The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1898-07-01
TAX ON STOCK CERTIFICATES
HOW AND WHEN STAMPS MUST
BE USED.
Companies Taxed Only On Original
Issues-Stamps Must Be Placed
On Transfer Certificates.

Washington, June Son the ques-
ton of that part of schedule y of the
act of June 10, 1898, imposing a tan
ION each original issue, whether on or
/ ganization or reorganization of GER
tificates of stock" it is held by the
! commissioner of internal revenue, in a
! circular issued today, that the meaning
! of the words original issue" as there
1 in used, is limited and controlled by
/ the words whether on an organization
or reorganization" and that, there
fore, the only certificates of stock on
which the tax of cents on each hui
dred dollars. of face value or fraction
thereof is imposed by this act, are those
certificates issued on or after July l,
1898, on the organization or re-organiza-
ton of a company. IT is held, further,
that in the case of a corporation hav-
ing (for inStance) an authorized capital
Stock of 81 100000, of which it has is
sred only 100000 prior to July l, 1898,
and on or after that date finds it neces-
sary to make one more additional Issue
Under the authority possessed by it,
each additional issue -hus made is an
original issue" within the terms and
n.eaning of the statute under construc-
ton, and the certificates of such issue
are subject to the stamp tax.
Where any original certificate issued
IS presented by the holder to the COM
pany or corporation for the issue of
another certificate or certificates in
lieu thereof, the certificate or certifi-
Gates thereupon issued to take the place
Of the original certificate could not, un-
der the language and limitation of the
statute above recited, require any
stamp as long as there is no sale or
agreement 10 sell, or memorandum Of
sale of transfer of any of those certifi-
ca ties issued in lieu of the original
In case of sale. where the evidence Of
transfer is shown only by the books Of
the company. 2 tax of , cents is re-
quired TO be paid on each 500 of face
value or fraction thereof, and the stamp
representing this is required to be
placed upon such books.
Where the change of ownership is by
transfer certificate, that is to say, the
executive authority to transfer is con-
tanned on the back of the stock GER
stamp must be placed on the transfer
certificate; that is 10 say, upon the sur
render certificate containing the trans
fer
In cases of agreements to sell, or
where the transfer is by delivery Of the
certificate assigned in blank, there must
be executed a memorandum thereof, to
" IllCH tHc stamp ID require 70 Dc IL
fixed.
Under the ruling herein stated, in a
case Ghat may be supposedly Of q man
who is the owner of g certificate for 100
shares of stock and wishes to sell ten
of them to another person, the result
being that one certificate would be is
sued for the 10 shares sod and another
additional certificate for the 80 shares
remaining with him. the result being
that the 90 shares issued with the GER
tificate fer 10 shares sOld) in lieu there
Of, does rot require any stamp and the
certificate for the 10 shares does not re-
quire Il stamp representing the tax Of
3 cents on each slice. or face value or
fraction thereof. as it is not an original
issue. The only stamp required with
reference TO in =se certificates is a stamp
on the transfer of ,he shares sold, rep
resenting payment of the tax of cents
on each SO of face value or fraction
thereof.
In another case Stated for illustra-
tom where a. man holds several GER
tihcates for shares of stock aggrcgating
100 shares, and for his convenience
calls upon the company to issue to him
in lieu thereof. one certificate for 100
shares, there being no sale OF ag. cement
TO sell, or memorandum of sale or de-
livery or transfer OF this new Gertifi-
cate, the statute does not require the
Of any stamp thereto.