Newark evening star and Newark advertiser., 1910-07-08
Collateral inheritance
Levy Law Of 1906
Upset by Court.
JUSTICES OF ERRORS ~
TRIBUNAL UNANIMOUS
Means New Jersey May Have to
Return Sz5O,O0O Already
Collected and Disputed.
Especial to ne Nevark star.,

Especial to ne Newark star1
TRENTON, July s-Under an
opinion OF the Court of Errors and Ap-
peals rendered today, New Jersey viii
probably be called upon to pay back
approximately a quarter of q million
dollars, which IL has collected under
the collateral Inheritance tax Law or
1906
This opinion reverses the supreme
Court decision, which upheld an as
sessmsnt OF s27, 500 by former Sur1ogAEs
George e. Russell, of Essex coant&.
upon that part OF the estate Of the lath
Martha T. Fisk Collord embracing l. Il
shares of stock of the Standard ON
Company Mrs. Collord died In 1908 II
Cairo, Egypt
Chief Justice Gummere wrote the
opinion OF the Court of Errors and il
was unanimously affirmed by the tEir-
teen members who were present.
The opinion holds that the wording
OF the title Of the act of 1906 does not
make the <ct applicable 70 the ASSESS
ment of taA 5 upon legacies. The scope
of this decision Is that collateral in
heritance taxes collected on legacIes
and imposed between 1906, when this
act was approved. and 1909, when an
amendment was passed, viii have 10 be
refunded by the State financial depart
ment IL those who have paid Ia the
assessments demand return OF their
money. Before the State will refund
any of this collected tax the demand-
ing parties viii, of course. have to 60
through the due process OF law.
After the question OF validity of fha
act of 1905 was raised. the financial de-
~ 81.
come the very defect which the Court
OF Errors las found in the 1905 law.
To do this the Legislature OF 1909
amended the title OF the act nf 1906 50
as to make It unquest ttonably apple
able to legacies The amendment 70
the act of 1906 became operative on
July 4. 1909 so that from that time to
this the collateral inheritance PROPOSE
ton. in so far as It relates to legacies.
is not In question.
Money IN Balance.
The exact amount OF money which
now hangs IN the balance because Of
today's decision cannot be learned at
this time. but an idea of 1t may be
had from the fact that in 1909 New
Jersey collected s56s,449 under the COL
lateral inheritance statute. AS only q
part of this was derived from tax on
iegacies the total revenue of the State
from inheritance tax is not In jeopardy
It is hardly probable that the State
win be asked to refund less than
s250, 600
The collateral inheritance tax was
ostensibiy for the purpose Of increas-
ing State revenue, SO that the effect
of today's opinion must OF necessity
be of vital Importance to the States
financial policy. The syllabus OF Chief
Justice Gummere's opinion Is as fol-
lows:
"The words an act TO tax legacies
contained in the title OF statute, does
not express that the object OF the en-
actment, so far as It relates to legacies.
is the imposition of tax upon the
transfer OF property which is the sub
ject of bequest-"
In view of the fact that the States
law department did not seek to coli
lect collateral inheritance tax on prop
erty in New Jersey of non-resideD<
decedents until 1909, practically the en-
tire amount from this source paid into
the State treasury is that received
during that year.
Before 1909 and from 1906 probably
not more than 100000 was collected on
New Jersey property of nonresident
decedents. That part Of the collateral
inheritanice tax law which involves
property of resident decedents is not
disturbed by the Court of Errors
opinion. and because OF the enactment
OF an amendment last winter to this
title of the act Of 1908 there win be
no necessity for any further legisla-
ton to correct the law, as 1t relates
to property of ION resident decedents,
to conform with the view OF the Court
of Errors.
State VIII Lose Much.
While State Comptroller Henry J.
West and Governor Fort have not had
time to digest the Court of Errors
opinion, both admit that the State viii
lose considerable money. The Gov
ernor said that the decision. according
TO his quick reading OF it, does not
affect the law of 1909, amending the
title Of the act of 1906.
The State comptroller said that while
it was impossible at this time 10 tel
just how much money the State viii
have to refund under the opinion. he
roughly estimated 1t at between sSo00oo
and 100000.