91 N.J.L. 76 | N.J. | 1917
The opinion of the court was delivered by
In each of the above-stated causes an application is made by the respective prosecutors for the allowance of a writ of certiorwii to review the assessment for taxation of the real and personal estate of the several applicants in the cities of Passaic, Jersey City and Newark respectively for the year 1917, the principal basis upon which the applications are rested being an assessment for state road purposes at the rate required by statute to be applied to the value of property assessed in the different municipalities.
The power to make these assessments is founded upon an act entitled “An act to provide for the taxation of real and personal property in this state for state road purposes”' (Pamph. L. 1917, p. 41). This act provides that, for a period of five years, there shall be assessed annually “In each of the municipalities of the counties of this state, a tax of one mill on each dollar of the value of all the real and personal property in every such municipality upon which municipal faxes are or shall be assessed, levied or collected. Such tax shall be assessed, levied and collected in the same manner and at the same time as other taxes upon real and personal property are now assessed, levied and collected.”
This is clearto a state tax, levied upon property classified “As property upon which nnmicipal taxes are assessed, levied and collected.”
The facts not being in dispute it was agreed at the argument that the three applications should be heard at the same time, and if the court should conclude that the writs ought to go then, without further argument, the court should consider and decide the controlling questions argued. TTe being
As the principal ground, applicable alike to all of the cases, is that the statute which it is claimed justifies the assessments is unconstitutional, we first deal'with that question.
It is argued that the title of the act is insufficient because it applies to all real and personal property, while the body of the act limits its application to property upon which municipal taxes are levied and collected. The title does not read all real and personal property, but if it did, or should be so construed, it is sufficient to sustain an act which includes all real and personal property upon which municipal taxes are assessed, which, by fair intendment and reasonable implication includes all taxable property not subject to exemption, or to other methods of taxation because of its character or classification. The title is sufficiently indicative of the purpose of the act to support the legislation, and the statute is not unconstitutional for this reason.
It is next urged that the act is not valid because it does not include all railroad property, which has been classified by the legislature into four classes, on the first and fourth of which the statute lays a direct tax in which the municipalities take no part either in assessing, collection or participation in ’the proceeds, all being taken and applied by the state for its use, and collected by a special statutory method.
The third class it is admitted is subject to the statute under review, and that taxes thereon have been assessed locally, therefore it does not affect the present question.
The prosecutors contend that the statute of 1917 does not include first and fourth class railroad property and therefore is in violation of the constitutional requirement that “Property shall be assessed for taxation under • general laws, and by uniform rules according to its true valuation.”
There is no legal rule better settled in this state than that the classification of railroad property, for the purpose of taxation by a special scheme, does not violate the foregoing constitutional requirement concerning the levying of taxes, so
A different question arises as to second-class railroad property, for in each of the three cities involved, the value of second-class railroad property, as fixed by the state board, was included in the ratables and the rate of taxation computed on that basis, so if this latter class of railroad property is not within the law, that is, not property upon which municipal taxes are to be assessed, levied and collected, then each mu
Under the law relating to the taxation of railroad property it is made the duty of every assessor in all taxing districts within which there may be second-class railroad property, to send to the state board of assessors in each year a statement of such property, showing the assessed valuation thereof by the state board (whose duty it is to make such valuation) and at the same time certify to the state board the local rate of taxation ascertained by adding to the sum of the valuation of all other taxable property, the valuation of second-class railroad property fixed by the state board and computing its relation to the sum to be raised. The state board then applies the certified rate to the value of such property and ascertains the amount of tax to be raised for local use from second-class railroad property, which the state collects and remits to the municipality. We think a tax thus levied, assessed and collected is a municipal tax within the meaning of the law of 1911'. The local authorities, it is true, do not value the property; that is done by the state board, but such valuation is certified to the local authorities and on it, with other ratables, they ascertain the percentage according to which all taxes are assessed and their amount determined. The tax that is thus assessed in part by municipal agencies is received in toto by such municipalities just as all other municipal taxes are, for local purposes generally, and not for anjr specific object fixed by the legislature as in tire case with the school tax. These and other substantial features distinguish the tax on second-class railroad property from the state tax, that was dealt with in the case of The Society for Useful Manufactures v. Paterson, 89 N. J. L. 208. As was said in the opinion in that case: “The method of assessment and collection throws no light upon the character of (a) tax.” The substantial features of the local property of railroads upon which taxes are thus raised for strictly municipal purposes, bring such property within the classification of the Road Tax act, by which
The next point argued is that the act does not include the franchises of street using public utilities corporations.
The brief of the prosecutors relating to this point consists of a mere statement that whether the tax to which public franchises of all such utility corporations are subject, be state or local, in neither ease does the act provide any machinery for their collection. We think Ibis is without merit for the act provides that the, taxes imposed by it shall be collected as oilier taxes are, and there is ample provision in the, law for the assessment and colled ion of either class. It makes no difference to these prosecutors whether the tax be state or local, for such franchises are either exempted, by reason of classification, from local taxation, or subject to the act under consideration, and if, under the act they are subject to local taxation and have been omitted by the local assessor, that is an error in execution of the law which does not make it unconstitutional.
It is further argued that the act is unconstitutional because it does not include the shares of the capital stock of banking associations and trust companies. It does include such property unless the ad of 1914 (Pamph. L., p. 141) relating to assessment and collection of faxes upon the shares of the capital stock of banks and trust companies, puts such stock beyond the pale of local taxation. We fail to perceive why under that act such stocks are not property upon which municipal faxes are assessed, levied and collected. The valuing of the property, and the assessment and collection of the tax
It is also urged that the act is unconstitutional because it does not include the real and personal property of The Society for Useful Manufactures in the city of Paterson.
The argument that the act is unconstitutional because its classification excludes the property of The Society for Useful Manufactures is based upon a false premise and fails to note the distinction between propertjr and the owners of property, that has been insisted upon by our cases touching taxation. Briefly stated these cases hold that property must be classified by its characteristics as property, and not by the status of its owner, or by some incident of that ownership. The. first of these propositions is illustrated in the classic case of State Board of Assessors v. Central Railroad Co., 48 N. J. L. 146, and the second in the more recent case of Tippett v. McGrath, 70 Id. 110; affirmed, 71 Id. 338. Prom the principles thus established it follows that as property can be lawfully classified by its own characteristics only, and not by the status of its owner, its classification by its own characteristics cannot be rendered unlawful by the status of its owner or by any mere incident of such ownership.
A contract with the state by the owner of property for its exemption from local taxation is the act of the owner, not a use of the property, and the resulting immunity is therefore an incident of ownership, not a characteristic of^ property. Prom this it follows that a classification that includes such property according to its characteristics as such, which is the only legitimate test, cannot be judically held to exclude it upon considerations derived from the status of its owner. The legal rule that property must be classified by the characteristics possessed by it, and not by the incidents of its ownership must he consistently applied to'the upholding of a classification that exactly conforms to the legal rule. This being so, the fact that The Society for Useful Manufactures has an irrepealablc contract with the state exempting its property
It is also urged that the assessment against the prosecutor, Charles F. H. Johnson, is invalid because no action was taken by the commissioners of the city of Passaic assessing or levying the road tax. What appears to have been done in the city of Passaic was the making of an assessment and the fixing of the tax i*ate by the county board of taxation, which included the one mill tax authorized for state road purposes, although the municipal authorities had taken no action with reference to the state tax for roads, and that the commissioner of revenue and finance entered upon the tax collector’s duplicate an assessment against the prosecutor for an amount, which was arrived at by multiplying the value of' his taxable property by the local percentage rate which included the one mill rate fixed by the statute. We see nothing in this objection. The one mill rate is fixed by the statute and the local authorities had no control over it.
They fixed the rate for local purposes and having ascertained the raiables subject to taxation, it became tlie duty of the collector to add to it the rate fixed by the legislature to be applied in ascertaining bow much should be raised for state road purposes. This objection, if it has any foundation, is technical, and in no way affects the amount to be paid.
Tt is also argued that in the counties of Passaic and Hudson, the county board of taxation apportioned to the cities of Passaic and Jersey City the amount to be raised by them respectively, and in doing this added to the local ratables the value of second-class railroad property. It may be granted
This disposes of all the questions argued, with the result that the statute assailed is a constitutional one, and that the assessment against each of these prosecutors is valid and will be affirmed in each case, with costs.