Motor Finance Corp. v. City of Newark

Supreme Court of New Jersey

Motor Finance Corp. v. City of Newark

55 A.2d 247, 136 N.J.L. 262, 1947 N.J. Sup. Ct. LEXIS 45

DecidedOctober 23, 1947

StatusPublished

This text of 55 A.2d 247 (Motor Finance Corp. v. City of Newark) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Motor Finance Corp. v. City of Newark, 55 A.2d 247, 136 N.J.L. 262, 1947 N.J. Sup. Ct. LEXIS 45 (N.J. 1947).

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Opinion

The opinion of the court was delivered by

Colie, J.

Prosecutor is engaged in the business of dealing in and negotiating promissory notes and making and dealing in secured and unsecured loans, and it is stipulated that it comes within the provisions of chapter 174, laws of 1946, R. S. 54:10B — 1, et seq., legislatively denominated the “Financial Business Tax Law (1946).” Section 3 of the act imposes an annual excise tax upon all financial businesses of three-fourths of one per centum upon its net worth and expressly provides that “Such tax shall also be in lieu of any state franchise tax or of any state or local taxation of, upon or measured by personal property entering into the determination of net worth.” Section 2 (c), so far as pertinent, defines “net worth” as:

*263 “(1) in -the ease of a corporation — the aggregate of the values disclosed by the books of the corporation for (1) issued and outstanding capital stock, (2) paid-in or capital surplus, (3) earned surplus and undivided profits, (4) surplus reserves which can reasonably be expected to accrue to holders or owners of equitable shares, excluding reasonable valuation reserves and (5) the amount of all indebtedness owing directly or indirectly to holders of ton per centum (10%) or more of the aggregate outstanding shares of the taxpayer’s capital stock of all classes, as of the close of a tax year.”

Depositions were taken by rule of the court which disclosed that prosecutor in the return filed by it in accordance with section 15 of the statute included, in determining its net worth, the value of its tangible personal property owned as of October, 1946. The City of Newark assessed the tangible personal property owned by the prosecutor on the assessing date at $10,000 and levied a tax thereon of $556. The city attempts to justify this, act under the purported authority of R. S. 54:4-1 and contends “that the tangible personal property in question is neither expressly exempted or expressly excluded from taxation” under R. S. 54:4-1.

The fact is, and we so find, that the value of the tangible personal property of Motor Finance Corporation is included in its “net worth” as shown on the return filed by it and therefore the municipality had no legal justification for levying the tax complained of. Any other view would render meaningless the provision in section 3 that “such tax shall also be in lieu of any * * * local taxation of, upon or measured by personal property entering into the determination of net worth.”

The assessment under review’' is set aside, with costs to the prosecutor.

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The opinion of the court was delivered by

Colie, J.

Prosecutor is engaged in the business of dealing in and negotiating promissory notes and making and dealing in secured and unsecured loans, and it is stipulated that it comes within the provisions of chapter 174, laws of 1946, R. S. 54:10B — 1, et seq., legislatively denominated the “Financial Business Tax Law (1946).” Section 3 of the act imposes an annual excise tax upon all financial businesses of three-fourths of one per centum upon its net worth and expressly provides that “Such tax shall also be in lieu of any state franchise tax or of any state or local taxation of, upon or measured by personal property entering into the determination of net worth.” Section 2 (c), so far as pertinent, defines “net worth” as:

*263 “(1) in -the ease of a corporation — the aggregate of the values disclosed by the books of the corporation for (1) issued and outstanding capital stock, (2) paid-in or capital surplus, (3) earned surplus and undivided profits, (4) surplus reserves which can reasonably be expected to accrue to holders or owners of equitable shares, excluding reasonable valuation reserves and (5) the amount of all indebtedness owing directly or indirectly to holders of ton per centum (10%) or more of the aggregate outstanding shares of the taxpayer’s capital stock of all classes, as of the close of a tax year.”

Depositions were taken by rule of the court which disclosed that prosecutor in the return filed by it in accordance with section 15 of the statute included, in determining its net worth, the value of its tangible personal property owned as of October, 1946. The City of Newark assessed the tangible personal property owned by the prosecutor on the assessing date at $10,000 and levied a tax thereon of $556. The city attempts to justify this, act under the purported authority of R. S. 54:4-1 and contends “that the tangible personal property in question is neither expressly exempted or expressly excluded from taxation” under R. S. 54:4-1.

The fact is, and we so find, that the value of the tangible personal property of Motor Finance Corporation is included in its “net worth” as shown on the return filed by it and therefore the municipality had no legal justification for levying the tax complained of. Any other view would render meaningless the provision in section 3 that “such tax shall also be in lieu of any * * * local taxation of, upon or measured by personal property entering into the determination of net worth.”

The assessment under review’' is set aside, with costs to the prosecutor.

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55 A.2d 247, 136 N.J.L. 262, 1947 N.J. Sup. Ct. LEXIS 45, Counsel Stack Legal Research, https://law.counselstack.com/opinion/motor-finance-corp-v-city-of-newark-nj-1947.