The evening times. [volume] (Washington, D.C.) 1895-1902, 1901-03-29
THE EVENING TINES WASHINGTON FRIDAY, MARCH 20 1901

companies in the State ard the immense
number Of corporations chartered by that
Commonwealth IN
This is what Mr. Clufssartou saws a to
the New Jersey system.
The segregat ton Of State from local
taxes is tE@ distinguishing feature in the
system of t2XatinH IN This State Since
the wear 1884 there has been no direct
State tax levied on rEaI and personal
property. the revenues derived from the
special tax on railroad md canal cOrpo-
I&tiouS, riparian lands, tie franchise tax
on miscellaneous corpora lions. the tax on
iutestate estates audI collateral Inherit
ancss and official judicial. and other
fees being sufficient g defray all State
expenses.
The general system of taxing corpo-
rationS directly by the State is efficient.
simple. certain, and economical SO far as
il extends.
The contributions of CORPORATIONS in
general except railroad and canal COM
pauies. to the revenues OF the State and
municipal Government are received from:
First A tax upon the privilege of in
cooperating
second a license fee or franchise tax
To the State
Third. \ local tax upon real estate and
visible personal property by muuicipali-
ties
Not until 1893 was any fee in the ma
ture Of a tax required 70 be paid on fling
q certificate Of Incorporation. and no
change in this fee has been made since
then
The payment required on filing such
certificate Is ~ cents for each 81 090 Of the
total amount of capital stock authorized.
DIt IN no. cas-" less than 80. A further
Zee OF 20 cents per thousand of increase
Is charged upon Increase Of capital stock.
ana ike fees upon consolidation where an
increase of capital stock is authorized.
i NJ Secretary Of Stat received for fees
ana taxes from corporations under the
general corporation act and supplement
IN 1879, 25.l;:3.Gl. Ccomptr0lIer's Report,
D. 81
From the LIST OF January to the LIST of
August. 1898. l:S6 CORPORATIONS were or
gantZed under the laws OF New Jersey.
with an authorized capital Of q G10, 900 0lEj.
IN 1884 franchise taxes. in addition 10
the local taxes upon real and personal
property, We're first imposed upon corpora
tons and in this year il was provided
that a certain annual tax by way of Ii
cenSe Tor It's franchises should be paid
by all corporations. except certain cor
porauons enjoying special privileges,
which. at present. are railway, canal.
banking and trust companies savings
banks cemeteries, religious corporations
and charitable or educa tionai associations:
also manufacturing or mining companies.
at least 50 per cent of whose capital stock
issued and outstanding is invested in
mining or manufacturing carried on with
Two methods Of determining such fran
chISe tax are provided for
First. BY computing per cent Of
gross receipts or gross earnings
Second \ per cent Of the capital
The first method is applied to certain
specified corporations doing business
within the State. wherever chartered and
the second TO corporations incorporated
under the laws Of the State whether ex-
ercising their functions within or without
the State
The telegraph telephone cable. electric
light. gas. and insurance companies doing
business in the State pay the tax on THEN
gross earnings. Corporations of all kinds
not doing business III the State. but char
tered by It pay a comparatively small tax
on their capital stock.
This tax was imposed simply for the
purpose of additional revenue and the
rates were made low IN pursuance of the
lOng-established policy Of encouraging
rather than burdenizss the aggrega ton Of
capital for the purpose of business. 1t is
not regarded as 4 property tax. but as a
franchise tax. Franchises are not taxable
as property.
The tax is computed upon the basis of
the capital stock issued and outstanding
not upon authorized capital stock, and Il
is held that stock is issued when the
company has received and accepted sub
scriptiOns for the same, whether paid or
not. As long as the corporation exists it
Is liable for this franchise tax It con-
tinues after q receiver has been appointed
and until the dissolution Of the company.