G. L. c. 63, §§ 61-63]

operated by it, such total length of track in the case of each kind of company being determined as provided in section fifty-four. Such return shall also state the amount of the gross receipts of the company during the year ending on September thirtieth preceding, including therein all amounts received by it from the operation of its railway or railroad, but excluding income derived from the sale of power. rental of tracks or other sources.

SECTION 62. Annually on or before November first, the assessors of every town where a street railway or an electric railroad is operated, including a company whose lines are located partly within and partly without the commonwealth, whether chartered or organized under the laws of the commonwealth or elsewhere, shall assess on each company described in the preceding section operating a railway or railroad therein an excise of an amount equal to such proportion of the following percentages of the gross receipts of such company as, in the case of a street railway company, the length of tracks operated by it in public ways and places of such town bears to the total length of tracks operated by it in public ways and places, and in the case of an electric railroad company as the length of tracks operated by it longitudinally in public ways and places of such town bears to the total length of tracks operated by it.

The percentages shall be based upon the annual gross receipts for each mile of track as follows, and computed upon the aggregate of said annual gross receipts: four thousand dollars or less, one per cent; more than four thousand dollars and less than seven thousand, two per cent; more than seven thousand dollars and less than fourteen thousand, two and one quarter per cent; more than fourteen thousand dollars and less than twenty-one thousand, two and one half per cent; more than twenty-one thousand dollars and less than twentyeight thousand, two and three-quarters per cent; twenty-eight thousand dollars or more, three per cent.

The excise provided by this section shall be in addition to all other taxes.

SECTION 63. Aldermen, selectmen, or a street railway or an electric railroad company operating in their town, may petition the department of public utilities for a revision of the amount of the excise to be paid by a company under the preceding section. Said department shall, upon such petition, after public notice and a hearing at which said aldermen or selectmen and said company may submit evidence, determine the average annual cost to said town of the

[G. L. c. 63, §§ 63-66 inc. work described in section sixty-six done by it during the preceding three years which it was not by law required to do prior to October first, eighteen hundred and ninety-eight, and also the average annual payment made by said company to said town under and pursuant to the preceding section during said three years; and having determined said average annual cost and average annual payments, said department shall fix the proportion of a percentage of the gross receipts which shall be paid as an excise under said section by the company to said town annually thereafter, said percentage to be fixed at such a rate as will be necessary to yield to said town annually thereafter an amount equal to the average annual cost to said town determined as aforesaid; and the percentage so fixed shall not again be changed for the period of three years, and then only in the manner herein provided.

SECTION 64. The department of public utilities may at any time, upon petition therefor by a town entitled to a part of the excise paid. by a street railway or an electric railroad company, after such notice as the department may order to all other towns entitled to share in the excise paid by said company, and after a hearing, determine as to the distribution thereof among the several towns where such company operates any part of its railway or railroad, and fix the proportions thereof to which they shall respectively be entitled, which shall thereafter be the proportions of said excise to be assessed upon said company, instead of the proportion based upon length of tracks. as provided in section sixty-two.

SECTION 65. Prior to November fifteenth in each year the assessors of every town shall notify the collector of taxes thereof of the amount of excise assessed therein under section sixty-two, and the collector shall forthwith notify the treasurer of each street railway and electric railroad company of the amount of excise so assessed upon it, which shall become due and payable within thirty days after receipt of such notice. The provisions of chapter sixty, so far as appropriate, shall apply to the collection of such excise.

SECTION 66. All taxes collected from a street railway or an electric railroad company and paid to a town under the preceding section, section twenty-five of chapter fifty-eight or section twenty-eight of chapter five hundred and seventy-eight of the acts of eighteen hundred and ninety-eight, shall be applied in the case of street railway companies toward the repair and maintenance of the public ways and the removal of snow therefrom within such town, and in the case of

G. L. c. 63, § 66]

electric railroad companies shall be applied toward the construction, repair and maintenance of the public ways and places where the tracks of such company are located, and to the removal of snow from such public ways and places within such towns.

Prior to 1898 there was no special provision for the taxation of street railway companies, and, when incorporated in this commonwealth, they were taxed just as other domestic corporations, paying the local tax on their real estate and the excise on their capital stock. They were bound to keep in repair that portion of the street which lay within their tracks, and in many instances were subject to various other burdens imposed as conditions of the grant of their locations. Some of these conditions were of doubtful validity, and in the rapid extension of street railway construction which took place in the final decade of the last century the whole subject of the relations between street railway companies and the municipalities in which their tracks lay became unsatisfactory and confused. The question whether street railways should make a direct payment for their use of the streets to the municipalities in which their tracks were located was brought to the attention of the legislature by Governor Wolcott in 1897. The result was the appointment of a commission to investigate the subject of the relationship of municipalities and street railway companies and in the following year a complete revision was made of the system of taxing such companies and obtaining compensation for their use and disturbance of the streets.3

In the first place, the regular corporate franchise tax upon the capital stock of such street railways as maintained lines both within and without the commonwealth was proportioned to the percentage of miles of line within the commonwealth to the entire mileage of the company and imposed regardless of the place of incorporation, and instead of being distributed in accordance with the residence of the stockholders, it was distributed in proportion to the mileage of track in the different cities and towns in which the railway was located."

'P. S. c. 113, §32. St. 1897, c. 509.

St. 1898, c. 578.

'St. 1898, c. 417, now G. L. c. 63, §55, supra, page 575.

5 St. 1898, c. 578, §4, now G. L. c. 58, §22, supra, page 177.

[G. L. c. 63, § 66 In the second place, an additional corporate franchise tax was imposed upon street railway companies the locations of which proved to be especially profitable. This tax was based upon the amount of the annual dividends, was assessed by the commonwealth and distributed among the various towns in proportion to the mileage therein of the railway assessed.

In the third place, the obligation to repair portions of the highway, whether imposed by statute or franchise, was commuted to an annual money payment based upon the gross receipts per mile of track,' assessed and collected by the cities and towns in which the tracks lay. This change in the terms of a franchise could be effected, it was held, against the wishes of the municipalities concerned, without violating that clause of the constitution which prohibits the impairment of the obligation of contracts."

These various taxes were cumulative. The money derived from the additional franchise and commutation taxes is required to be expended upon the maintenance of the streets in which the tracks are situated.10 The commutation tax is not an excise upon the franchise of the street railway company as a corporation, or upon its right to exist and do business, but is exacted for the privilege of operating the street railway upon public ways. The tax is payable as long as the railway is operated, even if the company is in the hands of a receiver.11

12

In 1906 elaborate provisions were made for the regulation of electric railroads operating principally upon private rights of way. They were made subject to the additional corporate franchise tax, and, so far as they maintained tracks in the public ways, to the commutation tax as well. It has been held that a

*St. 1898, c. 578, §3, repealed by St. 1919, c. 349, §18.

In Greenfield & Turner's Falls Street Railway Co. v. Greenfield, 187 Mass. 352 (1905), it was held that in computing the annual gross receipts for each mile of track, the total gross receipts should be divided by the number of miles of all tracks operated by the company, whether on public highways or private land. In Natick & Cochituate Street Railway Co. v. Wellesley, 207 Mass. 514 (1911), it was held that the gross receipts of the year should be divided by the number of miles of track on the thirtieth day of September, regardless of any changes of mileage that have taken place during the year.

SG. L. c. 63, §62.

Springfield v. Springfield St. Ry Co., 182 Mass. 41 (1902); Worcester v. Worcester St. Ry Co., 182 Mass. 49 (1902), affirmed, 196 U S. 539 (1905). 10St. 1906, c. 463, Part III, §137, now G. L. c. 63, §66.

"Collector of Lakeville v. Bay State St. Ry Co., 234 Mass. 336 (1920). 12 St. 1906, c. 516, now G. L. c. 162.

G. L. c. 63, §§ 66, 67]

corporation operating freight cars in the public streets by steam the charter of which imposed upon it all the duties provided by general law for street railway companies is subject to the commutation tax.13

In recent years the operation of street railways has tended to become unprofitable, and the assessment of these cumulative taxes contributed toward the abandonment of the weaker lines and the charging of increasing fares upon those which remained. In 1919 the dividend tax was repealed;1 and the assessment of the commutation tax was suspended for the two following years. 15 In 1921 the suspension was extended for two years more; 16 and there is some question whether the tax will ever again be enforced."

MISCELLANEOUS PROVISIONS APPLICABLE TO ALL CORPORATIONS

Excise on Corporations Interested in Ships and Vessels

SECTION 67. The commissioner shall assess annually as of April first an excise tax upon the interest of every corporation organized under the laws of this commonwealth and having a place of business therein, in any ship or vessel which has, during the period of its business in the year preceding said April first, been engaged in interstate "MacDonald v. Union Freight R. R. Co., 190 Mass. 123 (1906).

"St. 1919, c. 349, §18.

"St. 1919, c. 370.

1 St. 1921, c. 406.

"Special provision for the taxation of the Boston Elevated Railway Company was made in 1897 (St. 1897 c. 500, §10) and the company was exempted from the operation of the general legislation of the following year. St. 1918, c. 578, §28. The tax was based on gross earnings, and the gross earnings, it was held, included only those accruing from all lines of railway operated by it as a common carrier, and did not include income derived from other corporate property. Boston Elevated Ry. Co. v. Commonwealth, 199 Mass. 96 (1908). The section of the statute excepting the Boston Elevated Railway Company from the general street railway law taken literally appeared to include all railways on streets upon which the Boston Elevated Railway Company had locations, but it was held not to include any railway companies other than the one named. Boston v. Union Freight Railroad Co., 181 Mass. 205 (1902). In 1917 the special tax upon the Boston Elevated Railway Company was abolished, and it was provided that the company should be taxed as if it were a street railway company, and should in addition pay each year a sum equal to the excess of any dividends over six per cent paid by it during the year, Sp. Acts 1917, c. 373, IV. In 1918, when the company became subject to public operation, all of the special provisions in regard to the taxation of the company were repealed, but it was also provided that nothing in the fact of public operation should affect the liability of the company and its stockholders to taxation. Sp. Acts 1918, c. 159, §§2, 17.