Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1904-04-14
Iowa Supreme Court Adopts
Peculiar Course In Case In
volving Tax Payment
REPEALED LAW DECLARED VOID
State Law Taxing Telephone Com,
panies Directly and Exemptins Them
From Local Taxation - Claim Of
Polk County That it Was Unconsti.
tutional is Upheld by the Court.
Epeciai to Times-RepupiIcan.

p 6pec1di to 1meS-HcpuDilcan.
Des Moines, April 1.-THE Iowa
supreme court did the unusual
yesterday In declaring unconstitutional
and void a law of the state which has
been repealed. Another unusual thins
about it was that the case was one ills
yolving taxes paid by corporation
and it was the corporation that con-
tended before the court that the law
was constitutional, while the taxing
authorities We're engaged in showing
that the law was a dead one at the
tine. This anomalous condition of ar
fairs came about in peculiar manner.
The law was one in which the state
had sought to tax telephone companies
directly and TO exempt them from local
taxation. The Iowa Telephone Com
rany had paid taxes to the state under
such law In 1898, and then the coun~
~ treasurer. of Polk county had as
sessed locally the property of the COM
pany in Des Moines for $4,000 as
property not otherwise assessed The
county claimed the state taxing law
WINS unconstitutional. The supreme
court upheld this view, tho taking
pains at the close to note that the leg
isfature has since changed the law SO
as to meet the constitutional objections
thereto. The court also notes in q
general way that the issue between
those who believe in the segregation OF
sources OF tax income and those who
believe In a strong centralized system,
while not perhaps appreciated by those
who have given the matter little
thought is sharply drawn. and the leg
isiature has veered from one side to
the other according to the views of its
constituent members until the matter
was settled In the decision in the case
OF the Hawkeye Insurance Company
VS., French, from Des Moines. But this
announced no new rule since decisions
of like import had been made before.
These decisions had evidently been
overlooked by many subsequent legis-
latures and the matter was not pressed
for hearing until matter arose which
seemed to deprive a municipality of a
considerable amount OF it's local reve-
nues. The rule Is well settled in lows
that corporations should be subject to
taxation the same as individuals as to
purposes and objects. Hence that part
OF the law which exempted telephone
companies from local taxation was in
valid and the whole scheme fell to the
ground. The Twenty-eight general
assembly recognized this fact and pro-
vided that while the state should as
sess the companies the taxation should
be local in it's nature, and thus cureo
the defect.
Incidentally in this same decision the
court pointed out a weakness which 1t
is feared may affect one more recent
law. In the case of the telephone law.
lit was provided that the state execu-
tive council should, at the time of lnak>
Ing the assessment, fix the rate of tax
alton to be paid the state and it should
be the average rate of taxation as
fixed in the state for all purposes. II
was contended that this would make
the taxation the same as If locally
taxed. But the supreme court In this
decision. written by the able chief JUS |
tice, points out that this does not ae>
complish the purpose. for the rate, of
taxation varies greatly in different dis
tricts. and taxation of the property in |
city, where the rate is high, would |
therefore not be uniform with that on
local property. But the fact is that |
this Very system of getting at the tax
alton of freight lines and refrigerator
two years ago. If it would not apply in
the case of telephones, why would IL
not be wrong with fast freight lines?