US SUPREME COURT DECISIONS

In determining whether an exemption from taxes granted by a state to a local corporation was merely a privilege or amounted to a contract right protected against impairment by the federal Constitution, this Court inclines to follow the decision of the state tribunals. P. 254 U. S. 49.

A city joined with certain railroad corporations in forming and financing a city terminal corporation and covenanted with them all that it would apply with them for an act exempting the terminal company from taxation upon an amount exceeding its then capital stock, and that, failing such legislation, it would refund the amount of city taxes upon any greater valuation. Held that a law passed on such application, granting the exemption as to both city and county taxes and reciting that this was in accord with the city's agreement might properly be construed by the state courts as creating a repealable privilege, rather than a contract right to the exemption, in view of the general attitude of the courts against tax exemptions, the parties' own opinion that the grant was not irrevocable, as shown in a later contract, and a power reserved by the state constitution to alter or repeal general or special laws for the formation of corporations. P. 254 U. S. 60. N.Y.Laws, 1853, c. 462; 1909, c. 201; Const. 184, Art. VIII, § 1.

224 N.Y. 187 affirmed.

The case is stated in the opinion. chanrobles.com-red

Page 254 U. S. 48