The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-05-04
CAN ASSESS BANK STOCK.
Attorney General Jonss' Opinion Z
Oimculties Of tho Law.

Attorney General Jonss' Opinion -
Dimeultiss Of tho Law.
Attorney General Jones has fled an i'm.
portant opinion regarding the assessment
OF national bank stock in reply to . request
OF Prosecuting Attorney John F. Miller.
Of this county. Mr.. Miller requested an
official opinion on the folio wing inquiries;
First-Accordirg to the revenue Law OF 1893
should the shares Of stock in national banks be
essessed to the individual stockholders (resi.
dent). or to the bank Is the agent Of its stock.
holders. both resident and non-rssidentf
second-lf assessed to the individual stock.
holder, are such stockholders allowed to deduct
the gross amount Of all debts in good faith. -
expressed In the 6rst proviso, section 8, revenue
law, from the value Of their shares of stocx
Or In other words. are shares Of stock In
national banks ''credits," or such . form OF
-credits' - viii permit the deduction of bona
ode debtsf
Third-If the shares of stock are to Be assessed
to the bank - the agent OF its resident and
nonresident holders can such deduction a.
expressed In first proviso, section 5, be per.
mittedf
In his opinion Attorney General Jones
says:
With respect to your first inquiry, sections q
and y OF the revenue Law of March Is. 1893,
clearly provide that the tax on shares Of bank
stock shall be charged to and collected from the
banks representing such shares This 10 Q com.
mon provision in the statutes OF the several
states. aud ha: frequently been held by the
courts to be q legitimate method OF taxation.
Your second inquiry presents . question OF
much difficulty. The question whether shares
OF stock in banks are credits within the mean.
Ing OF laws authorizing q deduction Of indebt-
edness from credits for the purposes OF taxation
Is one which has been much mooted before the
courts, and the conflicting decisions OF the diff
ferent states fully sstest the perplexity OF the
question.
Mr.. Jones then reviews at considerable
length number Of decisions by state and
United States courts brought under
statutes similar to the one in this state,
and says:
In view OF these decisions 1t seems clear that
IL the holder OF shares OF stock in a national
bank should insist on deiucting his bona ide
Indebtedness from the value Of such shares, and
his right to do so were denied by the various
officers charged with the administration of our
revenue law, no could successfully appeal to the
Federal courts for redress. And il our courts
should hold that shares of stock in banks were
not credits within the meaning Of our revenue
law, and that the taxpayer was not authorized
to deduct his bona fde indebtedness
from the value OF such shares, our
statutes would be held void so far as
hosiouhA OouAb were cOuCeIueu 60 l2I ~ OtueE
interpretations within the state are concerned,
the decision OF our own court in that respect
might be held binding and conclusive, in which
event the result would be that the holder of
shares In a national bank could deduct his bona
ide indebtedness from the value of such shares,
while the holder of shares In . state bank could
not, manifest discrimination against the state
banks which the legislature certainly did not
Intend. In view of these decisions / think il
must be presumed that the legislature did not
intend to enact law which would b In conflict
with any provision of the Federal statute, and
therefore used the term "moneys and credits
in a sense broad enough to include bank stock
within Its meaning.
After quoting from a decision In an Iowa
case, MI. Jones concludes:
For the foregoing reasons I am constrained
to answer your second question In the afiirma-
tive.
Your third question seems to present . practi-
cal rather than legsl difficulty. 1t 10 apparent
that the taxpayer might expert ence some DIM
Guilty In securing the full benefit Of the provis-
ion authorizing him to deduct his bona hde in.
debtedness from his credits, where the stock is
assessed not to himself. but to the bank. and the
tax paid by that institution. However. 1t IL far
from impossible for him to secure the full bene-
fit of this provision. and am unable to see that
the inconvenience that he may experience In
doing can have any bearing upon the legal ques-
ton presented.