Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-01-02
TAXATION OF BANKS
No Authority for Exclusion Of
Real Estate Earnings.
Mr.. DARNEILLE'S VIEW
OPINION UPON PROTEST FILED
WITH THE COMMISSIONERS.
Rents Of Buildings Owned by Banks
REGARDED as Part Of Gross
Earnings.
Mr.. DARNEILLE'S VIEW

The Commissioners have no authority I'M
der the provisions Of the personal tax law
to exclude the earnings from real estate
from the gross earnings of national banks
and other incorporated banks and trust
companies, according to a report on the
question submitted to the District author
tiles by Hopewell H Darneiile. District
assessor and chairman Of the personal
tax board. Mr.. Darneille states that while.
in his opinion, the inclusion for taxation
purposes of the earnings from real estate
is burdensome and unjust, yet there seems
no doubt as to the legality of the assess
ment. The only way to be relieved from
this assessment it seems, Is by means OF
an amendment to the personal tax laws.
Several days ago a number of bankers
in the city forwarded to the Commissioners
petition protesting against the action
of the personal tax appraisers in assess
ing as gross earnings the revenues col
lected by the banks from real estate owned
by such institutions upon which the regu-
lar tax of IN per cent has been assessed
and paid. The petition was signed by the
presidents of the following institutions:
Traders National Bank, Central National
Bank, Lincoln National Bank, Second Ma.
tional Bank, Washington Loan and Trust
Company, Columbia National Bank, Ma
tional Safe Deposit, Savings and Trust
Company, Citizens National Bank, Ma.
Banking Corporation, American Security
and Trust Company, Union Savings Bank,
American National Bank and the Washing
ton Savings Bank.
The Bankers Claim.
The petition of the bankers sets forth that
there are several banks in the District
which own buildings far greater than is
necessary for the accommodation Of their
business, and from which they derive con-
siderable revenue in the way of rents, etc.
1t was claimed by the petitioners that
such money so collected should not
be brought forward for personal tax
alton under the law for the reason that
it is a revenue from real estate on which
there has been paid tax. The bankers
further argued that there should be no dls-
criminal ton between the bank as hoider
of real estate, and the ordinary citizen tax
payer. The bankers requested that II there
was any doubt in the minds of the Commis-
sioners as to the justice of their claim that
an opportunity be given the petltlonefs 10
discuss the matter
In his report on the question Mr.. Darneille
says:
THE board Of personal tax appeals care
fully considered the assessments returned
by the appraisers against the national banks
and trust companies under paragraph OF
the personal tax law, particularly with re-
gard to the inclusion of interest on United
States bonds and revenue derived from real
estate investments.
Quotation From the Law
THE paragraph referred to reads as fol-
lows:
Each national bank as the trustee for
its stockholders, through its president or
cashier and all other Incorporated banks
and trust companies in the District of Co
lumbia. through their presidents or cashiers,
and all gas. electric lighting and telephone
companies through their proper officers
shall make affidavit to the board of per-
Sonal tax appraisers on or before the LIST
day of August each year, as to the amount
of its their gross earnings for the pre-
,ceding year ending June 80 and shall pay
to the collector of taxes of the District per
annum on such gross earnings as follows:
Each national bank, and all other incorpo-
rated banks and trust companies. respective
ly. per cent; each gas company. per
cent; each electric lighting and telephone
company, per cent. And in addition
thereto the real estate owned by each ma
tional or other incorporated bank, and each
trust, gas, electric lighting and telephone
company in the District shall be taxed as
other real estate in the District
The board determined unanimously that
both items properly returnable under
the law part of the gross earnings of said
companies. AS A general rule the banks
themselves interpreted the law in the same
manner and made returns accordingly. The
board of appeals adjourned December 16
sine die. 1t would seem, therefore, that it
bankers this year.
Regarded as Imperative
while am firmly of the opinion that the
inclusion for taxation purposes of earnings
from real estate in the gross earnings of
such companies is burdensome and unjust,
still from careful reading of the law and
from the fact that the companies them
selves carry such amounts in their reports
to the treasury, there seems to be no doubt
as to the legality of the assessment, which
includes earnings from real estate
Upon motion of Commissioner West the
bankers of the District will be informed in
accordance with the report of the assessor
NrcrDnc