The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1908-11-08
This Is the Holding Of Supreme
Court in Important
Controversy.
MEANS 100000 A YEAR
IN REVENUES TO STATE
Taken Up on Appeal and Judg-
ment of Lower Court
Affirmed.

Section -, article 13, of the Revised
Statutes Of Utah, which provides for
franchise or stamp tax on corpora
tions, is constitutional and all corpor-
ations organized under the laws Of
Utah and all foreign corporations do
ing business in this state will have to
pay the tax. Only religious or cbarita-
BILE societies, corporations not organized
for pecupiary profit, irrigation connpa-
MES, formed for the purpose Of provid-
ing water for lands owned solely by the
incorporators, and insurance companies
are excepted. This was decided by
the supreme court in an opinion in the
Black Rock Copper Mining and Mill.
ing company case against Charles S.
Tingey, secretary of state, handed down
Saturday. ...
There are 5000 corporations in the
state, of which 1000 are "livep ones
and 5000 pay taxes. The tax on each
paying company will average $40 a
year. By the opinion, approximately
$50 600 annually Will be added to the
state s revenues from this source Any
corporation. that does not pay this tax
on or before November ID of any year
becomes delinquent, and must pay
penalty of Slo0. The delinquent. tax
or license, together with the penalty.
becomes lien against the property
and suit may be instituted by either
the county attorney or the attorney
general TO collect the lien.
Demurrer Sustained.
The case came to the supreme court
on an appeal by the plaintiff from Judge
Morris L. Ritchie's division of the
third district court. The action was
brought by the Black Rock Copper Min.
ing and Milling company to recover
taxes paid to the state under protest.
the contention Of the plaintiff being
chise or stamp tax or license was uu.
constitutional, and the tax therefore
invalid and non enforceable The state
demurred, on the grounds that the act
was constitutional, and the complaint
therefore did not state a sufficient
cause Of action and the demurrer was
sustained. The plaintiff then ap.
pealed.
The appellant contended that fran
chises are declared by the constitution
TO be property, and that section of
the state constitution provided that all
property must be taxed uniformly on
its valuation and not on its incorpora-
ton. The. act, therefore it was con-
tended, was void, because it imposed
tax on property not in proportion
10 It's value, but by naming the amount
to be paid IN gross, regardless OF the
value.
Holding Of Opinion.
The court, while admitting that there
is hopeless conflict in the contention.
held that In its opinion the leoisla-
tuTe did not intend the license tax
imposed to be a property tax. uotwith-
standing that the constitution provides
that franchises are property, nor did
the trainers of the constitution intend
TO limit the right Of legislation to i'm
pose any other than corporation tax
by valuation upon franchises by what
is said In section . of article l3. The
trainers of the constitution, no doubt.
had in mind the fact that a franchise
relating merely to the right or privilege
TO be or exist as corporation, al. |
though a matter of value to incorpor.
ators or stockholders, is not an asset. |
but since IL is u privilege or right |
granted by the state, a license tax
may be imposed and tho extent thereof
is left TO the discretion of the lcgis- |
lature.
The tax ranges from tax of SIS on
an incorporation of $4,000 TO $50 900 |
for one not exceeding S2Oo.000 Justice |
Frick wrote the opinion, Justices Straup |
and McCarty coneurring.