The Guthrie daily leader. [volume] (Guthrie, Okla.) 1893-1996, 1910-10-18
TAXATION
FIXED BY
EARNINGS
RsPOR rs BY RAILROADS.
TO STATE AUDITOR
ASIS USED
JON STHUF .OlALIlY OF
LAM Is QUESTIONED
State Asserts Right TO Value
Each Property as Going
Concerns

Railroads are making reports TO tue
state auditor showing their earnings,
expenses and mileage for the fiscal
year ending June 80 last. Upon these
figures under the automatic yalun
tlon tax law passed by the Second
legislature IN special session,
Is to be based all the taxes railroad
companies viii be required to pay
Reports are to be on file with the
state auditor not later than October
Is each year
Reduced to figures, railroad com'
panies are taxed as per valuation
established by their earning capacity,
1t has been the stae's contention that
it has the right to consider the prop
critics as growing concerns for the
purpose of fixing values. But three
elements are considered. Gross re-
ceipts, operating expenses aud mile
age The relation the gross receipts
bear to the operating expenses de-
tcrmino the property's profit earnings
capacity and In arriving at this the
law applies the following formula;
Divide the total gross receipts Of the
company by the total mileage Of the
main inc track in the system, and
the result is the value per mile for
taXation In he state. Reduro the op'
4 Grating expenses to the mileage unit
1 ip the same way, and when such aver
age IS further reduced to the per cent
relation IL bears to the average gross
receipts per mile, determine the rate
Of taxation 10 be applied on the val
uatlon Appearing With this tormu-
| In In the law Is percentage table
carrying the rates which, when appi-
ed II has been contended. produce
taxes only in proportion to the earn
ing power of the line. In other words
] when a railroad company Is flush and
doing large business II pays heavy
taxes Gin proportion to the busness)
but when such company has a bad
wear. the taxes go down accordingly
i Taxes for municipalities, etc. are ar
rived at in practically the same way.
Roads Fix Own Values.
/ t'uder The automatic law the state
4 beard OF equalization has nothing 10
0 with fixing the rate or determining
the valuation. as the railroads fx that
by their reports, II remains for tho
state auditor to apply his algebrat
knowledge 10 the percentage table and
the companys reports There is
however. sCme question as to the law
consttutOnality and In order to be
on the safe side the state board ol
equalization applied the old law o
. assessed valuations for the purpose.
of completing the tax levy for 1910
The state is, nevertheless. contronte,
by a peculiar state Of affairs II th,
courts should hold that the aut0mail,
law was TN effect then the assesse,
valuation method as applied By tho
equalization board can no, be effec
tive. and II. in this event the court
shOnld hold the automatic tax Law IN
E. valid, the state would be withoF. rev
enues from this class OF public ser
vice corporations, for the time, a
least An unofficial opinion was plat
ed before the board Of equalization
It is understood. that the law woul'
not stand test IN the courts. Mhel
it fina ~ arrives to the test tn
courts VIII also haze TO determine th
amount of percentage. II appears tina
IN writing the bill and placing the dee
lmal point and ciphers before the fil
ures the rates are fixed at about on'
tenth OF what Il was presumed tn
legislature intended
From many standpolnts the auii
matte tax law u the most satisfactor
TO the railroad companies For OH
thing. It confines It's business TO on
department Of state, yet there Is
! belief that under the new order, the
will be required 10 pay more i1Xt
: than under the old