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wholly within the State of Pennsylvania, and a like bonus upon each subsequent increase of capital so employed." "

8723. South Dakota.

A foreign corporation pays a fee of $10.00.38

8724. Tennessee.

37

A foreign corporation on filing its charter pays the following fees: On a capital stock of $100,000 or less, $50; one hundred thousand to two hundred fifty thousand, $100; two hundred fifty thousand to five hundred thousand, $150; five hundred thousand to one million dollars, $200; over a million dollars, $250. But if the foreign corporation desires to locate its principal office and do all its business in and from Tennessee, and have its main property holdings there, it must pay a privilege tax of one-tenth of one per cent. on its entire capital stock, like a domestic corporation.

An insurance company is credited with the amount of fees paid to the Insurance Commissioner on entering the State.39

8725. Texas.

Each foreign corporation shall pay fees as follows: if its capital stock be one hundred thousand dollars or less, a fee of twenty-five dollars to procure a permit; if its capital stock be more than one hundred thousand dollars, and less than five hundred thousand dollars, it shall pay a fee of fifty dollars; if its capital stock be five hundred thousand dollars, and less than one million dollars, it shall pay a fee of one hundred dollars; if its capital stock exceed one million dollars, it shall pay a fee of two hundred dollars.40

37 Pa. 1901, P. L. 150, § 1. This affects only such corporations as come into the State to do business after the passage of the statute. Com. v. Danville Bessemer Co., 207 Pa. 302, 56 Atl. 871.

38 Code, 1911.

39 Tenn. 1903, ch. 239, § 2.

40 Tex. Rev. Stat. Art. 2439.

§ 726. Utah.

For filing articles of incorporation of foreign corporations, twenty-five dollars; provided, that the same sums shall be charged and collected for receiving and filing certified copies of articles of incorporation or of amendments increasing the capital stock of foreign corporations hereafter organized for the purpose of operating property or carrying on business in this State.41

8727. West Virginia.

A fee of five dollars is paid by a foreign corporation on filing its articles of association.42

8728. Wisconsin.

For filing its articles of incorporation, a foreign corporation pays twenty-five dollars, and for amendments ten dollars. 43 In addition, a foreign corporation shall be required to pay into the office of the Secretary of this State upon the proportion of its capital stock represented by its property and business in Wisconsin, one dollar for every one thousand dollars in its capital stock in excess of twenty-five thousand dollars. And in case of an increase of capital stock by amendment, one dollar for every one thousand dollars of said increase; provided that said payment in excess of twenty-five dollars shall not be required from any corporation upon which a license fee is imposed under other sections of these statutes.44

41 Utah Corp. L. p. 31.

42 W. Va. Code, ch. 54, § 30; 1901, ch. 35, § 30.

43 Wis. 1899, ch. 351, § 27.

44 Wis. 1901, ch. 399, § 1.

CHAPTER XXIX.

TAXATION OF SHARES OF STOCK.

§ 731. Shares and capital stock both | § 735. Taxation of stock in foreign

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§ 731. Shares and capital stock both taxable.

The share of stock held by the stockholder and the property owned by the corporation are different things; and each may be taxed without technical double taxation.1

"The capital stock of a corporation and the shares into which such stock may be divided and held by individual shareholders are two distinct pieces of property. The capital stock and the shares of stock in the hands of the shareholders may both be taxed, and it is not double taxation." 2 "As the result of its application, it is unquestioned that much property has

1 Jefferson County Sav. Bank v. Hewitt, 112 Ala. 546, 20 So. 926; State v. Travellers' Ins. Co., 70 Conn. 590, 40 Atl. 465, 66 A. S. R. 138; Illinois Nat. Bank v. Kinsella, 201 Ill. 31, 66 N. E. 338; Cook v. Burlington, 59 Ia. 251, 13 N. W. 113, 44 A. R. 679; Home Assur. Co. v. Assessors, 42 La. Ann. 1131, 8 So. 481; Bradley v. Bauder, 36 Oh. St. 28, 38 A. R. 547; Providence & W. R. R. v. Wright, 2 R. I. 459, 464; State v. Bank of Commerce, 95 Tenn. 221, 31 S. W. 993; Com. v. Charlottesville P. B. & L. Co., 90 Va. 790, 20 S. E. 364, 44 A. S. R. 950; Second Ward Sav. Bank v. Milwaukee, 94 Wis. 587, 69 N. W. 359.

2 Peckham, J., in Bank of Commerce v. Tennessee, 161 U. S. 134, 146, 40 L. ed. 645.

been brought within the range of the taxing power which otherwise would have escaped taxation." 3

But though this practice is not unconstitutional as double taxation, it is inequitable as in effect making a man pay twice for the services of the government. "In corporations four elements of taxable value are sometimes found: 1, franchises; 2, capital stock in the hands of the corporation; 3, corporate property; and 4, shares of the capital stock in the hands of the individual stockholders. Each of these is, under some circumstances, an appropriate subject of taxation; and it is no doubt within the power of a State, when not restrained by constitutional limitations, to assess taxes upon them in a way to subject the corporation or the stockholders to double taxation. Double taxation is, however, never to be presumed. Justice requires that the burdens of government shall, as far as is practicable, be laid equally on all, and if property is taxed once in one way, it would ordinarily be wrong to tax it again in another way, when the burden of both taxes falls on the same person. Sometimes tax laws have that effect; but if they do, it is because the legislature has unmistakably so enacted. The presumptions are against such an imposition." 4

The method pursued in several States is to tax the corporation upon its tangible property, subtract that from the total value of the shares of stock, and tax each stockholder for his share of the balance, if any.5

The objection to this form of what is in effect double taxation is accentuated where (as in several States) the corporation pays the tax, collecting the amount from the stockholders; and where the tax upon the shares is of that sort, it would be double taxation also to tax the corporate property. In this case the tax is in theory laid upon the capital of the corporation and not upon the stockholders; and to tax the property in specie

3 White, J., in Owensboro Nat. Bank v. Owensboro, 173 U. S. 664, 43 L. ed. 850.

4 Waite, C. J., in Tennessee v. Whitworth, 117 U. S. 129, 136, 29 L. ed. 830. Ryan v. Comrs., 30 Kan. 185, 2 Pac. 156.

and also in the form of capital stock would result in double taxation. Bartol, J., said:

rectly."

"It is unquestionably true that the property of a corporation does not belong to the shareholders; they are not the legal owners, but they have an equitable or beneficial interest therein. It is held and managed for their use and benefit, and under their control and direction. It is not a mere metaphysical subtlety to say that the corporate property is represented by the shares of stock. It is substantially true, for a tax assessed on the property of the corporation is in reality imposed upon the shareholders, and is paid by them indiAnd the Supreme Court of the United States said in such a case: "While nominally the taxes authorized are not to be assessed upon the capital stock of the corporation in the aggregate and as its property, yet in substance that is its effect. The taxes are assessed upon the actual shares as registered in the names of individual shareholders, but are to be paid by the corporation, so that while the form and mode of taxation is changed, its substance remains as though assessed against the corporation by name. . . . A tax such as that sought to be imposed upon the company by the appellees is a tax upon the corporation within the meaning or the prohibition of its charter, because it is compelled to become surety for taxes nominally imposed upon its stockholders, and is made liable primarily for their payment; a payment which, in the first instance, must be made out of the corporate property, without other recourse than an action against individual stockholders to recover the amounts advanced on their account." 8

8732. Double taxation of this sort often forbidden.

This unjust form of taxation, placing as it does a double burden of taxation upon corporate property, is often forbidden

County Comrs. v. Farmers' & M. Nat. Bank, 48 Md. 117.

7 County Comrs. v. Farmers' & M. Nat. Bank, supra.

• Matthews, J., in New Orleans v. Houston, 119 U. S. 265, 279, 30 L. ed. 411.

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