Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1914-09-16
NEW BANK TAX
ACT DOES NOT
EXEMPT BONDS
Deductions Would Defeat the
Purpose of the Law, Jess
! Writes National Bank.
Special to the Evening Star.

1PNctat To Lne Evening star.
TRENTON. Sept. 16.-Frank B.
Jess, president of the State Board
for the Equalization of Taxes, has
addressed a letter to William F. Nor
gan, president of the Burlington
County Board of Taxation, which is
of particular interest to all those ac-
uuainted with the working out of the
new bank tax act enacted at the last
session of the Legislature.
The letter is in reply to a query
from the Burlington county board as
TO whether a national bank which
filed its statement could be permitted
to make certain bond deductions.
which amount, it claimed, could be
subtracted from the capital, surplus
and undivided profits taxable under
the new act thus escaping that much
taxation. President Jess, in his re-
ply, states that such a move would
render nil the provisions of the bank
tax act. and quotes the provisions of
this law to show that nothing can be
deducted or exempted except the as
sessed Alue of the real property of
the bS~K.
Jess's Letter.
lEIltT III part 10 DIS AOlAONSs
"FI n the statements made by you
AM the documentary evidence pre-
sehted we understand the state of
fact upon which our opinion Is
sought to be as follows:
"A national bank files with your
board a statement in accordance
with the requirements of the new
bank tax act Chapter 80, laws of
1910, in which it shows its total capt.
tai, surplus and undivided profits to
be $1"2.257 SO and the assessed value
of its real property $4,000. The bank
supplements this statement with a
declaration that on May 20, 1914. "a
portion of capital. surplus and I'M
divided profits was invested in cere-
tain bonds of the par value of $160, 900,
which said bonds are by law nom
taxable The bank gives a list of
the bonds so purchased and then
claims that in estimating the value
of the stocks of said bank for the
purpose of taxation the value Of said
bonds. in addition to the value of the
real estate owned by the bank, should
be deducted from the amount of the
capital, surplus and undivided profits
of said bank Your board is advised
that the deduction claimed cannot be
allowed. To allow 1t would be to
nullify the bank tax act and to de-
Feat the very purpose the statute was
intended to accomplish.
No Reduction of Any Kind.
Section 2 of the bank tax act pro-
vides: The value of each share of
stock of each bank, banking associa-
ton, or trust company shall be as
certained and determined by adding
together the amount of the capital,
surplus and undivided profits of such
bank, banking association or trust
company, and deducting therefrom
the assessed value of the real prop
erty of such bank, banking associa-
ton or trust company. and by dtvid-
ing the result by the number of out
standing shares of such bank. bank
ing association or trust company. No
deduction or exemption shall be al
lowed or made from the value de-
termined as herein provided.
Mr.. Jess's letter then quotes sec
ton of the bank tax act as provid-
ing that the taxing rate shall be
three quarters of one per cent, the
owners of the stock not to be entitled
to any deductions whatsoever. He
also says that section makes 1t the
duty of the county boards to deter
mine the true value OF each banks
stock and then outstanding and true
value of each single share, and con-
cludes by saying that these provi-
sions clearly state the method OF as
sessment of bank shares and express
ly prohibit any deductions except for
real estate.