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§ 1095. The "situs" of shares and corporate bonds for taxing purposes. For purposes of taxation, the situs of shares of stock in a corporation may be fixed by statute at the place where the corporation is located even as against non-resident stockholders, and may require the tax to be paid by the corporation on dividends accruing on the shares, or may make such taxes a lien upon the shares and require their payment by the corporation or shareholder before the making of a transfer on the books.1.

But the "power of taxation, however vast in its character and searching in its extent, is necessarily

stock of corporations, but provides that corporations, etc., "liable to tax on capital stock under this section shall not be required to pay further taxes on the mortgages," etc., "constituting any part of their assets, within the appraised value of their capital stock." It was held, the capital stock of corporations was first to be taxed at its appraised value, and then their mortgages not included in the appraised value of the capital stock are to be taxed under sec. 1. Penn. Co. for Ins. v. B'd of Revision (Pa.), 21 A. 163; Fidelity Co. v. Same, Id.; Girard Co. v. Same, Id.; Guaranty Co. v. Same, Id.; Phila. Trust v. Same, Id. See also Penn. Co., etc., v. Com. (Pa.), 15 A. 456. Under the Kentucky Act of 1884, the stockholders are not liable to taxation on their stock, though the corporation has not reported and paid taxes on its property. Whittaker v. Brooks (Ky.), 13 S. W. 355.

The provisions of sec. 3 of Act Ohio, Apr. 5, 1859 (Swan, etc., Rev. St. 1438), are that "no person shall be required to include in his statement, as a part of the personal property, moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise, which he is required to list, any share or portion of the capital stock or property of any company or corporation which is required to list or return its capital any property for taxation in this state." It was held that these do not apply to shares of a foreign corporation, although the capital of the corporation is taxed in this state where located, and although the corporation has substantial property in Ohio on which it pays taxes there; nor does it apply to shares of a railroad company which is formed by the consolidation of an Ohio company with companies of other states, notwithstanding such company pays taxes in Ohio on the portion of its property which is situated there. Lee v. Sturges, 46 Ohio St. 153; 19 N. E. 560.

1 Street R. R. Co. v. Morrow, 87 Tenn. 406; Nat. B'k v. Com., 9 Wall. 363; Cummings v. B'k, 101 U. S. 156; Maltby v. Reading R. R. Co., 52 Pa. St. 140; Ottawa v. MacCaleb, 81 Ill. 556; New Orleans v. Sav. B'k, 31 La. Ann. 826; Baltimore City Pass. Co., 57 Md. 31; St. Albans v. Car Co., 57 Vt. 68; Leonberger v. Rouse, 43 Mo. 67; Am. Coal Co. v. Alleghany County, 59 Md. 197. The constitutionality of such statutes is no longer open to controversy. See Tappan v. Merchants' B'k, 19 Wall. 390; Mandater v. Smith, 65 Ill. 44; People v. Tax Commr., 35 N. Y. 423.

limited to subjects within the jurisdiction of the state." And bonds of corporations differing from shares, in the fact that they are not only evidences of property, but property in themselves, so as to be capable of having a situs independent of the place of the corporation, are not taxable in a state other than that of their owners' residence. This situs cannot be altered by statute as to pre-existing bonds without violating the obligation of the contract.2 Such is the settled rule in New York by a long line of decisions.

The place of residence of the owners of steamboats, steamships and water-craft generally is the proper place of taxation, although such vessels be the greater part of the time employed in foreign or interstate com

merce.

Enrolled vessels engaged in conveying passengers and freight which were owned by citizens of the state of New York entered the port of San Francisco, and while there were compelled to pay certain taxes. Payment having been made under protest, the owners of the vessels brought suit to recover back the amount; and

1 State Tax on Foreign-held Bonds, 15 Wall. 319, per Justice FIELD. Act Pa., June 7th, 1879, sec. 4, does not tax so much of the capital stock on domestic corporations as represents tangible property situate without the state, and there employed for corporate purposes. Commonwealth v. Montgomery, L. & Z. M. Co., 5 Pa. Co. Ct. Rep. 89. See City of Balt. v. Hussey (Md.), 9 A. 19.

2 Street R. R. Co. v. Morrow, 87 Tenn. 406; St. Louis v. Ferry Co., 11 Wall. 430; Hoyt v. Fox Commrs., 23 N. Y.; Goldfast v. People, 106 Ill. 25; Com. v. C. & O. R. R. Co., 27 Gratt. 344.

3 Passenger Cases, 7 How. 283. In these cases the court said: "The states could not regulate foreign commerce; but held that they may tax a ship or other vessel used in commerce the same as other property owned by its citizens, and said the case of such vessels was similar to that of stage coaches in which the mail is transported. The tax did not regulate the conveyance of the mail in the one case or commerce in the other; though it was admitted that the tax in both instances affected in some degree the use of the property. Plaintiff was taxed on stock in a foreign corporation, whose boats lying in the same state were taxed there. Held that, as the boats were improperly taxed, the stock was taxable against plaintiff." Graham v. Township of St. Joseph, 67 Mich., 652; 35 N. W. 808.

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Justice NELSON, in disposing of the case in the United States supreme court, held that "the vessels were not in any proper sense abiding within the limits of California, so as to become incorporated with the other personal property of the state; that they were but temporarily engaged in lawful trade and commerce, with their situs at the home port (New York), where the vessels belonged and where the owners are liable to be taxed for the capital invested, and where the taxes had been paid." 1

And dredgers, tug-boats and scows belonging to a Pennsylvania corporation, which were not registered and were not permanently located anywhere, but were carried from state to state for dredging purposes, were held to be taxable in Pennsylvania, although they were built in other states and had never been in Pennsylvania.2

1 Hays v. Pac. Mail Steamship Co., 17 How. 596.

2 Com. v. Am. Dredging Co., Sup. Ct. Pa., 1888. See also, Roberts v. Township of Charlevaix, 60 Mich. 197; Morgan v. Parham, 16 Wall. 471; Halstead v. Adams, 108 Ill. 609; Vogt v. Ayer, 104 Ill. 583; Graham v. Township of St. Joseph, 67 Mich. 652; N. W. Rep. 808; State v. Haight, 30 N. J. Law, 428; People v. Commr. of Taxes, 11 Abb. L. J. 401. Under a statute which declared that all property not exempt from taxation, whether manufactured, purchased or otherwise procured, shall be taxable, and all property must be listed for taxation, except bank or other stocks where the bank or other institution or corporation in which it is held is required to pay taxes on the same, it was held that the stock held by the members of a steamboat corporation must be listed, but not the specific property of the corporation. Louisville & E. Mail Co. v. Barbour (Ky.) Ct. of App. 1888; 25 Am. & Eng. Corp. Cas. 317, n. But a boat is subject to taxation at its port of registration, and where it lies up when not in use, without regard to the place where its owner may reside. Irvin v. N. O. St. L., etc., R. Co., 94 Ill. 105; S. F. v. Talbot, 63 Cal. 485; Battle v. Mobile, 9 Ala. 234.

In Transportation Co. v. Wheeling, 99 U. S. 273, plaintiff, a corporation, incorporated under the laws of West Virginia, had brought suit in assumpsit against the city of Wheeling as the owner of certain steamboats used by it in navigating the Ohio river between several cities in different states. The vessels were duly enrolled and licensed under the act of congress. The stock was owned by citizens of West Va. and Ohio, but its principal place of business was in Wheeling. The vessels started from that city on their voyages and when not running were laid up there. They were assessed according to their value as

The tax may be measured by the tonnage capacity if it clearly appears that the tax is to the owner in the locality of his residence, and is not a tax upon the ship as an instrument of commerce.1 But the imposition of a tax upon a steamship company incorporated under the laws of a state, measured by the gross receipts of such company derived from the transportation of persons and property by sea between different states and to and from foreign countries, is clearly an invalid regulation of interstate and foreign commerce.2

§ 1096. Shares in national banks. By the terms of the national banking act, its shares are taxable at the place where the bank is located and not elsewhere. This provision affords an exception to the general rule that personal property is to be taxed only in the state of the owner's residence. The act provides that the shares shall not be taxed "at a greater rate than is assessed upon other moneyed capital in the hands of individual

personal property of the company, and the tax was collected under the laws of West Virginia authorizing the city to "assess, levy and collect an annual tax for the use of the city on personal property in the city." The right of the city to impose a tax on such vessels was deemed by the company as in violation of art. 1, § 10, part 3, of the constitution, which declares that "no state shall, without the consent of congress, lay any duty on tonnage," and of art. 1, § 8, part 3, which provides that congress shall have power to regulate commerce with foreign nations and among the several states and with the Indian tribes." On writ of error from the court of appeal of West Virginia the validity of the decison of the state court in favor of the validity of the tax was affirmed.

On the constitutional point that the tax had the effect of a tonnage duty, Justice CLIFFORD, delivering the opinion, said: "Tonnage duties on ships by the states are expressly prohibited, but taxes levied by a state upon ships or vessels owned by the citizens of the state as property based on a vaulation of the same as property are not within the prohibition, for the reason that the prohibition when properly construed does not extend to the investments of the citizens in such structures." See also Cooley on Const. Lim. (4th Ed.), 606; Burroughs on Taxation, 91; Johnson v. Drummond, 20 Gratt, 419; Howell v. State, 3 Gill. Md. 14; Perry v. Forrence, 8 Ohio, 522.

1 Cooley on Taxation, 61; Transportation Co. v. Wheeling, 99 U. S. 273,

2 Philadelphia & S. M. S. S. Co. v. Pa., 122 U. S. 326; S. Ct. 1118.

citizens of such state," and that it shall not exceed the rate imposed upon the shares of any of the banks organized under the authority of the state where the bank is located. Nothing in the act exempts the real estate of such banks" from either state, county or municipal taxes to the same extent, according to its value, as other real estate is taxed."

If the laws of the state where the bank is located provide for a reduction of the value of real estate of other banks in the valuation of shares in them, such reduction must also be made in taxing shares in national banks.1

There have been numerous adjudications by both state and federal courts under the national banking law, touching the taxing powers of the states in relation to them and their affairs, the general results of which only need be stated. The act does not permit the capital to be taxed as such, the tax upon the shares being in effect a tax upon the capital."

1 Loftin v. Citizens' Nat. B'k, 85 Ind. 341.

2 Nat. B'k of Mobile v. Mobile, 12 Ala. 284; Smith v. First Nat. B'k of Tecumseh, 17 Mich. 479; Collins v. Chicago, 4 Biss. 472. See Smith v. Webb, 11 Minn. 378; First Nat. B'k of Hannibal v. Meredith, 44 Mo. 500; Nat. B'k v. Douglas County, 3 Dill. 330. See Lemly v. Commr's, 85 N. C. 379. See People v. Nat. Gold B'k, 51 Cal. 508. A rule adopted by the board of assessors of a city, to assess all shares of stock in state and national banks in the city at par, without regard to their actual or market values, but making the requisite reduction for real estate owned by the banks, is not in conflict with Rev. St. U. S., § 5219. Stanley v. County of Albany, 121 U. S. 335; 7 S. Ct. 1234; Williams v. County of Albany, Id. 1244.

An exemption from taxation of deposits in savings banks is not a discrimination against national banks within Rev. St. U. S. § 5219. Richards v. Incorporated Town of Rock Rapids, 31 F. 505; Mercantile Nat. Bank v. City of New York, 121 U. S. 128; S. Ct. 826.

Trust companies are not virtually or in a commercial sense “banks;” and it not appearing that capital invested therein is taxed at a lower rate than national bank stock under Act N. Y. July 1, 1882, § 312, they furnish no argument against the validity of that section. Id.

Taxes assessed on national bank shares under act N. Y. July 1, 1882, § 312, are not void on the ground that the securities of life insurance companies, the deposits of savings banks, the stock of corporations incorporated under the laws

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