The Van Buren press., 1912-08-10
STATE IS SUE|NG
FOR BACK TAXES|
Attorney General Norwood Will
Push Cases Before Courts,
Millions Involved.
RESULT OF LAW MADE IN 1879
Nearly Every Foreign Insurance Com.
pany Doing Business Is Involved
in Suit.

Western Newspaper Union News servic,
Little Rock.-Attorney General "
L. Norwood, Assistant Attorney Cen
eral w. H. Rector and A. W Dobyps
special counsel filed suits in the pr.
laski chancery court against IS firs
accident and miscellaneous insurance
companies and AZ life insurance CON.
panies for back taxes, aggregatips
more than 100000, said to have A.
crued since the year 1878. The suits
we're filed under AN Act to Establs4
an Insurance Bureau approved Apn
25. 1878, and under another act ae
proved February 81, 1895, and include,
nearly every old-line foreign insurance
company doing business in Arkan.
sas.
The total amount sued for is s4,23g,
61O.75. and the proceeds will 20 for
the use and benfit of the state, Pulas
XII 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, briel.
" put. is that all foreign insurance
companies are annually liable for the
pavment of two species of taxes, one
a property tax on its gross receipts
less losses and commissions, and he
other a privilege tax on its gross re-
ceipts. allowing no deductions what
ever. A great majority of the cOms
nies have paid the property tax Of a
- per cent on part Of their net re-
ceipts. In paying this tax, however
a large number of the companies i1I
addition to deducting losses and con-
missions from their gross receipts
have also deduced premiums, div
dends, refunds and rebates, The Statt
contends that these deductions were
unlawful and judgment is asked iOr
a . - 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 CON
panies since 1880, which is as far bac
as we have gone in examining the rec
ords. The legislature Of 1873 proyi|
ed for the payment Of these two hnti|
of taxes by foreign insurance Cop|
panies-one a tax for the privilege II
doing an insurance business In ths|
state.
"In 1875 the property tax val
changed, and instead Of the proper
being subject TO the general state an
county leyies, levy Of 2 l-s per ceu
tum was provided This uatter ac
did not repeal the act requiring ths|
payment of a privilege tax of pei
cent. The latter act can only be COZ
strued as property taxi becaI'|
to construe It otherwise would be N
exempt property from taxation, whIa|
is contrary to the constitution.
"The questions involved have been
given a great deal Of attention and a.
exhaustive examination Of the au
thoritles has been made with the re
suit that we have reached the COZ |
clusion that a large sum OF money
due the state on account OF back
taxes,
THE suits filed are against prac
cally all the foreign insurance cor
panies which have been doing bus
ness in the state for more than tS'
years, Other suits will follow.
This office will insist upon speed
trials, and suits for back taxes haW
right Of way over all other causes