owned in the State of New York, is not taxable to its owner there, provided it is capable of and has a permanent situs away from the owner or his domicile.
The United States Supreme Court (Hayes vs. Pacific Mail Company, 17 Howard, 713) decided that the situs of a vessel for State taxation is only at the port where it is registered, and not where it may happen to be.
In the case of The City of New Albany vs. Meekin (3 Indiana Reports, 481), the defendant was a resident of New Albany, and was assessed for personal property in respect to a steamboat enrolled at Louisville, Kentucky, and which touched only occasionally at New Albany. It was held that the tax was illegal, the Supreme Court observing that "the only question we have to consider is whether the boat or the defendant's share is within the city."
It is also an interesting circumstance that this legal controversy concerning the situs of a ship for the purpose of taxation has its almost the exact counterpart in the records of English law; case after case having formerly come up before the English courts in which the question involved was: Shall the ship or her owners be taxed at the place of the vessel's registry, or at the domicile of her proprietors? The ultimate decision was, that the only situs of a vessel for taxation is the port of her registry, and this decision was recognized in practice until Parliament and the people arrived at the conclusion that it was for the interest of the nation that ships should no longer be taxed directly in any manner.
The United States Supreme Court, in the case of the Northern Central Railroad vs. Jackson (7 Wallace 262), also affirmed the principle that two States can not tax at the same time the same property, nor can a State tax property and interest lying beyond her jurisdiction. The railroad corporation in question, extending from Baltimore in Maryland to Sunbury in Pennsylvania, was the result of the consolidation of four railroad companies, one incorporated by the State of Maryland and three by the State of Pennsylvania. The latter State imposed a tax of three mills per dollar of the principal of each bond issued by said road, which tax the company, at their office in Baltimore, deducted from the coupons of the bonds of said consolidated road held by Jackson, an alien, resident in Ireland. The court, by Mr. Justice Nelson, decided adversely to the tax, on the ground that the bonds were issued upon the credit of the line of the road, a portion of which was within the jurisdiction of the State of Maryland, and that the security, bound and pledged for the payment of the bonds and of the interest on them, embraces the Maryland portion of the road equally with that portion situated in the