The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1914-01-08
Mining Companies and Corpora
ton Tax

Those exempted are labor, agricultural
or horticultural organizations. frater-
nal beneficiary societies orders or as
sociatlonS operating under the lodge
system, domestic building and loan as
sociations. corporations and associa-
tons organized and operated for re-
lsious. charitable or educational pur-
poses, etc Moreover, the section i'm
poses a special excise tax with re-
spect to the carrying on or doing bust
ness by such corporation etc. That
. mining companies are doing business,
within the fair intent and meaning of
this clause, seems to us entirely plain,
for reasons already given. The con-
duct of such business results in profit.
for It can not be seriously contended
, that the ores are not worth more at
the mine mouth than they are worth
In the ground, plus the cost of mining.
Corporations engaged in such business
share In the benefits Of the federal
government, and ought as reasonably
to contribute to the support of that
government as corporations that con-
, duct other kinds Of profitable busi
ness"
The third important Issue raised by
the case--whether depreciation should
be given a special status in mining az
sessments is dealt with In part as fol-
lows
TT is at the same time obvious that
that excludes all element of gain from
the process of mining must. through
one process or another, exempt min.
ing companies from liabilities to tax
under the act Of 1909 with respect to
, their mining operations. And SO. an
:. affirmative answer to the third ques-
ton as propounded would be the same
in effect as an aftirmatiev answer to
= the first or the second. For it is a
;, matter Of little or no moment whether
: It Is to be said (a) that mining cor
porations are not engaged In business
!, al ALL or OBJ that they are engaged in
business, but the proceeds Of ore min
= ed are not income, or Co that such
proceeds are income. but that there
must be allowed as depreciation all
:, that part of the proceeds which re-
:. mains after paying the bare OUTLAWS
of the business In either case min
ing corporations would be exempt
:. from the tax
:, In our opinion there are at least
=, two insuperable obstacles In the way
Of t,or t{t,r
:. the third question as certified.
- In the first place, 1t Is fallacous to
say that, whateve may have been tho
ts original cost Of mining property or
"A the cost Of developing It. If in fact II
,t afterward yield ores aggregating many
times its original cost or market value.
this result merely proves and at the
- same time measures the intrinsic value
-. that existed from the beginning. We
-, are here seeking the correct interpre-
4. tation and construction of an act Of
, legislation that was, at least. designed
W., to furnish practical mode of raising
-. revenue for the support of the gov
eminent, and to do this IN part by i'm
posing annual taxes upon corporations
T. organized for profit and by measuring
the amount of the contribution to be
- required from each corporation ac-
-. cording to its annual income The act
=. deals with corporations engaged in
~ actual business transactions and pre-
:. sumably conducted according to Or
= binary business principles. 1t was, Of
t~I hot he
might be derived from the employ
=. ment Of property In business. and that
. this property might become more or
:. less exhausted in the process; and be-
u, cause of this, a reasonable alloWancs
:, was to be made for depreciation of 1t.
70 if any. But plainly. we think, the VAL
- uation of the property and the amount
-, of the depreciation were to be deter
- mined not upon the basis of latent
>. and occult intrinsic values, but upon
-, considerations that affect market
value and have their influence upon
), men of affairs charged with the man
i agement Of the business and account
ing Of corporations that are organized
- for profit and are engaged in business
for purposes Of profit.
- And, secondly. assuming the deple-
tion of the mineral stock Is an element
al to be considered in determining the
reasonable depreciation that IS to be
t.. treated as a loss in the ascertainment
~ Of the net income Of mining company
=, under the act we deem It quite mad
l., MISSILE to estimate such depletion q:
" If it had been done by a trespasser, tc
:, whom all profit is denied
IL, with respect to the proper meas
u, ure Of damages where ore has beer
;, unlawfully mined by one person upon
>. the land Of another, there IS much
49, conflict Of authority Different mode.
1a Of determining the damages have
or been resorted to, dependent some
- times upon the form Of the action
=, whether trespass or trover, sometimes
i, upon whether the case arose at Law
or In equity; and often upon whether
,o the trespass was willful or, inadvert
ent"