The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1906-06-14
THE kauai TAX
APPEAL CASE



LIHUE June 1.-THE Tax Appeal
Board for the Fourth Tax Division held
"a session at Lihue last Friday to give
a hearing i'm the only two cases from
which appeal had been taken from the
assessment Of Tax Assessor Farley for
the year 1906.
The Knudsen Estate had made re-
turn Of $4,000, which the Assessor had
raised to $393.525, and the Makee Sugar
Co.'S return of $1OOO.OOO had been rails
ed to St,6OO,OOO
As counsel for the Knudsen Estate
Mr., Lewis called II. NJ Won Holt. the
trustee, who testified that he had made
Iuha return of $4,000 as the value of
the leasehold He had arrived at this
result by deducting 10000 from the
valuation accepted by the assessor the
previous years. The lease had about
IA years more to run and the value of
it would decrease from year to year
deduction of $4,000 each year would
bring it down to nil at the expiration
of the term. He had acted as executor
of the will of the late Mr.. Knudsen
tee and i'm those capacities made the
tax returns for the estate every year
since 1898. In that year $4,000 was the
amount accepted, but this had been
raised to $780, 900 the following year.
After consulting with those interested
i'm the trust this valuation had been ac-
cepted and returned each subsequent
year but the present one, when for
above reason he had reduced it 100000.
Under cross examination he stated that
the rent paid to the government was
$4,000 a year. that the net income from
the estate during the last five years
had averaged about $4,000 a year, some
years running as high as $4,000, at
others as low as $4,000 He explained
that the income was variable, as we'll
from sugar as from the suitcase of
the rice land The present outlook for
sugar was dark and labor difficulties
made the prospects for future returns
very doubtful. He had had large eX-
perience i'm leasing land as well for
cane growing as for ranch purposes and
| did not consider the valuation of $l4O,-
600 at all too low, but he asserted that
if the leasehold was put on the market
under the most favorable condition, it
would not bring more than that
amount.
Rev. H. Isenberg was the next wit
ness and corroborated what Mr.. Won
/ Holt had said about the valuation OF
the leasehold under the present diff
culties Kekaha was one of the worst
situated plantations as far as labor was
concerned 1t had no staple labor, own
ing its own climate, which in the sum-
mer is so hot as to drive a great many
away. Oriental labor was the only kind
that could be used there, and the gov
eminent was now intent upon OBJ
structing a fresh supply from that
source Thought it unfair to levy so
many taxes on the same property as
the sugar company had paid both prop
erty and income taxes on the same land
and this would be the third tax levied
on the same land in the same year.
| Tar. Assessor Farley testified that he
as member of the board of equalization
had been instrumental i'm raising the
| assessment. He had i'm former years
| accented the return of $150,00O, which
was a purely arbitrary amount not nix
ed bv any computation of the actual
value of the leasehold. When the truS-
tee reduced the amount returned he
had decided to bring the assessment
IN to what he considered the full
amount of the valuation. This he had
arrived at by the common formula for
computating values from a given rental
! when the number of live years was
taken into consideration. He had TAX
en- $4,000 as the bass allowed $4,000
from the ,avera ge yearly income and
thus found the value Of the leaSehold
ON the LIST January, 1906 to be 1898, 525.
/ The assessment was for one year only,
/ and if the income i'm years to come was
to decline, the assessment would be
reduced accordingly. The supreme
Court had recognized the Z per cent
basis to he a fair one in the Bishop
case, and this was the basis upon which
he had made his calculations. He
thought it more likely that the income
would increase than decline as the com
pletion of the new ditch would furnish
the plantation with sweet water an'
also bring something like 500 additional
acres under cane cultivation.
After Mr. Lewis on behalf of the es-
tate and Mr., Milverton ON behalf of the
Territory had addressed the board and
reviewed the evidence the latter retir-
ed for consultation, but returned short
~ with decision sustaining the return
made by Mr.. Won Holt on behalf Of the
estate.
Mr.. Breckons on behalf Of the Makee
Sugar Co. then offered to make returns
to the amount of $1,25OOOO, which Mr..
Milverton promptly accepted in the
name Of the Territory, thus disposing
Iof the last case without trial.-The Gar