Salomon v. Jersey City, No. A--119

CourtUnited States State Supreme Court (New Jersey)
Writing for the CourtJACOBS
Citation97 A.2d 405,12 N.J. 379
Decision Date18 May 1953
Docket NumberNo. A--119
PartiesSALOMON et al. v. JERSEY CITY. L. O. KOVEN & BROTHER, Inc. et al. v. JERSEY CITY.

Page 379

12 N.J. 379
97 A.2d 405
SALOMON et al.
v.
JERSEY CITY.
L. O. KOVEN & BROTHER, Inc. et al.
v.
JERSEY CITY.
No. A--119.
Supreme Court of New Jersey.
Argued March 23, 1953.
Decided May 18, 1953.

Page 382

[97 A.2d 407] Milton B. Conford, Newark, for appellant (John B. Graf, Corp. Counsel of City of Jersey City, Jersey City, attorney; Francis X. Hayes, Jersey City, of counsel and on the brief).

Herbert J. Hannoch, Newark, for plaintiffs-respondents in Salomon v. City of Jersey City (Hannoch, Lasser, Weinstein & Myers, Newark, attorneys for plaintiffs-respondents and for Jersey City Merchants Council, amicus curiae; Morris Weinstein, Newark, of counsel and on the brief).

George J. Baumann, Jersey City, for plaintiffs-respondents in L. O. Koven & Brother, Inc. v. City of Jersey City (Wolf & Baumann, Jersey City, attorneys for plaintiffs-respondents and for Jersey City Chamber of Commerce and Jersey City Real Estate Board, amici curiae).

Frederic G. Stickel III, Newark (Norman Heine, Camden, of counsel), filed brief for New Jersey Institute of Municipal Attorneys, amicus curiae.

Shanley & Fisher, Newark (Harold H. Fisher, Newark, of counsel; J. William Barba, Newark, on the brief), filed brief for New Jersey State Chamber of Commerce, amicus curiae.

The opinion of the court was delivered by

JACOBS, J.

The fundamental issue presented to us for determination is whether the Legislature, by the general terms of R.S. 40:52--1, N.J.S.A. and R.S. 40:52--2, N.J.S.A., has delegated power to municipalities to impose solely for revenue purposes, license taxes upon all businesses operating within their borders including manufacturers, wholesalers and retailers.

On December 12, 1952 the Board of Commissioners of the City of Jersey City adopted an ordinance 'establishing licensing requirements for businesses having a situs in the City.' It contains no regulatory features whatever and is admittedly a taxing measure designed to raise anticipated revenues of $3,000,000 annually. It provides that wholesalers and retailers shall pay license fees measured by their

Page 383

gross receipts, manufactures shall pay license fees measured by their payrolls, and truckers shall pay license fees measured by the square footage of space occupied by their truck terminals. It provides further for other classifications and license fee bases, for certain exemptions, for a Business License Bureau and Business License Board of Review, and for other matters which need not be detailed here. On December 13, 1952 Harry F. Salomon and others, retailers located in Jersey City, instituted an action in the Law Division attacking the ordinance for lack of statutory basis, Inter alia, and seeking a judicial determination of its invalidity. On December 19, 1952 a similar action was instituted by plaintiffs L. O. Koven & Brother, Inc. and others, a manufacturer and real estate brokers located in Jersey City. The status of the plaintiffs to maintain their proceedings as Jersey City taxpayers and citizens or persons who were affected by the terms of the ordinance is beyond question. See Gurland v. Town of Kearny, 128 N.J.L. 22, 26, 24 A.2d 210 (Sup.Ct.1942); O'Mealia Outdoor Advertising Co. v. Mayor and Council of Borough of Rutherford, 128 N.J.L. 587, 591, 27 A.2d 863 (Sup.Ct.1942); Koons v. Board of Com'rs of City of Atlantic City, 134 N.J.L. 329, 338, 47 A.2d 589 (Sup.Ct.1946), affirmed 135 N.J.L. 204, 50 A.2d 869 (E. & A.1947). Cf. Haines v. Burlington County Bridge Commission, 1 N.J.Super. 163, 170, 63 A.2d 284 (App.Div.1949); Garrou v. Teaneck Tryon Co., 11 N.J. 294, 302, 94 A.2d 332 (1953). Before answer, the plaintiffs moved for a stay of the ordinance pending trial and the defendant city moved for summary judgment. The Law Division granted the stay and denied summary judgment. The city appealed from the granting of the stay (Rule 4:2--2(a)(1)) and pursuant to leave (Rule 4:2--2(b)) also appealed from the denial of summary judgment. The appeals were consolidated in the Appellate Division and we certified on our own motion. Rule 1:5--1(a).

The power of taxation is a vital attribute of government and is vested in the State Legislature; municipalities being but creatures of the State have no comparable power except to the extent plainly delegated to them by the Legislature. Jersey City v. [97 A.2d 408] Martin, 126 N.J.L. 353, 360, 19 A.2d 40

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(E. & A.1941); Jersey City v. North Jersey Street Ry. Co., 78 N.J.L. 72, 74, 73 A. 609 (Sup.Ct.1909). Cf. Edwards v. Mayor, etc., of Borough of Moonachie, 3 N.J. 17, 21, 68 A.2d 744 (1949). The bulk of municipal revenues required for their operations are received from general property taxes imposed pursuant to express and comprehensive legislative provisions. R.S. 54:4--1, N.J.S.A.; R.S. 54:4--9, N.J.S.A.; R.S. 54:4--23, N.J.S.A. These property taxes had their origin in colonial times and have been in effect for over a century in much their present form. See The General Property Tax in New Jersey, Sixth Report of the Commission on State Tax Policy, 3, 7(1953). In recent years there has been considerable agitation for the granting of broader tax powers to municipalities to enable them to meet the tremendously increased costs of governmental services. In response to similar stimuli the legislatures of our neighboring states have authorized municipalities to impose business taxes based on sales, gross receipts, etc., subject, however, to express statutory provisions and limitations. See 53 Purdon's Pa.Stat., §§ 2015.1--2015.8; N.Y.General City Law, § 24--a. Our own Commission on State Tax Policy in its report on Taxation and Public Policy in New Jersey, Fifth Report (1950) submitted several alternative proposals to our Legislature, including a project to place local governments in a position to finance themselves from bases other than property. A specific method suggested by the Commission (at p. 19) in furtherance of this project was 'to authorize counties and municipalities to levy, assess and collect such taxes as are suitable for local administration--for example, a consumers sales tax, luxury taxes, gross business tax or income (payroll) taxes.' No legislative action has thus far been taken pursuant to this report of the Commission; indeed, no effective legislation has ever been passed avowedly designed to broaden the bases for municipal taxation, except R.S. 40:48--8.15 (L.1947, c. 71, § 1), N.J.S.A., which authorized cities of the fourth class to adopt sales taxes subject to express statutory provisions and limitations. See Karins v. Board of Com'rs of Atlantic City, 137 N.J.L. 349, 60 A.2d 246 (Sup.Ct.1948). No fourth class city other than Atlantic City has ever taken

Page 385

action under this legislation; and it may be noted that our only state legislation imposing general consumer sales taxes was very short lived. See L.1935, c. 268, effective June 11, 1935, repealed by L.1935, c. 329, effective October 25, 1935.

Despite the apparent unwillingness of the Legislature to adopt any statute authorizing general municipal taxation other than property, the efforts to tap new sources of municipal revenue continue. In 1947 the City of Trenton adopted its ordinances 504 and 505 under Title 40, Chapter 52 of the Revised Statutes, N.J.S.A. which provides that the governing body may enact ordinances 'to license and regulate' a. Vehicles--, b. Autobuses--, c. Cartmen--, d. Hotels--, e. Automobile garages--, f. Theatres--, g. Lumber and coal yards, stores and other kinds of business--, h. Street signs--, i. Auctioneers--, j. Sales advertised as forced sales--, k. Gypsies--, l. Barbershops. See R.S. 40:52--1, N.J.S.A. The succeeding section, R.S. 40:52--2, N.J.S.A., provides that the governing body 'may fix the fees for all such licenses, which may be imposed for revenue, and may prohibit all unlicensed persons and places and vehicles, businesses and occupations from acting, being used, conducted or carried on; impose penalties for violation of ordinances providing for licenses, and revoke any license for sufficient cause and after notice and hearing.' Trenton's ordinances require wholesalers, retailers and designated trades and professions to obtain licenses. Their titles set forth that they are ordinances 'governing, regulating and fixing license fees' of certain businesses, trades and professions, and in section 2 they provide that the fees are for revenue 'and for...

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67 practice notes
  • Robinson v. Cahill
    • United States
    • United States State Supreme Court (New Jersey)
    • 3 Abril 1973
    ...municipalities have no inherent power to tax and can do so only pursuant to a delegation of the State's power. Salomon v. Jersey City, 12 N.J. 379, 383--384, 97 A.2d 405 Hence the fact that the obligation to furnish a service is the State's could not serve as an index to the 'fundamental' n......
  • News Printing Co. v. Borough of Totowa
    • United States
    • Superior Court of New Jersey
    • 3 Enero 1986
    ...the Legislature has expressly authorized regulation, a municipality has no power to regulate it or to tax it. Solomon v. Jersey City, 12 N.J. 379, 97 A.2d 405 [511 A.2d 155] To hold that the Legislature authorized municipalities to regulate, under the police power, the time, manner and plac......
  • Bernardsville Quarry, Inc. v. Borough of Bernardsville
    • United States
    • United States State Supreme Court (New Jersey)
    • 23 Julio 1992
    ...license. It found that "[t]he authority to license ... goes hand-in-hand with the authority to regulate," citing Salomon v. Jersey City, 12 N.J. 379, 388, 97 A.2d 405 The cases cited by BQI to support its contention that the license requirement is ultra vires involve municipal attempts to u......
  • Holmdel Builders Ass'n v. Township of Holmdel
    • United States
    • United States State Supreme Court (New Jersey)
    • 13 Diciembre 1990
    ...revenue except through "property taxes imposed pursuant to express and comprehensive legislative provisions." Salomon v. Jersey City, 12 N.J. 379, 384, 97 A.2d 405 (1953). If the primary purpose of the fee is to raise general revenue, it is a tax. Daniels v. Borough of Point Pleasant, 23 N.......
  • Request a trial to view additional results
67 cases
  • Robinson v. Cahill
    • United States
    • United States State Supreme Court (New Jersey)
    • 3 Abril 1973
    ...municipalities have no inherent power to tax and can do so only pursuant to a delegation of the State's power. Salomon v. Jersey City, 12 N.J. 379, 383--384, 97 A.2d 405 Hence the fact that the obligation to furnish a service is the State's could not serve as an index to the 'fundamental' n......
  • News Printing Co. v. Borough of Totowa
    • United States
    • Superior Court of New Jersey
    • 3 Enero 1986
    ...the Legislature has expressly authorized regulation, a municipality has no power to regulate it or to tax it. Solomon v. Jersey City, 12 N.J. 379, 97 A.2d 405 [511 A.2d 155] To hold that the Legislature authorized municipalities to regulate, under the police power, the time, manner and plac......
  • Bernardsville Quarry, Inc. v. Borough of Bernardsville
    • United States
    • United States State Supreme Court (New Jersey)
    • 23 Julio 1992
    ...license. It found that "[t]he authority to license ... goes hand-in-hand with the authority to regulate," citing Salomon v. Jersey City, 12 N.J. 379, 388, 97 A.2d 405 The cases cited by BQI to support its contention that the license requirement is ultra vires involve municipal attempts to u......
  • Holmdel Builders Ass'n v. Township of Holmdel
    • United States
    • United States State Supreme Court (New Jersey)
    • 13 Diciembre 1990
    ...revenue except through "property taxes imposed pursuant to express and comprehensive legislative provisions." Salomon v. Jersey City, 12 N.J. 379, 384, 97 A.2d 405 (1953). If the primary purpose of the fee is to raise general revenue, it is a tax. Daniels v. Borough of Point Pleasant, 23 N.......
  • Request a trial to view additional results

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