The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1901-12-31
STATE TAX ON
CORPORATIONS.
CONTINUED from page ~ Il

CONTINUED from page ~ W
tail kind and character, with Its cash
market value at the time 1t was re-
ceived in payment; date Of the organi'
zation of the corporation, where organ.
lied, giving reference to the statutes
under which 1t Is organized, II coonsol.
idated naming the constituent compa
MES, and where they were organized;
IL reorganized, naming original corpo'
ration with full reference to the laws
under which It Is organized, II consol-
have taken place, with the same infor-
nation as to all prior companies In the
chain Of organization.
OHIO IS CURIOUS.
The total Indebtedness Of the corpor,
alton Is also demanded, including the
nature of the same and the purpose
for which 1t Is incurred; in case Of in
debtedness represented by mortgage
notes or other obligations, the amount
authorized, amount issued, amount
outstanding and cash realized on the
same. date, rate of interest and when
payable. A statement Of the assets ut
their present cash market value aud
liabilities; total earnings and income;
operating expenses, interest, taxes,
maintenance, permanent improve
ments, net earnings and dividends last
declared; salaries of the officials and
wages paid.
This section It is proposed to follow
with another providing for the pen.
alties for false return and forbidding
any corporation, existing or to be in.
dnin r,si
state without making full answer as
above.
Another section should provide for
the levying of franchise tax, which is
to be paid annually, amounting to one
tenth of one per cent upon the author
lied capital stock of every such corpo.
ration. Upon such payment, the sec
retary of state should be authorized to
| issue a certificate giving such corpora
ton the right to do business In this
state for one year from the date there
of. This should be followed with
certain duties imposed upon the attor.
ney general, directing him to begin
an action in Injunction against any cor
poration seeking to do business In
Ohio without having made such return
and without having paid such tax.
ASKS AN AMENDMENT.
The original idea was to discrimi-
nate against foreign corporations and
in favor of domestic corporations in the
levying of such tax, but under the de-
cision in Horn Silver Mining company
v New York, 143, U. s.. page 305, and
New York v. Roberts, III, u. s., page
65S, am satisfied that such discrimina-
ton cannot be made. In my opinion,
the present law should be amended so
as to eliminate the measuring Of the
franchise tax by thesamount Of capital
represented by property owned and
used in business transacted In Ohio,
and should be gauged by the entire
capital stock of the corporation, wheth-
er used in Ohio or elsewhere. This Is
perfectly lawful and has been sustain
ed.
Personally, / would favor the ex-
emptionE OF all corporations to the
amount that their capital Is actually
used in business within this state, and
that would have a tendency to bring
them within the state. AS the law now
stands, we base the franchise tax upon
that which Is used in the state, which,
in my opinion, keeps the foreign cor
poration out. The supreme court of the
United States. upon this question, said:
ut Is said that the operation of that
portion of this taxing law which eE-
empts from business tax corporation
which are wholly engaged In manufac-
turing within the state of New York,
is to encourage manufacturing corpora
tions which seek to do business in that
state, to bring their plants into New
York. Such may be the tendency OF
the legislation, but so long as the
privilege is not restricted to New York
corporations, it Is not preceived that
thereby any ground Is afforded to JUS
tify the Intervention of the federal
courts"
MIGHT INCREASE 1T.
It would be question as to whether
the franchise tax of one-tenth OF per
cent on all corporate capital Is suffi-
cient to raise the desired revenue. This
could be determined by the secretary
and auditor of state, and IL not sufii-
cient, the amount could be increased
and no constitutional provision would
prohibit 1t. BY such measure, we would
tax watered stock the same as values,
and that which President Roosevelt
suggests as one of the greatest evils
with regard to interstate corporations,
could be done away with In those cor
porations not engaged in interstate
commerce.
James B. Dill, of Chicago recently
sounded note OF alarm against those
states which are seeking by lax cor
porate laws to invite capitalists to In
corporate therein. II will be found be-
fore many years that the states that
have not abandoned the rule requiring
corporate honesty will, by this system
of franchise taxes, levied upon the cor
porations created In the states similar
to Delaware, New Jersey and West Vir-