The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1928-08-10
ROYALTY TAX
LAW UPHELD.
DECISION OF SUPREME COURT
UPHOLDS THE STATE ROYALTY
TAX LAW-LESSEES MUST PAY
THE TAXES.

MinneSota's state supreme court has
upheld the state royalty tax on iron
ore as constitutional.
The decision means that the state
will continue to receive on an aver
age of $950,000 annually in iron ore
royalty taxes, and that $4,000 being
held back during the litigation now
must be paid by mine lessees.
In a decision filed Thursday by
Judge Andrew Holt, associate justice
of the supreme court, four test cases
are decided.
In these cases, owners and lessons
OF iron ore properties in the state
sought to obtain payment of royalty
taxes by lessees, and the high courts
ruling holds that lessees must pay
the tax.
"The tax imposed does not violate
the state constitution, which pro-
vides that taxes shall be uniform
upon the same class of Subjects nor
the 18th amendment of the federal
constitution" the supreme court de-
cision holds.
Cases decided today are those of
Irene v. Fraser VS.. Vermilion Iron
Co., Laura A. Day VS.. Crete Mining
Co., Laura A. Day VS.. Inland Steel
Co., and H. B. Fryberger VS.. Inland
Steel Co.
In all cases owners or lessons of
the mines have paid royalty taxes
in the past three years, and the
suits were to collect from lessees for
| money paid out on these taxes.
Suits were filed in st. Louis county
district court, and the lessees and
defendants filed answers contending
the royalty tax is unconstitutional
Unconstitutionality was charged on
two grounds, one that the tax title
! did not cover taxation of interest or
estates in railty and one that it vio-
| lated the state and federal constitu-
tons, in that the tax applied only to
properties leased and not to properties
operated by owners
Plaintiffs filed demurrers to the de-
| PENDANTS answers and Judge E.. J.
| Kenney upheld the demurrers, rem
dering verdicts in favor of the plain
tiffs in st. Louis county district court.
The high court decision affirms Judge
Kenney.
at is very vigorously contended, {"
Justice Hollis decision says, that even
though there be no constitutional OBJ
lection to the title Of Chapter 226
(the Royalty tax law such construc-
ton necessarily renders the law un-
constitutional as contravening section
seven, article one of the state consti-
tuition and the 18th amendment of the
federal constitution in that, construed
as tax on interests in land, it applies
to a portion of the ore lands only,
| and is discriminatory
classification for the purposes of
taxation is permissible under our con-
stitution, which provides that taxes
shall be uniform on the same class of
subjects The interests of an owner
of iron ore in place, apart from the
land, may be well placed in differ
ent class for taxing purposes from that
of an owner where mining Is in pro-
gress, and the interest in the ore is
being depleted. But it is said that the
owner who conducts his own mining
pays no royalty tax, whereas from an
adjoining owner, who for a considera-
ton has given another permission to
remove the ore, the tax is exacted.
The former, however, must pay an oc-
cupation tax, while the latter may de-
duct the royalties paid from the oc-
cupation tax The state, by the occu-