It has very

Presumption against duplicate taxation. properly and justly been held that a construction of tax laws was not to be adopted that would subject the same property to be twice charged for the same tax, unless it was required by the express words of the statute, or by necessary implication.' It is a fundamental maxim in taxation that the same property shall not be subject to a double tax payable by the same party, either directly or indirectly; and where it is once decided that any kind or class of property is liable to be taxed under one provision of the statutes, it has been held to follow, as a legal conclusion, that the legislature could not have intended that the same property should be subject to another tax, though there may be general words in the law which would seem to imply that it may be taxed a second time. This is a sound

of tangible property. Porter v. Rockford, etc., R. Co., 76 Ill., 561; Chicago, etc., R. Co. v. Siders, 88 Ill., 320, and cases cited; Chicago, etc., R. Co. v. Raymond, 97 Ill., 212; Hamilton Manuf. Co. v. Massachusetts, 6 Wall., 632, and cases cited. In assessing shares the value of the franchise is to be considered. Stratton v. Collins, 43 N. J., 562.

If a corporation holds any of its own stock, it is taxable for it when an individual owner would be. Richmond, etc., R. Co. v. Alamance Co., 84 N. C., 504. Where a bank owned its bank building and rented a part of it, it was held that this represented the capital stock in part, and a tax on the par value of the shares was a tax on the whole. Lackawana County v. National Bank, 94 Pa. St., 221.

1 Salem Iron, etc., Co. v. Danvers, 10 Mass., 514; Amesbury Woolen, etc., Co. v. Amesbury, 17 Mass., 461; Water Power Co. v. Boston, 9 Met., 199, 202; Bank of Georgia v. Savannah, Dudley, 130; Gordon's Executors v. Baltimore, 5 Gill, 231; The Tax Cases, 12 Gill & J., 117; Savings Bank v. New London, 20 Conn., 111, 117; Toll Bridge Co. v. Osborn, 35 Conn., 7; Osborn v. N. Y. & N. H. R. R. Co., 40 Conn., 491; Smith v. Burley, 9 N. H., 423; Savings Bank v. Portsmouth, 52 N. H., 17; Kimball v. Milford, 54 N. H., 406; State v. Collector, 37 N. J., 258; People v. Commissioners of Taxes, 95 N. Y., 554.

2 Savings Bank v. Nashua, 46 N. H., 389-398, citing Smith v. Burley, 9 N. H., 423, and other cases. And see Osborn v. N. Y. & N. H. R. R. Co., 40 Conn., 491; American Bank v. Mumford, 4 R. I., 478; Rome R. Co. v. Rome, 14 Ga., 275; Smith v. Exeter, 37 N. HI., 556; Kimball v. Milford, 51 N. H., 406; U. S. Express Co. v. Ellyson, 28 Ia., 370; Cook v. Burlington, 59 Ia., 251; Board of Rev. v. Gas Light Co., 64 Ala., 269. In State v. Sterling, 20 Md., 502, a law taxed savings banks a certain percentage on all deposits held by them on a certain day. Held to be void because not exempting the investments in securities otherwise taxed or not taxable at all. When by authority of law city lots are appropriated for a railroad track and assessed as such by the state, they cannot also be assessed as city lots by the local

and very just rule of construction, and it has been applied in many cases where, at first reading of the law, a double taxation might seem to have been intended.1

Application of the Presumption. A few instances in which this rule of presumption has been applied will show what taxation has been held to be in effect duplicate taxation, and for that reason excluded from the general language made use of in tax laws.

Under a statute in Massachusetts, shares in any incorporated company possessing taxable property were taxable to the owners in the towns of their residence respectively. While this was in force, a manufacturing corporation was assessed under the general law for the taxation of property to its owners, for all its real and personal estate in the town where its business was carried on. It was held that this taxation of shares was by implication to be regarded as standing in the place of a taxation of the personal estate to the corporation itself, since, if both were taxed, it would in effect be duplicate taxation. As to the real estate, however, the conclusion was different. taxes upon land had always, in that state, been paid exclusively

The

authorities. Chicago, etc., R. Co. v. Miller, 72 Ill., 144. But this right of way only includes land actually used for the road itself, not ground used for stations and machine shops. Chicago, etc., R. Co. v. Paddock, 75 Ill., 616. See People v. Ohio, etc., R. Co., 96 Ill., 411.

When the state lays a specific tax on banks measured by the stock, a bank is not liable upon its capital stock as “taxable property." To tax it thus would be to tax it on its debts. So held in Trustees of Eminence v. Deposit Bank, 12 Bush, 538. Compare San Francisco v. Spring, etc., Works, 54 Cal., 571. A tax of a specified sum on family vehicles already taxed by value is invalid as a double tax and as grossly disproportionate. Livingston v. Paducah, 80 Ky., 656.

1 Bank of Georgia v. Savannah, Dudley, 130; Factory Co. v. Gardiner, 5 Me., 133; Glass Co. v. Boston, 4 Met., 181; Savings Bank v. Worcester, 10 Cush., 128; American Bank v. Mumford, 4 R. I., 478, 482; Savings Bank v. Gardiner, 4 R. I., 484; Smith v. Exeter, 37 N. H., 566; Toll Bridge Co. v. Osborn, 35 Conn., 7; State v. Hannibal, etc., R. R. Co., 37 Mo., 265. In the case of Kimball v. Milford, 54 N. H., 406, stock in a foreign corporation, which by its charter pays a specific tax in lieu of all others, was held not taxable in New Hampshire, under its statutes. See as to a law for taxing the gains of a corporation, and the dividends declared or earned, Board of Revenue v. Gas Light Co., 64 Ala., 269. And further for the general rule, Coatesville Gas Co. v. Chester County, 97 Pa. St., 476; Rice County v. National Bank, 23 Minn., 280.

to the town in which it was situated. In all successive valuations made in pursuance of the laws for that purpose, each town had been charged with the value of all the real estate within it, in the apportionment of the tax among the several towns. It would therefore be unjust if the real estate which was included in estimating the amount of taxes charged on a town, by being assessed as represented by the shares of stockholders elsewhere, should be exempted from contributing to the discharge of such taxes. The policy of all the tax laws had been that the land should contribute to the local taxes irrespective of the residence of the owner, and the implication that this was intended in the case of corporate real estate was so strong that the counteracting presumption against an intent to impose duplicate taxation must yield to it.'

So in Georgia it has been held, under a city charter empowering the corporation in general terms to levy taxes on real and personal estate, that while the city might tax the stockholders of a bank upon their shares, this taxation would by implication exclude the taxation of the bank on its capital stock.2 In Pennsylvania it has been decided that a tax on the discount business of a bank is in a degree a tax upon the capital of the bank. Where, therefore, it was provided by its

1 Salem Iron Factory v. Danvers, 10 Mass., 514. This case was followed, after some change in the statute, in Amesbury Woolen, etc., Co. v. Amesbury, 17 Mass., 461. And see as to the real estate, Amesbury Nail Factory Co. v. Weed, 17 Mass., 53; Tremont Bank v. Boston, 1 Cush., 142; Boston Water Power Co. v. Boston, 9 Met., 199. In Middlesex R. R. Co. v. Charleston, 8 Allen, 330, where shareholders in a street railway were taxable on their shares in the towns where they resided, it was held not competent to tax the personal property of the corporation used in and necessary for the prosecution of its business. "The value of the personal property owned by the corporation is included as a subject of taxation in the value of the shares; as in the case of banks, insurance companies, manufacturing corporations and other railroads." Hoar, J., p. 333. Compare The Tax Cases, 12 G. & J., 117. To tax a bank on its property and also the stockholders on their shares was regarded as duplicate taxation, and not allowable under the Maryland laws, in Gordon's Ex'rs v. Baltimore, 5 Gill, 231, and Baltimore v. B. & O. R. R. Co., 6 Gill, 288. And see American Bank v. Mumford, 4 R. I., 478; Providence Institution v. Gardiner, 4 R. I., 484; Farrington v. Tennessee, 95 U. S., 679; Railroad Co. v. Gaines, 97 U. S., 697.

2 Bank of Georgia v. Savannah, Dudley, 130, citing with approval Massachusetts cases. See Bank of Cape Fear v. Edwards, 5 Ired., 516; Johnson v. Commonwealth, 7 Dana, 338; State v. Tunis, 23 N. J., 546.

charter that the bank should not be subject to taxation on its capital stock, for any other than state purposes, the tax on its discount business would be inadmissible but for the fact that the charter was granted under and subject to a provision in the state constitution which made it at all times subject to legislative alteration or repeal.1

So in Massachusetts it is held that a bank which pays a specific tax on its capital stock is not taxable on collaterals deposited with it as security for loans. Further illustrations will appear in cases cited in the margin.3

2

On the other hand a tax on the market value of the capital stock of a corporation, over and above the value of its real and personal property, is not duplicate taxation by reason of the tangible property being also taxed, but is a tax upon the franchise. So a tax on the deposits of savings societies has been held a tax on the franchise and not a tax on property. And where by statute "no income shall be taxed

1 Iron City Bank v. Pittsburgh, 37 Pa. St., 340.

2 Waltham Bank v. Waltham, 10 Met., 334; Tremont Bank v. Boston, 1 Cush., 142; and see Salem Iron Factory v. Danvers, 10 Mass., 514.

3 State v. Branin, 23 N. J., 484, which cites Johnson v. Commonwealth, 7 Dana, 338; Tax Cases, 12 G. & J., 117; Gordon's Ex'rs v. Baltimore, 5 Gill, 231; Smith v. Burley, 9 N. H., 423. See, also, State v. Bentley, 23 N. J., 532; State v. Powers, 24 N. J., 400; Bank of Cape Fear v. Edwards, 5 Ired., 516; Wilmington, etc., R. R. Co. v. Reid, 13 Wall., 264.

4 So held in Hamilton Co. v. Massachusetts, 6 Wall., 632, in reliance upon a settled course of decisions in Massachusetts. See Commonwealth v. Hamilton Manuf. Co., 12 Allen, 298, 306; Porter v. Rockford, etc., R. Co., 76 Ill., 561; Chicago, etc., R. Co. v. Siders, 88 Ill., 320; Chicago, etc., R. Co. v. Raymond, 97 Ill., 212. Shares of stock in a foreign corporation may be taxed in full to resident owners, irrespective of the taxation of its property where it is located. Dwight v. Boston, 12 Allen, 316. A state may tax the franchise or the capital of a corporation by such rule as it may prescribe, even though it be arbitrary. And if the corporation be a railroad company owning a road in two states, one state may tax the corporation on a proportional part of its stock, measured by the length of the road in that state. Minot v. Philadelphia, etc., R. R. Co., 18 Wall., 206.

5 Society of Savings v. Coite, 6 Wall., 594; Provident Institution v. Massachusetts, 6 Wall., 611. See Portland Bank v. Apthorp, 12 Mass., 252; People v. Savings Bank, 5 Allen, 428; People v. Supervisors of Niagara, 4 Hill, 20; Farmers' Loan & Trust Co. v. New York, 7 Hill, 261; Bank of Utica v. Utica, 4 Paige, 399; Coite v. Society for Savings, 32 Conn., 173; Coite v. Conn. Mu. Life Ins. Co., 36 Conn., 512; Illinois Mu. Ins. Co. v. Peoria, 29 Ill., 180; Oliver v. Washington Mills, 11 Allen, 268; Commonwealth v.

which is derived from property subject to taxation,” a merchant may nevertheless be taxed on his income under the general law taxing income from a profession, trade or employment, this income being the "net result of many combined influences: the use of the capital invested; the personal labor and services; . . the skill and ability with which they lay in or from time to time renew their stock; the carefulness and good judgment with which they sell and give credit; and the foresight and address with which they hold themselves prepared for the fluctuations and contingencies affecting the general commerce and business of the country. To express it in a more summary and comprehensive form, it is the creation of capital, industry and skill." So it is competent to tax brokers upon their annual receipts, notwithstanding they pay a license tax for the privilege of carrying on that business. So a tax upon the amount of the nominal capital of a bank, without regard to loss or depreciation, has been likened to "one annexed to the franchise as a royalty for the grant." A tax on the interest paid by a corporation on its indebtedness, though collected from the corporation, is still a tax on the creditor; the corporation being only made use of as a convenient means of collecting the tax. So a tax on the shares of stockholders in a corporation is a different thing from a tax on the corporation itself or its stock, and may be laid irrespective of any taxation of the corporation Carey Improving Co., 98 Mass., 19; Attorney-General v. Mining Co., 99 Mass., 148.

As to what is a franchise tax, see post, ch. XII.

1 Wilcox v. Commissioners of Middlesex, 103 Mass., 544, per Ames, J.

2 Drexel v. Commonwealth, 46 Pa. St., 31.

Bank of Commerce v. New York, 2 Black, 620, 629, per Nelson, J. 'Haight v. Railroad Co., 6 Wall., 15; Railroad Co. v. Jackson, 7 Wall., 262; United States v. Railroad Co., 17 Wall., 322. In the second of these cases a state tax on the interest on bonds issued by a railroad company and secured by mortgage on a line lying partly in another state was held to be void, on the ground that to the extent of the road out of the state she was "taxing property and interests beyond her jurisdiction." It is to be said of this case that the plaintiff was a non-resident, and for that reason not taxable in the state on his bonds, under the subsequent decision of the same court. State Tax on Foreign Held Bonds, 15 Wall., 300, 323. Railroad bonds are taxable to the owners notwithstanding the company pays a tax on 66 the market value of their stock and their funded and floating debt, in lieu of all other taxes on railroad property and franchises." Bridgeport v. Bishop, 33 Conn.,