The Delta independent., 1895-09-11
GENERAL INTELLIGENCE.
Have Power 10 Tax Franchises.

County Attorney f. C. Goudy this
morning rendered a decision to the
| county commissioners with reference TO
the taxing Of franchises. holding that
they could be taxed. The matter was
referred to the attorney some time ago,
and the opinion given today is a lengthy
one, covering twelve pages. In passing
upon the question the attorney calls at,
tention to the distinction that must be
maintained between what is generally
known as franchise tax and a tax upon
franchise when assessel and taxed as
property under the general revenue
laws.
The first a franchise tax. is a tax in
the nature Of license fee or tax i'm
posed by the power granting the right
Of franchise, and the amount OF tax can
be and often is, fixed without regard to
the actual value of the franchise go
taxed: such as tax Of a certain sum
per annum on the right to exercise cor
porate functions, or so much per
car per anuum for the right TO operate
a railroad. carry passengers or freight,
and take toll therefor, or certain per
cent OF the gross earnings. etc.
The second is a property tax. and il
levied upon franchises at all it must be
so levied upon them as property and ac-
cordiGg to their value as property, the
came as on any other character OF prop
erty. Much confusion Of thought will
be avoided by keeping this distinction
clearly in mind.
No provision has been made by the
legislature Of this state for thc.leyy or
collection of a a-"franchise tax" as above
defined; therefore. if franchises are to be
taxed at all under the present condition
Of our laws, they must be assessed and
taxed as property, and according to their
value as property under the general rev
enue laws, the same as all other prop
erty is assessed and taxed. Indeed, it is
the policy in this state, as declared by
the constitution, that all taxes shall be
levied and collected under general laws.
and upon a just valuation Of all prop
erty.
Sections 3. Q and 10 Of article 10, OF
the state constitution. are quoted. show.
ing that the constitutional provisions,
and the section 1865 OF Mills statutes,
are clear as TO the tax OF all proper ty in
the state, except such as are expressly
named as exempt. The question natur-
ally presented is whether or not fran.
chiscs are properly within the meaning
of the law, and with respect to this the
attorney quotes Blackstone's definition
OF a franchise: "A royal privilege or
branch Of the kings prcrogative. sub
sistiug in the hands Of the subjects" and
then quoted other authorities, the attor.
Hcy proceeding:
1t seems 10 me that a torse and com.
prehensive definition Of the term,
franchise as understood in this country
at the present day. and in the light OF
the authorities, is grant by the soyer-
eign people 10 a person or persons, OF a
right to exercise and enjoy privileges of
a permanent character and Of public
concern. not common to a private citizen.
and such right may be granted directly
,
provisions or through their national or
state representatives. or other municipal
or quasi municipal corporations. deriv-
ing power to make such grant from the
state
AS stated hereinbefore, it has not
been the policy OF this state TO tax fran.
chises granted by the legislature, but it
has been sought TO bring all taxation. as
far as possible. TO an ad valorcm stand.
ard.
AS to the next question, whether n
franchise is to be classod ms real or per
sonal property. and how il is to be as
sossod and valued. Mr. Goudy shows
that in the assessment OF franchises it
is imperative that the franchise of
corporation be valued and assessed as a
whole.
In my opinion" he says, franchises
must necessarily be treated and assess
ed as personal property by the county
authorities, By SO treating them they
can be assessed as whole and in one
jurisdiction. viz: The jurisdiction where
the principal office OF the company is
located and said property is held, and
by so doing no confusion, uncertainty
or conflict Of jurisdiction need arise in
their assessment.
ln concluding the attorney says: at
may be more difficult, by reason OF the
intangibility of franchises, TO determine
as TO Just valuation than as tangible
cannot be done under our present laws.
we do assess and value other intangi.
Bile property, and why not franchises?