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

AhN Inv 10
Proceedings have been begun in the
United States court by Maine stock
holder Of the Consolidated railroad com
pany. consisting of the Central Vermont
and Vermont & Canada companies which
seem likely to interfere with the operation
Of our corporation tax law so far as the
railroad, telegraph and express companies,
and the steamboat, car and transportation
companies are concerned. A full state
ment Of the issue involved is given in an
article on our first page today. The hear
ing on the motion for an injunction to re-
strain Tax Commissioner Martin from en-
forcing the penalty of the law for non-pay-
ment Of taxes comes before Judge Wheeler
at the Brooks house to morrow, and hear
ing on the main issue comes before the
same court at Burlington April = The
penalty in question is one Of 500 a day for
non-payment of taxes after the date fixed
by law, or after date of extension which
may be named by the commissioner The
law provides for the payment Of the corpo-
ration taxes semi annually in February
and August. At the present time all such
taxes have been paid except those Of the
Central Vermont, and ON these Mr.. Martin
granted an extension of time until March
% ON an application made 10y ex Gov.
Smith, president of the company, stating
that the illness Of clerks with the grip had
prevented the returns from being made
out The taxes due from the company for
the last six months probably amount to
about $4,000
Whom the corporation tax law was passed
in 1882 it was supposed to be constitutional,
the PENNSYLVANIA courts having held to this
effect, but since then the United States
supreme court has decided that such laws
are unconstitutional on the ground that
they enforce n tax on commerce between
the states, a matter which Congress alone
has the power to lcgislate upon Earnings
entirely within "a state can, of course, be
taxed, but it is held that if the earnings on
a car Of freight, for instance, which comes
from another state, are taxed after the car
enters a state, it is tax laid on interstate
business.
decision of the United States supreme
court on this point in Texas case was
given in August, 1885 and the present tax
commissioner, who was appointed the No
vember following, while admitting posi-
blity of the unconstitutionality of the law,
has said to any of the companies when they
have proposed contest that he thought
the law IA reasonable and equitable one, and
that he believed the corporations would not
fare 50 well should the state he obliged to
pass a new law. a year ago now the Del
aware x Hudson company proposed TO re
sist the payment Of its tax but was readily
brought to terms 10y statement 10 this eff
feet.
The only other company which has ever
shown disposition to make contest is
tine Central Vermont, and although the pro.
ceedngs in the present case are nomnally
begun 10y stakeholder living in another
state it is 10y no means probable that they
have been brought without the coguzance
and consent Of the company officials
Should the court hold that the company
need not pay their taxes this would, Of
course, put an end TO the payment of the
corporation tax by all the railroad compa-
mics, and by the other companies which fall
within the interstate provision, the corpo-
rations not effected being the savings banks
aud trust companies, insurance companies
and telephone companies. The amount lost
70 the state would be at least SlOO, 900 an
nually. which must of course, be made up
in some other way. Whether, in the con
tingency named the governor would
think il advisable 10 call a special session of
the legislature remains To be seen In any
case there will be lao trouble in framing a
law which will he constitutional, and which
will compel the railroad companies To make
a just return 90 the state for value Of their
franchise, and To pay their fair share Of the
public burdens
Mr. Martin announces his intention 10
contest the case closely at every point be
leving, as he does, that the law is an entire
" Just one. aud fixed upon strictly equi-
table basis One thing seems 10 be assured.
and the railroad companies may as well
take this point into consideration. Had
these taxes been assessed upon the value of