The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1895-05-14

N - ave SO~9 49,
1 Desty, Tax'n, 348; 2 Thomp. Corp
281O; Jones ". Davis, IS Ohio st
474, 476; People v. Coleman, Il
N. Y, 4S3, 437; State v. Petway, :
N. c., 800, 4O6. Especially is
important to distinguish a tax o
shares of stock from a tax on the car
ital stock, "says 1 Cook, Supra (sec
ton 563) citing Porter v. Railroad Co.
rs ILL.,, SCI, and numerous cases IN not
2 to that section. In Belo ". CommIs
sioners, 80 N. O., on page 418, the sam
distinction is clearly laid down, anC
additional authorities given by Smith
G. J. Originally the tax upon tne
shares of stock was collected OF tne
individual shareholders at their sew
eral places of residence. Buie ". Com
m-issioners, 70 N. c., 267. But under
that statute many shares failed to be
listed for taxation; besides, the shares
off nonresident owners, except those OF
national banks, escaped taxation IN
this State under the ruling in North
Carolina Co. ". Commissioners OF Ala
nance, 81 N. c., asa. To remedy this,
the provision was passed which is Sec
ton IA of chapter 296, Acts 1898, and
which requires the list of shares to be
given in by the proper officer of the
corporation, which shall pay the same
in behalf of the shareholders. This
does not aft set the liability of the shares
to tax as the property of the share
holders, but is simply for the conven-
fence of the State in collecting the
tax. The effect is merely to change
the situs of the shares for taxation
from the residence of the owner to the
locality where the chief Office of the
corporation is situated, as was held in
Wiley v. Commissioners, Ill N. G.,
397. It simply extends to the collec
ton of taxes due by shareholders in
other corporations the mode of col
already in force as to share
holders in national banks. U. S. Rev.
Stat, sec. 1919. From this summary
it will be seen that the State
within its taxing power in the pro
visions of chapter 900 of the Acts of
1898 It levies % q tax upon the real
and personal property of corporations;
% upon the shares which r the per-
sonal property of the shareholders, but
requires them to be listed and collected
through the agency of the corporation;
81 it levies no tax upon franchises and
~ it does not tax the en-
tire capital stock, but only the excess
of it's total value above the value of
the real and personal property which
the corporation lists for taxation. The
stock belongs to the corpora
ton. The shares or certificates
Of stock are entirely a different
matter. They belong to the share
holders individually, and, under the
constitution, must be taxed Gd VGlOrem,
ike other property belonging to the
Independently of the taxation
lpon the corporation, its franchises,
Smith, @. j., in Belo v. Commits
'ioners, 80 N. O., on page 419, citing
Const. Linn, 169, and Field,
Corp. 521, etc. He further says that
5he relation of stockholders to the cor
ooration lis very analogous to that Of
4 creditor towards his debtor. * x
The latter must bear the taxation i'm
posed upon it's property, and this may
diminish it's distributable profits; but
5he stakeholder cannot, any more than
5he creditor, claim exemption on this
account for his stock, as distinct and
separate property in his own hands,"
N. @, 42O. To tax only the real
and personal property of the corpora
ton would leave, as we have said, IN
taxed that large part of its capital
stock which represents its good will,
its trademark, the proftableness of it's
business, all of which are property, as
much protected by the laws, and as
capable of being turned into money,
as the real and'personal property which
the corporation owns. To tax the
whole of the capital stock, in addi-
ton TO the tax upon the real and per
sonal property, would be, to the ex
tent of the tax on the latter, double
taxation, of the same kind as the tax
on mortgaged property and a tax at
the same time on the mortgagor's notes
in the hands of the MORTGAGE; but
there is nothing in either case to re-
strict the Legislative pc wert to so decree.
Here, however, there is no double tax,
but simply a tax on so much of the
real and personal properly of the cor
poration as is located in this State, and
a tax ON the value of it's capital stock