The Richmond Virginian. (Richmond, Va.) 1910-1920, 1912-03-26
AUDITOR BELIEVES
HIS RULING RIGHT
CITY GAS WORKS. WATER WORKS
AND MARKET MIST PAY
STATE TAX.
QUOTES CONSTITUTION
EXEMPTION SEEMS TO APPLY ONLY
TO PLANTS AND PROPERTY
DEVOTED WHOLLY TO TINE
PUBLIC Use.
QUOTES CONSTITUTION

Will the city have 10 pay State taxes
on the city market the city gas works
ana the city water works?
Under the ruling of Auditor c. Lee
Moore all municipalities which own
public utilities or property which
charge for the product OF such utilities
or for the use OF such property must
pay the state tax thereon.
This ruling was first made public in
the Richmond virginian several days
ago and has attracted widespread at
tention and comment.
In the Office of the Corporation Com
mission it was stated that. the eon-
mission had not made a practice Of
assessing for taxes the plants OF
municipalities even though the product
Of such plants were sold, and u profit
or revenue derived therefrom
Mr.. Moore yesterday declared that
the Corporation Commission was d.
reeted by the law TO assess only the
plants owned by chartered companies
that the plant of 4 municipality was
properly assessabIe under the general
law by the assessors or, should they
fail to SO assess. them, then by the COM
,nissioners of the revenue.
City Must Pay.
Mr. Moore believes that the city
markets, of Richmond the city gas
works and water works should be as
sessed tor state taxes Tor me reason
That the city derives q revenue from
these properties.
Section lss Of the Constitution says:
Except as otherwise provided in this
Constitution, the following property.
and no other, shall be exempt from
taxation, state and local; but the Gen
eraI Assembly may hereafter tax any
OF the property hereby exempted save
that mentioned in subsection ta). H..
'ta) Property directly or Indirect
iy owned by the State, however held.
and property lawfully owned and held
By counties, cities. towns. or schooi
districts, used wholly and exclusive
~ for county, city, town or pubic
school purposes. and obligations is
sued by the State since the 18th day
OF February. 1889, or hereafter.
Mr. Moores contention is that
where IA municipality operates ii plant
the product OF which is sold to the
public. that such a plant is not used
wholly and exclusively for county,
city. town. or public school por-
poses" Under Mr.. Moore definition
the Dfoptity "IhtF ~puAa "N
exempted under this exempting clause
Of the Constitution it merely applies
to those plants the product OF which
is used in it's entirety for strictly pub
lie purposes.
Electric Plant Not Taxable.
As An Illustration he would not tax
the electric light plant Of the city
nj Richmond for the reason that the
current from this plant Is used solely
for lighting the streets and public
buildings OF the city. However, the
city gas plant will be assessable.
under the ruling. for the reason that
its product lie not who'll for public
use, hut is sold generally to private
consumers. and the city derives
revenue from such sale.
AS the matter would mean pay
ment by the city of several thousand
dollars in taxes the ruling will doubt
less be resisted in the courts II IT be
insisted on.
Those who oppose the view OF the
auditor say that as matter OF fact
that where the net proceeds OF the
operation OF any publicly owned plant
like a water works or d gas plant arg
covered into the public treasury a
broad view OF the Law would include
them in the categorv Of the exstnp-
tions set out In subsection ie). of
section 1873 OF the Constitution.