The Forest Republican. [volume] (Tionesta, Pa.) 1869-1952, 1903-01-07
FRANCHISE TAX LAW.
Declared Unconstitutional by
Third Appellate Division.
Future Revenues Of 100000 a Year
Are Involved = Decision Of Judge
Robert Earl as Referee Set Aside.
State Will Appeal to Higher Court.
Important Decision.

important Decision.
Albany, Jan. Cit is said here that
the Third appellate division of the SUI
preme court will, within "a hours, hand
down decision declaring the franchise
tax law passed by the legislature Of
1899 unconstitutional Sc far as 1t re-
lates to the state constitution.
The decision is expected at noon to-
day and is one OF the most important
both to the state and corporations, ever
given in this state.
So far $12,0O0,O00 in taxes is in.
volved, the state by the decision prac-
tically losing that amount of money
and the corporations gaining 1t, while
at least four million dollars year in
future revenues also are involved.
The constitutionality of the fran.
chise tax law was attacked by the in.
terested corporations on two PROPOSE
tions, namely:
First. That it violated the home rule
provision of the state constitution in
that it gave to the state board or tax
commissioners the power to assess real
estate for the purposes OF local taxa
ton, power which is reposed in local
boards of assessors.
Second. That it violated the provis'
ions of the national constitution which
holds inviolable contracts made be-
tween individuals, corporations or
other corporate bodies.
1t was also alleged that it violated
bAe national constitution because cor
poration when granted the privilege to
use streets and highways for the pur-
pose Of their corporate existence en-
tered into a contract with the power
vested by statute to grant them the
franchises, which constituted contract
beyond the power of the legislature or
any public body to modify or to break
The litigation to test the constitu
tionality of the franchise tax law has
been in progress for the past two
years. 1t was instituted originally
through the procurement by the
corporations affected of a writ OF
certiorar for review by the
board of tax commissioners under the
special franchise tax act.
Corporations operating AZ of the
largest franchises in Greater New
York combined in test case to carry
the litigation to the cn"r' ot appeals
and higher if necessary.
Writs of certiorari procured in the
Third Judicial district were referred by
Justice d. Cady Herrick to former Chief
Judge Robert Earl of the court of ap-
peals as referee Judge Earl took tes-
timony and heard arguments covering
a period of several months.
Last spring he handed down de-
cision declaring the franchise tax act
to be constitutional in all its features,
and upholding its Interpretation by the
state board of tax commissioners in all
but one point The board had assessed |
special franchises at their full value |
whereas, according to his interpreta- |
ton, they should have been assessed |
at the came rate as other species of |
real estate in the same tax districts.
Justice D. Cady Herrick affirmed pro |
forma and without opinion the decision |
of Judge Earl for the purpose of per
mittlng an appeal to be taken as ex-
pediently as possible to the appellate
division. This appeal was taken and
argued at the Dc cember session of the
appellate division, Third department
II the adverse decision is handed down
the state will appeal to the higher