Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1911-04-01
GIVES ADVICE To
ASSESSORS UPON
BANK STOCK TAX
City Counsel James X. Nugent
Answers Questions of
Local Board.
TELLS HOW TO REACH
THE TRUE VALUATION
Fire Insurance Concerns Taxed
in Same Manner as
Trust Companies.

An official Interpretation of the deci-
sion of the Supreme Court on February
u relative to the manner of taxing
mix shares was given today by City
sunsel James r. Nugent. following a
quest by the Board of Assessment
I'd Revision of Taxes. Four questions
Ire asked the city counsel, three Of
%nich he answers at this time by posi-
We statements and the fourth, he says,
ust be given further consideration.
Mrhese questions and answers are the
tcome of the suit between the city
Md the banks as to whether the book
e the market value of bank shares are
be assessed The tax commissioners
N3sessed the market value and the
latter was taken to the courts by the
#anks. The Supreme Court ruled in
1avor Of the city on the 1909 assess
Gent, and an appeal was taken by the
anks. Within the last day or two the
Hity filed brief with the Supreme
ourt relative to the 1910 assessment.
& Tfbe questions taken up by the city
outsel refer to the deductions to be
7Nnadio from the true value of bank
y hafes of non-taxable securities, in
debtedness of the individual and the
Question of whether fire insurance and
trust companies are to be assessed on
Elthe market value of their stocks. The
Sbpinion in full follows:
City Counseps Opinion.
Va March "a. 1911.
"a Board of Assessment and Revision OF
Taxes, City Hall, Newark, N. j.:
N "Gentlemen--Your favor of March Ia
&inquiring as to t,,e effect of the opinion
10y the Supreme Court in the case Of
Newark VS.. Tuns relative to the taxa
.gtion of bank stock is duly received, and
81 will take up and answer your ques-
as in the ord r stated in your let
ktrirst-'Are deductions fo- non-tax-
81 pi pioperty held by national banks
k4rust companies to be allowed d
#ucted from the true value of the
PIX shares?'
$rhs is expressly decided in the af-
&ative anC also by the Court Of
-ors and Appeals in the case of Lip
5isicott vs. Lippincott. The proper
pressly laid down by Justice Swayze
Z in the Tunis case as follows: The true
raluation of all the shares at their eX-
change value in the market under ordi-
nary and ormal conditions. From this
is to be deducted the assessed valua-
ton of the real estate and the value
Of the non taxable securities Gf any
held by the bank. The difference, di-
vided by the total number of shares,
gives the assessable value of each share
Of stock l.. the hands of the stockhold-
ers.
'.Second-If so, are further deduc-
tons for Indebtedness to be allowed
TO the individual holders of bank
;hares?'
THE i-dividual holders Of bank
sares are to be allowed deductions for
tisir individual Indebtedness as against
tlA Total lue of their taxable prop
cry, just as in the case of other indi-
u& ). The fact that they are allowed
deduction for the real estate and nom
taxable securities held by the bank
does not do away with their right to
dedl .tions for their individual debts.
ItliA to la RENE 1bered that the prop
ertypf the bank is not taxed except it's
real Estate.
Fire insurance Companies.
"Thrd-'Fire insurance companies
and tust companies having been as
sessedin the same manner are fire in
Arane companies to be assessed the
fime Is trust companies will be for
F11?'
E"sectpn IS of the tax act of 1908 pro-
eides tAat
"'Evdy fire insurance company and
livery tAst company shall be assessed
IA the liking district where its office
B situatf upon the full amount of its
sapital sbck paid in and accumulated
lurplus. the real estate belonging to
Every sucl corporation, however, shall
be taxed b the taxing district where
such real Estate is situated, and the
Samount ofassessment upon said real
estate shall be deducted from the
amount of any assessment made upon
the capita1lstock and accumulated
surplus. as lerein provided for
Judge Sw;kze in the Tunis case ex-
lpressy decfes that under this
language. trut companies are to be
assessed upon the rue 0hat is, the
fair exchangel or market) value of
their capital stclz. 1t necessarily fol-
lows that fird insurance companies
Ilmust be assessd in the same manner.
"Fourth-'If dnuctions for non-tax-
hble property hid by national banks
Ind trust computes are allowed to
be made from TIL true value of bank
| shares shall an lffidavit be attached
tp their statement wherein the officer
Of the bank mailing such statement
DECLARES the non-4xable property held
by the bank or tust company is a
paH of the capita surplus and un-
diviaed profit of slth bank?'
''The taxation of fhational and State
banA stock is agahst the individual
holda of the stocA the stock being
treatAd as property L the stockholder,
just he same as ally other personal
property. From thl value of this
properly the stockho(er is entitled to
deduttiop of all thu non-taxable Sc
curlty owned by .hl bank. In the
Rxatioh Of trust couparies and fire
a