New-York tribune., 1902-01-08
FOR INDIRECT TAXATION
MEASURES INTRODUCED AT
ALBANY
TO IMPOSE HEAVY PENALTIES ON FOR
EIGN CORPORATIONS WHICH
SHOULD BE DOMESTIC.

Assemblyman Morgan the chairmen Of the COM
mittees on Taxation end Retrenchment, of an
indirect taxation measure, intended TO reach for
eign corporations of high Importance; of
other bill intended TO strengthen the existing
indirect taxation law touching foreign manu-
featuring concerns. and the announcement by
Senator Krum that his committee would give
a hearing on the Stranahan Mortgage Tax bill
next Tuesday.
Governor Odell in his message said that the
wisdom OF the legislation recommended by him
year ago for the liberalization of the corpora
ion laws Of the State had been proven, and yet,
while this was true, he regretted to say that the
largest combinations were still refusing to in
corporate within tie State A comparison showed
that up to a capitalization of $3 600 000 the laws
Of New-York offered more favorable opportuni-
ties than those Of other States. Beyond this.
however, on other than manufacturing corpora
lions. the discrimination seemed to be against
the State. Nevertheless, he did not believe the
State should make any further concessions, be-
cause it was certain that by incorporation in
New-York advantages We're offered which
more than commensurate with the increased
expense. Yet it was. unfortunately. true that
Foreign associations, while nominally located
elsewhere, Were virtually transacting all of their
business within the borders of New-York. This
was unfair. because the wealth of the people of
New-York which was invested in their shares
was taken out OF the taxable values of the
State. The Governor ended this part of his
cage by saying:
While the stock of domestic corporations
which pay tax on their capital stock Is not
taxable under our laws in the hands OF indiVid-
mails the same right should not be extended TO
stockholders OF foreign corporations. unless they
shall have filed with the Secretary Of State a
certificate of their Incorporation and have paid
upon their capital stock annually tax of, say
mill per dollar UP TO and including a
capitalization above that amount fran
chise tax TO the State, for the privilege Of doing
business in the State Of New York, and reliev-
ing their stockholders resident in this State of
taxes, except the transfer tax, which would
otherwise be assessed against them individ-
llal owners Of such shares.
Second Governor Odell said there was legsla-
tion last year intended to deprive manufact-
tiring corporations incorporated under the laws
of other States, unless they employed at least
40 per cent Of their property within the State Of
the exemption which was granted to domestic
corporations. Then the Governor added:
That this has been a failure has been in
stanced by some recent interpretations filed,
whereby certain companies have taken the
amount of their corporate holdings IN this State
and incorporated under the same name as desig-
mated in the Incorporation in other States,
thereby evading the taxes which they otherwise
would be liable for. To correct this injustice
should be your aim. No joint stock company
should be permitted to incorporate with the same
name es that borne by corporations of other
States, If for no other reason than to prevent
confusion, and no corporation thus formed
should be allowed TO merge with or to be oper-
ated by foreign corporation unless such for
eign corporation has filed its certificate with the
Secretary OF State.
The first of the bills introduced by Senator
Krum and Assemblyman Morgan amends Sec
ton of Chapter 90S of the Laws of 1896 which
states that mo deduction shall be allowed IN
the assessment of personal property by reason
nf he ind Of he Or
incurred in the purchase Of non-taxable property
or securities owned by him held for his bene-
fit nor for or on account Of any indirect liza
bility surety. guarantor. indorser or other
wise for account of any debt LA
bility contracted incurred for the purpose
OF evading taxation" by adding the following
sentence:
Nor from the full value OF much Of such
taxable personal property as shall consist of
shares OF stock in foreign corpora tions subject
TO, and which have failed to pay the fee and tax
provided for by Sections 1S1 and 1S2 A of the
Tax law within the time therein specified
The bill also amends Section 1s1 of the same
law. This section refers to the license fees on
foreign corporations. The amendments make
the section read as follows:
Every foreign corporation. except banking
corporations, fire. marine. casualty and life in
surance companies. cooperative fraternal is
surance companies and building and loan as
sociations authorized to do business under the
general corporation law shall pay the State
Treasurer, for the use Of the State, license fee
of one-eighth of per cent for the privilege
of exercising its corporate franchises or carry
ing on it's business f. such corporate organ
ized capacity in this State, to be computed upon
the basis Of its capital stock II any year there
after any such corpora tion shall increase It's !
capital stock license fee shall be due and
payable upon any such increase al the same
rate The tax imposed by this section on a
corporation not heretofore subject to its pro-
visions shall be paid within six months after
beginning business within the State. No action !
shall be maintained or recovery had in any of |
the courts in this State by such foreign corpo-
ration without obtaining receipt for the license
fee hereby imposed within six months after be- |
ginning such business within the State, if at |
the time this section takes effect such corpora i
tion is engaged in business within this State !
without obtaining such receipt within six |
months after this act takes effect.
The bill also has this section:
1s2A- Additional franchise tax on foreign |
corporations. Every foreign corporation, except
and life insurance companies, cooperative fra
ternai insurance companies, and building and |
loan associations. authorized to do business un-
der the general corporation law, shall. in addi-
tion to the tax provided by Section IS2 pay an
annual tax Of one-tenth of per cent upon each
dollar of its capital stock up to and including
SloO0OO0 or any part thereof, on all accounts
OF capital stock in excess of $4,000, 600 for the
privilege Of exercising its corporate franchises
carrying its business in such corporate or
organized capacity in this State.
The bill also says that Every foreign corpora
ton liable TO pay tax under Section 1S2A of
this chapter, shall, on or before November Is in
each year. make written report to the Con-
tpoiler stating the amount of it's authorized cap
ital stock On October 81 preceding
Then Section 1s9 is amended by having added