Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1868-03-26
From the Caledonisn.l
Taxation of Railroad St0ck.

We alluded same weeks since, TO the
passage by the last legislature, of bill
taxing nonresident railroad stock in the
town or city where the principal ofaos Of
| the corporation Is I0caruu. II appears
such bill passed both branches OF the
legislature on the closing evening Of the
session, but Gov Page neglected 10 9gn
it. This question has become one Of some
importance TO the public. The law Of the
State in regard to the taxation Of railroad
stock is, that whenever a corporation d.
vides or earns six per cent per annum
lbove expenses, the clerk of the company
shall return the shares owned by citizens
If any town, TO the town clerk Of such
town, and the nonresident shareholders
must pay one dollar upon each 500 Of
| their stock into the State treasury. This
feature of the law, relating 10 taxing nom
resident shares, is deemed unconstitu-
tional, inasmuch as it imposes unequal
taxation. The constitutional idea Of tax
ltion is, that it must be equal Resident
stockholders pay more than one dollar
upon 5000, and the mode of taxation also
is not uniform. Indeed, we think some
If the nonresident stockholders in the
Vermont and Canada Railroad have
already obtained a decision in the q. 8.
Circuit Court adverse to this mode Of tax
ing non-residents. and the case il now,
by appeal, carried to the Supreme Court
Of the United States. Their theory Is
that taxes can be imposed only where the
holder of stock resides within the United
States.
There have been decisions of the U. 8.
Court sustaining the theory that certain
kinds of personal property is taxable only
where the owner resides. irrespective Of
its location, and we are not at all sure the
nonresident holders of the Vermont and
Canada Railroad stock will not obtain a
result in their favor. Congress-, however,
has recently provided that shares OF Ma
tional Bank stock shall be taxed only in
the State where the bank 10 located.
Should the Vermont and Canada share
holders, now in court, obtain their case,
the question OF taxation Of nonresident
shareholders III our railroads will be- set
tied, and the State and towns will be con-
strained to dismiss all claims for taxes
upon such stock, unless our present laws
are amended. Large amounts Of stock in
our railroads are owned by non-residents,
and it will ut once be seen that it 10 an
object of consequence with them TO avoid
town taxation in Vermont, especially 30
If they happen to reside in 'Massachu-
sets, where the State law requires them
to pay taxes there, even il they pay ia
Vermont.
Massachusetts is the only State in New
England where the people--holders OF
stocks in corporations out Of the State
are required to pay taxes on them when
they are taxed in the State where the cor
poration is located. Indeed, Massachu-
sets stands alone in this respect among
all the States of the Union, 10 far as.we
know.
There seems to us wiser mode OF tax
ing nonresident stocks thun any we have
seen suggested. Should the courts Aettls
it as principle that taxation OF person
property follows the owner, the foreign
stock in corporations within Vermont will
all be beyond our reach under our present
mode Of assessing stock as simply personal
property. The principle has been re-
cognized, and we think correctly, that
when the property Of corporatioa u II
mixed character--psrt real and part
personals ulstluctluu euouIu W uAAAt,
for taxation that which i per-
sonal property. In this way the State
would retain, for taxation, all real en-
tate. r.r
The major value Of our railroads con-
sists of road bed rails, bridges and build
ings-properly real estate. Let there BE-
a division among the towns Of tAxes upon
such property in proportion 70 the value
Of this sort of property located in each.
Here would Re equality, and an end Of
all strife. Perhaps, if the people sh0uaa
sometime elect men to the Legislature most
noted for wisdom, measure something
like the one ggested-providsd they
cannot find better one-may b en-.
acted.