New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-05-22
FRANCHISE TAX DIGEST.
LAWS OF OTHER STATES on THE AS
SEsSMENT OF CORPORATIONS.
INFORMATION FOR THE USE OF NEW YORK
LBGIsLAToRs-DATA COLLECTED BY
ROBERT II. WHITTIER.

LBGIsLATORs-DATA COLLECTED BY
ROBERT II. WHITTIER.
Albany. May SpeciaD. Numerous requests
having been made by the Legislative division" OF the
State Library for Information regarding the laws
OF the various States relating to the taxation OF
franchises. Robert II. Whittier. who has charge
OF this division, has prepared a brief digest OF the
laws OF other States relating the taxation OF the
franchises OF stree railways. This digest. which
also refers TO the taxation OF other franchises. Mr.
Whittier has just mailed 10 the members OF the
Committees on Taxation anu Retrenchment OF the
Assembly and the Senate. 1t is expected that the
members Of these committees will find this digest
OF special value AT the approaching special session
OF the Legislature next weed. when amendments to
the Ford Franchise Taxation bill under con-
siderstion
Mr.. Whittier said to-day: The taxation OF street
railways Is the principal form OF franchise taxa
ton In other States. although In the States Of In
diana. Illinois. Ohio and Massachusetts the local
assessors assess the tangible property OF all kinds
OF corporations. and make returns OF Il TO Board
which resembles our State Board OF Tax Commits
soners. The usual way these State boards have
in estimating the value OF franchise IL TO sub
tract the value OF the tArgible property. locally
assessed from sum representing the market value
OF the capital stock The State then collects the
tax and apporons It TO the localities, being gov
erned IN the OF a street railway by the length
OF the railway In each locality. In A good many
OF the States the laws provide for taxation OF
both the real and the personal property Of a cor
poration. which must include franchise tax. In
California the taxation laws specifically say that
all property. including franchises. is taxable. In
Illinois all real and personal property is subject
to taxation. is also the fair hash value OF the
stock Of corporation. including the franchises.
and above the assessed value p, the tangible
property
The digest which have issued" continued Mr..
Whittier shows that all kinds OF franchises. be-
sides street-raway franchises are intended 10 be
taxed. according the terms OF the taxation laws.
In the States OF Indiana. Kansas Maryland Massa-
chusetts. Nebraska. North Dakota. Tennessee, Utah
and West Virginia"
Mr. Whittier stated that the data given in his
digest compiled chiefly from the repor: OF the
special commission appointed by the Governor OF
Massachusetts, in 1897 consisting OF Charles Francis
Adams. William W. Grape and Elihu 3. Hayes. 70
Investigate the relations between cities and towns
and street railway companies. Mr.. Whittier how
ever has brought the data OF this commission UP
to date by examination Of the laws recently
passed by the various States. This Massachusetts
commission in their report made the following
interesting remarks
In this country general statement to
methods Of taxation be made. these vary
in almost every State, and even in almost every
city. large sum is collected from street railway
companies under the name OF tax. but also mu,h
through the operation OF conditions contained In
the grant: and these amounts may be considered to
be the charge for the franchise. for the right 10
use .he public streets for the purpose OF carrying
business
The State. as in Ohio. may assess a tax OF
definite percentage on the capital employed. whether
that capital be shares or bonds: may have
plan. like that in in Massachusetts. where the
tax is assessed tho excess value OF the share
capital over and above the value OF the tangible
~
value Of the corporate franchise. Is determined by
taking the marie; value OF the stock and deduct
Ing It the valuation laid by the local assessors
on the tangible property OF the company. the DIFF
ference being assumed be the value OF the right
70 carry on business-a right obtained from the
State by the granting If the charter and therefore
rightly subject TO a license fee privilege tax.
Some States make provision for taking a share in
the profits OF the company after certain amount
has been earned on the stock and this is done by
taxing dividends the state considering that II is
justified in taking a portion Of the surplus profit
after allowing a fair return on the money in
vested.
Many municipalities make charges for the fran
chise rights in the streets and these charges take
great variety Of forms. The most common. per-
haps is that Of tax on the gross receipts OF the
company. and this tax has the advantage NJ being
flexible: that is when the business OF the company
IL good. and It's receipts increase the municipality
shares in the increase when the company IL new
or business Is poor. and the gross receipts small
the tax Of course is small. and does not act as an
traordinary burden"
Below are abstracts OF the statutes Of various
States IN relation the taxation Of street railways
prepared by Nj Whittier and 70 the Repub
can and Democratic leaders Of both branches Of
the legislature and 10 the members OF the Com
mittee on Taxation and Retrenchment OF both
houses Of the Legislature. already stated
AIABAMA-Taxes are levied on all property. real
and personal and the amount of tax that may De
levied by a municipality is limited by the Constitu-
ton. Taxes on capital stock may be levied either
on the corporation OF the shareholder. but properly
otherwise taxed 10 the corporation may be de-
Quoted. A license Is imposed by the state
KANsAs-Municipal taxation is limited by the
Constitution and is levied all property. stock
Of the company not being taxable in the hands OF
the holders.
CALIFORNIAN property including franchises
all. Corporations doing business in city may
be REQUIRED 10 pay a city license tax. Franchises
IN the streets were formerly granted by direct act
OF the Legislature. but now only by the local au-
be sold at public auction. after due advertisement,
and are awarded 70 the person or corporation
offering the greatest percentage OF the gross earn
ings No franchise which has expired can De re-
newed unless advertised for sale, but this sale
cannot be made until within one year OF the e1-
piration Of the ola grant The minimum rae
which may be accepted is per cent nut no TAX
COLORADO-Taxes are assessed on all property
NJ the company but stocks and bonds based on
such property are not taxed again
CONNECTICIT-An property is taxable where
located. but stock is not taxable In the hands or
holders.