Third Avenue Transit Corp. v. City of New York

The plaintiffs operate street cars and buses under city franchises, some going back to trolley and cable car days. These franchises all provide for the payment of compensation to the City of New York based on a percentage of the company’s gross receipts from their operations under the franchise. In addition to their normal passenger revenue, plaintiffs received revenue from commercial advertisements carried in their cars and buses. They ask for a declaratory judgment holding that under these outstanding franchises, such revenue be taxable only on the amount (50% or 60% of the gross revenue…