Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-10-03
INCOME TAX LAW
Of STATE To Be
TESTED SHORTLY
Suit Is Filed in Santa Fe
District Court Attacking
Validity of Statute and of
Its Administration.
(BY CLINTON p. ANDERSON,

(BN CLINTON p. ANDERSON
Santa Fe. Oct. 2.--The validity
of the state income tax law passed
by the 1919 session Of the state
Legislature is to be tested by a suit
filed in district court here today
by w C.. Reid, George Downer, f,
r, Wright and j. j. kenney as at
torneys for George Bond, w. c.
ThaXton, Ivan Grunsfeld, Alfred
Grunsfeld and the Charles Held
company. These cases Of these in
dividuals are used in order that a
complete test of the law may be
made.
The income tax law was passed
in the closing hours of the 1919
session, even though there was
much doubt as to the constitution
atty. In his call for special SEES
sion of the legislature in March Of
this year Governor Larrazolo de-
clared his doubt of the constitu-
tionality of the measure. 1t was
repealed but the substitute meas
ure sought by the governor did not
pass. The governor thereupon
vetoed the repeal and allowed the
1919 law to stand on the statute
books. The time for filing returns
was extended by State Treasurer
Charles L. Strong from March to
November ! to give time for the
filing of a test suit.
Double barrcled Attack.
The plaintiffs in the suit filed
today attacked the law on a double
proposition. They assert first that
the law itself is unconstitutional,
and second. that the attempted ad-
ministration of the law is illegal
and void. They seek to enjoin and
restrain both the law and its ad-
ministration.
The complaint sets forth that
the plaintiffs are citizens and tax
payers in New Mexico and that
they bring their action for them
selves and all other taxpayers in
the state similarly situated. George
Bond Is listed as an individual re-
siding in the state of New Mexico;
w. G. ThaXton as an individual re-
siding here whose property for the
most part conists of real estate out
of which he realized in the year
1919 a gross and net income in
excess of $4,000. Alfred and Ivan
Grunsfeld as co-partners and the
Charles Ilfeld company as a cor
poratiOn. Another corporation, or
ganized under the laws of another
state, will be added 10 the list of
plaintiffs in order TO complete all
the classes made liable to tax under
the 1919 act.
Says 1t Is Unconstitutional.
The complaint alleges that the
income tax law contravenes sec
ton one of article eight of the
constitution of New Mexico which
provides that taxes levied upon
tangible property shall be in pro-
portion to the value thereof and
taxes shall be equal and uniform
upon subjects of taxation of the
same class.
The cited inequalities are:
That it singles out incomes as
subject or class of taxation but
makes the taxation of Incomes un-
equal and ununiform by prescrib-
ing a graduated rate upon differ
ent amounts,
That it exempts persons whose
gross income does not amount TO
$4,000 both from making a return
from paying any taxes on the in
come; that by allowing arbitrary
inequality and ununiformity be-
tween persons whose holdings are
in personal property and those
whose holdings are in real prop
erty.
That it creates an inequality by
preventing the allowance of reduc-
tons against profits realized with
in a given tax year on investments
which have extended over period
of several years; and that it only
taxes incomes of certain persons,
firms, associations or corporations.
1t is further asserted that the
act contravenes Section 26 of
article four of the state constitu-
ton which provides in substance
that the legislature shall not grant
to any corporation or person an
immunity or exemption which
shall not upon the same terms and