East Oregonian : E.O. (Pendleton, OR) 1888-current, 1909-03-06
State MAY LOSE
THOUSANDS
BLUNDER OF LEGISLATURE
MAY COST OREGON DEARLY
Attorney General Crawford Declares
Legislature Repealed Gross Earn
ings Tax by the Passage OF the
Measure Providing for the Creation
of q Tax Commission.

odltIl, OT't MdICH O'-N HeLlSI ny
inadvertance or with actual intention
It is not known, but the legislature by
the enactment of the tax commission
act has repealed the gross earnings
tax, imposed by an act Of the people
az the general election held in 1906.
This is the opinion of the attorney
general, who after a careful exami-
nation Of the act, declares that Ore
gon's system of taxation has been so
badly muddled that those whose duty
It Is to enforce the law hardly know
where they stand.
The gross earnings tax has been
one Of the most highly valued of the
states sources Of income. The law
was enacted by the people under in
ltiative at the instigation of the state
grange. 1t is being contested in the
courts by the Pacific states Telephone
& Telegraph company on the ground
that the initiative and referendum, by
which the tax was imposed, is uncon-
stitutional in that it endeavors to set
aside a representative form of gov
ernment. The case was decided in
favor Of the state a few weeks ago
in the Oregon supreme court and has
now been carried to the United States
supreme court
Means Thousands TO State.
The suit means a difference of
from 100000 to $4,000 to the state
Of Oregon in the matter of taxes for
the year of 1907 and 1908 and If the
opinion of the attorney general is cor
rect it means that Oregon has lost
this sum in taxes for the past year and
much larger sum for the next few
years unless the extraordinary session
Of the legislature can correct the er-
ror.
By section % of the new law the
board is authorized to apportion am
ong the counties the assessment roll
of the property Of all corporations,
such as telephone and telegraph COM
panies, oil and tank line companies,
doing business in more than one coun-
ty This assessment roll is obtained
by inquiring as to the gross receipts
and net earnings, and as to all other
property, real and personal Of the
corporations. and is the basis upon
which the levy is made by the differ
ent counties.
This, in the opinion Of the attorney
general, is what abrogates the gross
earnings tax law. For the gross earn
ings Of the corporations are included
as a basis upon which the general
levy is made, and is not taxed separ-
ately as required under the initiative
act of 1906 and paid directly to the
state treasury.
However, should this opinion be
wrong, says the attorney general, it
is certain that the courts could never
uphold a law such as this, requiring
double taxation: for the gross earn
ings tax enactment of 1906 imposes a |
direct tax on gross earnings while the |
new act passed by the last legislature
impose a tax upon corporations, lev
led on all its property including gross
receipts and net earnings" So that |
the new law is either a direct repeal |
of the new gross earnings tax by the |
clause inserted which is as follows:
And all acts and parts of acts LII !
conflict herewith, be and the same is
hereby repealed" as it imposes a
double taxation expressly forbidden
by the constitution both of the state
OF Oregon and the United States.
TN view of all these circumstan-
ces," said Attorney General Crawford
this morning, 81 would be very much
in favor of compromising our suit
with the Pacific Telephone & Tele-
graph company I see very little for
the state to gain in the further prose-
cution of this suit or for the telephone