New-York tribune., 1899-11-17
NEW-JERSEY NEWS.
TAXATION OF FRANCHISES.
AN IMPORTANT REPORT SHOWING THAT
SUCH ASSESSMENTS ARE
PRACTICABLE

Trenton. Nov. 16 (SpeclaD.-Charles c. Black,
OF the State Board Of Taxation has incorporated
chapter on the subject Of the taxation OF pub
lie franchises in the Boards annual report,
which has just been presented to Governor
voorhees,. His attitude and sentiments on the
question have the approval OF the entire Board.
In view Of the consideration which the matter
Is receiving throughout the State, especially In
Hudson. Camden and some Of the other larger
counties. this contribution to the report is con-
sidered Of much Importance Mr.. Black says:
In corporations four elements of taxable prop
erty value are sometimes found. First. franchises:
second corporate property third, bonds and shares
stockholder; fourth. capital stock in the hands Of
the corporation. Each OF these elements is, under
taxation. and It is within the power of the State.
when expressed by legislative enactment and not
restrained by constitutional limitation, to assess
taxes upon each Of them. even though 1t may sub
1ect the corporation or shareholders to double
but in the absence of express legislation to that
effect 1t Will not be presumed.
HOW CORPORATIONS ARE TAXED.
Mr.. Black quotes the law Of the State to
show the existing method Of taxing corpora
tions, which is that of assessing the property
held by the corporation and not its capital
stock He differentiates between franchises
granted to corporations to engage in business
and franchises such as the privilege of using
public streets.
points out tnat steam railroads tHe
law Of 1884 are assessed by the State Board
of Assessors upon the true value of their fran
chises. while other corporations pay no franchise
tax except that imposed by way OF license 10
do business. and which confers no monopoly
right, as the privilege Of becoming Incorporated
Is not limited.
Referring to companies which acquire public
franchises, such street railway companies,
telephone and telegraph companies, gas, water
and electric light companies. Mr.. Black says
that they, by reason Of the character or the
oil and
he adds that their success and consequently the
value Of the franchise Is dependent upon and
made by the people of the community In which
they operate. Their use OF public property may
be called a special public franchise. to dis
tnguish it from the corporate franchise.
TAXATION OF FRANCHISES PRACTICABLE
The two points involved in this question, Mr.
Black says, are: First, is 1t just to tax this
public franchise as property, as a source OF
revenue for the local communities in when they
operate in addition to the material corporate
property? Second, is 1t constitutional to segre-
gate the public franchises from the corporate
franchises, and subject them to property tax
as a class? To these questions might be added
a third, Is II practical?
In New-Jersey the public streets. highways
and other public property cannot be used oy
individuals or corporations for other tnan pup
lie purposes. except by the consent OF tne
is given upon condition OF the payment OF fees
for the use Of the districts. In some cases the
payments are grossly Inadequate 10 the
privileges granted That 1t Is as practical to
tax these franchises IL is to tax any other
class of property can hardly be denied 1t has
been done in many States without objection or
resistance The taxation Of the railroad fran
chises in this State under the act OF 1854 Is
case in point That some Of these companies
operate in one or more taxing districts would
not be a valid objection to such system or
taxation as the amount equtably to be paid
TO each taxing district could be determined by
the State Board Of Taxation without additional
legislation In conclusion Mr.. Black calls at
tention to the New-York law of 1889 taxing
nublic franchises as property. for the use OF the
municipalities in which they are granted.
VALUATION OF TAXABLE PROPERTY
The report states that the total assessed value
OF real and personal property taxable locally for
all nurposes in the State of New-Jersey for the