Bergen Aqueduct Co. v. State Bd. of Taxes & Assessments

• Decision Date: 28 February 1921
• Docket Number: No. 42.,42.
• Citation: 112 A. 881
• Parties: BERGEN AQUEDUCT CO. v. STATE BOARD OF TAXES AND ASSESSMENTS et al.
• Court: New Jersey Supreme Court

112 A. 881

BERGEN AQUEDUCT CO.

v. STATE BOARD OF TAXES AND ASSESSMENTS et al.

No. 42.

Court of Errors and Appeals of New Jersey.

Feb. 28, 1921.

Parker, Black, White, Heppenheimer, Taylor, and Gardner, JJ., dissenting.

Appeal from Supreme Court.

The State Board of Taxes and Assessments and others confirmed an assessment upon the Bergen Aqueduct Company. From a judgment of the Supreme Court affirming the assessment, the latter appeals. Affirmed.

Collins & Corbin, of Jersey City, for appellant.

Thomas F. McCran, Atty. Gen., and J. W. & E. A. De Yoe, of Paterson, for appellees.

MINTURN, J. The State Board of Taxes and Assessments confirmed an assessment upon the Bergen Aqueduct Company, based upon its gross receipts. The Supreme Court affirmed the assessment, and from that judgment this appeal has been taken, upon the ground generally that the assessment as levied cannot be legally supported under the legislation invoked to sustain it. The company is engaged in the supply and distribution of water for public and private use in the village of Ridgewood and the boroughs of Glen Rock and Midland Park, in the county of Bergen, and extends its operation into the adjoining state of New York.

The legislation applicable to the situation is contained in section 4 of the act of 1900 (P. L. 1900, p. 502), as amended by Laws of 1918, p. 908, and section 4 of the Laws of 1917 (P. L. 1917, p. 42). The prior act is as follows:

"Any * * * corporation having * * * lines, wires or mains in this state and part thereof in another state or states, or * * * on private property and part thereof on public streets, highways, roads, lanes or other public places, shall make a report showing the gross receipts * * * from the whole line, wires or mains, together with a statement of the length of the [same], and the length * * * in this state along any street, highway, road, lane or other public place." P. L. 1918, p. 908, § 2.

The franchise tax is computed for the business so done in this state upon such proportion of the gross receipts as the length of the lines, wires, or mains in the street or public places bears to the whole length of the lines, wires, or mains.

The later enactment referred to is as follows:

"The tax levied and assessed during the year one thousand nine hundred and twenty computed upon the gross receipts of the year ending December thirty first, one thousand nine hundred and nineteen, shall be five per centum [per annum], * * * provided, that those persons, copartners, associations or corporations, whose gross receipts shall not exceed the sum of fifty thousand (50,000) dollars, shall be assessed at the rate of two per centum per annum upon such gross receipts." P. L. 1917, p. 45, § 4.

The record shows that the whole length of the mains was 51.33 miles; that the length of the mains along any street, highway, road, lane or other public place in this state was 41.527 miles; and that the proportion of gross receipts based upon this relative mileage is $49,774.96, while the entire gross receipts returned are $61,168.39.

The inquiry presented by the reasons filed on this proceeding is whether the rate to be applied is determinable upon the entire gross receipts, or upon such portion thereof as the entire mileage of the mains in the public streets bears to the entire mileage of the prosecutor's mains.

It will be observed that the fourth section of the act of 1900 is designed to indicate what character of corporations are taxable for franchise taxes upon their gross receipts, as well as the method to be resorted to in determining the tax. The legislative requirement is manifest that for the purpose of determining the basis for the assessment the corporation shall make its report, showing "the gross receipts from its...