The Supreme Court held that Southern Pacific Railroad Company did not have to pay property taxes assessed by the Santa Clara County Board of Equalization. The Board did not have jurisdiction to include fences alongside the railroad in its assessment of the company's property. Since the tax amount for the fences could not be separated from the overall assessment, the entire assessment was considered void. The Court decided the case on jurisdictional grounds rather than addressing the company's argument that it was denied equal protection under the Fourteenth Amendment by the different tax treatment.
The Supreme Court held that Southern Pacific Railroad Company did not have to pay property taxes assessed by the Santa Clara County Board of Equalization. The Board did not have jurisdiction to include fences alongside the railroad in its assessment of the company's property. Since the tax amount for the fences could not be separated from the overall assessment, the entire assessment was considered void. The Court decided the case on jurisdictional grounds rather than addressing the company's argument that it was denied equal protection under the Fourteenth Amendment by the different tax treatment.
The Supreme Court held that Southern Pacific Railroad Company did not have to pay property taxes assessed by the Santa Clara County Board of Equalization. The Board did not have jurisdiction to include fences alongside the railroad in its assessment of the company's property. Since the tax amount for the fences could not be separated from the overall assessment, the entire assessment was considered void. The Court decided the case on jurisdictional grounds rather than addressing the company's argument that it was denied equal protection under the Fourteenth Amendment by the different tax treatment.
Halah Barre, Houman Kargar, Krystina Mastrandrea, Michael Stout
LAW/531 Business Law July 16, 2014 Taleed El-Sabawi
IRAC Brief
In Santa Clara County v. Southern Pacific Railroad Company, the U.S. Supreme Court held that Southern Pacific Railroad Company could not be assessed for taxes because the State Board of Equalization did not have jurisdiction over the fences.
Issue:
The legal issue brought before the court in Santa Clara County v. Southern Pacific Railroad Company is that the railroad company refused to pay taxes assessed by the Board of Equalization. Corporations and natural persons are entitled to equal protection from the law based on the Fourteenth Amendment. However the Constitution denies railroads equal protection because the Board did not reduce the value of the property for assessment purposes by the amount of any outstanding mortgage debts on it, as it did for property owned by natural persons or other corporations (Farlax, 2008). This began because the Board of Equalization assessed the length of fence alongside the railroad. Because the fences ran alongside the railway, they are considered property of the corporation and the State Board assesses the valuation of property of a corporation. The fences ran through a few counties so that the Board of Equalization of California was required by law to assess the franchise of all railroads operated in more than one county.
Rule:
The Constitution of California provides that land, and improvements thereon, shall be separately assessed. (Article 13, 2)
Application:
Santa Clara County performed a tax assessment of Southern Pacific Railroad Companys property. Southern Pacific Railroad Company challenged the portion of the tax assessment for the fences along the railroads lines.
The railroad company used six special grounds of defense. In its second ground of defense, the railroad company defended that under the Fourteenth Amendment, it was being treated differently that other corporations and natural persons, denying equal protection of the law. The Supreme Court decided that, since this case could be decided on the grounds of the sixth defense, there was no need to decide the case on the Constitutional question:
[118 U.S. 394, 410] That the assessment upon which the action is based is void, because it included property which the state board of equalization had no jurisdiction, under any circumstances, to assess; and that, as such illegal part was so blended with the balance that it cannot be separated, the entire assessment must be treated as a nullity.
The Supreme Court decided that the State Board of Equalization had improperly assessed the fences because the Board did not have jurisdiction to include the fences in its assessment of the IRAC BRIEF 3
franchise, roadway, roadbed, rails, and rolling stock of railroad company property. Also, since the tax assessment for the fences could not be separated from the rest of the property tax assessment, the entire tax assessment was considered null and void. The railroad company did not have to pay any of its tax assessment.
Conclusion: Works Cited
Farlax. (2008). Santa Clara County v. Southern Pacific Railroad Company. Retrieved from The Free Dictionary: http://legal- dictionary.thefreedictionary.com/Santa+Clara+County+v.+Southern+Pacific+Railroad+C ompany
American Trucking Associations, Inc. The Pennsylvania Motor Truck Association the New Jersey Motor Truck Association Roadway Express v. Delaware River Joint Toll Bridge Commission, 458 F.3d 291, 3rd Cir. (2006)
Atchison, T. & S. F. Ry. Co. v. Railroad Commission of State of California Los Angeles & S. L. R. Co. v. Same. Southern Pac. Co. v. Same, 283 U.S. 380 (1931)