The Barre daily times. (Barre, Vt.) 1897-1959, 1911-03-14
CORPORATION
TAX VALID
Measure Upheld by Supreme
Court
In UNANIMOUS DECISION
So, 100000 in Annual Revenue Is
Saved - A Total of $751;
100000 of Capital
Affected
In UNANIMOUS DECISION

Washington. March l4.-The supreme
court of the United States yesterday, by
unanimous opinion, upheld the validity
of the corporation tax law which was
passed as an amendment to the Payne
Aldrich tariff law. In fifteen cases, APP
plying to nearly every form Of corpora
tion, the court held the law constitu-
tional at every point at which 1t was
assailed. In three cases, two arising in
Massachusetts, involving real estate
trusts organized under the common law,
not Incorporated under the laws OF Mas
sachusetts, and one coming TO the court
from Minnesota--the "Zonne case" which
affects a real estate holding corporation
which is practically defunet and enjoys
no business activities" court held
that the law did not apply.
Over S28,000,000 has been collected UNI
der the law, and the government win
not be required to refund it. The opin-
ion of the court was read by Associate
Justice Day, but was concurred in by the
entire court
The court holds that the tax applies
to practically every form OF corporation,
ihNAthAHE AuSlAi allNt COMPANIES anu pun
lie service corporations.
Solicitor General Frederick W. Leh-
man, who argued the cases for the gov
eminent on the retrial, expressed the
greatest satisfaction yesterday over the
opinion. He said that the opinion was
all that the government could desire.
Justice Day, in delivering the opinion,
took up the points made against the
validity of the act and disposed of them
in their order.
The objection urged that the law was
revenue measure and should have origi-
mated in the House of Representatives
under the constitution was met by the
statement from the court that the
Payne-Aldrieh act, Of which it is a
part, originated in the House, and that
as IL came from the House it contained
a provision for an inheritance tax The
Senate struck out the inheritance tax
feature and substituted the corporation
tax amendment.
"The bill having properly originated
in the House. we perceive no reason"
said Justice Day, in the opinion, ''in the
constitutional provision relied upon why
it may not be amended in the Senate in
the manner in which 1t was in this
case"
The court holds that the tax was sim.
posed, not upon franchises of the cor
poration irrespective of their use in
business, nor upon the property Of the
corporation, but upon the doing of cor
poration or insurance business with re-
spect TO carrying on thereof"
ct is tax" says the court. "upon
the doing of business with the advan-
tages which inhere in the peculisrities
of corporate or joint stock organiza
ton of the character described"
The court differentiated between the
corporation tax and the income tax BY
the statement that the "act under con
does not impose direct taxa
ton upon property solely because of its
ownership, but the tax is within the
class which Congress is authorized to
lay as excise with the limitation that
they shall be uniform"
"The Pollock case, tthe income taxi I
the tax there levied as direct, |
because il was imposed upon property
simply because OF it's ownership. In the /
present case the tax is not payable I'M
less there be carrying on or doing Z
of business in the designated capacity, .
and this is made the occasion for the (
tax. measured by the standard pre-.
scribed The difference between the acts I
is not merely nominal, but rests upon
differences between mere (
ownership of property and the actual (
doing of business In certain way"
The court says: IF we are correct /.
in holding that this is an excise tax,
there is nothing In the constitution re
guiring such taxes to be apportioned ac-
eording to population"
One of the chief objections urged
against the law by the attorneys for
public service corporations was that IL
taxed the Exclusive right of state to
grand corporate franchises, because it
taxes franchises which are the creation
Of the state in its sovereign right and