The Richmond Virginian. (Richmond, Va.) 1910-1920, 1913-09-21
by EDGAR syDENsTRucKER

The Corporation Tax-IV. From 1869 to 1880
Prior TO and during the civil war practically
all public service corporations In Virginia were
taxed according to their earnings Before 1855
tax law of 1S56-lS56, the tax gross
earnings. As soon the general assembly met
after the reconstruction days, and under the
L aderwood constitution the property tax was
applet To corporations and earnings basis
for taxation was discarded for time. In
previous article attention was called to the fact
that before 1869 there was provision for apply
Ing he property to any public service cor
porator when that corporation failed to give
IN specified time the sworn statements to
rec, pts. Excepting the use of the tax as a
pena!tE the property tax not recognized
as a method Of corporation taxation.
Property license and individual income taxa
dior was emphasized in the constitution of 1867
as he proper method of obtaining revenue. and
preference given property the best
hasl" for taxation. Capital stock was regarded
aE property and It expressly provided that
+ al property should be taxed in proportion
TO its value. Only when business. he II in
eorporated or not. could not be reached by the
property tax was the license tax to be used.
As the result IN the acts Of lS6s-7o, as
amended by the acts of 1S7i-72, with hut one
exception all public service corporations were
tSctt- with rre property Tux atone. TOff DTfdKe
and ferry corporations. railroad. canal express,
steamboat, stage. sleeping and other in
corporated transportation companies were taxed
on property basis of so cents. the hundred
dollars, Telegraph companies taxed at the
same rete on their stock and assets, and in ad-
dttcn, were made to pay double license tax.
Telegraph companies having capital stock Of
$4,000 TO 100000 had to pay fat license of
$3.50: companies of $4,000 had to pay
$3.50 plus additional IS for each 81 900 of
capita. In addition to this there a gross
earning tax Of one and one-half per cent. All
! local taxation was prohibited of public service
Icorporetions.
| The property tax was not confined to the
tangible property Of the railroads and other
corpora tons. however. 1t intended that
| heir Intangible value should be used basis
for taxation we'll Since none of the rail-
1 r0atS, in the industrial wreck and chaos that
followed the war. paid any dividends, bonds
were chosen as the measure Of value rather
than stocks. In 1872. besides the five mill prop
| crty tax, tax of five mills on the dollar of
bon Gee Indebtedness imposed. In order
| that this tax might not fall upon the railroad
lromnalaies, 1t was expressly provided that the
amour. of the tax should be deducted from the
/ bondhol ders' annual interest. This law, so far
rs IL applied to bondhoders outside Of Virginia.
wa. later declared void, and since the majority
/ of thc bonds held by investors outside OF
! the state. the companies had to pay most of
The corporations were required as they were
before the civil war. TO furnish to the State all
| the information necessary for the imposition of
1 the tex. Since the property tax was now ap-
piled they became their own assessors. The
state auditor accepted final the assessme nts
of corporation property made by the corpo-
| tendency To minimize the value of the property
as much possbe~a tendency which is evil
dent Under normal conditions In all times and
places by all payers of taxes, and this tendency
vas greatly encouraged ny the pitlable physi-
fcAi condition in which the public service cor
porations found themselves Immediately after
the war 1t cannot be denied that, in the
habit of greatly undertaking their property, II
we difficult to get into that frame Of mind
which would he conducive to higher voluntary
assessments especially when there little
actual pressure for one reason another from
the legislature The reasons for this. time
went on. became more and more political rather
| than economic
But regardless Of the causes the fact remains
that this method of corporation taxation re-
suited in revenues that became disproportion-
ately less In relation to revenue from other tax
abes The following table will Illustrate;
Table Showing Total Revenue of State and Rev
enues from Corporation Taxes, 1S7f-1SsO.
Ave annual. Ave annual
| receipts, receipts
Source. lS71-1875. 1876-1S8o
| Express companies .....S 500 400
Pullman companies. 100
Railroads .............. 26,600 G9,109
Steamboat companies 49,. 600
Telegraph and telephope
/ companies ........... ~ 300
Ferries and toll bridge
| companies .,........., 700
Improvement companies 10000
| Total corporation taxes. s 5s.l40 $4,000
Revenue from all sources 2.114.440 2.236, 100
F.
| 'Includes some revenues later specified under