Evening journal., 1909-05-18
TAXATION IN
NEW ENGLAND
Bureau of Corporations
Makes Report Of Its
Investigation
,y United Press Leased Special wIrs.

BY United Press Leased Special Wis.
WASHINGTON. May 1s-The first ih-
stallment Of the results of an inquiry by
the bureau of corporations. into the sys-
TENS OF state taxation OF manufacturing,
mercantile, and transportation corpora
tions throughout the United states was
published to-day by Herbert Knox smith,
commissioner of corporations. II is de-
voted to the new England States. In his
letter Of transmittal TO President Taft.
Mr.. smith comments upon the wide diver
sity in these forms Of taxation in the
various states and the fact that admins
tration OF the corporation tax laws ranges
from a system highly developed, and
handled centrally by state officials with
large powers to no centralized administra-
ton whatever. He believes that the re-
port win be particularly interesting to
legislators, and tax officials.
The commissioner Of corporations in
his letter of submittal says:
Tho taxation of individuals is sub
stantially the same throughout New
England. Corporate taxation, on the
in theory and in practice. Individuals
are taxed on property. Corporations
are taxed on property, or on income,
or on a combination Of both, or on cap
ital stock, either par or market value,
or occasionally-as in the case of tele-
graph and telephone companies-on
mileage or number Of instruments. Ad-
ministration ranges from a system
highly developed. handled centrally by
state officials with large powers, to no
centralized administration whatsoever
Particularly interesting is the Mass
achusetts taxation of corporate ex-
cess" on the market value of STOCK
less property otherwise taxed, and ap-
piled TO all domestic corporations. Con-
necticut applies this TO railroads, add
ing also their bonded Indebtedness as
measure of ability to pay taxes.
Railroads are among the largest tax
payers. In Maine they are taxed at
a graduated percentage of gross trans
portation receipts; in New Hampshire
on property. but through state board;
I'm Vermont. upon gross earnings; in
Massachusetts, by the State on their
corporate excess" (market value of
lstock, less amount OF property taxed
locally. and by the towns on much
of their property; in Rhode Island, on
real property by the local authorities;
/ i'm Connecticut, on the sum Of bonded
debt and market value of stock.
Other public-service corporations,
such as street-railway. telegraph, tele-
phone, express. car, gas. and electric
companies are most often brought
under special and new systems of tax
alton. Taxation OF Dublic-service cor
porations on gross receipts is growing
In use. Maine and Vermont use this
largely, Massachusetts, Connecticut,
and Rhode Island in part; but New
Hampshire not at all.
Massachusetts, alone succeeds ap-
preciably in efforts to tax specially the
manufacturing and mercantile corpor-
ations. This State taxes the corpora
/ tion itself on its corporate excess
through the state tax commissioner.
The other States make unsuccessful ef-
forts TO reach this corporate excess in
the hands of the shareholders through
local oficials. Massachusetts receives
over two millions Of dollars from this
source; the other FIVE States very little.
Y Banks, insurance companies, and
other financial corporations pay large
amounts, often exceeding the tax paid
by railroads. but they do not come
within the scope OF this report, except
in the comparison of financial results.
Maine alone OF the New England
States secures large revenue by char
tering Overwhelmingly a quarter
of a million dollars annually.
New England has made considerable
advance in separating the sources OF
state from local revenue, supporting
the local jurisdictions through the taN
upon local property. and the state gov
ernment by taxes upon corporations
and inheritances. Vermont and Con-
lnecticut are the only States which
thus pay practically all state expenses
In the other States the towns collect
large amounts to turn over to the State