The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1935-09-12
$780, 900, 900 AT Stake
In Law Battle
Selover Decision KNOCKS Out Eek
cess Tax Measure Of 10 years
Ag0-Decision Late

Immediate steps will be taken
to appeal to the State Supreme
Court from the judgement Of Dis
trict Judge Arthur w. Selover, who
ruled Saturday that the corporate
excess tax law Is invalid and the
enforcement Of it unconstitutional.
Attorney General Harry H. Peter
son announced plans for the appeal
but made no other comment.
A quick appeal and a quick de-
cision might settle the matter in
time to eliminate from considera-
ton Of the impending special ses-
sion of the State legislature one of
the major issues over which there
looms a certain battle. The posi-
bility of a decision before the end
Of such a session seemed remote,
however, because Of the time given
appellants and respondents in
which to submit their briefs. It
may take several months before
a decision Is reached, unless the
process is speeded up.
The legislature is expected to
meet December 2. This tax is in
volved in the tax program Of the
legislature.
At stake in the appeal, as it was
in the suits heard by Judge Selover,
Is the right of the Minnesota tax
commission to collect 100000, 900,
more or less, from corporations do
ing business in the state, under a
statute enacted IS years ago.
The law taxed the Intangible as
sets" of corporation; technically,
the difference between the market
value of the corporations stock
and the actual value of its physical
assets. It has been termed a tax
on the good will of the business.
Judge Selover, in a terse, lucid
opinion, found
The taxing statute, known as
section 2021, Mason's Minneso-
ia Statutes 1927, had been wholly
annulled and repealed
by subsequent legislation"
That the enforcement of the stat
ute and the collection of taxes
hereunder would deprive corpor-
atoms of their property without
due process Of law, in violation of
the state and federal constitutions.
That neither foreign nor do
mestic corporations are subject to
tax under the statute.
Two suits were brought before
Judge Selover last spring under the
provision of the declaratory judg-
ments act, recent law that per-
mits the courts to rule on the valid
ity, interpretation and application
Of questioned statutes.
s. H. Clausin G. Co., of Mime
apolis, a firm of manufacturing
jewellers, as a domestic corporation,
in the suit 1t filed, asked declara-
tory judgment, claiming the 1878
law was not applicable to it.
Bemis Brothers Bag Company,
bag manufacturers with a factory
in Minneapolis, Missouri corpora
ton, asked judgement, asserting
tn law did not impose tax on
it.
The defendants named in the two
suits were the same: George e.
Wallace, Harry e. Boyle and
George F. Gage, members Of the
Minnesota tax commission; AL P.
Hennepin county auditor,
and Edward 8. Gould, Minneapolis
city assessor.
Behind the cold legal facts, be-
meath the exterior of dusty legal
phraseology, lies a situation polite
ally and economically dramatic.
The hearing on the claims of the
sides was shot with stilt-
ed formalities Of the courts-books
cluttered the tables, the bench and
the floors of Judge Selover's court
room-figures, dates and arid Ian
guage constituted the long argu.
ments. But in the background was
the smoke Of larger battle.
Governor Floyd B. Olson's adj
ranged itself against
what the Governor himself has
termed the "capitalistic corpora
ton philosophy; a radical govern
ment against reactionary business.
When the state of Minnesota was
young, its legislatures drew a law
designed to tax the corporations
that were springing into being with
the new order Of business methods.
The legislature Of 1878 passed the
law since known Familiarity as
the corporate excess tax law. It
imposed the tax on the Intangible
assets" of corporation doing BUSH
ness within Minnesota's borders.