The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1904-08-27
INSURANCE POLICIES TAXABLE.

INSURANCE POLICIES TAXABLE.
A few years ago Senator B. f, Ay-
cock, of Wayne, introduced q bill, or
made the suggestion that in consider
ing subjects for taxation the cash
value of policies should be listed for
taxation. He pointed out that very
much money is invested in insurance
policies, and that it wholly escapes
taxation, and that the cash value of
such policies ought to be taxed just
as we'll as cash on hand.
Only this week the Attorney General
of Kentucky has held that all policies
of life insurance are property within
the meaning of the Constitution and
Statutes of Kentucky and are subject
to taxation in the hands of the holders
at their cash surrender value. The
matter is one of such great Importance
that we print below the opinion of the
Attorney General:
"On June 80. 1904, an official opin-
ion of this office was requested by
Mr.. Biscoe Hindman, agent of the Mu-
tual Life Insurance Company, of New
York. as to the liability for taxation
of an insurance policy issued to Mrs.
Martha j. Stafford, of Paintsville, KY,
in June. 1903. The terms of the pol
icy of $4,000 payable at her death to
her children, and in annuity of $140
during her life.
ION July II, 1904, Hon. Henry r..
PreWitt Insurance Commissioner, in
an official communication to this office
~ 10
general liability of this and similar
policies for taxation; and, on July 20,
1904, we received the following re-
quest:
'Paintsville, KY, July 49, 1901
Attorney General Frankfort, KY
Dear Sir: Will you kindly inform me
whether or not an insurance policy,
paying annual dividends, is subject for
taxation? Also as to whether or not
a POLICY not paying dividends is tax
able Both policies paid up in full.
Thanking you in advance for the fav-
or | am, very truly yours,
A. j. PRICE, Tax Collector
1--WE shall answer these requests and
others similar, not mentioned and
which have been made of this office,
in one opinion. The present Constitu-
ton. Section 10, after specifying
what property under the laws of the
Commonwealth shall be exempt from
taxation provides: All laws exempt
ing or commanding property from
taxation other than the property above
mentioned shall be void
Section III provides: The Cen
eral Assembly shall provide by law an
annual tax, which, with other re-
sources shall be sufficient, to defray
the estimated expenses of the Com
monwealth for each fiscal year.
They (taXeS) shall be uniform upon all
property subject to taxation within
the territorial limits of the authority
levying the tax, and all axes shall
be levied and collected by general
laws
Section 172 provides: All proper
ty, not exempted from taxation by this
Constitution, shall be assessed for tax
alton at it's fair cash value. estimated
at the price it would bring at a fair
voluntary sale
'It will be seen from Section 10,
supra, that insurance policies are not
exempted from taxation.
THE General Assembly has by sec
ton 1919, Kentucky Statutes, provid
ed that AN annual tax of fifty cents
upon each one hundred dollars of
value of all property directed TO be
assessed for taxation. as hereinafter
provided, shall be paid by the owner,
person or corporation assessed
constitution section IIZ dlrectS
that all property not exempted shall
be assessed for taxation. The Cen
eral Assembly has, by section 1920,
provided that all personal estate of
persons residing in this State
shall be subject to taxation unless the
same be exempt from taxation by the
Constitution and shall be assessed at
its fair cash value, estimated at the
price it would bring at a fair volun-
tary sale
''In order to determine whether or
not a life insurance policy is subject
to taxation, it is necessary to deter
mine whether or not it is property and
has an asSessable value. We have been
given the following data by the insur-
ance department of the State, and
from a careful consideration thereof
we have ariverd at the conclusion
hereinafter stated:
1.-The legal reserve life insurance
companies of Kentucky received on
both old and new policies for 1903
premiums to the amount of $7,038.-
1861. These companies issued new
policies in 1903 which aggregated
$53,617, 1892.
Policies both old and new, in force
in Kentucky in 1903 aggregated $214,-
S63269.71
From the data furnished this office
by the insurance department of the
State, with a slight variance by differ
ent companies the statements herein