The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1930-03-12
STATES TAXATION
PROBLEM ANALYZED
ITO TELEPHONE MEN
Bill Authorizing Equalization Of
I Phone and Power Line
Values Is Planned
DEFECTIVE REPORTS MADE
Companies Blamed for Unsatis-
factory Assessments as
Result Of Returns
REPORTS MADE

Grand Forks, N. O., Mar. 12.-(Pj-
Facts pertaining to the state tax
problem and their relation to the
taxation of. telephone companies were
discussed today. at the North Dakota
Telephone association convention. in
session here. by Lyman Baker. Bis
mack, deputy state tax commissioner.
The total valuation of telephone
property in 1929, Baker said. was
Se,712,240 or one-half of l per cent of
the total valuation of property in the
state. The number Of companies as
sessed totaled 300. of which 678 were
farm-line companies and 122 operated
exchanges. There were 5.183 miles Of
toll lines and 29.254 miles of farm
lines. A total of Al ,614 telephones
were connected with exchanges.
Can't Follow Taxing Basis
Although the best means of valuing
public utility property for taxation
purposes is to capitalize it on the
basis Of its net earnings, this system
could be followed with only a few
North Dakota telephone companies.
Baker said, since some Of the larger
companies have been operating as
such for only a short time. AS a re-
suit, he said, the practice is to value
them ON the basis of what it would
cost to produce the facilities owned.
LEES depreciation.
If telephone companies would make
proper annual reports, Baker said.
there would be little difficulty in
making a fair assessment OF telephone
property. but some fail to give the
proper information. or give inaccur-
ATE. and sometimes they suffer as a
result. In some cases. he said, they
arc assessed twice where they should
be assessed only once. and. in others.
inaccurate Information leads to a
higher classification OF the property
fer taxing purposes than the facts
justify.
Equality Clause Beat Bill
The speaker predicted that a bill
authorizing the state board OF equal
ization to fix the taxable value OF
Telephone and power line companies
will be introduced at the 1881 legisla-
tive session despite defeat of a SIM
liar bill at the session Of 1929
hM / lS plll ldAlCO al AOAO 0CNoAoN VI "
disagreement over a clause which. IN
thc opinion of utility operators. was
Necessary to insure that they pay no
more taxes in proportion to value
than owners OF other property. The
senate held such a provision unneces-
sary.
N Baker said the state tax department
IL, not concerned with the provision
(which caused the trouble in 1929 but
that it does want adequate and proper
legislation covering the subject. AS
It stands now. he said. the state board
o. equalization is operating without
any law governing the assessment OF
utilities with property extending
Through hundreds of taxing districts.
There is no law governing the nam
Tier of making the assessments or pre-
scribing a basis for distribution to the
local taxing districts. Baker said.
In 1929. he said, assessment OF pow
er companies was made under author
fly of the constitution, as amended
In 1923 but was open to challenge be-
cause no statutes covering the au-
thority outlined by the constitution
had been enacted.
Telephone Tax Rates Highest
Some pertinent facts bearing on the
tax situation and the relation of one
kind of property to another for pur-
poses of taxation. the speaker said.
are: That North Dakota farm prop
erty pays 60 per cent Of the taxes:
railroads and other public utilities Is
per cent: and other property, consist
ing mostly of urban real estate n
personal property. pays "a per cent.
Reducing this to money. he said
the farmer pays $4,000, 900 of a total
of $50, 0O0, 900 in property taxes. n
II payments for motor vehicle licenses.
gasoline, cigaret and federal and state
income taxes are added. the total tax
hill paid by the farmer is probably
500. OOO. 900.
He said the farm tax burden IN
this state is 1853 per cent of the In
vestment and 1872 per cent OF his
GROSS income. Railroad taxes are 20
ner cent of their investment and 3
Hner cent of their gross income while
lN'commercial telephone company re-
'nnrts indicate an average OF 3.13 per
'retn Of their investment and 9.l3 per
cent Of their gross income go for
faxes. Figures for North Dakota
mower companies were 2.D7 per cent
81 their investment and 7.54 per cent
81 their gross earnings. This was m
creased in 1929, however. by q flat
;sraise OF Is per cent in the assessed
Maluation OF such property.