The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1900-11-13
THE FRANCHISE TAX UPHELD
DECISION or rae DALLAS COURT
WILL he FAR-REACHING.
1t Is 10 lie Carried To state supreme
court and Probably Through
the Federal Courts.

The decision just rendered in the dis
trict court of Dallas county uphoiding
the principle and Legality OF the tax on
franchises is of great Importance in
Texas and also in other states Of the
Union. Tor the case viii ultimately be
carried to the United States supreme
court for final determination. The as
SCISSORS OF a number Of counties in Texas
have placed ON their books assessment
against various corporations doing bust
ness in their counties, or having domi-
Giles therein, placing value on their
franchise or right to do business; these
assessments amount in the aggregate te
several millions of dollars Tor tne big
counties OF the State. Dallas county alone
having about S20000,000 of such intang
bto p.uperty assessed.
II Is contended by the persons VINO
originated this scheme that the franchise
is tue most valuable property owned BY
a corporation as without IA legal right
to do business It's tangible property be-
comes much less valuable, ana on this
hypothesis they have placed the valua-
tions OF the franchise at a large figure.
There are at least a score OF counties
In Texas which have enough corporations
domiciled within their boundaries to near
~ or quite pay all the expenses OF the
government, provided the State supreme
court and the Federal supreme court up
hold the legality OF the plan under which
tine franchises are taxed. There are now
suits pending In number of counties
awaiting the decision in the case carried
up from Dallas county, and most of these
suits are for taxes for back years as well
as for the current year.
The corporations meet the plea that
the franchises are valuable property with
The answer that If they are property at
sll-and this they deny--they are intangi-
bic and hence can not be taxed; the an
swer to this by the originators of the
plan OF taxation that though the fran
chise is not in itself apparent. it adds
value to property which is tangible amt
is therefore, of tangible and real vaiue
ana comes within the statute taxing all
property of value. IL is further argued
by the corporations that the State coll
iects an annual franchise tax, which
thereby debars a further tax; which is
met with the answer that the State col
lects its own tax and not the tax belong
ing to the county.
The tax is placed against all corpora
tons whether they be chartered in Texas
States and are operating in Texas under
permit to do business, This being the
case, a number OF the interstate corpo-
rations Will be affected, and they will
undoubtedly carry the matter into the
Federal courts.
Tho tax applies to all corporations. and
when ii is remembered that there arc
@everal thousand of these in Texas, With
capital stock ranging from n few hundred
dollars to millions, the amount of revenue
TO he derived from this one source alone
provided that the supreme court up
holds it-ran be "a irly estimated at enough
to support most of the county and several
OF the city governments; and the State
Will also be enabled to cut down the ad
vSiorem to a much smaller figure than
II is now, Ii Is quite probable that most
Of the assessors viii value the franchise
according TO the capital stock, hence any
water therein Will be paid for
The parties who originated the plan
have made contracts with several coun-
ties in the State for 30 per cent of all
the money recovered from the current and
back years, and If their plans succeed
they will be wealthy There are many
lawyers of much ability who have de-
clared that there is nothing In the plan
and that II viii not be sustained. but the
decision Of the Dallas court certainly
gives it an aspect of legality which VIII
cause franchise taxes to he placed on
the assessors books in many counties
where they have not been before.