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U.S. Supreme Court

Brooklyn City R. Co. v. Tax Commissioners, 199 U.S. 48 (1905)

Brooklyn City Railroad Company v.

New York State Board of Tax Commissioners

No. 79

Argued April 17-19, 1905

Decided May 29, 1905

199 U.S. 48


A license fee is a charge for the privilege of carrying on a business or occupation and is not the equivalent or in lieu of a property tax, and a provision in the grant of a franchise for a license fee does not, in the absence of express stipulations of exemption, relieve the property employed in the business from the ordinary burdens of property taxation and amount to a contract of exemption from further taxation within the impairment of contract clause of the federal Constitution.

The legislation challenged in this case, being in terms an amendment of the general tax law of New York and subject to the provisions of that law in respect to notice and review by certiorari of the action of the assessing board, is not obnoxious to the charge of a lack of due process of law; nor is due process shown to be wanting by a failure to require a return of the valuation of the franchise held by a corporation separately from that of the tangible property held under the franchise.

This case, like the preceding, involves the special franchise tax law of New York. The facts are these: on December 22, 1853, the relator was authorized by the City of Brooklyn to construct, maintain, and operate street surface railroads upon specified streets, and required to enter into a good and sufficient bond conditioned for the faithful performance of all the terms and stipulations in the resolutions granting the authority. On December 30 of that year, a bond in the sum of $200,000 was duly executed by the relator, and has ever since been kept in force. The terms and stipulations as to the construction and operation of the railroad need not be mentioned. The resolutions contained these further provisions:

"The rates of fare for each passenger and the license fee for

Page 199 U. S. 49

each car to be paid annually into the city treasury shall be on the respective lines above mentioned:"

"1. Furnam Street route, fare not to exceed five cents, license fee, $50. 2. Court Street route, fare not to exceed four cents, license fee, $20. 3. Powers Street route, fare not to exceed five cents, license fee, $20. 4. Flatbush Avenue route, fare not to exceed five cents, license fee, $20. 5. Fulton Avenue route, fare not to exceed four cents, license fee, $20. 6. Myrtle Avenue route, fare not to exceed four cents, license fee, $20. 7. Sands Street route, fare not to exceed five cents, license fee, $10. 8. Front Street route, fare not to exceed five cents, license fee, $10."

This action of the City of Brooklyn was validated by the state legislature. Other contracts were made by the City of Brooklyn with other companies. Those companies were subsequently consolidated with the relator, which, on the first of January, 1900, held forty-five similar contracts with the municipalities for the construction, maintenance, and operation of street surface railroads in the present Boroughs of Brooklyn and Queens. Some of these contracts required the annual payment of a certain percentage of the gross receipts. Subsequently, under due legislative authority, the contract arrangements between the relator and the city were modified in respect to the amount of the annual license fee. The statute authorizing the modification contains this clause:

"The said license fees shall be taken in full satisfaction for the use of the streets or avenues, but the same shall not release said company from any obligations required by law to keep such streets or avenues, or any part thereof, in repair, which said obligations and the contracts, laws, or ordinances creating and enforcing the same, are hereby continued in full force and operation. "

Page 199 U. S. 50

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