Pub. Serv. Co-Ordinated Transp. v. State Bd. of Tax Appeals

• Citation: 178 A. 550
• Decision Date: 30 April 1935
• Docket Number: No. 213.,213.
• Parties: PUBLIC SERVICE CO-ORDINATED TRANSPORT v. STATE BOARD OF TAX APPEALS et al.
• Court: United States State Supreme Court (New Jersey)

178 A. 550

PUBLIC SERVICE CO-ORDINATED TRANSPORT

v. STATE BOARD OF TAX APPEALS et al.

No. 213.

Supreme Court of New Jersey.

April 30, 1935.

Certiorari to State Board of Tax Appeals.

Proceeding by the Public Service Co-ordinated Transport against the State Board of Tax Appeals and others. To review a judgment for defendants, plaintiff brings certiorari.

Reversed.

Argued January term, 1935, before HEHER and PERSKIE, JJ.

William H. Speer, of Jersey City, for prosecutor.

David T. Wilentz, Atty. Gen., for respondent.

HEHER, Justice.

Prosecutor challenges an assessment of a gasoline sales tax levied against it by the state tax commissioner under the provisions of the Motor Vehicle Fuel Sales Tax Act, for gasoline claimed to have been used by it in the operation, during the month of May, 1934, of auto buses through the town of Nutley, on its Newark-Clifton bus route. Pamph. L. 1927, p. 782, as amended by chapter 239, Laws ] 930, p. 1055, chapter 357, Laws 1931, p. 875 (N. J. St. Annual 1931, § 208—581 1/2 et seq.). The state board of tax appeals sustained the assessment. The sole question presented for determination is the applicability of this fuel sales tax act.

The bus line in question is wholly intrastate in character, and is operated under the provisions of chapter 144 of the Laws of 1926, known as the Kates Auto Bus Act. Pamph. L. 1926, p. 219 (Comp. St. Supp. 1930, § *136—4000A (1) et seq.), amending P. L 1916, p. 283. This statute provides (section 3 [Comp. St. Supp. 1930, § *136—4000A (2)], amending P. L. 1916, p. 284, § 2) that: "Whenever the route of any auto bus extends through more than two municipalities and one or more municipalities have granted consent for such operation and the Board of Public Utility Commissioners has approved such consent and one or more municipalities have refused or failed to grant the necessary consent, in such case the Board of Public Utility Commissioners may permit the holder of such consent so granted and approved to run his auto bus through the municipality or municipalities which have refused or failed to grant the necessary consent; provided, that no passengers be either taken on or discharged from said auto bus anywhere within the boundaries of the municipality or municipalities so refusing or failing to grant such consent; and provided, further, that nothing herein contained shall be held to entitle any such municipality which has refused or failed to grant such consent, to any proportion of the five per centum franchise tax herein imposed."

The town of Nutley withheld its consent to the operation of buses on this route within its corporate limits. The board of public utility commissioners approved the consents given by the other affected municipalities; and it also granted permission for the operation of the line through Nutley. In obedience to the command of the statute, no passengers were received or discharged within the confines of that municipality; and no part of the franchise tax imposed by section 4 of the act (Comp. St. Supp. 1930, § *136-4000A (3), amending P. L 1916, p. 285, § 3), was paid to it. This section obliges the bus operator to pay, in such a situation, to the consenting municipality a franchise tax of "five (5) per centum of such proportion of the gross receipts as the length of the route in the municipality bears to the whole length of such route." Prosecutor paid to each assenting municipality along the route its proportionate share of the gross receipts; but, as found by the board of tax appeals, "no tax was paid upon its gross receipts apportioned to the length of the route extending through" Nutley, and, therefore, the total municipal franchise tax paid did not equal 5 per cent. of its total gross receipts. The board found as a fact that 1,025 gallons of gasoline were consumed in the operation of prosecutor's buses through Nutley; and it is conceded that no motor fuel tax was paid upon the gasoline thus used. The board held that "the Auto Bus Act applies to vehicles which indiscriminately accept and discharge passengers at the termini or points along the route," and that, inasmuch as the prosecutor "is not permitted to accept or discharge passengers in the Town of Nutley, * * * its vehicles are not operating there as auto buses, and it is subject to motor fuel tax upon the gasoline consumed over the portion of its route extending through the Town."

The essential question therefore is one of statutory construction. Has the Legislature evinced a purpose to make the provisions of the Motor Fuel Tax Act applicable to buses so operating through a municipality withholding its consent to the transaction of local business? We think not

Section 1 of the Motor Fuel Tax Act of 1931 (N. J. St. Annual 1931, § 208—581 1/2), amending P. L. 1927, p. 782, § 1, supra, excludes from the statutory class subject to the payment of the motor fuel tax the operators of "auto buses, commonly called jitneys, which now pay a municipal or franchise tax on their gross receipts." This exclusion is absolute and unconditional; it is not qualified in any sense. And prosecutor is indubitably within the exempted class. It pays a franchise tax to the municipalities which have consented to the transaction of its business within the municipal confines. A legislative purpose to give the prosecutor, in the operation of this bus line, a double classification, L e., within the exempt class as to the municipalities to which such a franchise tax is paid and without it as to those withholding consent to do a local business will not be implied; it must be explicitly declared.

In seeking for the legislative purpose, the objects sought to be accomplished are to be considered. Is there such a relation between the purposes to which these taxes are to be devoted as to evince the legislative purpose which the defendants say is clearly implied in the pertinent language of the Motor Fuel Tax Act, supra? We do not think so. Section 4 of the Auto Bus Act of 1926, supra, provides for the direct payment of the franchise tax to the chief fiscal officer of the municipality, "as a monthly franchise tax for revenue for the use of the streets." The moneys derived from the assessment of the motor fuel tax are paid, through the medium of the state tax commissioner, to the state treasurer, for distribution by him to the following agencies, and for the following purposes, viz.: (a) To the board of public utility commissioners, $2,000,000 per annum, "to be used by it to defray the public share of the cost of eliminating grade crossings"; (b) to "defray the expense of the state tax department" in administering the statute; (c) to the department of commerce and navigation, the sum of $90,000, "to be used for the construction, reconstruction and maintenance and improvement of the inland waterways"; and (d) to the state highway commission, the remainder of said moneys "to be used for the construction of roads and bridges, included in the state highway system." Pamph. L. 1931, p. 879, § 7 (N. J. St. Annual 1931, § 208—588) amending P. L. 1927, p. 785, § 8. Section 8 (N. J. St. Annual 1931, § 208—588a) amending P. L. 1827, p. 782, § 8-a, as added by P. L. 1930, p. 1055, f 2, provides that from the sum remaining for the use of the state highway commission, as provided in section 7, there shall be set aside the sum of $5,000,000, "to be expended for the control of traffic and the repair and improvement of streets, which sum shall be turned over in quarterly payments to the several counties in the State in proportion" to the ratables. The county collector is directed to distribute this fund to the several municipalities within the county in proportion to its tax ratables. In the one case the franchise tax is a direct payment to the...