Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1890-03-07
THE coRPoRArIoN TAX LAW

4 suit Brought in the United states
Circuit Court 10 Test its Constitution
RIity.
In the United States circuit court at Bur
lington last Friday morning, says the Bur
lington Free Press, G 4 Prouty, Esq, of
Newport asked the court to appoint date
for hearing ON the motion for an injunc-
tion 10 restrain the Central Vermont rail
road company from the payment of taxes
on its gross earning derived from inter
state commerce, and the commissioner Of
taxes. j. L. Martin of Brattleboro, from
enforcing any penalties against the road
for neglecting To pay such taxes until fur
ther order of the court. 1t appears that
the bill is brought in behalf of John H.
Kimball Of Bath, Me. who owns 10 shares
of the preferred stock of the consolidated
railroad company of Vermont, which has
a capital stock Of 500, 900 preferred stock
and $500 OOO common stock. The orator
narrates that on June 30, 1884, the consol-
idated company leased its railroad before
known as the Vermont Central and Yer
mont and Canada railroads ~ the Central
Vermont railroad company for 80 years,
the lessee agreeing after paying the work
| ing expenses as defined in the lease, nclud-
ing costs of maintenance, rents and taxes,
10 pay the interest on $1,000, 600 bonds Of
the consolidated company which were then
secured by first mortgage Of the road, and
| after paying interest on this bonded debt
and working expenses, including cost of
maintenance and rents of other roads op.
Grated by it, and taxes, it further agreed
that if the net revenue remaining were
sufficient for that purpose it would pay on
| the preferred stock of the consolidated
company dividends not TO exceed & per
cent per annum.
The orator states that the lessee has paid
the rents and working expenses of the
roads named and of other leased roads
! the Rutland, the Vermont division of the
| Vermont and Massachusetts, railroad the
Montpelier aud White River, the Addison,
and the Brattleboro and Whitehall rail
| roads, and has paid taxes upon the gross
earnings of all these roads as required by
law, but has never paid "A dividend upon
! the preferred stock of the consolidated
railroad of Vermont for the reason that
there was not any net revenue remaining.
| The orator claims that the net revenue
would have been sufficient so that he would
have received a dividend upon his pre-
| ferred stock except for the payment of
taxes upon the gross earnings
The orator refers further TO the fact that
the act of legislature approved Nov. 2S,
| 1882 provides in the llth section that
every corporation, person or persons own
ing and operating a railroad shall pay tax
to the state on the entire gross earnings of
such railroad, ''if such railroad is situated
! wholly within the state and that the
| taxes, according to section H. are assessed
at the rate of ? per cent on the first $1,000
gross earnings per mile or total earnings
if less than that sum; per cent on the
first thousand or part thereof above S20nO
per mile per cent on the first thousand
or part thereof above $1,000 per mile, and
j per cent on all earnings above that sum,
payable one half semi annually, in the
months of February and August, accord
ing to section l3
The orator claims that much the greater
part of the entire part Of the gross earn
ings of the Central Vermont railroad are
derived from interstate commerce, aud
that the taxes thereon assessed for the half
wear euulnR Dtt o. loob, VIII oe oebWteu
$50, 900 and $40 900, and that substantial
ly that sum has been paid for the several
half years since the passage of the statute
in question.
| The statute is claimed by the orator 10
be in violation Of that section of the con
| slitution of the United States which regu-
lates commerce between states, so far as it
attempts to tax the gross earnings of the
railroads operated by the Central Vermont
| in this state which are derived from inter
state commerce; and with view of pro
tecting his interest he requested the presi
dent and directors 10 take steps to resist
the collection of taxes assessed under this
unconstitutional statute, but they declined
so TO do
The orator therefore brings this bill in