jecting "non-residents" to taxation on the sums invested in business includes foreign corporations; 59 while on the other hand a statute providing for taxation of personal estate in the city where the owner is an "inhabitant" does not render the property of a foreign corporation liable to taxation, since it is not an inhabitant of any place within the State. So where the cars of a railroad company were by statute taxable at the home office or principal place of business of the company, the cars of a foreign railroad company could not be taxed, since its principal place of business was outside the State.61

In Massachusetts, where a domestic corporation is locally taxable only on its real estate and machinery, "every foreign corporation which is subject to the provisions of this act shall be subject to taxation upon all real estate, machinery and merchandise owned by it and situated in this commonwealth by the city or town in which such property is situated."

1962

A retaliatory tax may be laid upon a foreign corporation, as the following:

When, by the laws of any other State or nation, any other or greater taxes, fines, penalties, licenses, fees or other obligations or requirements are imposed upon corporations of this State, doing business in such other State or nation, or upon their agents therein, than the laws of this State impose upon their corporations or agents doing business in this State, so long as such laws continue in force in such foreign State or nation, the same taxes, fines, penalties, licenses, fees, obligations and requirements of whatever kind shall be imposed upon all corporations of such other State or nation doing business within this State and upon their agents here; provided, that

59 People v. Barker, 141 N. Y. 118, 35 N. E. 1073, 23 L. R. A. 95; People v. Feitner, 62 N. Y. Supp. 1107, 49 App. Div. 108.

60 Boston Investment Co. v. Boston, 158 Mass. 461, 33 N. E. 580.

61 Appeal Tax Court of Baltimore v. Pullman P. C. Co., 50 Md. 452. 62 Mass. 1903, ch. 437, § 71.

nothing herein shall be held to repeal any duty, condition or requirement now imposed by law upon such corporations of other States or nations transacting business in this State.63 63 Del. 1903, Franchise Tax, §9; Nev. 1903, ch. 121, § 106; N. J. P. L. 1894, pp. 346, 446; Corp. Supp. § 101.

CHAPTER XX.

TAXATION OF TANGIBLE PROPERTY.

481. Situs and taxation of real

estate.

within the State: property in transit.

482. Real estate and franchise as § 490. What property is situated

§ 481. Situs and taxation of real estate.

Real estate, which has a fixed local situs, can most effectively be taxed by itself in the local taxing district where it lies; and this is the method usually employed for taxing the real estate of corporations.

This would undoubtedly be the rule if there were no express statute regulating the matter; but in most States the taxation of real estate of either domestic or foreign corporations in the place where it is situated is especially provided for.1

1 Ark. Stat. § 6402; Cal. Const. Art. 13, § 1, Pol. Code, § 3617; Ga. Code, 1895, § 767; Hawaii Laws, 1897, §§ 817, 830; Kan. Gen. Stat. ch. 158, § 1; Ky. 1902, ch. 128, Art. 1, § 2, Art. III, § 9; La. R. S. § 733; Md. Gen. L. Art. 81, § 21; Me. R. S. ch. 6, § 14, cl. 3; Minn. Gen. Stat. 1894, § 1508; Mont. Const. Art. 12, § 17, Pol. Code, § 3711; Neb. Stat. § 3897; N. J. Corp. Supp. 101; N. Y. Tax L. § 11; N. Dak. 1897, ch. 126, § 2; Oh. Rev. Stat.

In Massachusetts and Iowa machinery is taxed with the real estate and as part of it. In New York a corporation having a franchise in the public streets is taxed on the franchise where it is exercised as real estate. In several States the ordinary roadbed of a railroad is not assessed locally as real estate; and in a few States the real estate of corporations used in the business is not assessed locally, but only as part of the capital stock, unless the corporation is not taxed on its corporate stock. In these cases any real estate not used in the ordinary business of the corporation is locally taxed."

In several States it is provided that where land is exempted from local taxation, improvements on the land shall be taxed."

§ 482. Real estate and franchise as a unit.

Under a statute providing for the taxation of the tracks, stations, etc., of a railroad as part of its real estate in the towns through which the road ran, it was held that all elements should be valued together as a single piece of property, the utmost limit of value being the cost of reproduction; and the earnings of the road could not be considered. O'Brien, J., said: "It is difficult to formulate from the adjudged cases any general rule or principle applicable in all cases to the valuation of the real estate of a railroad for the purpose of taxation. Cases may be found in the Federal courts containing strong expressions of opinion in favor of the rule adopted by the

§§ 2731, 2744; Ore. Misc. L. § 2739; S. Car. Rev. Stats. 1893, §§ 217, 250; Tenn. 1901, ch. 174, § 22; Tex. Rev. Stat. Art. 5061; Va. 1902, ch. 686, § 1; Wash. 1897, ch. 71, § 20; Wis. Rev. Stat. § 1034; N. Bruns. Consol. Stat. ch. 100, 18; Nov. Scot. Rev. Stats. ch. 58, § 3.

2 Mass. 1903, ch. 437, § 71; Ia. Code of 1897, § 1319.

3 N. Y. 1899, c. 712.

4 Const. N. Dak. § 179; Mich. Comp. L. § 3830, cl. 7, 1901, Act 44. Contra, Tex. Const. Art. 8, § 8.

Conn. Stat. § 3832; Mich. Comp. L. § 3830, 1901, Act 44.

• Conn. Stat. § 3833; Mich. 1901, Act 44; N. H. Pub. Stat. ch. 55, § 6.

7 Minn. Gen. Stat. § 1510; N. Dak. 1897, ch. 126, § 4; Texas Rev. Stat. Art. 5063.

P. v. Clapp, 152 N. Y. 490, 46 N. E. 842, 39 L. R. A. 237.

state laws providing for the assessment of all the property of assessors. But these were cases involving the validity of railroads within the state, real, personal and mixed, including franchises, and the statute pointed out in terms the mode of assessment, which in some respects included the methods adopted in this case. Where the assessors have jurisdiction over all the property of the corporation within the state, whether it be real estate, capital stock, or franchises, they may deal with every element of value that constitutes property of the corporation, or enters into its earning or producing capacity. But in most cases in this state the assessors have jurisdiction only over a part of the corporate property; that is, the real estate. . 10

"An assessment of the portion of the real estate of a railroad which is within the town, and subject to the jurisdiction of the assessors, upon the basis of the income or profits of the whole system of which it is a part, must necessarily include the use of franchises and personal property which are otherwise assessed, and hence such a principle of valuation must, in some measure at least, impose double taxation. It is doubtless within the power of the state to authorize such a method of assessment, but it has not attempted to exercise such a power. The real estate, the personal property, and the business and franchises are taxable under different statutes, and these three elements into which the corporate property is divided should not be commingled when it is reasonably possible to avoid it. When there is no question before the assessors save the value of that part of the real estate of a railroad which is within the town, the cost of replacing it will ordinarily furnish a just measure of valuation. . .

"The real estate of a railroad in a town is not to be assessed as an isolated piece of land, but with reference to its position

Pittsburgh, C. C. & S. L. Ry. v. Backus, 154 U. S. 421, 38 L. ed. 1031; Telegraph Co. v. Taggart, 163 U. S. 1, 41 L. ed. 49.

10 A franchise cannot be considered in taxing real estate of a corporation locally. P. v. Assessors, 15 N. Y. St. Rep. 461.