Evening journal., 1899-04-05
AN IMPORTANT RULING.
TAX ON FRccdTSSoRY NOTES AND
MORTGAGES AS APPLIED UNDER
sCHEnImlE A AMENDMENT

TAX On FRCDaISSoRY NOTES AND
MORTGAGES AS APPLIED UNDER
SCHEDULE A AMENDMENT
For some time past numerous in
Quirles have been made at the Office of
the deputy internal revenue collector in
this d.ty regarding the tax as applied TO
mortgages and promissory notes OF
those interested.
For the benefit of such parties Colo
mel Leitch, deputy internal revenue col
lector, has secured the following ap-
phcation OF the law from the Treasury
Department at Washington, which viii
fully explain the application Of the
amendment to schedule A, recently ap-
proved:
Treasury Department Onice of Com
missioner of internal Revenue.
Washington, ID. c.. March 25, 1899.
SER: This Office is n receipt OF your
letter Of March 22 1899 written in ref
erence to the application of the amend
ment 10 schedule a.. approved Febru-
airy IS. 1899, in so far as said amend
ment Is applicable to promissory notes
secured by a mortgage.
In considering this amendment, this
office holds that ior the purpose Of de-
ltermining which instrument should De
stamped. the comparison i3 10 be made
between the mortgage and the note OF
| bond secured by same and not the
plural notes or bonds.
AS your letter relates only 20 prOmis-
sorry notes, they Will be considered,
and the question of bonds will not be
entered into, because there is a differ
ent taxation on bonds given by pri-
vate persons and those given by cor
porations.
Considering the question CT promis-
sorry notes only, the comparison is
made between the mortgage and one
note and that the larger note, rf more
than one note is secured by the mort
gage.
For instance the sum Of $1,4O0 Is
borrowed, and to secure the payment OF
this sum a mortgage Is executed for
that amount securing the payment Ol
two notes-One for 500, payable in one
year and one for 500, payable in two
years. Comparison in this instance is
made between the mortgage and one
OF the notes. each note being subject tC
a tax Of II cents and the mortgage sub
mortgage should be stamped.
IT, instead of executing two notes
for 500 each, one note for 81 400 were
executed, the greater tax would accrue
on the note, a 81 400 promissory note
being subject to a tax OF % cents an(
the mortgage securing same being sui
ject to a tax Cf % cents; therefore, tn,
81 400 note would he the instrument
THAI should he stamped.
When mortgage is given ITO secur,
The payment of a sum exceeding $1,000
said $1,000 Indebtedness being repre-
sented by promissory note, the great
er taxation will always accrue upoi
the mortgage, hut up to this amount o
Sl,5O0 The question cf whether or NO
more than ono note is executed shoult
be taken into consideration I'm the com
par'son in order to determine whicl
instrument should be stamped. Th
following is the correct manner o
lstamp,ng a motgage and note for SUM
not exceeding 81 500:
Note not exceeding 81, 900. 20 cents
lnOte not exceeding 81 1O0 (stamp mort
gage and act note). % cents: note nc
Exceeding 81 l,2OO (stamp mortgage an
mot note). 25 cents; note net exceedln
$1,000 (stamp ncte and not mortgage)
26 cents; note not exceeding $1,4O
(stamp note and not mortgage), 2
cents; note not exceeding $1,000 (stam
note and not mortgage), 30 cents.
In an instances regarding notes sc
lcured by a mortgage, the instrument O
which the tax does not accrue shoul
have indorsed upon II that the cor
temporaneous instrument Is du'
stamped according to law.
Respectfully yours.
: G. W. WILSON, Commissioner