On appeal from the former Supreme Court, whose opinion is reported in 137 N.J.L. 444.
For reversal: Chief Justice Vanderbilt and Justices Case, Oliphant, Burling, and Ackerson. For affirmance: None. The opinion of the court was delivered by Oliphant, J.
[1 NJ Page 497] This appeal is from the former Supreme Court which, on certiorari, reversed a judgment of the Division of Tax Appeals sustaining an assessment levied on the property
of respondent pursuant to R.S. 54:4-22. The decision of the former Supreme Court was rested on the ground that the tax was not an excise tax, but an ad valorem tax on personal property, and that by taxing a fund composed of exempt property, in this case obligations of the United States which are exempt from state, municipal or local taxation under 31 U.S.C.A., Sec. 742 and R.S. 54:4-3, is to tax such exempt property. We are not in accord with this interpretation of the statute.
The respondent is a stock insurance company subject to taxation under the cited statute, R.S. 54:4-22, supra.
The statute requires that the property of such companies, other than life insurance companies, shall be assessed and taxed in the taxing district where its office is situated, upon the full value of its property at the local rate and by the following formula.
There shall be excluded from the value of its property the following property: (a) Real estate and tangible property (which are taxed at the situs by general law); (b) all shares of stock owned by the company; (c) non-taxable property (which includes United States government securities which the state has no power to tax as such); (d) property exempt from taxation under the law of this state.
After excluding the above classes of property, there is deducted from the value of its property so found to be taxable the following items or debits (1) all debts and liabilities certain and definite; (2) the full amount of all reserves for taxes; (3) such proportion of the reserves for unearned premiums, losses, or other liabilities as the full amount of value of its taxable intangible property bears to the full amount and value of all its intangible property.
The arithmetical result produced by the application of the formula at this point is subject to the following controlling proviso which is integrated into the formula as a whole, that the assessment calculated under such formula shall in no event be less than 15 percent of the paid up capital and surplus in excess of all liabilities of the insurance company as the same are stated in the company's annual statement for the
calendar year next preceding the assessing date and filed with the Department of Banking and Insurance, less the amount of the tax assessments against real estate owned by the company.
The total assets of the respondent as shown by its return were $774,972.98 which included the following items which were excluded under the formula, exempt property $461,682.25, mortgages on New Jersey real estate $129,175.32; title plant $47,500.00, cash on deposit $136,594.74; other cash items and prepaid charges $5,981.89, making a total of excludable property of $770,454.20, which left a total of taxable intangibles of $4,583.78. The deduction for debts and liabilities, certain tax reserves and proportionate loss of reserves was $54,690.22 which left no balance of assessable property subject to tax at the local rate.
The respondent's capital stock and surplus on the assessing date as shown by its annual statement for the calendar year 1943 filed with the Department of Banking and Insurance totaled $547,462.93. The assessment placed upon the net worth of ...