The Green Forest tribune., 1912-08-09
STATE IS SUE|NG
 FUR BACK TAXES
Attorney General Norwood Will Push Cases Before Courts.
 Millions Involved.
RESULT OF LAW MADE IN 1873
Nearly Every Foreign Insurance Com. pany Doing Business Is Involved
 in Suit.
Western Newspaper Union News Service.

Western Newspaper Union News Service Little Rock.--Attorney General H.. L. Norwood, Assistant Attorney Cell eral w. H. Rector and A. w. DobynS, special counsel filed suits in the Pu- laski chancery court against 8S fire, accident and miscellaneous insurance companies and 42 life insurance com- panies for back taxes, aggregating more than $4000,000, said to have ac- crued since the year 1873. The suits were filed under An Act to Establish an Insurance Bureau" approved April | 25, 1873, and under another act ap- proved February 27, 1895, and includes nearly every old-line foreign insurance company doing business in Arkan- sas.
 The total amount sued for is $4,236,- 610.75, and the proceeds will go for | the use and benfit of the state, Pulas- Xxi county, the city of Little Rock and the school district of Little Rock. Regarding the suits, the following statement was made at the attorney generals office:
 "The contention of the state, brief ly put, is that all foreign insurance companies are annually liable for the payment of two species of taxes, one a property tax on its gross receipts, less losses and commissions, and the other a privilege tax on it's gross re- ceipts, allowing no deductions what ever. A great majority of the compa- nies have paid the property tax of 2 1-2 per cent on a part of their net re- ceipts. In paying this tax, however a large number of the companies ir addition to deducting losses and com missions from their gross receipts, have also deduced premiums, divt dends, refunds and rebates. The state 1 contends that these deductions were unlawful and judgment is asked for 2 1-2 per cent tax thereon.
 'The privilege tax, which is fixed by the act of 1873 at per cent on the entire amount of premiums received has not been paid by any of the com panies since 1880, which is as far bach as we have gone in examining the rec ords. The legislature of 1873 provid ed for the payment of these two kinds of taxes by foreign insurance com panies-one a tax for the privilege oi doing an insurance business in this state.
 "In 1875 the property tax was changed, and instead of the property being subject to the general state an6 county levies, levy of 2 12 per cen tum was provided. This uatter act did not repeal the act requiring the payment of a privilege tax of 3 pei | cent The latter act can only be con strued as a property tax( because to construe it otherwise would be to exempt property from taxation, which is contrary to the constitution.
 "The questions involved have been given a great deal of attention and ar exhaustive examination of the au7 thorities has been made with the re- suit that we have reached the con clusion that a large sum of money is due the state on account of back taxes.
 "The suits filed are against practi cally all the foreign insurance con- panies which have been doing busi- ness in the state for more than two years. Other suits will follow.
 "This office will insist upon speedy trials, and suits for back taxes have right of way over all other causes"