Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1915-09-22
ATTORNEY GENERAL
lsSs CONSTITUTES CAPITAL
Important Opinion Is Rendered Up
holding Auditor Moorc's View
g of New Tax Law.
CITES CASE OF FuNKHoUsER
Supreme Court Has Defined Capital
as Money Out at Ones Risk and
| Profit, Whether Owned or Bor-
rowcd-Garnett Writes Opinion.

q
Commerce IS sustained in An opinion
rendered Yesterday By Assistant At
5orney- General c. r Garnett.
The committee that called upon tho
Auditor for proper construction OF
tho law consisted Of granville h Val
ontine. Arthur II. Cannon and q. \.
Hswkins The Auditor. after advising
the committed referred tho question to
-he Attorney Generals office tho bet
ter To satisfy the business men
AUDITORS OPINION
Is FULLY SUSTAINED
In the opinion received yesterday the
Auditor Is fully borne out in his con-
s,ruction as the following commune
= cation viii show:
September 81, 1915.
Hon. c. Lee Moore
Auditor OF Public Accounts.
Dear Sir-You have requested this
office TO advise you as to the proper
construction OF the word capital
under section OF the tan bin. as
amended by tho Acts Of 1915. p 9S.
and specifically rs TO whether, under
the present state OF the law, capital
includes money which may have been
invested in business.
Section S Of the tax bill, as amended
by Acts OF 1915. ?. as, provides for
The taxation Of:
All capital OF individuals invested.
used or employed IN any trade or bust
ness not otherwise taxed. Moneys and
credits actively used and employed In
carrying on the trade or business, ma
terials. goods, wares and merchandise
i. on hand and all solvent bonds, notes.
demands or claims made or contracted
in the course of business during the
preceding year tbut not Including any
moneys on hand received from loans
made for period OF not more than
fonr months. which shall be owing and
- shall have been actually contracted for
the necessary conduct of such bust
ness, shall he held TO be capital in
such trade or business, and shall! not
DE taxed otherwise than as such cap
stall; but real estate shall not he listed
as such capital. but shall he listed and
taxed as real estate; provided how
ever. that nothing herein shall pre-
Vent cities and towns OF this Common
wealth from imposing n license tax on
merchants, mercantile firms or cor
Torations, based on their purchases or
otherwise in pursuance OF their re-
.9eciivc charters or general laws OF
7hs state for the government OF cities
and towns"
II is claimed by some taxpayers that
the exemption OF money on hand re-
"c!ved from loans made for a period
oi not more than four months. which
shall be owing and which have been
actually contracted for the necessary
conduct ot such business, should be
construed II exempt not only money
on deposit or in the cash drawer but
also money which has been borrowed
und invested in the business although
may not be literally on hand on
february /. In this connection. II
ieems proper to quote an order en-
tered At meeting OF the State Advis-
Dry Board on Taxation, held on Sep
iember ?. 1918, copies OF which were
"cnt 10 the Examiner OF Records and
local BOARD OF Review for the city of
l.ynchourS, and which reads as fol-
loWS.
The State Advisory Board OF Tax
alton having heard representatives Of
the manufacturing interests o: the city
OF -lnchhurS respecting the taxation
OF capital for 1918. and having duly
considered the question is OF the opiu-
ION ana advises that there being no
change In the present law nroy;dinr
Tor the taxation OF capital from, tha
provisions OF the former law proy,d-
ny cor the taxation OF capital, other
nan to allow ~. ueduti ion for any
moneys on haId received from loans
made FOR period OF not more than
ioUi months, which shall Dc owing and
snail have been actually contracted for
we necessary conduct Of such bust
ness, and the Supreme Cour, OF An
Iea!S OF inns State having construed
me former LAW. capital ;ov tho y,,r
A3!" should be assessed in accordnnc.
"itA the opinion o: that court as 50,
tp!tH IN the case OF tho Rr!d-cwai.r
manufacturing Company VS. Funk
fouser. commissioner. ana others Tx
NlTs!nla Reports. subject, however 10
she EsHt OF the taxpayer 10 d.duc,
'any moneys on hand received from
ioans made for 4 period OF not more
man -FOUR months. which shall be
, wing and shall have been actually
contracted tor INC necessary conduct n,
Such business as authorized by the
amendment above referred 70
"As this board win issno
circular relating 20 ,hc assessment n,
this time OF omitted taxes on ~
tangible personal property. money and
income, and the merchants license tax
that matter is not here dealt Win
specihchlly Win respect 10 taxpaycrs
or the city Of Lvuchburc
After a careful consideration ~ m.
question. and also OF Brldgnwa,er
Manufacturing Company vs. prrk.
houscr, ll5 Va SIS. ! am rnaFla -
agree with the contention OF tho 49,
payers aforesaid. and ain force5 -
conclude that money received IRON,
aoans mad" for period % moi ,7oro
than Tour months which shall ha o,virc
and which shall have been ac,usiis
contracted for the necessary condrc, -.
Inc business. IS not ON hand wh.n !,
mas been utilized IN ,hc business ans
mat therefore, n!oncys received IRON,
such loans and utilized I'm the nljsircss
is suoJect 10 taxation IS capita!
Nerl truly yours
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