TAXATION AND REVENUE SYSTEMS—NEW JERSEY. 
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(2) When the transfer is, by will or intestate law, of tangible prop 
erty within the state and decedent was a nonresident of the state 
at the time of his death. 
(3) When the transfer is of property made by a resident, or of 
tangible property within the state made by a nonresident, by deed, 
grant, bargain, sale, or gift, made in contemplation of death of 
grantor, intended to take effect after such death. 
(4) When any person comes into the possession or enjoyment, 
by a transfer from a resident or nonresident decedent, when such 
nonresident decedent’s property is within the state, of an estate 
in expectancy of any kind or character which is contingent or 
defeasible, transferred by an instrument taking effect after the 
passage of this act, or of any property transferred pursuant to a 
power of appointment contained in any instrument taking effect 
after the passage of this act. 
This tax is at the rate of 5 per cent of the clear 
market value of the property and is to be paid to the 
state treasurer for the use of the state. 
Property passing to father, mother, husband, wife, 
child, or lineal descendant born in lawful wedlock, 
brother, sister, son-in-law, or daughter-in-law, or to 
any child or children adopted as such, of the decedent, 
or to any child to whom such decedent for not less 
than 10 years prior to such transfer stood hi relation 
of a parent; provided such relationship began at or 
before the child’s fifteenth birthday and was con 
tinuous for said 10 years thereafter, or to churches, 
hospitals, orphan asylums, public libraries, Bible or 
tract societies, religious, benevolent, and charitable 
institutions, or for a public monument or memorial, is 
exempt. 
If the tax is paid within one year from the date 
of the death of the testator, a discount of 5 per cent 
is allowed; if not paid within one year from such 
date interest at the rate of 10 per cent per annum is 
added. 
D. CORPORATION TAXES. 
All corporations, both domestic and foreign, are 
taxed on their property within the state for local 
purposes and by several different methods for state 
purposes. Some are also taxed for local purposes on 
the basis of gross earnings. (Only state taxes are 
described in this section; for local taxes, see Municipal 
Revenues.) 
1. State franchise tax on capital stock. 
All corporations incorporated under the laws of New Jersey, other 
than those which are subject to the payment of a state franchise tax 
assessed upon the basis of gross receipts (to wit: gas and electric light 
companies when not using the public highways; domestic life insur 
ance companies; parlor, palace, or sleeping car companies, and 
express companies operating in the state), or subject to a local fran 
chise tax based on gross’earnings (to wit: street railway companies, 
water companies, gas and electric light or power companies, tele 
graph and telephone companies, district telegraph messenger com 
panies, sewer companies, oil or pipe-line companies, all when using 
public highways), and other than insurance companies subject to 
a tax on gross premiums or to retaliatory taxes, collected by the 
commissioner of banking and insurance, pay an annual license fee 
or franchise tax of one-tenth of 1 per cent on all amounts of capital 
stock issued and outstanding up to and including $3,000,000; on all 
capital stock issued and outstanding in excess of $3,000,000 and not 
■exceeding $5,000,000, one-twentieth of 1 per cent, and the further 
sum of $50 for each $1,000,000 or fraction thereof in excess of 
$5,000,000. 
This tax does not apply to the following classes of corporations, in 
addition to those mentioned above: Railway, canal, or banking com 
panies, including savings banks, cemeteries, or religious corpora 
tions, charitable or educational associations not conducted for profit, 
or manufacturing or mining companies at least 50 per cent of whose 
capital stock issued and outstanding is invested in mining or man 
ufacturing carried on in the state. Mining and manufacturing copi- 
panies doing business in the state, but having less than 50 per cent 
of their stock invested in such business in the state, are entitled to 
deduct from the amount of the capital stock issued and outstanding 
subject to taxation an amount equal to the assessed value of the 
property used in the state. 
This tax is assessed on the basis of a return made to the state board 
of assessors and is collected by the controller. 
2. State franchise tax based on gross earnings or on gross premiums 
and surplus. 
The following classes of corporations are subject to a state tax 
based on gross earnings or gross premiums received within the state 
at the rate named: Gas and electric companies, when not using the 
public streets, highways, etc., at the rate of one-half of 1 per cent; 
life insurance companies incorporated in New Jersey, on gross 
premiums at the rate of thirty-five one-hundredths of 1 per cent, 
with an additional tax on surplus at the rate of 1 per cent; parlor, 
palace, or sleeping car companies, on gross receipts at the rate of 
2 per cent; express companies on gross receipts at the rate of 2 per 
cent. These taxes are assessed by the state board of assessors and 
collected by the controller. 
3. The state tax on railroads and canal companies—Historical note.— 
This tax originated in the “act for the taxation of railroad and 
canal property ” approved April 10, 1884. The chief provisions of 
this act were: First, that all property of any railroad or canal com 
pany not used for railroad or canal purposes shall be assessed and 
taxed by the same assessors, and in the same manner and at the 
same rate of taxation as the taxable property of other owners in the 
same municipal districts; second, that all property used for railroad 
and canal purposes shall be assessed by the state board of assessors 
under the following four separate heads: 
(1) The main stem, consisting of the right of way not over 100 feet 
wide, with rails and sleepers and all passenger depots. 
(2) The real estate other than the main stem, including road 
bed and tracks, outside of the 100 feet; all buildings other than depot 
buildings used for passengers; all water tanks, waterworks, riparian 
rights, docks, wharves, and piers. 
(3) The tangible personal property, including rolling stock, cars, 
locomotives, ferry boats, machinery, tools, etc. 
(4) The franchise: All four of these classes of property were to be 
valued and assessed by the state board of assessors. They were all 
to be subject to a state tax at the rate of one-half of 1 per cent, and 
items 2 and 3 were to be apportioned among the local taxing dis 
tricts where they were to be subject to the same taxes as were levied 
on other property in these districts, but the latter tax was not to 
exceed 1 per cent. 
The railroads objected to this tax on the ground that it was un 
constitutional in that it created a special class of property for pur 
poses of taxation, but the courts sustained the constitutionality of 
the tax. The act was further attacked by certain cities which re 
garded it as withdrawing too much property from local assessments 
and taxation, and it was also the object of attack by a political move 
ment in favor of “equal taxation” on the ground that railroad prop 
erty was not thereby taxed at the same rate as other property. The 
act was amended sixteen times down to and including the session of 
the legislature in 1908; in one year (1906) it was amended three times. 
It was also the subject of frequent litigation and the form which it 
took in 1906 and 1907 was held to be unconstitutional. 
Present form, 1908.—The state board of assessors assesses the fol 
lowing three items of railroad and canal property: No. 1 of the act of 
1884 modified, the “main stem” including, in the case of railroads, 
the right of way 100 feet wide, with rails and sleepers and all struc 
tures other than passenger and freight depots; in the case of canals