Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1916-11-24
CITY LOSES CASE
IN SUPREME COURT
Cannot Tax Capital Stock of
Merchants More Than 80
Cents Per $lOO.
HUSTINGS. COURT is UPHELD
Opinion by Judge Harrison
Strikes at Important Source
of City's Revenue.

Striking at the heart OF one of the
citys important sources Of revenue
and. at the same time, setting pre-
ccdent to be followed by local com
munities in the matter of taxing in
tangible personal property under the
provisions Of the segregation act of
1915, the Supreme Court of Appeals
yesterday declared that the capital
stock Of merchants may not he taxed
locally at Il rate higher than 80 cents
on each 800. thereby upholding the
contention Of the Drcwry Hughes Com
pany. dry goods jubbcrs OF this city.
that the rate OF Sl.i0 on each sl00
cNactcd under ordinance by the city
of Richmond is excessive and illegal.
The case came up TO the appellate
tribunal from the Richmond Hustings
Court, whore, on complaint OF the dry
goods company that the assessment Of
its capital stock at 100000 and the
rat" of taxation applied were excess
sive, Judge Richardson held that the
rate of 30 cents on the 500 was the
correct one, and ordered that IL tax
Of 5000 be assessed against the firm.
The opinion OF the Supreme Court af-
by Presiding Judge George NJ. Harrison.
CITY CONTENDED FOR
RIGHT TO HIGHER RATE
1t was contended by City Attorney
Pollard on behalf of the city. that a
rate of taxation to be followed by local
communities is prescribed under the
terms of the segregation act of 1915
only for such intangible personal prop
made subject to State taxation only.
and that the same act provides that
capital OF merchants shall not be sub
ject to State taxation. but may he taxed
locally as prescribed by law.
In dsposinE of this contention and
in explanation Of the meaning of the
act. the court has this to say:
Now the state taxes the capital Of
merchants on the basis of their pur-
chaSeS, calling II license and the
purpose OF the language relied on was
clearly TO exclude the idea that the
state intended 10 tax the capital of
merchants with both license and an
ad valorem tax. The act had already
by clear and specific language. segre-
gated and set apart all taxable intan-
giblc personal property as one of the
subjects that the State alone could
tax. providing that localities might
levy tax thereon not exceeding 80
| cents on the sIo0, and it is not to be
supposed that in the next breath the
Legislature intended to emasculate
what Il had just done by excepting
from the operation of the act one of
the largest classes Of intangible per-
sonal property, thereby rendering it's
action meaningless
OBVIOUS PURPOSE OF
LEGISLATURE. SAYS OPINION
Apart from the manifest desire and
purpose of the Legislature, as shown
throughout this legislation. to adopt
more equitable system of taxation
than had heretofore existed il is
clear that one of its chief purposes
was TO reduce the rate OF taxation
upon intangible personal property. in
order thereby TO induce more general
return of such property and to bring
| about uniformity in the rate of tax
thereon by establishing Il fixed rate
applicable alike 10 all localities The
uniformity, consistency and reason
ableness sought 10 bc attained would
be wholly defeated if the contention Of
the plainiiT in error We're tenable
The whole legislation on this subject
makes it. we think. quite clear that
under the act Of March IS, 1915. the
city of Richmond was limited in its
power to tax the capital of merchants
TO 81 cents OH the sl0O.
Further. the language of tbo so
called exception, that the capital of
merchants shall not be subject TO
State taxation. but may be taxed local
ly as prescribed by law meant that
such capital should not be subject TO
state taxation on the ad valorem ba sis
so long as the State continued 10 tax
merchants with license. The lam
guaGc. but may be taxed locally as
prescribed by law meant that the local
tax must be in accordance with the
general law OF the State, and had
reference TO the preceding provision
or the same section placing "a maximum
tax OF 80 cents. by localities upon in
tangible personal property. If. how
ever. this Interpretation of the ac, of
March 10. 1915. were doubtful. the re-
suit would be the same I'm this case IL
being well settled that n tax must be
plainly authorized before the citizen
can be charged herewith
Richmond has not for many wears
levied license tax on merchants. but.
IN lleu thereof. has taxed their capital.
hc taNc ol Si-fu was nXcu by Ordi-
nance
COMMITTEE on FINANCE
CALLED FOR MONDAY NIGHT
quick action by the City Council
may save Richmond's treasury from
serious embarrassment as IA result of
the supreme Courts decision sustain
ing Judge richardson. and TO that end
special meeting of the Council Com.
mittce on Finance has been called for
O'Clock on Monday night. City At
torney Pollard said that il is within
the power OF the Council to enact. be-
fore The expiration OF the current fircal
year, legislation imposing tax upon
merchants purchases. in lieu OF the
tax OF capital. which Judge Richard
sons decision cut from $40 to 80
cents.
Last summer the Council was pre-
pared to adopt an ordinance imposing
the tax on purchases. but believing that
the supreme Court would reverse the
Hastings Court. action on the matter
was held In allegiance.
An ordinance. which a majority Of
merchants told the Finance Committee