The Bridgeport evening farmer., 1916-01-26
CORPORATION TAX LAW TO RECEIVE
 TEST IN COURTS
Attorney General Hinman Files Suits to Settle Valid
 ity of Statute,

Attorney General George F. Hin man, representing the state, filed suits in the superior court yesterday against the United Electric Light & Water Go. of Waterbury and the Fountain Water Go. of Ansonia for non-payment of states taxes under the terms of the so- called miscellaneous corporations tax law passed at the last session of the legislature. Although only two companies are sued, the suits are ad- mittedly test cases in which practical ly all the large electric light. gas and water power companies in the state are vitalIy interested. They are only two of nearly 40 companies which have re- fused to pay the full amount of tax assessed against them by the board of equalization.
 These companies refused to pay the full amount of the tax ordered by the board of equalization, but paid what they admitted was due according to their interpretation of the law. At torney General Hinman, in accordance with the statute, applied to Judge Tut tie for an order for payment of the full amount of the tax on December 16. The companies filed specific an swers saying that the part of the tax they had paid was the only part they were required by law to pay. The attorney general then filed a, demurrer
 
 ton as to how certain terms In the statute should be defined to apply to these cases. Headings were begun and were ended yesterday on the com plaint the answer and the demurrer
 The cases against the WaterpuFy and the Ansonia companies han. .';a..s, Ias1a.,z while, been selected by the various lawyers concerned as typical Of all the suits at issue and yesterday these two suits were formally filed in the supe- rior court, with the request that the nuastions. of law which are raised De referred to the supreme court TOT 1rs interpretation and opinion. Judge Futile granted the request ana re- ferred the cases. They will be heard at the next term of the supreme court in March.
 nosinp the tax law are water, gas, electric and water power companies, those which are taxed under part of chapter 292 of the public acts or 1915. The law provides that these companies shall pay an annua1 taA upon gross earnings from operaIAofls in this state" and that mo deductions shall be allowed from such gross earn ings for any commission, renahe oE other payment, exceut a reIuno resuII- ing from an error or overcharge. Tn the case of companies carrying on a business wholly within this state. the gross earnings is defined as "the amount of gross earnings from opera tions'' Upon this gross earning, the amount of which is to be determined by the board of equalization, after hearings, a tax of 1-2 per cent. is to be charged, under the law.
 The companies which have deter mined to oppose the law and have re- fused to pay the full amounts as- sessed base their opposition on three chief points: That deductions should be allowed from the amount of gross earnings for earnings derived from operations incidental to the main bug mess of the company, that deductions should be allowed for payments made from capital for the purchase of raw material, etc., and that operating ex- penses should be deducted.
 In the case of the state against the United Electric Light & Water Co.,, the board of equalization had deter