Opinion of the Justices

64 A.2d 324, 95 N.H. 543, 1949 N.H. LEXIS 218

Opinion

To the House of Representatives:

The undersigned the Justices of the Supreme Court make the following answer to the inquiry in your resolution with reference to House Bill No. 188, entitled, “An Act in Amendment of Chapter 84 of Revised Laws Relating to the Franchise Tax.”

In our opinion the proposed act is unconstitutional. Chapter 84 of the Revised Laws was apparently enacted in strict conformity to the Opinions of the Justices, 82 N. H. 561 and 84 N. H. 559, and imposes a property or estate tax upon franchises at “the average rate of taxation at that time upon other property throughout the state.” The proposed bill would tax electric utilities at the rate of one-quarter of a mill for each kilowatt hour of electricity produced within the state during the prior taxable year over and above the electricity, consumed by the utility in connection with such production.

Elwin L. Page (by brief and orally), for the Interim Committee on Overall Taxation, for the bill. Sulloway, Piper, Jones, Hollis & Godfrey (Mr. Alvah W. Sulloway) orally), opposed.

A “franchise or privilege to do certain things may be granted to a corporation ... or an individual,” but “a tax laid upon it is subject to the constitutional rules of proportionality and reasonableness which apply to all taxes.” Opinion of the Justices, 82 N. H. 561, 565. The proposal of House Bill No. 188 would change the character of the tax from an estate tax to a privilege tax, which is not permitted by our Constitution. Opinions of the Justices, 82 N. H. 561, 565; 84 N. H. 559, 567-568, 576.

Oliver W. Branch. Francis W. Johnston. Frank R. Kenison. Laurence I. Duncan. Amos N. Blandin, Jr.