The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-10-20
A TAX ON GOOD WILL
ARGUMENT ON DEMURRER IN THE
NEWS TAX CASE.
Merrill Moores for the state and Fer
dinand Winter for the News
Other Court Cases.

Argument on demurrer in the suit of
the indianapolis News against State
Auditor Hart to enjoin him from collecting
taxes assessed against the plaintiffs plant
by the State Tax Board was heard by
Judge McMaster, of the Superior Court,
yesterday. The real contention is whether
goodwill can be taxed. The News was as
sessed at $4,000 one year and $4,000 an
other. and In each instance the assess
nIent was raised by the tax board to $780,
600, appeals having been taken from the
county board by Frank McCray. The
plaintiff alleges that the good will of the
business was taxed contrary TO the Con-
stitution AS the question of good will IS
the point on which the litigation rests the
decision will have much bearing in taxing
all individual and partnership business.
Deputy Attorney General Merrill Moores,
in his argument for the State. contended
that good will can be taxed, that 1t is
part of the valuation of the property, and
according to the Constitution taxation is
based upon valuation. He says that in
determining the value of business the
name of the paper is to be considered, its
circulation, advertising business, and
everything from which profits can accrue
outside of the tangible property is prop
erty and is taxable. He cited decisions in
the New York and United States Circuit
Courts, which held that good will is part
OF property and is taxable. He also pre-
sented decisions showing that the names
of stores, hotels. breweries and all bust
nesses, when they figure in the financial
success of the firm, are considered part of
the property, and when one Of a partner
ship dies the good will of the property in
which he was interested is held assets,
appraised. and his heirs receive their share
on such appraisements.
The good will of corporations is taxed. he
said, and that good will is recognized as
part of the capital stock. To thus tax
the good will of corporation and let the
Individual and partnerships escape, he said,
would be unjust
certain the value of the good will of a
newspaper, he said, IL is no more difficult
than to estimate the value of seat in
stock exchange. an abstracter's books, race
horses, diamonds, paintings and Sculpture.
The valuation of these, he said. depends
upon the financial estimate placed upon
the nature OF the property by the owner
and not upon the amount of canvas.
weight of the stone or the mere fact that
a horse is horse.
Ferdinand Winter, for the plaintiffs said
the tax board had no jurisdiction from the
fact that the county board had not raised
or lowered its first assessment. and under
those circumstances the case could not be
appealed He said only the good viii of
corporations can be assessed and taxed,
and that there is no machine by which an
assessor can find the value of the good will
of a newspaper or partnership. He also said
ii was discrimination TO attempt TO col
lect taxes from his clients and let other
partnerships go.
Either side will likely carry the case to
the Supreme Court, and Mr.. Moores said
he would not be surprised 10 see it go to
the United States Supreme Court.