Opinion
April 26, 1907.
Edward W. Hatch [ Charles A. Collin, John L. Wells and George D. Yeomans with him on the brief], for the relator.
George S. Coleman [ William B. Ellison with him on the brief], for the respondents.
The scheme of the statute for the taxation of special franchises (incorporated in the Tax Law) is that they are assessed at their value without any diminution for any local public charges thereon, and that such charges are to be deducted from the tax when levied. Section 46 requires that if there has been paid to the city, town or village for the tax year, " under any agreement therefor, or under any statute requiring the same, any sum based upon a percentage of gross earnings, or any other income, or any license fee, or any sum of money on account of such special franchise, granted to or possessed by such person, copartnership, association or corporation, which payment was in the nature of a tax", all amounts so paid shall be deducted from the tax. In this there are two inconsistent phrases applied to the payments mentioned, the one "under any agreement therefor", and the other "in the nature of a tax" (if the latter refers back to the former), for that which is paid under an agreement is not of the nature of a tax. A tax is an exaction of sovereignty, and not something derived from an agreement. This inconsistency and lack of scientific precision affects the interpretation of the statute. It cannot be said that only sums paid as taxes may be deducted, for the statute classifies sums paid under agreement as taxes — which they may be in a loose sense — and directs them to be deducted.
The relator runs its cars across the Brooklyn bridge under an agreement with the city requiring it to pay a toll of 5 cents the round trip for each car. This payment is within the meaning of the statute, provided the relator's contract right to such use of the bridge is a special franchise. Inasmuch as the State has treated it as such and assessed it, it is not open to the city comptroller to refuse to make the deduction on the ground that it is not. If the tax is to be imposed and collected the deduction must be allowed.
The order should be modified accordingly.
HIRSCHBERG, P.J., WOODWARD, JENKS and HOOKER, JJ., concurred.
Order modified in accordance with the opinion of GAYNOR, J., and as modified affirmed, without costs.