For the prosecutor, Lindabury, Depue & Faulks (Josiah Stryker, of counsel).
For the respondents J. H. Thayer-Martin, state tax commissioner, and William H. Albright, state treasurer, David T. Wilentz, attorney-general.
For the respondent city of Paterson, Charles F. Lynch and Charles H. Roemer.
Before Justices Trenchard, Heher and Perskie.
The opinion of the court was delivered by
PERSKIE, J. The writ of certiorari, in this case, brings up for review an assessment of taxes made upon the gross receipts of the prosecutor, at the rate of five per cent., for the year ending December 31st, 1934. This assessment of $10,521.66 was made by the state tax commissioner pursuant to an act of the legislature entitled, "An act for the taxation of persons, co-partnerships, associations and corporations engaged in the production and sale of hydro-electric power in this state." Chapter 144, Pamph. L. 1935, p. 357.
The act of 1935 provides, inter alia, that (section 1), in addition to all other taxes imposed upon those engaged in the production and sale of hydro-electric power in this state there shall be levied and assessed an annual tax at the rate of five per centum (5%), per annum, upon the gross receipts of all their business in this state for the year ending December 31st, next preceding, and annually thereafter; that (section 5), all local taxes assessed and paid for the calendar year commencing with the taxable year of 1935, and each year thereafter, shall be deducted from and constitute a credit against the tax due from those assessed under the act," and the state tax commissioner shall allow such deduction or credit upon presentation of satisfactory proof of payment of all local taxes and shall certify said deduction or credit
allowed by him to the state treasurer; that (section 6), the taxes so assessed under this act shall be paid to the state treasurer for the general purposes of the state and shall be credited by him on account of the state tax assessed against the respective municipalities in which those affected under the act are assessed for local taxes, in proportion to the value of the property located in such municipalities * * *.
Prosecutor contends that the state is without authority under the act and proofs herein exhibited, to make the challenged exaction.
In support of that contention, prosecutor summarizes its eleven reasons as follows:
1. That the assessment against the prosecutor and the act under which the assessment was made, if construed so as to authorize such assessment, impair the obligation of the contract between the state and the prosecutor contained in section IV of the prosecutor's charter. This reason is based upon the provisions of the act, the tax exemption contained in prosecutor's charter, article IV, section VII, paragraph 3, of the constitution of this state, and article I, section X, paragraph 1, of the constitution of the United States.
2. The act and the assessment made thereunder deprive the prosecutor of its property without due process of law and deny to it the equal protection of the laws in violation of the fourteenth amendment to the federal constitution, and they take from the prosecutor its property for public purposes without compensation in violation of article I, paragraph 16, of the constitution of this state.
3. That the act is a special act based upon a classification which is entirely illusory and designed to affect the prosecutor alone and to exclude all others from its operation which naturally would fall within its purview, and that no notice was given of the intention to apply therefor and of its general objects as required by article IV, section VII, paragraph 9, of the constitution of this state.
4. The prosecutor also objects that the assessment made under the act was erroneously made upon its entire gross receipts instead of its receipts arising only from the production
and sale of hydro-electric power. If, however, the reasons first above mentioned are sustained, there will be no occasion for ...