Morris tribune., 1912-08-16
HOW RAILROADS PAY.
Gross Earnings Taxes All Go
to State.

xxx. GROSS EARNINGS TAXES
The law provides two general
methods of taxing the property of cor
porations in Minnesota-the general
property tax and the gross earnings
tax. The property of corporations
engaged in manufacturing and business
enterprises and the property of GER
tain public utility corporations, such
as telegraph and sleeping car com
panies, and water, gas and electric
light companies, is assessed and taxed
on the ad valorem basis the same as
like property of individuals. Railroad
and freight line companies. and express
and telephone companies pay a certain
specified amount of their gross earn
ings in lieu OF all other taxes. Insur-
ance companies pay two per cent of
their gross premiums.
The first departure from the general
property tax as the sole system of tax
alton was made before the territory
was organized as a state. In 1857
the territorial legislature granted a
charter to the st. Paul and Pacific
Railroad Company, now part of the
Great Northern system, which pro-
vided that, in consideration of the
grants and privileges therein contained,
the company should pay into the trea-
sury of the territory or future state
three per cent of it's gross earnings
in lieu of all other taxes and assess
ments. A number of other railroad
charters were granted in that year
carrying the three per cent gross
earnings provision.
Prior to 1871 the rate of the gross
earnings tax was fixed by the legisla
tuer. In that year a constitutional a
mendment was adopted which proviu-
ed that any change in the taxation
of the gross earnings of railroad com.
panies, either in rate or method, must
be submitted to the people for thei1
approval.
In 1903 the legislature proposed
an increase of the gross earnings rate
of railroads from three to four per
cent. The increase was ratified by
the people in the general election Of
1904 and became effective in 1905.
The special session Of the legislature
held in June Of this year provided for
an increase of the rate from: four te
five per cent. and if approved by the
people at the ensuring general election
the new rate will become effective in
1913. 1t is. also proposed to reqt ire
lsemi-annual payments of the tax in.
stead of annual as heretofore.
The gross earnings principle of tax.
alton has been extended to telephone.
express, freight line and insurance
companies. Telephone companies pay
three per cent, and express and freight
line companies six per cent of gross
earnings, and Insurance companies two
per cent of gross premiums.
On or before February LIST of each
year all companies subject to the gross
earnings tax are required to file an
itemized statement with the tax com.
mission and duplicate with the pub.
lie examiner showing the gross earn
ings for the preceding year.
The tax commission computes IT,
tax and certifies the amount to the
state auditor who makes a draft OF
the company for the amount of .ths
tax and places it IN the hands of the
state treasurer for collection.
In case Of failure toreport earnings
within the prescribed time the ta1
commission notifies the company O.
such failure, and if the default con
tinues for thirty days after the servic'
of such notice the commission proceed
to fix the amount of the gross earningl
for the proceeding year from the bes
evidence it can obtain and then add
a penalty equal totwenty-fve per cen
ot the tax for such failure. ~y%..a
With the exception Of the tax OF
insurance premiums no distribution O
the gross earnings tax Isl made +
municipalities: The receipts iron
Ethis source are credited to the :reyen
ned fund Of the. state, and ins1 Oil con
stituted about 57peE cent of the tOta
Estate revenues derived frons taxation
TF5f,T y1Igt .4:Hsr g
| Photographer & Arithmetic. J
"a !, 80 minutes for a sitting .,
|: 8 excellent procfs.s2-: - En-