Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1910-06-22
THREE OPINIONS
AFFECT SEVERAL
TAX ASSESSMENTS
City Counsel Nugent Advises
Against Following Parts
of State Law.

ance until the opinions rendered were
received.
1t is Mr.. Nugent's opinion thai Sec
ton Is Of the general tax act Of 1903,
relating to assessments in the case OF
fire insurance companies and trust COM
panies is unconstitutional and he
recommends that this section be dis
regarded and that section 20 Of the
trust company act of 1899 be used as
the basis for arriving at the proper
taxable value.
In the matter of the Prudential In
surance Company's reserve fund, which
the company claims Is exempt from
taxation, the city counsel advises the
board to disregard the exemption claim
and tax the fund for 1910 on the same
basis as in 1909. This matter Is still
before the Supreme Court for decision,
but the opinion prevails that the city
will be upheld in it's contentious. which
will mea a difference In this years
tax levy of s279, 303. so.
The other opinion affects the hold
ings of stock of foreign corporations
by residents of this State and the bonds
of such corporations upon which a tax
has been paid in the State where the
corporation has its home office. 1t Ia
held that stocks and bonds upon which
a tax a been paid in the corporations
home State within twelve months be-
fore May 20, the day fixed by law for
commencing the assessment, shall be
exempt from taxation.
The city counsel's opinion in the Pru-
Dental case follows:
Prudential Case Opinion.
1.-THE Supreme Court not having yet
decided the question of the taxation OF
the so-called reserve fund of the Pru-
Dental Insurance Company, which they
claim to be exempt, and which the city
contends is liable to taxation, 1 think
you are constrained to tax the company
for the year 1910 upon the same basis
as you did for the year 1909, refusing
to allow this exemption claimed by
them and following the opinion given
you by the law department last year.
Here is the decision in the case OF
the fire insurance companies and trust
companies:
Section Is of the general tax act of
1903 provides Athat Every fire insurance
company and every trust company shall
be assessed in the taxing district where
its office lie situated upon the full
amount of its capital stock paid in and
accumulated surplus This method of
taxing trust companies with fire in
surance companies. 1t seems to me, is
an arbitrary and special classification
and is unconstitutional under the
twelfth paragraph of section 7 of act
4 of the State constitution, which pro-
vides that property shall be assessed
for taxation under general avs and
by uniform rules, according to it's true
value
"If this section Is of the general tax
law of 1903 IS unconstitutional and void
in so far as 1t relates to trust compa-
MES, then section 20 of the act of 1899,
AN act concerning trust companies
Grew. 1897 P, L. 1899, p. 467, is still in
force.
Under this section of the trust COM
pany act of 1899, trust companies are
taxable in the taxing district where
their offices are situate upon the
amount of their capital stock issued and
outstanding, except that any real es-
tate belonging to them shall be taxed
in the taxing district where the real
estate is situated, and the amount of
the assessment thereon deducted from
the amount of assessment made upon
the capital stock of the company.
I'm Fidelity Trust Company VS.. Vogt,
81 Vr. Sc, the Supreme Court construed
this section to mean that trust compa-
MES were liable to taxation upon the
whole number of its shares at the true
value thereof. If the true value of the
shares of stock of a trust company is
it's fair selling value, then under this
act trust companies would be taxable
upon the same basis as State and ma
tional banks, institutions of a kindred
character and engaged in business of a
very similar nature.
Disregard Section Is.
'T would, therefore, advise you, in
the taxation of trust companies for the
year 1910, to disregard section IS of
the act of 1903 as unconstitutional and
to tax them under section 20 of the
trust company act of 1899. And to
ascertain the assessable value of the
stock of the particular trust company
l would proceed upon the same method
as that indicated for arriving at the
assessable value of national bank stock.
"Of course, in the case Of trust COM
panies. the assessment Is made to the
itself and not to the indi-
vidual holder of the stock, as In the
cas- e of national banks. That is. you
assess. the trust. company for the whole
assessable, value of its outstanding
capital stock upon the basis of the fair
selling value after deducting the as
sessable valuation of the real estate of
the company and the fair selling value
of the fnon-taxable securities held
by It,"
On Foreign Corporations.
The opinion affecting the holdings OF
stock of foreign corporations by resi-
dents of, New Jersey reads as follows:
II am asked to advise you If stock
and bonds of foreign corporations held
by citizens of this State are liable to
taxation as against the holders in the
taxing districts where they reside.
.First-As to stock of foreign corpo-
~rations.
This question is settled by the re-
cent decision of the Court of Errors
and Appeals in Trenton VS.. Standard
Fire Insurance Company, 70 Att. 606. 1t
is there expressly held that stocks of
foreign corporations held by residents
of this State are exempt from taxation
under the general tax act of 1903, when
taxes have been actually assessed and
paid on the corporations property
within it's own State. within twelve
months next before May 20. the day
prescribed by law for commencing Vhe