New-York tribune., 1901-01-07
TO REACH CORPORATIONS.
GIANT COMBINATIONS TO BE BROUGHT
WITHIN THE SCOPE OF THE
TAX LAW
TAX LAW.

Albany. Jan 6.-Just what Governor-elect
Odell meant when he referred in his message
to the need OF amendments to the State laws
governing the taxation of corporations is ex-
planned by an Investigation of the taxes paid to
the Controller Of the State.
Under Section No. 1s3 of the Corporation Tax
law, all manufacturing. laundry and other cor
porations which employ labor exempted
from taxation their capital stock Under this
exemption the Standard Oil Company the Amer
ican Sugar Refining Company and other large
industrial corporations are permitted to escape
the large tax payment which would be other
wise required of them. The purpose OF exempt
ing this class OF corporations from the State
tax TO induce manufacturing establish
ments which would employ large forces Of work
men to locate in this State: but 1t is held that
the results have not justified the exemption.
It is estimated that the taxing of manufactur-
ing corporations, thus reaching the Standard
Oil and other large corporations, would bring
over 100000 additional annually into the
State Treasury.
Another Ioophole in the law is that which per-
mits corporations to go into New-Jersey. or
ganize by the payment Of small organization
fee, return to this State and conduct business.
thus escaping taxation by paying small annual
tax TO New-Jersey.
All corporations which pay a tax directly TO
the State are exempted. under Section 202 Of
the Corporation Tax law, from taxation by local
assessors for State purposes. The object of
the section was to prevent double taxation, but
the result has been the escape from taxation on
vast amounts Of personal property The direct
State tax reaches only a fraction of the per-
sonal property OF many corporations. and the
remainder escapes taxation for State purposes
through the exemption by this section.
Trust companies cited examples Of a
class of corporations which escape taxation.
They are taxed directly by the State their
capital stock but their surplus and undivided
profits, which in the aggregate amount to a
sum of twice the value Of the capital, go un-
taxed. Last year the trust companies paid tax
on a total capitalization OF S4S250 000 while
S74, ,506,4 400 of surplus and S15,319.567 of un-
divided profits escaped taxation. II is estimated
that an application of the tax law to the cap
ital, the surplus and the undivided profits would
have increased last year the revenue derived
from that class of corporations from $450,OOO
to 100000.
Bills to change the Corporation Tax law so as
to cover some OF the objections raised are un-
der course OF preparation, and will be intro
duced in the Legislature within a few weeks.
The Collateral Inheritance Tax act has
brought into the State Treasury during the last
three months over 100000, which is above the
average for period Of that length. The bulk
of that sum has come from New-YoTk City.
which has always contributed the major part of
the taxes collected under this statute. The
estate of Emma S. Schley, late of NeW-York
City, paid the largest amount of taxes during
the three months. Its contribution TO the State
cash S261, ,494 The second largest tax,
S73 90S, was paid by the heirs of Wallace 1.
Andrews, late of New-York City. The largest
sum paid from the estate Of a nonresident and
the third largest received from any source came
from the estate of Lloyd Tevis, of California.
That estate contributed $50,027.
It is expected that the collections from New
York City will be very large during the current
concluding their work on estates which went
into litigation over one year ago.