The Marion daily mirror. (Marion, Ohio) 1892-1912, 1911-07-31
SMITH REPORTS
TO PRESIDENT
Tells How States Tax Cor
pOratiOnS.
OHIO INCLUDED IN LIST


That Eastern Central Group Use
Much More Extensively the Gen.
eral Property Tax Fer state ReVe-
nue Than the Middle Atlantic
croup--Buckeye State Second In
List In Amount Of Money Raised.
Washington, July Commission
er Of Corporations Herbert Knox
Smith has submitted to President
Taft his report on state taxation of
corporations, dealing with tine east
ern central states.
In speaking of the differences be-
tween the tax laws of the states. in
the light Of judicial decision. pactical
administration and revenue returns.
Mr. Smith says:
"The eastern central group differs
from the middle Atlantic group in
using much more extensively the gen
eral property tax for state fevenue.
Wisconsin alone appoacheS>a separa.
special taxes yield sufficient revenue
for ordinary state expenses. Ohio
applies special taxes and the general
property tax to- the same corpora
tions for state purposes. mdinn and
Illinois levy practically no lpecial
taxes on corporations.
Michigan and Wisconsin make
.T.t fff..
and street railway property, which,
. with earning capacity, forms the ba-
sis of state-administered ad valo-em
taxes. Reversing the tendency al.
most universal elsewhere, these two
states have. with respect TO the taxa
tion OF railroads. gone from ;he mod
ern gross earnings method to the ad
valorem tax. They also use eXten-
sively the average rate method l. e..
applying to certain public service cor
porations rate which is tho average
of the state and various local rates.
wisconsin derives about Il per
cent OF It's total state taxes from cor.
porations; Ohio. 80 per cent; lndi.
ana. 10 per cent; Illinois. "a per cent.
In Michigan. revenue from special
corporation taxes is applied entirely
TO the school fund. and equals about
AS per cent of the total taxes collect
ed BY the state. The entire real and
personal property Of Wisconsin Is an
nually valued for state purposes by
a state commission.
Railroads Among Heaviest Payers.
The constitutions of three states IN
this group. namely. Ohio. Indiana and
Illinois. prohibit the exemption Of
corporate property from the general
property tax. Railroad and Insurance
companies are among the heaviest
taxpayers In this group"
In speaking of Ohio the commits
sioner has this to say:
"rhe total state revenue from tax
alton In 1909 was a little more than
$40 900 900. or this amount over 3.
per cent was from corporations.
state and local taxation Of corpo
rations Is by the ad valorem method
supplemented by special methods o.
state taxation. Thus. in addition {;
the state tax on property, railroad.
pay on gross earnings; express. tele
graph and telephone companies OF
gross receipts; and mercantile. mar
ufacturing and miscellaneous zorro
rations on capital stock
"WhIle the rate Of the capital stool
tax is comuaratively low q, y.olGi
about 81 100000 ansually. T. is lev
fed on the par value OF Issued capita
stock OF domestic ccrrorati2u7 an,
on that portion Of autlorizel cariia
stock OF foreign corporations whi"l
Is represented by property within tl'
state.
"The new law Of 1910 provides 10
the most highly centralized admin'a
tration found in any Of the state
thus far studied. The state tx com
mission has wide administrative row
ers. II assesses tie TrorUty Q
practically all public service corpora
tions ami apportlons us value ancn
counties and LEGAL districts. II fac
the amount upon which the stnte col
lects taxes on corporate cGrp'ngs an
capital stock ana has SUPERVISOR
and administrative autFor.t" owe
local officials. with additional rowo
10 change local assessments Iron Il
own initiative"