The herald-advance. (Milbank, S.D.) 1890-1922, 1907-10-11

An important case, which was insti.
tuted to test the provisions of the new
state Inheritance tax law. and which
involved the payment Of an inherit
ance tax upon property willed to the
First Congregational Church Society Of
Sioux Falls and to the city Of Sioux
Falls, by Mrs. Helen G. McKennan, a
wealthy Sioux Falls who died
about a year ago, has been decided by
County Judge D. R. Bailey Of this city.
During her last illness Mrs. McKen-
nan executed a deed Of certain real es-
tate to the First Congregational
Church society of an aggregate value
OF $4,000 and also executed to the city
of Sioux Falls a deed to other property
valued at $4,000. Testimony In the
a showed that after the death of
Mrs. McKennan and delivery of the
deed the Congregational Church So
ctety sold the real estate willed to It
and received the sum Of $1,000 in cash
therefor, and that the city Of Sioux
Falls also had sold a portion of the
land decided to 1t, receiving therefor
the sum Of $1,000.
Call Il Unconstitutional.
It was centended by the attorneys
representing the church and the city
that the state inheritance tax law was
unconstitutional; that the state did
not state the objects of the same to
which the tax should be applied; that
the provisions in the law requiring the
tax when collected to be paid into the
state treasury was not sufficient COM
pliance with the state constitution. It
further was contended that the stat
ute does not comply with the consti-
tuition, in that it does not provide for
the exemption of the property of
municipal corporations and property
used exclusively for the agricultural
and horticultural societies, for school,
religious, cemetery and charitable pur-
poses.
The attorneys further urged in be-
half Of the church society and city that
the tax imposed by the statute Is not
uniform in it's operation as required
by the state constitution. The decis-
ion o. Judge Bailey, which will be Of
interest throughout the state where
similar questions may arise under the
new state inheritance tax law, was in
substance as follows:
THAT the provisions of the consti-
.dtion Of South Dakota restricting the
legislative power In matters OF taxa
ton had reference only to the taxation
of property for the support of the or
binary expenses of the state; that the
inheritance tax, so-called, is not a tax
upon property, but is a tax upon the
privilege secured by law to heirs, lega-
tees or donees of receiving property,
passing by gift, will or interstate law;
the inheritance law provides that all
property, real, personal and mixed,
which shall pass by gift, will or the
interstate laws of the state, which are
to take effect upon the death Of the
grantor, testator or under the inter
state laws of the state, To any person
or to anybody polite or corporate shall
be subject to a tax
Is Lien Up,n Property.
That, although the law fixes the
amount to be paid according to the
value of the estate transferred, the
greater percentage and also Classics
the recipients into three classes, wax
ing the percentage to be paid differ
ent upon the beneficial interest receiv-
ed by each class, it has been judicially
determined that such provisions in an
inheritance tax law are not open to
the objection hat they are invalid, al
though the laws governing taxation re-
quire uniformity; that the tax in this
state is a lien upon the property deed
ed to the church and to the city, and
upon the property left by will, and by