The Hawaiian gazette., 1903-06-09
TOO HIGHLY
ASSESSED
Tax Appeal Court
Ruling Set
Aside.


ion of the Supreme Court, in which he
Is Joined by Justice Galbraith, regard
ing the tax assessment of Lam Wo
Sing. The appeal of the taxpayer is
sustained so far as reduction is con-
cerned, though the valuation fixed Is
upon property returned as not having
value. Justice Perry concurs in part.
Holmes & Stanley for taxpayer, Ro-
bertson & Wilder for assessor.
The taxpayer returned his rice plan
tation at Waikiki as separate items:
real property in fee, consisting of
many small pieces, s14,332 leasehold
interests in many small pieces Of land,
nothing; rice, paddy, ETC., $l3,152;
growing crops, $4,000, and live stock,
$3.50. The assessor raised nearly all
the valuations to greater or less ex-
tent. The fee simple property was
raised about fifty per cent. The tax
payer acquiesced in all the increased
amounts except that of the leasehold in
terests, which the assessor had placed
at $19,621. AS to that he appealed to
the Tax Appeal Court, which reduced
that valuation to 5000, from which he
appealed to the Supreme Court.
Omitting the land held in fee and
about thirty acres held at will, there
remained about 100 acres held under
about one to thirteen years to run.
The court has this to say:
1.-THE assessor in nearly every in
stance adopted $500 per acre as the
value of the land without the lease,
deducted the amount of eight times the
rental as the value of the lessons in
terest and assessed the balance to the
lessee with, of course, absurd results.
For instance, one lease of less than
half an acre on which rent was paid
at the rate of $40 per acre per annum
and which had only ten months to run
was valued at s75. That lessons in
terest cannot be valued in this arbitra
ry way is evident" (Six Hawaiian de-
csions are noted. "The assessor also
considered the value of a lease that
was about to expire as equal to that Of
one having a long term to run, be-
cause the lessee could make out of it
during the year as much in the one
case as in the other. This, of course,
was erroneous. The tax was pro-
perty tax, not an income tax"
The court reviews the action of the
Tax Appeal Court, commenting on val
uations. AS to one leasehold of SO
acres with an artesian well, it is held
it must remain as assessed at $3.50
because, not having been returned
there can be no appeal regarding it,
1t is stated that bad leases cannot be
used to offset good ones, when they
are returned and assessed separate
ly. The conclusion Is this:
without going into details We
think that such of the leasehold inter-
ests as have value, including tie 90
acres unreturned, might properly be
assessed at $4,000, and it is so ordered"
Justice Perry says: IT concur as to
the unreturned piece of land, but as
to the appellants leasehold interests in
the other pieces my finding, upon the
evidence, is that they have no salable
or taxable value"
The syllabus of the ruling opinion
establishes the following as law:
"A lessee's interest cannot be arbit-
rarily valued for purposes of taxation
by fixing the value of the land with
out the lease and deducting therefrom
eight times the annual rental supposed
to be the value of the lessons inter-
est.
"The value of leasehold varies with
the length of the term of the lease
as we'll as with the income derived
therefrom.
IAN assessment of unreturned pro-
perty Is held unappealable."
COURT NOTES.
B. L. Marx, guardian of A. NJ. More,