The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1904-11-19
SATURDAY, NOVEMBER 10, 1904.
The Tax Principle.

The Tax Principle.
Nv an annoying typographical error we
we're made to say in yesterdays paper
chat the Constitution of Virginia pro-
yNed for a franchise tax Of 10 per cent.
upon the gross earnings of railroad cor
pora.ionsL The error was so glaring that
Wa hope the reader readily detected 1t.
Tho tax Is per cent. and not 10.
While on the subject we may as well
state for the benefit Of outside readers
what the constitutional provisions are
for the taxing OF corporations in this
State.
First Of all. it is provided in Article
XIII. OF the new Constitution that al
taxes, whether State. local or municipal
shall be uniform upon the same class
OF subjects within the terrttoriaae limits
OF the authority lev,tng the tax, The
General Assembly may In its discretion
make distinct groups of the several sub
iects Of taxation and form them INTO
classes But when the classes have been
-
each class must be equal and uniform
The exception to this is that "the Cen
eral Assembly may allow a lower rate
OF taxation to be imposed for period
of years by a city or town upon land
added to its corporate limits than Is i'm
posed on similar property within its
limits at the time such land Is added
1t is under this provision that Richmond
proposes to take in new territory wltll-
out raising for the time being the tax
rate.
1t is further provided in section 10 of
Article XIII. that "the General Assem-
bly, may impose State franchise taxes
and In imposing a franchise tax may,
+ OF taxes upon other property, in whole
or in part Of a transD ortauon, industrial
or commercial corporation. Whenever a
franchise tax shall be imposed upon a
corporation doing business In this State,
or whenever all the capital, however In
vested. OF a corporation chartered I'M
der the laws of this State, shall be tax
ed. the shares Of stock issued by any
such corporation, shall not be further tax
cd
This carries into effect tho principle
stated by us yesSxeraay that whenever the
stockholders OF corporation are taxed
rs an Organization on all theil. property.
including the franchise. they are exempt
fro, a Ion, 1ixy11
Tho same provision applies especially
to railroad corporations. Under section
17e OF this article the State Corporation
Commission is required to ascertain and
assess annually the value OF road bed and
III other real estate. rolling stock and all
other personal property whatsoever OF the
railroads, except their franchise and nom
taxable shares Of stock issued by other
corporations, and such property shall be
taxed FOR State. county. city. town and
district purposes, at such rates or taxa
ton as may be imposed by them rcspec-
lively from time to time upon tho real
estate and personal property Of natural
+ persons; provided that 40 tax shall be
laid upon tho net income of such cor
poration
In addition to this ii is provided that
each such railway or canal corporation
shall also pay an annual State franchise
tax equal to per cenium upon Abe Eross
receipts from year to year, which shall
be In lieu Of all other taxes or license
taxes whatsoever upon tho franchise Of
such corporation. the shares OF stock
issued by it. and upon its property assess
ed under section l7G above clted There
are some exceptions IN the mutter Of
street railways, but the general principle
is as stated.
& 1t IS perfectly clear that where COR
poration thus pays taxes on all its prop
crty aging In {, gwen State, Including
la franchise TAX. IT. shares Of stock
held in other States should be exempt.
or course, some complications arise in
the matter Of interstate corporations
that is 10 say Of corporations owning
property and doing business IN more than
one State. But this broad principle can.
not bn successfully attacked that when
II q corporation ts assessed and taxed upon
All It's real and personal property and fur
Their taxed upon its capital stock or gross
earnings or otherwise, as q franchise
tax. its shares OF stock, no matter where
held. should DO exempt. we repeat .hal
II is a monstrous example Of double taxa
ton TO tax the shareholders in any cor
poration as body upon all their prop
arty, real and personal and upon th'
franchise, and In addition TO tax them a
!. individuals upon their separate shar
holdtnEA