The Jersey City news., 1899-08-18
W WANT TO
TAX STATE
Revenue Officers Demands
Refused by Secretary
Wurtz.
TEST CASE TO BE BROUGHT
Attorney General Grey Says
the Stamps Required Are
Not Necessary.
TEST CASE TO Be BROUGHT


involving a principle of great importance
under the United States Internal Revenue
law may result from an effort which is
now being made by the Collector of the
| First District of New Jersey to tax GER
tain instrumentalities of the government
Of this State by requiring them to bear
an internal revenue stamp. These docu-
ments are certificates issued by the
Department of State of New Jersey. and
| bonds of sundry State and county Off
GERS which are on file in the same DEPART
| ment
The particular form of certificates upon
which the United States Collector of In
ternal Revenue is trying to impose the
stamp duty is one which the law of the
States requires the Secretary of State to
issue to corporations authorized to do
business in New Jersey upon their fling
the annual statement of the election of
directors and officers, which statement is
also made a legal obligation, and the fee
for filing which is fixed at st. The effort
Of the United States Revenue department
| is to reduce this source OF the States in
come one-tenth, by requiring that each Of
such certificates snail bear ten-cent
stamp
these certificates it, if anybody, would
have to apply the stamp. Since the In
ternal Revenue act went into operation
nearly 1000 certificates of this kind have
been issued BY the State Department Of
New Jersey, and the demand is made
practically that these certificates shai
be recalled and stamped.
The bonds which it is claimed should
Ind
among them being those of the treasurers
of several of the State institutions, the
State Librarian the State Comptroller as
treasurer of the New Jersey Home for
Deaf Mutes, County Clerks and Surro-
gates. clerks or district courts, and a
number of others.
Attorney-General Grey. Of New Jersey,
since the internal Revenue law went into
effect, has given a number of opinions
to departments of this State bearing upon
various phases of the internal revenue
stamp question. The earliest of these
rendered several months ago to the State
Treasurer, in reference to the matter of
placing revenue stamp upon checks
issued by the State, was very elaborate
and was meant to cover the whole ques-
tion of the right Of the u. s. Government
to tax any of the instrumentalities neces-
sary TO carry on the government of the
State. This opinion, in which numerous
decisions of the highest federal courts
were cited, was emphatically to the effect
that the Federal Government could not
tax a State or diminish its revenue in any
way. Opinions, written and oral, by the
Acknowledgement of New Jersey 10 the
Secretary of State, directly to the point
of the right of the United States to tax
the certificates and bonds above referred
to- have led our State Department to de-
cline to stamp such papers
Within the past week the demand from
the United States Collector of the First
District OF New jersey to the Secretary
of State that the official bonds held by the
latter shall be taken to the Collectors
Office to have a fifty-cent stamp attached
to each, has been peremptorily renewed.
but, of course, under the opinion of the
law adviser of the State this demand
must be refused. The case may. therefore.
become an important one. involving the
Federal right to tax State as no doubt
the United States Treasury Department
will make the instrumentalities of gov
ernment in other States that it has In
New Jersey. It was supposed that the
question was long ago settled beyond con-
troversy.
In regard to the official certificates
issued by the State 1t is impossible to
see how they can be taxed without the
United States requiring the State of New
Jersey to pay part of its revenue into
the United States Treasury, as in this
case the State would have to buy the
stamps and affix them without the power
to restore its loss. 1t would in fact, be
utterly impossible now TO get hold of and
stamp the nearly 1900 State certificates of
this kind that have already been issued
as they have gone all over the United
States.
AS for the bond question. that is not SO
clear 1t is not impossible that 1t might
be held that the giving of hese bonds was
in some sense personal act, even if it
were a statutory prerequisite to entering
upon the incumbency of State office
Acknowledgement Grey does not accept
this idea. But even If it should be up
held, it would seem to make the theory
consistent, that the demand to have such
papers stamped should be upon the indi-
vidua1 giving the bond and not upon the
State, which, if it pays for stamping such
documents as are already on file, must
do so out of its own funds.
1t may be mentioned that in small
way the State of New Jersey is even now
at it's own expense actually helping the
United States to collect its internal rev.
enue taxes The Department OF State,
while it has acted since the passage of
the Internal Revenue law upon the opin-
ion of Attorney General Grey, that no
stamp need be placed upon any certificate
or other document issued by any State de-
partment has regarded all certificates
sent 10 1t from private persons as subject
to the stamp duty. A large proportion
cf the certificates sent to the State De-
partment for filing as an act of incorpor-
alton come without the revenue stamp
which the law requires that all forms of
certificates shall bear In such cases the
State Department. having in view the in
terests of the State. requires the person