts
from sales.” We are not persuaded by the restaurants’ argu-
ments that the restaurant Tax must be a sales tax because it is
calculated upon gross receipts.
The option to itemize the tax on the bill only reinforces
its nature as an occupation tax.36 It is significant that instead
of listing the tax on a customer’s bill, a restaurant or “drink-
ing place” may choose to absorb the cost of the restaurant
Tax. Alternatively, the restaurant or drinking places may indi-
rectly pass the tax on to the consumer through an increase
in prices. This is notably distinguishable from sales taxes
under § 77-2703. Section 77-2703(1)(c) mandates the sales
tax “shall be displayed separately from the list price.” And
§ 77-2703(1)(b) expressly prohibits that the retailer “advertise,
hold out, or state to the public or to any customer, directly
or indirectly, that the tax or part thereof will be assumed or
absorbed by the retailer.” The restaurants, by taking advantage
of a discretionary act created for the sole purpose of making
the tax less onerous for them, have not thereby invalidated the
restaurant Tax.
occupation taxes such as the restaurant Tax are not unprec-
edented. It might be “contrary to common sense and practical
business procedure” not to consider passing on the expense of
36 See, Watkins Cigarette Serv., Inc. v. Arizona St. Tax Com’n, 111 Ariz. 169,
526 p.2d 708 (1974); Southern Pacific Transp. Co. v. State, supra note 26;
Pac. Coast Eng. Co. v. State of California, 111 Cal. App. 2d 31, 244 p.2d
21 (1952); Waukegan School Dist. v. City of Waukegan, 95 Ill. 2d 244, 447
N.e.2d 345, 69 Ill. Dec. 128 (1983); Town of Fenwick Island v. Sussex
Sands, Inc., supra note 29.
880 	283 NebrASkA reporTS

an occupation tax to the customers.37 but that does not make
the tax a sales tax. ordinances that give businesses the option
of listing the tax on the customers’ bills simply give businesses
an “out” to explain to the customer precisely why the cost
has increased.38
Ultimately, the legal incidence of the restaurant Tax is upon
the restaurants and drinking places, and not upon the customers.
In Governors of Ak-Sar-Ben v. Department of Rev.,39 we were
called upon to determine upon whom the legal incidence of the
state sales tax really fell. The statute mandates that the busi-
ness owner collect and remit the tax to the Tax Commissioner.
Nevertheless, we observed that the statute40 “clearly states that
the purchaser must pay the tax on the cost of his purchase to
the retailer.”41 Thus, we concluded that “the purchaser . . . is
the taxpayer,” not the business.42 The business is simply the tax
collector43 under the state sales tax statute.
Conversely, here, the restaurant Tax is “imposed . . . upon
each and every person conducting business as a restaurant
or drinking place.”44 The restaurant ordinance specifically
states that no matter whether the business chooses to itemize
the tax levied on a bill receipt, or other invoice provided to
the purchaser, the “business shall remain liable for the tax.”45
pursuant to the provisions of the restaurant ordinance, if the
tax is not remitted to the City, it is the business that can incur
penalties, not the purchaser.46 If the customer refuses to pay the
37 Town of Fenwick Island v. Sussex Sands, Inc., supra note 29, 1990 WL
161177 at *3.
38 See id.
39 Governors of Ak-Sar-Ben v. Department of Rev., supra note 25.
40 See § 77-2703 (reissue 1981).
41 Governors of Ak-Sar-Ben v. Department of Rev., supra note 25, 217 Neb.
at 520, 349 N.W.2d at 386 (emphasis supplied).
42 Id. at 520, 349 N.W.2d at 387.
43 See Wiseman v. Phillips, 191 Ark. 63, 84 S.W.2d 91 (1935).
44 omaha Mun. Code, ch. 19, art. XVI, § 19-802(a).
45 Id., § 19-802(b).
46 See id., § 19-812.
ANTHoNy, INC. v. CITy oF oMAHA 	881
Cite as 283 Neb. 868

occupation tax when itemized on his or her bill, action by the
City will be taken against the restaurant, not against the con-
sumer. because the legal incidence of the tax falls on the busi-
ness and not the customer, the restaurant Tax is an occupation
tax, not a sales tax.
The restaurants briefly refer in their arguments to the
manner in which they have been directed, in the City’s letter,
to calculate the state and city sales and use taxes when the
restaurant Tax is listed on a customer’s bill. The restaurants
claim that when restaurants choose to itemize the restaurant
Tax on the customer’s bill and the restaurant then calculates
that tax on the bill as directed, the combined state and local
sales tax rate upon the consumer is illegally increased from
7 percent to 7.18 percent. They appear to argue that this sup-
ports their theory that the restaurant Tax is really a sales tax.
We fail to see how the directed method of calculating sales
taxes, which are imposed by an entirely different local sales
tax ordinance and by state laws concerning the state sales tax,
is pertinent to whether the restaurant Tax is a sales tax versus
an occupation tax.
Nor can the threatened application of the sales and use taxes
upon the restaurant Tax render the restaurant Tax inapplicable
to the restaurants in any other way. The method of calculating
sales and use taxes when the restaurant Tax is itemized in the
bill is not a matter expressly provided for in the restaurant
ordinance. even if it were, such provision would be severable
from the restaurant ordinance, under both the severability
clause of the ordinance and principles of common law.47 An
abuse in application or enforcement of an ordinance does not
render the ordinance itself invalid.48
47 See County of Sarpy v. City of Papillion, 277 Neb. 829, 765 N.W.2d 456
(2009).
48 See, Batt v. City and County of San Francisco, 184 Cal. App. 4th 163, 109
Cal. rptr. 3d 129 (2010); Mach v. County of Douglas, 259 Neb. 787, 612
N.W.2d 237 (2000); Kew Gardens Assoc v Tyburski, 70 N.y.2d 325, 514
N.e.2d 1114, 520 N.y.S.2d 544 (1987); Tempo Holding Co. v. Oxford City
Council, 78 ohio App. 3d 1, 603 N.e.2d 414 (1992).
882 	283 NebrASkA reporTS

In their petition below, the restaurants did not challenge the
method of calculating the customer’s state or local sales and
use taxes. The restaurants did not challenge the Department
of revenue regulation concerning sales tax calculations.49 The
restaurants did not challenge the statutes upon which the sales
tax regulation is based.50 In sum, the restaurants did not express
concern over the 0.18-percent increase in their obligation as
sales tax collectors when they chose to pass the restaurant Tax
onto their customers’ bills. And they did not purport to have
standing to challenge the alleged sales tax increase on behalf
of their customers.
The purpose of the restaurants’ action was to invalidate the
restaurant Tax and thereby avoid the 21⁄2-percent tax obligation
imposed upon the restaurants. because the method of comput-
ing the sales and use taxes on a customer’s bill does not affect
the validity of the restaurant ordinance, we do not address that
issue in this appeal.
tHe restaurant ordinanCe does not violate
liquor C ontrol aCt or omaHa
mun. C ode § 19-62
The restaurants next argue that insofar as the restaurant
ordinance applies to restaurants and “drinking places” which
have liquor licenses, it violates § 53-132(4) of the Liquor
Control Act51 and omaha Mun. Code, ch. 19, art. II, § 19-62
(2005). They argue that those laws prohibit the City from impos-
ing any occupation taxes upon liquor licensees which exceed
two times the liquor license fee. For the restaurants, two times
the liquor license fee would be $600 per year. We disagree
with the restaurants’ reading of § 53-132(4) and omaha Mun.
Code § 19-62, and find that the limit to two times the license
fee pertains only to taxes on the occupation of selling alcohol.
The limit has no bearing on occupation taxes designed to target
activities other than selling alcoholic beverages.
49 316 Neb. Admin. Code, ch. 1, § 007.
50 See Neb. rev. Stat. § 77-2701.16 (reissue 2009) and § 77-2701.35.
51 §§ 53-101 to 53-1,122.
ANTHoNy, INC. v. CITy oF oMAHA 	883
Cite as 283 Neb. 868

[10,11] It is not objectionable for there to be two or more
occupation taxes imposed upon the same retailer.52 The same
person or entity may engage in several different businesses or
activities and be taxed on each.53 There is no “double taxation”
unless both taxes are of the same kind and have been imposed
by the same taxing entity, for the same taxing period, for the
same taxing purpose, and upon the same property or the same
activity, incident, or subject matter.54 Furthermore, unless it is
unreasonable, confiscatory, or discriminatory, double taxation
is not unconstitutional or prohibited, although it is our policy
to guard against it.55
Nevertheless, the restaurants argue that § 53-132(4) of the
Liquor Control Act and omaha Mun. Code § 19-62 place spe-
cial limits on all occupation taxes for entities licensed under
the Liquor Control Act. Section 53-132(4) principally concerns
delivery of a liquor license to the licensee and the prerequi-
sites to such delivery. It states that a liquor license shall not
be delivered unless the licensee demonstrates it has paid the
“occupation taxes, if any, imposed by such city, village, or
county.” Section 53-132(4) then sets forth the language upon
which the restaurants rely:
52 See 14A William Meade Fletcher, Fletcher Cyclopedia of the Law of
Corporations § 6952 (perm. ed., rev. vol. 2008).
53 See, Bullock v. Pioneer Corp., 774 S.W.2d 302 (Tex. App. 1989); VEPCO
v. Haden, 157 W. Va. 298, 200 S.e.2d 848 (1973).
54 See, Fox etc. Corp. v. City of Bakersfield, 36 Cal. 2d 136, 222 p.2d 879
(1950); 71 Am. Jur. 2d, supra note 17, § 26. See, also, e.g., Lake Havasu
City v. Mohave County, 138 Ariz. 552, 675 p.2d 1371 (Ariz. App. 1983);
Hirschfeld Press v. Denver, 806 p.2d 917 (Colo. 1991); Cedar Valley
Leasing v. Iowa Dept. of Revenue, 274 N.W.2d 357 (Iowa 1979); Cooksey
Bros. Disp. Co. v. Boyd County, 973 S.W.2d 64 (ky. App. 1997); Bullock
v. Pioneer Corp., supra note 53.
55 See, Abernathy v. City of Omaha, 183 Neb. 660, 163 N.W.2d 579 (1968);
Stephenson School Supply Co. v. County of Lancaster, 172 Neb. 453, 110
N.W.2d 41 (1961). See, also, Scott & Scott, Inc. v. City of Mount. Brook,
844 So. 2d 577 (Ala. 2002); Waste Connections of Neb. v. City of Lincoln,
supra note 10; Village of Utica v. Rumelin, 134 Neb. 232, 278 N.W. 372
(1938); Speier’s Laundry Co. v. City of Wilber, 131 Neb. 606, 269 N.W.
119 (1936); 84 C.J.S. Taxation § 59 (2010).
884 	283 NebrASkA reporTS

Notwithstanding any ordinance or charter power to the
contrary, no city, village, or county shall impose an occu-
pation tax on the business of any person, firm, or corpo-
ration licensed under the [Liquor Control A]ct and doing
business within the corporate limits of such city or village
or within the boundaries of such county in any sum which
exceeds two times the amount of the license fee required
to be paid under the act to obtain such license.
omaha 	Mun. 	Code 	§ 	19-62 	establishes 	the 	occupa-
tion 	tax 	within 	the 	limits 	imposed 	by 	the 	above-quoted
“[n]otwithstanding” provision. Section § 19-62 states that “the
occupation tax for any person who engages in the manufac-
ture, distribution, . . . or selling at retail of alcoholic liquors
within the city shall be two times the amount of the license
fee required to be paid under the . . . Liquor Control Act,” as
stated in a schedule to be maintained by the city clerk (Liquor
occupation Tax). The current liquor license fee is $300 annually
for the type of liquor licenses maintained by the restaurants in
this case.56 Thus, as stated, the current Liquor occupation Tax
under § 19-62 is $600 per year.
According to the restaurants, § 53-132(4) does not just
limit the City’s Liquor occupation Tax to two times the liquor
license fee. The restaurants argue that any occupation tax
imposed by the City on an entity “licensed under the [Liquor
Control A]ct,” must be limited to two times the liquor license
fee. The restaurants claim that omaha Mun. Code § 19-62 sets
a similar limit to any occupation tax that is applied to entities
“who engage[] in the manufacture, distribution, . . . or selling
at retail of alcoholic liquors.”
First, we find no merit to the restaurants’ reading of omaha
Mun. Code § 19-62 as establishing any broadly based proscrip-
tion as to the amount of all municipal occupation taxes when
imposed upon “any person who engages in the manufacture,
distribution, . . . or selling at retail of alcoholic liquors.”
Section 19-62 was designed only to impose an occupation
tax on the occupation of selling liquor. And it was passed to
56 See § 53-124.01(8).
ANTHoNy, INC. v. CITy oF oMAHA 	885
Cite as 283 Neb. 868

impose such an occupation tax in an amount corresponding to
the limitations of the Liquor Control Act.
We reach a similar conclusion as to the “[n]otwithstanding”
provision 	of 	§ 	53-132(4). 	The 	“[n]otwithstanding” 	provi-
sion was first codified in 1935 as part of the predecessor to
§ 53-160.57 That statute imposed a state tax upon the privilege
of engaging in the business of manufacturing or distributing
alcohol.58 It principally detailed the rate of the tax, which
depended on the type of alcoholic beverage. The predecessor
to § 53-160 then stated:
The tax herein imposed shall be in addition to all other
occupation or privilege taxes imposed by the state of
Nebraska or by any municipal corporation or political
subdivision thereof: provided, notwithstanding any ordi-
nance or charter power to the contrary, no city or village
shall impose an occupation tax on the business of any
person, firm or corporation licensed under [the Liquor
Control] Act and doing business within the boundaries of
such city or village, in any sum which exceeds the amount
of the license fee required to be paid under [the Liquor
Control] Act to obtain said license.59
In 1947, § 53-160 was amended to provide for the current limit
of “double the amount of the license fee.”60
The Legislature reenacted the Liquor Control Act in 1993,
subsequent to a decision in which we struck down an unre-
lated provision of the Liquor Control Act as unconstitutional.61
At that time, the “[n]otwithstanding” provision was extracted
from § 53-160 and moved to its current location within
§ 53-132(4). The legislative history does not explain why this
was done.
57 See Comp. Stat. § 53-350 (Supp. 1935).
58 See 1935 Neb. Laws, ch. 116, § 50, p. 405.
59 Id., p. 406.
60 1947 Neb. Laws, ch. 189, § 1, p. 625. See, also, § 53-160 (Cum. Supp.
1949).
61 See, General Affairs Committee Hearing, L.b. 183, 93d Leg., 1st Sess.
67-70 (Jan. 25, 1993); Bosselman, Inc. v. State, 230 Neb. 471, 432 N.W.2d
226 (1988).
886 	283 NebrASkA reporTS

Section 53-132 sets forth a multitude of requirements and
considerations pertaining to the determination by the Nebraska
Liquor Control Commission of whether it should issue a liquor
retail license, craft brewery license, or microdistillery license
to an applicant. As already described, § 53-132(4) states that
once a license is issued or renewed by the commission, it
shall be mailed to the clerk of the city, village, or county. The
clerk shall subsequently deliver the license to the licensee
upon proof of payment of (1) the license fee, if by the terms
of § 53-124(6), the fee is payable to the treasurer of such city,
village, or county; (2) any fee for publication of notice of
hearing before the local governing body upon the application
for the license; (3) the fee for publication of notice of renewal
as provided in § 53-135.01; and (4) the “occupation taxes, if
any, imposed by such city, village, or county.”62 It is only after
referring to the proof that the “occupation taxes, if any,” have
been paid that the “[n]otwithstanding” provision appears.
A statutory provision focused on prerequisites to the pro-
curement of a liquor license is an unlikely place for an
overarching limit in the amount of occupation taxes imposed
upon entities which happen to hold liquor licenses. The
restaurants’ reading of the provision is also inconsistent with
the statutory reference to only one “occupation tax” so lim-
ited in amount, while at the same time referring to multiple
“occupation taxes” without such a limitation. but perhaps
most fundamentally, the restaurants’ reading of the provision
is manifestly contrary to the scope and purposes of the Liquor
Control Act.
[12,13] In the exposition of statutes, the reason and intention
of the lawgiver will control the strict letter of the law when
the latter would lead to palpable injustice or absurdity.63 When
words of a particular clause, taken literally, would plainly con-
tradict other clauses of the same statute, or lead to some mani-
fest absurdity or to some consequences which we see plainly
62 § 53-132(4).
63 Hoiengs v. County of Adams, 254 Neb. 64, 574 N.W.2d 498 (1998). See,
also, Boss v. Fillmore Cty. Sch. Dist. No. 19, 251 Neb. 669, 559 N.W.2d
448 (1997).
ANTHoNy, INC. v. CITy oF oMAHA 	887
Cite as 283 Neb. 868

could not have been intended, or to result manifestly against
the general term, scope, and purpose of the law, then we may
apply the rules of construction to ascertain the meaning and
intent of the lawgiver, and bring the whole statute into harmony
if possible.64
The Liquor Control Act concerns the regulation and control
of the manufacture, distribution, and sale of alcoholic liquor.65
It is also designed to generate revenue by imposing an excise
tax upon alcoholic liquor.66 The stated policy of the Liquor
Control Act is to “encourage temperance in the consumption
of alcoholic liquor.”67 Section 53-101.05 specifically states that
the Liquor Control Act “shall be liberally construed to the end
that . . . temperance in the consumption of alcoholic liquor is
fostered and promoted by sound and careful control and regu-
lation of the manufacture, sale, and distribution of alcoholic
liquor.” (emphasis supplied.)
A construction which imposes a special monetary limita-
tion on all occupation taxes as applied to any “business . . .
licensed under the [Liquor Control A]ct” would have the mani-
festly absurd result of creating a special tax immunity for any
business with a liquor license. pursuant to the restaurants’
reasoning, any number of occupation taxes in omaha and other
cities would, as applied to businesses with a liquor license,
violate § 53-132(4). Liquor licensees would thus be granted
the privilege of avoiding those occupation taxes, while busi-
nesses that do not sell alcohol would have to pay them. It
would reward businesses for selling alcoholic beverages and
encourage more businesses to do so. The restaurants’ read-
ing of § 53-132(4) is therefore contrary to the stated policy of
§ 53-101.01 of “encourag[ing] temperance in the consumption
of alcoholic liquor” and contrary to the mandate of § 53-101.05
that the Liquor Control Act be construed to “foster[] and pro-
mote[]” temperance.
64 Morton v. Green, 2 Neb. 441 (1872) (oliver, C.J., dissenting).
65 See § 53-101.01.
66 Id.
67 Id.
888 	283 NebrASkA reporTS

Furthermore, we observe that while the “occupation tax”
which must be limited to twice the license fee is referred to
by the statute in the singular, the “occupation taxes” which
the licensee must prove paid before obtaining the license is
plural. In other words, the limit of two times the liquor license
fee pertains only to one occupation tax. other “occupation
taxes,” are plainly contemplated, but are not similarly lim-
ited to two times the license fee. And we observe that this
has always been the case. At the time of the inception of the
“[n]otwithstanding” provision, the language preceding it stated
that the liquor license tax “shall be in addition to all other
occupation or privilege taxes imposed . . . by any munici-
pal corporation.”68
[14] Accordingly, given the language of the statute and the
purposes of the Liquor Control Act, the only sensible read-
ing of § 53-132(4) is that municipalities are prohibited from
imposing a tax on the occupation of selling liquor which
exceeds two times the liquor license fee. Municipalities are
not limited, however, in the amount of occupation taxes upon
other activities—regardless of whether the business taxed also
engages in the activity of selling liquor. The monetary limit
for “an occupation tax” “on the business of any person, firm
or corporation licensed under [the Liquor Control] Act” is a
specific limitation on an occupation tax on the type of business
or activity licensed under the Liquor Control Act.
[15] A state legislature, in fixing a license tax on a certain
subject, may limit taxes against the same subject by other
branches of government.69 The Liquor Control Act so lim-
its the amount municipalities may tax for the occupation of
having a liquor license and selling alcohol pursuant to such
license. but the Liquor occupation Tax and the restaurant
Tax are directed toward different objects. The restaurant Tax
is on the occupation of serving food and beverages—be they
with or without alcohol. reading § 53-132(4) as prohibiting
any type of municipal occupation tax over $600 per year for
68 § 53-160 (Cum. Supp. 1949) (emphasis supplied).
69 9 eugene McQuillin, The Law of Municipal Corporations § 26:41 (rev. 3d
ed. 2005).
ANTHoNy, INC. v. CITy oF oMAHA 	889
Cite as 283 Neb. 868

any business that happens to hold a liquor license would have
the absurd result that a liquor license would provide a special
exemption from all occupation taxes otherwise applicable. We
reject the restaurants’ reading of the statute. Therefore, the
restaurant Tax, when applied to the restaurants, does not vio-
late § 53-132(4).
sPeCial legislation
[16] Finally, the restaurants assert that the restaurant
ordinance is special legislation. They argue it creates an arbi-
trary and unreasonable distinction between restaurants and
“drinking places,” and “all other businesses who sell goods and
services to the public within the City.”70 When passing on the
constitutionality of an ordinance, this court begins with a pre-
sumption of validity.71 Therefore, the burden of demonstrating
the constitutional defect rests with the challenger.72
[17] The enactment of special legislation is prohibited by
Neb. Const. art. III, § 18, which prohibits the Legislature from
passing local or special laws for any of a number of enu-
merated cases, including the “[g]ranting to any corporation,
association, or individual any special or exclusive privileges,
immunity, or franchise whatever[.]” It also states that “where
a general law can be made applicable, no special law shall be
enacted.” When a law confers privileges on a class arbitrarily
selected from a large number of persons standing in the same
relation to the privileges, then the law in question has resulted
in the kind of improper “special favors” prohibited by the spe-
cial legislation clause.73
[18] A legislative act constitutes special legislation if (1) it
creates an arbitrary and unreasonable method of classification
or (2) it creates a permanently closed class.74 The restaurants
argue that the restaurant ordinance creates an arbitrary and
70 brief for appellants at 22.
71 Maxon v. City of Grand Island, 273 Neb. 647, 731 N.W.2d 882 (2007).
72 Id.
73 See Hug v. City of Omaha, 275 Neb. 820, 749 N.W.2d 884 (2008).
74 Id.
890 	283 NebrASkA reporTS

unreasonable method of classification. The City points out that
occupation taxes will always, by their nature, separate out a
particular class. At the same time, the revenue from a tax on a
particular occupation usually inures to the municipality’s gen-
eral fund.
[19,20] We have never addressed the validity of a municipal
occupation tax under the special legislation clause. We have,
however, addressed the validity of occupation taxes under the
same principles as those applied in a special legislation analy-
sis. We have said that, to be valid, a municipal ordinance clas-
sifying an occupation for the purpose of levying a tax thereon
must not be arbitrary in its classification.75 The classification
must instead rest on some reason of public policy or some
substantial difference of situation or circumstances that would
naturally suggest the justice or expediency of diverse legisla-
tion with respect to the objects or individuals classified.76
[21] Under these principles, “[t]his court has repeatedly held
that a classification separating out commercial businesses or
occupations as distinct from the use by the general public is a
reasonable classification.”77 “Classifications have been upheld
imposing different amounts of revenue charges on both widely
diverse and closely related commercial enterprises.”78 We have
said that “‘municipal authorities may by ordinance classify the
different occupations for taxation, and impose different taxa-
tion in different amounts upon the different classes; and a clas-
sification made by such authorities will not be interfered with
75 Speier’s Laundry Co. v. City of Wilber, supra note 55. See, also, Hug v.
City of Omaha, supra note 73.
76 Id.; MAPCO Ammonia Pipeline v. State Bd. of Equal., 238 Neb. 565, 471
N.W.2d 734 (1991).
77 City of Ord v. Biemond, 175 Neb. 333, 337, 122 N.W.2d 6, 10 (1963) (cit-
ing Gooch Food Products Co. v. Rothman, 131 Neb. 523, 268 N.W. 468
(1936). See, also, Petersen Baking Co. v. City of Fremont, 119 Neb. 212,
228 N.W. 256 (1929); Norris v. City of Lincoln, 93 Neb. 658, 142 N.W.
114 (1913); Western Union Telegraph Co. v. City of Fremont, 39 Neb. 692,
58 N.W. 415 (1894).
78 City of Ord v. Biemond, supra note 77, 175 Neb. at 338, 122 N.W.2d
at 10.
ANTHoNy, INC. v. CITy oF oMAHA 	891
Cite as 283 Neb. 868

by the courts, unless it manifestly appears that it is unreason-
able and arbitrary.’”79
The only special legislation principle we have never expressly
applied to municipal occupation taxes is that the distinction in
the classification should bear some reasonable relation to the
legitimate objectives and purposes of the legislation.80 This
is understandable since the objective of municipal occupation
taxes is simply to increase revenue—albeit to do so in a way
that is fair and justified by some reason of public policy. The
type of connection between an occupation tax’s purpose and
the occupation taxed is thus different from the connections
looked for in special legislation challenges to laws involving
tax revenue earmarked for special purposes, exemptions from
regulations, or legislation expressly granting a special privilege
to a certain class.81 The connection for an occupation tax is the
connection to the public policy behind singling out a certain
occupation for the burden of taxation.
Thus, the connection need not necessarily be that the occu-
pation taxed is especially responsible for the drains on the
city’s economy or that it especially benefits from the rev-
enue generation. Nevertheless, in this case, the restaurant
ordinance explains that restaurants and “drinking places” are
subject to the occupation tax because they derive a special
benefit from public expenditures. The restaurant ordinance
states that “persons engaging in restaurant and drinking place
businesses are benefited from tourism and recreational activ-
ity.”82 Such tourism and recreational activity “places unique
79 Gooch Food Products Co. v. Rothman, supra note 77, 131 Neb. at 528, 268
N.W. at 471 (quoting Norris v. City of Lincoln, supra note 77).
80 See, Big John’s Billiards v. Balka, 260 Neb. 702, 619 N.W.2d 444 (2000);
Pfizer v. Lancaster Cty. Bd. of Equal., 260 Neb. 265, 616 N.W.2d 326
(2000).
81 See, e.g., Hug v. City of Omaha, supra note 73; Bergan Mercy Health Sys.
v. Haven, 260 Neb. 846, 620 N.W.2d 339 (2000); Big John’s Billiards v.
Balka, supra note 80; Pfizer v. Lancaster Cty. Bd. of Equal., supra note
80; City of Ralston v. Balka, 247 Neb. 773, 530 N.W.2d 594 (1995); State
v. Galyen, 221 Neb. 497, 378 N.W.2d 182 (1985).
82 omaha Mun. Code, ch. 19, art. XVI, § 19-801(a).
892 	283 NebrASkA reporTS

demands on the city’s resources, but . . . should be promoted
and encouraged.”83
Thus, the classification bears a reasonable relation to the
purposes of the restaurant Tax. The purposes of the restaurant
Tax are to increase revenue so the City may expend money on
special attractions that draw visitors to the City and bring its
citizens out to enjoy recreational activities. restaurants and
“drinking places” tend to be located near these attractions and
are especially benefited from people’s recreational activities,
because those activities tend to also involve eating and drink-
ing out.
The classification also soundly rests upon the city coun-
cil’s public policy determination that it is preferable to target
discretionary spending in restaurants and “drinking places”
instead of in the much broader, and not always discretion-
ary, category of “all other businesses who sell goods and
services.” The restaurant ordinance states that the “residents
and non-residents who patronize these businesses are enjoying
a discretionary activity that is dependent upon, and generating
revenue from, the business’s location within the city and the
business’s access to the services provided by the city.”84 Thus,
“[s]ubjecting the business’s revenue to taxation for general city
purposes is fair, reasonable, and just.”85
Finally, the classification rests upon a substantial differ-
ence that would naturally suggest the justice or expediency of
diverse legislation. The restaurant ordinance states:
[T]he city council finds, determines, and declares that
restaurant and drinking place businesses form a discrete
class of occupation engaged in within the city and it is
appropriate that a tax be imposed on this class of busi-
nesses for the purpose of raising revenue to support and
further general city activities and services.86
83 Id.
84 Id.
85 Id.
86 Id., § 19-801(b).
ANTHoNy, INC. v. CITy oF oMAHA 	893
Cite as 283 Neb. 868

While other retail businesses might also benefit from tour-
ism, and some of those businesses might also principally sell
discretionary goods, restaurants and drinking places are eas-
ily identifiable as a distinct class. They are easily identifiable
as a certain discretionary form of entertainment. “[A]ll other
businesses who sell goods and services to the public within
the City”87 are not. It would be difficult for the City to come
up with a different, broader retail category which similarly
focused on discretionary spending and the entity’s benefit from
tourism. The classification of restaurants and drinking places,
as distinguished from other retail establishments, is not unrea-
sonable or arbitrary.
The restaurants have failed to meet their burden of dem-
onstrating a constitutional defect in the restaurant ordinance.
by focusing on restaurants and drinking places, the restaurant
ordinance 	does 	not 	create 	an 	arbitrary 	and 	unreasonable
method of classification. Its classification of restaurants and
drinking places from other retail businesses in the City soundly
rests on reasons of public policy, justice, and expediency. And
the classification bears a reasonable relation to the legitimate
objective and purposes of the legislation. Having already found
no merit to the restaurants’ other challenges to the restaurant
ordinance, we affirm the judgment of the district court.
CoNCLUSIoN
For the foregoing reasons, we find no merit to the restaurants’
arguments 	that 	the 	restaurant 	ordinance 	is 	invalid. 	The
restaurant ordinance is not an illegal sales tax, does not vio-
late § 53-132(4) as applied to liquor licensees, and does not
violate the prohibition against special legislation. Accordingly,
we affirm the judgment of the district court which granted
summary judgment in favor of the City and denied summary
judgment in favor of the restaurants.
affirmed.
wrigHt, J., not participating.
87 brief for appellants at 22.
894 	283 NebrASkA reporTS