Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-05-26
TAXATION OF CORPORATIONS.
A Highly Important Point Settled by
the Supreme Court.
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the Supreme Court.
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A recent decision by the Supreme
Court of the United States seems TO
put at rest the controversy pending in
the Supreme Court of Tennessee, as to
the validity of the taxation levied by
the State, county and city upon the
banking and insurance corporations
doing business in the State under char
tiers granted by the State;
The case referred to IN the United
States Supreme Court was decided du-
ring the October term, 1873, of that
court. and is entitled "Wm. Minot VS..
The Philadelphia, Wilmington and Bal
timore Railroad Company, W. j. Clark
and M. B. Ochiltree.
The charter of the company was
granted by the State of Delaware. and
contained a clause which enacted that
the company shall pay annually a tax
of one Quarter of one per cent on its
capital stock of $500, 600. SUBSEQUENT
" the Legislature enacted that all
railroad companies should pay annual
" tax of three per cent upon their
net earnings or income, and also one
fourth of one per cent upon the actual
cash value of every share of Its capital
stock.
The court held .that the subsequent
taxation was valid; that the provision
for taxation IN the charter did not i'm
ply any contract by the State to levy
no other taxation; that while, In ac-
cordance with former decisions of
questionable soundness, the State might
by express contract exclude itself from
taxation other than as declared by the
charter, yet that nothing less than an
express contract contained in the char
ter, or otherwise made, would have the
effect to prohibit the State from levy
ing taxation IN modes authorized By
the organic law of the State; that a
tax upon corporation proportioned to
the income received, or to the value of
the franchise granted, or to the value
of the property possessed by the cor
poration, is within the lawful discretion
of the Legislative department of the
government.
We may not recall all the questions
involved In the suits between our pub
lie authorities and the banking and in
surance corporations, but it seems
pretty clear that the principles an
nounced In the case above referred to
must put an end to any dispute as to
the power of the State to levy taxes of
the customary kinds upon our corpor-
ate bodies, in all cases where the char
tiers do not embrace an express pro-
vision excluding any other than the
prescribed amount or kind of taxation.
The singular thing about these suits
is that it has, been supposed that the
Government has not the constitutional
power to levy on corporations and
their properties the usual taxation upon
properties and privileges, IN the cases
Of those corporations whose charters
provided special kind or amount of
taxation. Such special provisions do
not imply an agreement on the part of
the State not to levy any other kind or
amount Of taxation. To give to such
provisions the exclusive force impaired
to them, they must be in a shape
amounting TO an express aSreenenJ on
the part of the State to levy no other
taxation.
The doubt has been whether even
such an express agreement has any per-
manent binding force upon the Govern
ment. The current of decisions in the
United States Supreme Court has been
that such agreement has such binding
force. From expressions declared III
the Delaware case, it may be inferred
that if the question were now before
that court fer the first time, the court
would hesitate to allow our Legislative
to bind the Government forever to not
subject the corporation and their prop
ties to the same kind and amount of
taxation levied upon persons and prop
critics generally. =