New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-05-22
BILL FOR TAX DODGERS.
ALMOST PASSES SENATE.
Whitney Exposes Measure Which
Has Passed assembly.
LBy Telegraph to The Tribune. ]

| by IeINgriph 10 me Tribune.
Albany. May 21.-What many lawyers here
| interpret as an adrot method of lodging per-
sonal taxes. amounting 70 millions of dollars
! alone in New York City is contained in a bill
almost through the Legislature. To be sure, the
taxes due under the statute which this measure
| would repeal never have been placed on the tax
| lists, but investigation Of the scope of this bill
| has shown that officials in New York City are
about to begin movement 10 add these personal
taxes to the assessment lists.
This bill was presented by Senator Cassidy and
Assemblyman Robinson. the latter of whom has
said that he did realize at all the nterpreta-
ton which might be placed on its provisions. and
now is determined TO kill it if possible. The As
sembly bill has been passed, and nov is on the
order of third reading in the Senate. In the up
per house. though it has been amended slightly
from the form IN which it passed the Assembly
So it will have 10 go back there if passed by the
Senate, for concurrence in the amendment. That
would place it again within the control of Assem-
blvman Robinson who will move To strike out
the enacting clause if II Is not killed before it
reac hes him again
Under the Ford franchise law the value Of
franchise rights and rentals is taxable This
especial bill, il has been discovered by Travis
H Whitney legislative counsel for the Citlzens
Union would repeal the clause in the law MAX
ing rents reserved III any lto'Se I"ASAHiN g." -
sonal property. Thus the rentals paid by the
traction merger in New York City to sub
sidiary companies the rentals paid by the New
York Central and numerous other concerns
which should be taxed personal property
would be exempted. Investigation of the origin
Qf the bill has yet shown whether the people
who drew it had heard in any way of the in
tentior of New York City officials to assess as
personal property the income from these rentals
The chief change proposed by the bill is tho
repeal of the following sentence of the existing
law:
Rents reserved in any lease in fee or for one or
more lives or for a term more than twenty-onc
years and chargeabe upon real property within
the state. shall be taxable to the person entitled
TO receive the same as personal property IN me
tax GlsrSt euo tb e tdpxot,nn thereof such
tt rict. % - &c O'e''' 9 ''0'~'''
Discussing the significance of the omission of
the sentence. Mr.. whitney said;
When this provision was first enacted in 1876 It
provided for the taxation OF rents reserved and
chargeahle upon lands, Subsequently, upon the re-
was substituted for lands and finally in 1899 by
the Ford franchise law the scope of the term real
property for the purposes of taxation was broad
ened so as TO include all surface, underground or
chises, rights or permission to construct. main
tain or operate the same; also pipes. mains, etc,
Considering the decisions of the courts sustain
ing such tax as valid tax and the amendments
have consulted a number of lawyers in New
Of tb ana ey Are OF the opinion That the leases
system of New York, we'll railroad leases.
terms Of this provision which il is now attempted
20 F repealed II Is true that no attempt has
these leases on the personal tax list bat this alone
they might or should he, and. in fact. WIS In
Termed during the course OF my inquiry TO this
oP1ni9n mat II is applicable to such rentals. The
sigh h OF this possible application should
", az
dollars could be added to the tax lists To take but
to the nterurban for perod Of @ yea Mas and Se
net rental hereunder was declared 10 he per cent
Sb9n 6o the capital stock Of the Metropolitan. namely
$ $a BY Subdivision OF Section q of tho
provided that the assessor shall estimate the value
OF the taxed rents reserved and chargeabe upon
which at the legal rste Per annnm Shall n'G PRODUCE ot
rental tbereore on the eropotan me- Lease &d
be something over s60c00Go0 and the tax on this
thing over 500 he %Ta nm9qn IN 12
rentals to various subsidiary companies. One Of
that it can he seen that even in New York city
a l an enormous amount could be added to the
In addition. there the leases Of the various
vision which this h Would res A4I65 a bro
he collected from the lessee who may then deduct
This taxation of rents reserved has been passed
others It is interesting to examine Woo S9lnF aT
Oswego Starch Factory, in II N Y 90 where the |
point Of double tSxa e9 ne sa and on the
rms Is not in striCtness o double taxa
tion What tho Legislature has done IS 10 declare
mat the rents reserved in such leases should be
same as personal property They severed from
the real estate and taxed at their capitalized value
as new subject of taxation. while the real estate
remains taxable to the lessee or tenant
w hereVer real estate is held under the form of
grant or lease described in che statute,
OF the person entitled to the reserved
lect 10 taxation a species of property which for
the purpose Is classed personal estate
IN the oswego case II is OF interest to observe
as showing the slowness or tax officials TO take
advantage OF the law add new property 10 the |
tax Ist, that the leases which were for land and |
water rights in perpetuity not placed on the |
TAX lists until 1898 fifty years after the leases
had been made They had. in other words &c !
tax, when i was finally imposed. consumed a little
over haif OF the annual rent This, however was |
no more serious than the taxation as personal prop
erty of mortgages previous the legislation OF |
cages lodged the tax
One explanation given for this bill by one Of tho |
leading New York law firms. said to be attorneys |
Tor the Marshal Field estate which has large hold
possible for real estate to be properly developed
with twenty year limitation upo<l leasahoids
that men with money Will not lease land and erect |
large and permanent buildings unless they can ger
longer leases Another explanation given for the |
advisabty OF this repeal Is that real estate |
men are anxious to adopt In New York the Massa |
chusetts system Of real estate trusts and in order
that the bonds issued upon real estate NAV have |
permanent ana steady value. TO lease the land |
for long period a fixed rental so that tha |
holders of the bonds may know the exact income |
value of land To these explanations IL is renIied
however. that up TO the present time there ha. |
been no difficulty IN the Improvement of leased |
ground