People ex rel. Empire City Subway Co. v. State Tax Commission

Headnote

Tax — franchise tax — valuation of special franchises.

People ex rel. Empire City Subway Co. v. State Tax Comm. (2 cases), 218 App. Div. 819 , affirmed.

Appeal, in each of the above-entitled proceedings, by permission, from an order of the Appellate Division of

the Supreme Court in the first judicial department, entered December 3, 1926, which affirmed an order of Special Term reducing, on certiorari, assessments for taxation of special franchises, levied against the relator. Its property consisted almost entirely of electrical subways and conduits maintained and operated under the streets of the boroughs of Manhattan and The Bronx. The State Tax Commission in its return to the writs certified that “ the valuation of the special franchise was made in gross and as a whole after considering separately, as elements in arriving at said valuation, both the intangible right or privilege to occupy and use the streets, highways and public places for the business purposes for which the special franchise in question was granted, and the value of the tangible property located therein and used in connection therewith.” The Special Term held that the “ net earnings rule ” was the method best adapted to arrive at a correct valuation.