The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1883-01-19

to compel the payment of sucl, tax TO
the State. The case was fully argued.
the facts not being In controversy he.
fore his honor Judge Sinohs. The
decision was adverse tn the State. IL
must be observed that the essential
point in this case Is, was this sam OF
$4,000 to be considered az gross
earnings IL was claimed in behalf Of
the State that unless 1t WAS considered
any Of the road could lease their track
or rolling stock IN other companies.
ccasing to operate themselves, still.
however, owning the road ind recev.
ing large sums for its nse, which. no
longer being considered ~ gross earn.
ings, would thus escape taxation. the
company only beii & liable Oh gross
earnings tax and exempt from all
others.
The other case Is rs follows: The
Northern Pacific had previously made
return OF its earnings on this same
line, operated under this same agree.
ment referred tn In the former case,
and had regularly paid its taxes on
its gross earnings of this local line.
At this junclure attorneys advised it
to refuse to pay further taxes on the
gross earnings Of this leased line
claiming that 1t was not liable on the
ground that they were not the owners
Of this line. On representation Of
the facts by the railroad commits.
sioners, the attorney. general brought
suit to compel snch payment. and this
suit Ia now pending in the same dis.
trict court. 1t will he observed that
these cases are essentially tO the op
pOsite of each other. Should both
cases he sustained by the court. it
will only he matter Of option for
any railway in the State to eyade its
taxes by u similar process of leasing.
The one refuses to pay taxes because
Of the claim that rental for the use
Of u railway is not gross earning.
therefore nOn.taXablc while the
other party To the same agreement
refuses to pay taxes on gross earnings
on the same line. because they claim
they do not own the road. Between
the two assumptions the State will
have lost the taxes in both instances.
This Office does not assume that any
scheme exists by the companies to
these cOrelative suits, to pave the way
for immunity from taxation. Such
action would exasperate the public
beyond endurance. But it is the du.
ty Uf.this Office To invite attention to
the strange peculiarities and possible
dangers Of the situation H. presented
in these suits. Any invasion on the
part Of the roads Of the present sys-
tenn of taxation Oh gross earnings
would probably result in sweeping
changes of the law, and induce IL sys.
tenn Of local taxation which might
make the companies regret such a
course.
TAXES FOR THE YEAR.
The relation the taxes paid by rail-
ways bear to the support of the ex.
penses of the State proper, is shown
by the figures here given: in 1881,
the railways paid SALE, 1920 in taxes,
and the State expenses proper
amounted to 1875, 900, or about dou
ble the railway tax receipts. In 1882.
the railway tax exceeded $500, 900,
oth ShO SOhChot va pChoCo Va thO SettS
were about 100000. In the ex.
tpenses of 1882 is included a2O0,000,
Of which but small amount figured
in 1881. the bulk Of the amount being
in the refunded debt of old railway
bonds then. But for this the relation
between railway taxes and expenses
would have been 5 to Z. instead of 5
toe. The income from insurance
company special taxes in 1881 $780,
1902; for 1882, $4,000. Add the
special tax from telegraph companies
SO, 1906, and taking the basis Of all
special taxes, the calculation would
be 5H to Q. The time Is not distant
when the State tax levy, which for
1882 was lilo mills. will entirely
disappear, If State expenses do not
largely increase. The inspection
and securing of all railway taxes
would more than justify the expenses
Of the railroad commissioners office.