Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1875-03-12
NEW YORK.
The Stamp Tax on Checks.
What Papersare Liable to the Tax

A Furry Among Banking Men.
NEW Y ORK, March 11-Banking men are
very much excited over the action Of the
Internal Revenue Department at Washing.
ton, to establish an inquisitOrial system OF
investigation iRte -the ua1aeF OF transact
ing business at the banks, with a view to
learning whether any checks which were
not properly stamped have been paid. The
| banks were called upon to furnish evidence
| of any careleSSnesS or omission on their part
in this respect, the object being 10 cOllectthe
penalty of fifty dollars for every check
discovered to have been paid
without stamps. At an in
formal conference yesterday between
MesSrS. Williams, President of the Metro
pOlitan Bank, Topper, President Of the
Gallatin, and Vermillie, President of the
Merchants National Bank, the subject of
the stamp tax on checks was considered.
The bank officers had written to the Com
missioner of the Revenue Department some
time before, asking for an official ruling or
Interpretation Of the tax law. Yesterday
they telegraphed for q reply, and received
in answer a telegram stating that an an
sWer was coming.
EULNaAE AZ AEuAAECE6-aN AAA
are Liable 20 n Stamp Tax.
On March 4, F. d. Happen, President of
the Gallatin National Bank of this city,
addressed in behalf of himself and other
bankers. letter to the Commissioner of
Internal Revenue, asking his decision Of
the following questions
l. Are notes, drafts and acceptances,
when made payable at bank, subject to a
stamp tax Of two cents And if so, does
the tax apply TO notes, drafts and accept
ances drawn or accepted prior to Feb. s,
1875, and which have matured and since
been paid?
?. Does the tax apply to checks drawn
by bank upon itself for the purpose Of
paying its own dividends, coupons or inter
est Of other corporations ?
8. Are checks drawn by State, county
or city government on a bank, subject to
this tax?
The following is the reply from the
commissioner:
l reply to your specific questions:
l. That if there is any understanding be-
tween the bank and the maker Of the notes,
or acceptOr of checks, drafts, or orders pay
able at the bank, that all such notes and
acceptances shall be paid by the bank and
charged on account of the maker, drawer
or acceptor, in the same manner as Ordi-
nary checks would be; such notes and &C
csptances are considered liable to a two
cent stamp tax as vouchers for the pay
ment Of money by the bank. This ap-
plies to notes, drafts, etc, made, drawn, or
accepted prior to Feb. s, 1915, when paid
by the bank on or alter that time.
2. This lax applies to checks drawn by
bank upon itself for the purpose Of paying
its own dividends, coupons or interest Of
other corporations, or for other payments.
3. Checks drawn by State, county or city
officers in their official capacity, upon pub
lie bobds deposited in a bank, are exempt,
if said bonds are kept separate from any
private account, it not being within intent
of law public treasure.
will add, with reference to some other
questions proposed frequently to me, that
orders for dividends are subject to a tax, if
drawn To- definite and certain sum, but
not otherwise. An ordinary certificate Of
deposit, used in the ordinary way, is not
liable. Interest coupons are considered
exempt. Bills of exchange, foreign as
well as inland, when drawn on banks,
banker or trust companies, are held 10 be
subject TO the tax, where payable at sight
or otherwise. Duplicates Of bills, orders,
etc, are liable the same as the originals.
Receipts not relating to banking business,
for ins lance, for rents, are exempt
Very respectfully,
j. w. DOUGLASS, Commissioner.