Court Opinion

ID: 8049342
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:10:09.185507+00
Date Added: 2024-06-11T16:37:38.241414
License: Public Domain

Batchelder, J.,
dissenting: I agree with the decisions of the commissioner of revenue administration and the New Hampshire Board of Taxation that AFUDC is properly included in “franchise taxable income.” The fact of construction must somehow be recognized in the valuation of the franchise even if it is not an asset for rate making purposes. Opinion of the Justices, 84 N.H. 559, 567-68, 149 A. 321, 326 (1930). The franchise tax is a tax upon the utility’s exclusive right to engage in the utility business. Public Service Company v. State, 101 N.H. 154, 158, 136 A.2d 600, 604 (1957). Additionally, the inclusion of AFUDC in “franchise taxable income” is a generally accepted accounting technique in the utility business. J. Bonbright, The Valuation of Property 2 vols. (1937). A franchise is not an asset for ratemaking purposes; therefore, RSA 378:30-a (Supp. 1981), a ratemaking statute, should have no effect on the analysis of tax items. Opinion of the Justices, supra. Public Service Company of New Hampshire includes AFUDC in its annual report to stockholders on its earnings statement. The inequities envisioned by the majority are more apparent than real because the legislature had the good sense to allow a credit for franchise taxes against the company’s liability for business profits tax payments.
I do not find, as the majority does, the failure of a rational relationship to economic reality in this case warranting the heavy sanction of an unconstitutional declaration cutting across the treatment of AFUDC by every utility in New Hampshire.