Kay

Gene Kay appeals from an order denying a preliminary injunction to restrain continuation of allegedly unlawful exemptions from a telephone users tax imposed by an ordinance of the City and County of San Francisco. While Kay’s appeal was pending, the cause was tried upon stipulated facts; the court rendered judgment determining that it was a denial of equal protection for the ordinance to tax intrastate use of telephone service without also taxing interstate use of such service. The judgment directed the city to amend the ordinance “to eliminate the exemption for interstate . . . services, or . . . repeal [the] ordinance entirely, ...” The court awarded fees to counsel for plaintiff of “five percent (5%) of the amounts collected from reaching interstate telephone communications services during each of the first five (5) calendar years after the tax first is imposed, . . .” The court estimated that the fee would amount to approximately $750,000. The city and Pacific Telephone and Telegraph Company have appealed from the judgment.

The stipulation of facts upon which the cause was submitted for decision establishes that Kay is a resident and property owner of the City and…