Citation Numbers: 25 N.J. Misc. 483
Judges: Conklin, Onek
Filed Date: 10/14/1947
Status: Precedential
Modified Date: 11/27/2022
Two appeals were filed by the Atlantic City Transportation Co., from the assessments made by the Director of Taxation for the year of 194G under the provisions of chapter 5 of the laws of 1940 as amended by chapter 21 of the laws of 1941, N. J. S. A. 54:31-45, et seq. One petition involves the question of the validity of the franchise tax levied under the provisions of paragraph 6, sub-paragraph (a) of the aforesaid act, and the other petition
The petitioner was incorporated as the Atlantic City Transportation Co., under the provisions of title 48, chapter 15 of the Revised Statutes, N. J. S. A., which act applies to street railways. On December 1st, 1945, the petitioner took title to various properties together with the operations, rights, and franchises formerly owned by the Central Passenger Railway Co., the Atlantic City and Shore Railroad Co., the Atlantic City and Ocean City Railroad Co., and the West Jersey and Seashore Railroad Co.
In the purchase from the West Jersey and Seashore Railroad Co., the petitioner became the owner of a right of way 24.3 feet in width, which began at or near the car barn at the inlet in Atlantic City, and which right of way extended through Atlantic City, Ventnor City, Margate City, and the Borough of Longport. For the year 1945 an assessment was levied upon this right of way as first class railroad property, and the assessment paid. For the year 1946, no assessment as first class railroad property has been made and no taxes collected. The original plan or map of dedication of the City of Atlantic City, filed April 15th, 1853, covered only the area on either side of the right of way of the West Jersey and Seashore Railroad Co., from the inlet to California Avenue, and as the cities developed they acquired a strip of land on either side of this 24.3 feet right of way and made it a continuation of the original Atlantic Avenue. At the present time, Atlantic Avenue in the City of Atlantic City, is paved from curb to curb, including that area between the rails of the street railway, with the same type of pavement. Pedestrian and vehicular traffic use the paved portions on the right of way of the petitioner, and one not knowing the history of the development of Atlantic Avenue could not ascertain from observation that there was a private right of way through the city. The paving between the rails was originally done by the West Jersey and Seashore Railroad and since that time an agreement has been entered into between the petitioner and the City of Atlantic City that the railway would
The Atlantic City Transportation Co., over the purchased lines, created two divisions, one known as the “Atlantic Avenue Division” and the other as the “Ocean City Division.” The Atlantic Avenue Division runs from the inlet in Atlantic City to Longport, iSTew Jersey, and return, a total of 8.31 miles. The Ocean City Division runs from Virginia Avenue and the Boardwalk in Atlantic City to Eighth Street and the Boardwalk in Ocean City, and goes through the cities of Pleasantville, Northfield, Linwood, and Somers Point, a total of 15.412 miles, making the total mileage of the petitioner 27.22 miles.
Paragraph 6, subparagraph (a), giving the formula in computing the franchise tax, provides as follows:
“(a) A tax computed at the rate of five per centum (5%) of such proportion of the gross receipts of such taxpayer for the preceding calendar year as the length of the lines or mains in this State, located along, in or over any public street, highway, road or other public place hears to the whole length of its lines or mains. In case the gross receipts of any such taxpayer for any calendar year shall not exceed fifty thousand dollars ($50,000.00) the tax on such taxpayer for such calendar year shall be computed at the rate of two percentum (2%) instead of at the rate of five percentum (5%).”
Thus, a factor used in determining the taxable gross receipts is arrived at by dividing the total number of miles located on a public place by the total length in miles of the street railway’s operation. The petitioner questions the factor used by the Director of Taxation and claims that he was in error, as the Director determined the total mileage located in the public street to be 4.156 miles, and the petitioner claims it should have been 1.113 miles. This difference is caused by the Director’s insistence that the portion of the petitioner’s
Paragraph 2 of chapter 5 of the Public Laws of 1940, as amended by chapter 21, of the laws of 1941, paragraph 2, subparagraph (g), defines a public place as follows:
“(g) 'Public street, highway, road or other public place’ includes any street, highway, road or other public place which is open and used by the public, even though the same has not been formally accepted as a public street, highway, road, or other public place.”
The statute is clear and explicit. It is not an attempt by the legislature to define what is a public street, highway, or other public place for any general purpose, but for the purpose of this statute only, and in particular the application of paragraph 6, subparagraph (a) of this act. Clarkson v. Ley, 106 N. J. L. 380; 148 Atl. Rep. 745; O’Neill v. Johnson, 99 N. J. L. 317; 123 Atl. Rep. 538.
We therefore feel that the Director used proper discretion in arriving at the amount of mileage in a public place to determine his factor of .175196020.
But we do believe that the Director was in error in using the figure of gross receipts in his computation of both the franchise tax and the gross receipts tax. 'The figures were arrived at as follows:
Atlantic City Transportation Co. Dee. 1, 1945, to Dec. 31, 1945 ............ $84,865.47
Atlantic City and Shore Railroad Co. Jan. 1, 1945, to Nov. 30, 1945 ........... 1,253,636.06
Atlantic City and Ocean City Railroad Co. Jan. 1, 1945, to Nov. 30, 1945 ........... 11,000.00
Central Passenger Railway Co. Jan. 1, 1945, to Nov. 30, 1945 ........... 4,497.43
Total gross receipts as computed by the Director ■..........................$1,353,998.96
Paragraph 15 of chapter 5 of the laws of 1940, the section under which the determination of the gross receipts was computed, reads as follows:
This section provides that where the street railway acquires the rights, &c., of another street railway subject to an excise
As a general rule, a liberal construction must be given all tax laws for public purposes, and it is the duty of the courts to see that no one, by mere technicalities which do not afiect his substantial rights, shall escape his fair proportion of the public expenses, and thus impose them upon others. Paulison v. Taylor, 35 N. J. L. 184.
But two of the petitioner’s predecessors in title, the Atlantic City and Shore Railroad Co., and the Atlantic City and Ocean City Railroad Co., were chartered under the Railroad Act, N. J. S. A. 48:12—1, et seq., and as such were in operation up to December 1st, 1945. Atlantic City and Shore Railroad Co. v. State Board of Assessors et at., 88 N. J. L. 219; 96 Atl. Rep. 568. The Director was not within his rights in computing the gross receipts of those two railroad corporations in arriving at his total, as they were not corporations subject to taxation under the provisions of section 15, supra. The Central Passenger Railway Co. was subject to such a tax and its gross receipts for the previous year were reported.
It is our finding that the gross receipts for the year ending December 31st, 1945, that should have been considered by the Director are:
Atlantic City Transportation Co. Prom Dec. 1, 1945, to Dec. 31, 1945 ........ $84,865.47
Central Passenger Railway Co. Prom Jan. 1, 1945, to Nov. 30, 1945 ....... 4,497.43
Total ............................... $89,362.90
Therefore, both the franchise tax and the gross receipts tax should have been determined by using gross receipts of $89,362.90, and the franchise tax by using the factor of .175196020.
The Director of the Division of Taxation should reassess, reapportion and recertify the franchise tax and the gross receipts tax for the year 1946 on the basis above set forth.
Judgment accordingly.