The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-07-09
MUST PAY IT NOW
Tax Commission Makes Its
First Official Ruling.
Express Companies Owe the
State 81, 100.
ITS NEW EXCISE TAX.
Amounts to One and One Half
Per Cent on Business.
Attorney for Companies ResiStS
the Payment.
ITS NEW EXCISE TAX.


the first official act in its history
the new state tax commission today
held that the new law imposing ex-
else tax of 11k per cent on the gross re-
ceipts of express companies doing busi-
ness in the state applies to the present
year, and that the express companies
must pay their first tax at once.
The amount involved for all the eX-
press companies IN the state is only $4,-
100, but the express companies through
th-i- attorney, E. s. Quinton. strongly
opposed the levy of the tax for the cur
rent year. The companies claimed tina
the law enacted at the last session of
the Legislature could not be retroactive.
The board holds, however, that in using
the 1906 gross receipts as basis for de-
tsrmining the tax, the law is not retro
active, but is merely using the 1906 fig
IS a means to determine what
would be a fair and equitable tax.
The following is the opinion of the tax
commission:
The law under which these proceed
ings are taken went into effect the 14th
of March, 1907. which provided in sub
stance that the express companies do
ing business in this state snail report
each year to the state auditor the
amount of their gross receipts and earn
ings made within the state. less the
amounts paid for transportation charges
for the year ending May 81. These re-
ted to this board for investigation and
certifcation back to the auditor of the
amount of such gross receipts charge
able to each company. and upon these
amounts the auditor shall compute the
amount of tax to be charged to each
company at the rate of IL per cent.
To render the law retroactive 1T
would be necessary that 1t should pro-
vide for the levying of a tax for per-
iod preceding its enactment. The ar
gument assumes that this is what is
49,, 1~rrr Gnf
in that the amount of the tax to be
imposed and exacted is computed upon
the gross receipts of the year preced-
ing the taking effect of the law But
the gross receipts of the preceding year
are simply used as a means of ascer-
tain the reasonable and just amount
which should be exacted by each COM
pany. This is not a tax upon proper
ty. nor are the receipts and earnings
as such taxed by this method. If 1t
was such tax the rule of uniformity
and equality. prescribed by section one,
article two of the constitution. which
governs the assessment of all property
would be violated in its imposition.
The character of cax which this law
imposes upon express companies is one
strictly within the coInpe tence of legis-
lative power. and the m1thodS by which
the amount of the tax may be arrived
iSlature to prescribe. The validity of
the law is conceded by counsel Its
application for the present year is con-
tested 1t seems to be assumed that
since the receipts of the year preceding
the enactment of the law are taken as
a basis upon which to ascertain the
amount of the tax, it is a tax for that
year. But since this is but a method
adopted to ascertain what amount of
tax should be imposed. the receipts of
any preceding year might have been
named as a basis for computing the
tax. without rendering 1t tax of such
preceding year. or in any wise chang
ing its character.
The tax in question is in its nature
an excise tax and the same is cor
rectly designated in the law prescrib-
ing it as distinguished from a tax on
property to which express companies
are nevertheless also subjected by the
tax laws of the state. Taxes imposed
in this form are deemed to be fran
chise tax, or tax on the privilege of
doing business as corporation within
the state. The fact that such tax
IS estimated by the receipts derived
for designated portion of the business
OF the corporation, covering previous
period. in the case under consideration
for the year preceding the first of May,
does not render 1t a tax of that busi-
ness nor of the receipts derived there
from, but this is construed to be simp-
" a method adopted by the Legislature
by which just estimated should be ar
rived at of the amount of the tax to
be imposed
Thus in Maine VS.. Grand Trunk
railway. 142 U. S. 217, the statute of
Maine provided an annual excise tax
upon the franchises of railroads
should be raduated by certain per-
centages upon the gross receipts from
transportation as returned to the
railroad commissioners. and divided by
the number of miles operated within
the state. 1t was held in that case that
although the gross receipts were of
mileage operated on roads partly with |
in and partly without the state, this
method of taxation was not objection
able to the rule inhibiting a state to /
not tax levied on the business, nor I
on the property derived from the busi- /
ness, But" says the court. "a resort I
to those receipts was simply to ascer- |
tain the value of the business done by |
the corporation and thus obtain a /
guide to a reasonable conclusion as to /
the amount of the excise tax which /
should be levied. and we are unable to |
perceive in that resort any interference /
with transportation. domestic or for |
eign. over the road of the railroad |
company, or any regulation of COM
merce which consists in such trans |
portation. If the amount ascertained |
We're specifically imposed as the tax no /
objection to its validity would be pre- /
tended, and If the inquiry of the state |
as to the value of the privilege were !
limited to receipts of certain past |
years instead of the year in which the |
tax is collected. 1t is conceded that the
ed and if not. we do not see how a |
reference to the results of any other
wear could affect its character
In the case of the Home Insurance
company VS.. New York, 134 U. S. 594
q franchise of the tax was resisted by I
the company upon the ground that I
the tax was in fact levied upon the cap |
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