[Chap. XXII. therefrom the value of the real and personal property, owned by such corporation, and that the corporation shall pay for the shareholders respectively the tax so assessed against their shares. If the aggregate value of the shares does not exceed the aggregate value of the real and personal property of the corporation, as assessed for taxation, then no tax shall be demanded or collected on the shares. It shall be no ground of objection to such assessment of shares that the same is entered on the assessment book in the name of the corporation." 198 512. Arkansas. There is no franchise tax. The corporation pays a property tax. The tangible property is assessed like that of individuals, and the intangible property is valued by the help of a statement filed by the corporation. The domestic corporation is taxed on its intangible personalty everywhere. "The term personal property . . . shall include: Second. The capital stock, undivided profits, and all other means not forming part of the capital stock of every company, whether incorporated or unincorporated, and every share, portion or interest in such stock, profits, or means, by whatsoever name the same may be designated, inclusive of every share or portion, right or interest . . . in and to every ship. All property, whether real or personal, in this State; all moneys, credits, investments in bonds, stocks, joint-stock companies or otherwise, of persons residing therein; the property of corporations now existing or hereafter created, and property of all banks and banking companies now existing or hereafter created, and of all bankers and brokers, shall be subject to taxation." 10 Gas, telephone, bridge, street railroad, savings banks, mutual loan, building, transportation, construction, and all other com 8 Ala. 1901, Act 1151, § 6. Ark. Stat. § 6401. 10 Ibid. § 6402. panies, corporations or associations, incorporated under the laws of this State or under the laws of any other State and doing business in this State, other than insurance companies whose taxation is in this act specifically provided for, in addition to the other property required by this act to be listed shall deliver a sworn statement containing the amount of capital stock authorized and paid up, number of shares, market or actual value of shares, amount of indebtedness, and true valuation of all tangible property belonging to the company; this statement is the basis of valuation of the property of the company.11 513. Arizona. There is no special corporation tax in Arizona, either by way of a franchise tax or a tax on the corporate excess, a corporation, whether domestic or foreign, being taxed on its property like an individual. "All property of every kind and nature whatsoever within this Territory" is subject to taxation.12 And shares of stock in a corporation the property of which has been assessed pay no tax.13 8514. California. The Constitution provides that "all property in the State not exempt under the laws of the United States shall be taxed in proportion to its value, to be ascertained as provided by law. The word property as used in this article and section is hereby declared to include moneys, credits, bonds, stocks, dues, franchises, and all other matters and things, real, personal and mixed capable of private ownership." 14 The statutes of the State provide that "shares of stock in corporations 11 Ark. Stat. § 6462. The intangible property of a foreign corporation assessed under this provision is described in Wells-Fargo Express Co. v. Crawford Co., 63 Ark. 576, 40 S. W. 710, 37 L. R. A. 371. 12 Ariz. Rev. Stat. § 3834. 13 Ibid. §3837. 14 Cal. Const. Art. 13, § 1. possess no intrinsic value over and above the actual value of the property of the corporation which they stand for and represent; and the assessment and taxation of such shares, and also all the corporate property, would be double taxation. Therefore, all property belonging to corporations, save and except the property of national banking associations not assessable by Federal statute, shall be assessed and taxed. But no assessment shall be made of shares of stock in any corporation, save and except in national banking associations, whose property, other than real estate, is exempt from assessment by Federal statute." 15 "The property of every firm and corporation must be assessed in the county where the property is situate, and must be assessed in the name of the firm or corporation." 16 The capital of the corporation, being its property, is taxable; 17 but the stock is not taxable even where the capital, being invested in government bonds, cannot be taxed.18 The franchises of the corporation are expressly included in taxable property by the constitution, and they may properly be taxed. "There can be no doubt of the power of a State to tax the franchise at its assessed value. There may be more difficulty in arriving at its value than that of a parcel of land or personal chattels, but still its value may be estimated. . . . If a State can impose a tax on the franchise of a corporation in the nature of an excise or duty, it does not exclude the taxation by a valuation made by an assessor." 19 The proper method of arriving at the value of the franchise is by taking the aggregate of the market value of the shares of stock, and deducting therefrom the value of the real and personal property. The difference is the market value of the 15 Cal. Polit. Code, § 3608. 16 Ibid. § 3641. 17 San Francisco v. Spring Valley Waterworks, 54 Cal. 571. 18 Peo. v. National Gold Bank, 51 Cal. 508. 19 Thornton, J., in Spring Valley W. W. v. Schottler, 62 Cal. 69, 112. franchise. This "corporate excess" it was the intention of the legislature to tax.20 Not only is a domestic corporation taxable on its franchises; a foreign corporation is also taxable on such of its franchises as are within the State. Its franchise to be is of course granted by the charter State, and does not exist elsewhere; but its franchise to act may be exercised in a foreign State. "In dealing with the franchise of the complainant as a corporation, the assessment must be held as applying only to the franchise as property in this state. The state has no power to assess or tax property located outside its borders. But the complainant has come into this state, and has brought with it the franchise of a corporation to exercise its corporate powers in this state. It has no mere silent existence in the state, but it has entered into active competition with similar institutions chartered by the state. The constitution and laws of this state declare corporate franchises to be property, and under this law the franchises of domestic corporations are taxed. It is this property in a corporate franchise in the possession of and owned and controlled by the complainant in this state that is involved in this assessment." 22 In the case of a domestic corporation not only the franchise to act but also the franchise to exist is taxable.23 Tangible property of the corporation located in another State is not taxable in California.24 A license fee is exacted of corporations doing a mercantile business upon the average amount of sales as follows: 25 Where the amount is not over $15,000, Over $30,000 but not over $60,000, 20 Spring Valley W. W. v. Schottler, supra. . 21 Citing Spring Valley W. W. v. Schottler, supra. $ 12 00 18.00 36 00 22 Morrow, J., in London & S. F. Bank v. Block, 117 Fed. 900. 23 Bank of California v. San Francisco, (Cal.) 75 Pac. 832. 24 San Francisco v. Flood, 64 Cal. 504. 25 Cal. Pol. Code, § 3382. The property of a corporation is assessed for both State and local purposes, and a franchise tax is also assessed. The real estate is assessed at its situs. The corporation is assessed upon its personal property where it is situated; but if a corporation owns property in two or more counties, the amount of the tax shall be apportioned between the counties in proportion to the amount of tangible property in each; and so where the property is partly within and partly without the State 26 For the purpose of arriving at the total value of the business and property returns are to be made, by domestic corporations and by foreign corporations doing business in the State.27 "In determining the true value of taxable property, except as otherwise provided in this act, the market value shall be the guide. As to all classes or items of property in respect to which it cannot be fairly said to have a market value, the price it would bring at a fair voluntary sale thereof, the value of the use thereof, and the capability of use, together with any other just method of determination, may be considered by the assessor. Except as herein otherwise provided in determining the value of taxable property in this State, of corporations, foreign and domestic, the value of the capital stock and bonds of each corporation shall be received and considered, and shall be competent evidence of the value of the entire plant of such 26 Col. 1902, ch. 3, § 63. 27 Ibid. |