The Richmond Virginian. (Richmond, Va.) 1910-1920, 1916-09-12
FOREIGN CONCERNS
TAXABLE BY STATE
LIABILITY OF CORPORATIONS
NOT DOMIOLED IN vIR-
GINA ESTABLISHED.
STATE COURT DECIDES
LOWER COURT REVERSED IN
CIGARETTE MACHINE 90. CASE,
SETS IMPORTANT PRECEDENT.
OTHER OPINIONS.

Declaring that the action of the
Supreme Court OF Appeals OF Virginia
in reversing the case OF the Common.
wealth against United Cigarette Ma
chine Company, Limited, the opinion
in which case was handed down yes
terday at stanton by Judge r. n.
Cardwell, was a decided victory for
the state of Virginia. Christopher b.
Garnet, executive secretary Of the
State Tax Board, issued statement
yesterday in which he said that II
was one of the most important cases
that has come before the court In
years.
/ Not only says Mr.. Garrett. is tho
i case important because 1t means q
/ large amount of taxes due the State.
/ but it sets a precedent in the pend
] ing cases of similar nature and future
! litigation. The case involves the liza
bility of foreign corporations doing
/ business in Virginia for taxes on their
actively employed capital. The Cir
/ cult Court held that the State could
not tax such foreign corporations, and
| the appeal was made to the Supreme
Court. which reversed the decision OF
the lower court
Mr.. Garnett yesterday afternoon
telegraphed to stanton for copy Of
the opinion. and until this arrives he
/ is unwilling to go into the points de-
cided The opinion will doubtless be
received today Mr.. Garnett was
counsel for the State in the proceed
ings before the Supreme Court, and
his statement is as follows:
The action of the Supreme Court
of Appeals in reversing the case Of
| Commonwealth VS.. United Cigarette
| Machine Company, Limited, Is de-
cided victory for the State of Virginia.
! 1t is one of the most important cases
that has come before the court for
many years, not only on account OF
| the large amount OF taxes due the
State and County of Campbell, but
also as a precedent in tax litigation.
| The claim OF the State and county
+, for taxes on intangible property ag-
/ gregating over FIVE millions of dollars
/ is established, and the liability of a
foreign corporation for taxes upon
capital employed in this State il set
tied.
The suit was instituted under thu
following circumstances: The United
Cigarette Machine Company, Ltd. IL
| a corporation of Great Britain, but
maintains a manufacturing plant at
F, Durmid, Campbell County. Va. which
has been designated as Its princtpai
offfce in this State, and where it is
arctic machines In the city of
Lynchburg its officers live. hold their
meetings and direct the policy Of the
company, and from that office loans
have been made aggregating more
than s2.s74, 900 beginning with $685.
900 in 1908 and increasing to $651,-
! 600 in 1918. The total amount of its
intangible property for the years 1908
to 1918, inclusive, including its ac-
counts and money on deposit. was
s5,1s255S. During these ~ears this
company paid taxes onlv on a capital
of $40. 900 per year, In 1913 the COM
missioner of the revenue for Camp
! bell County, not being able to get
any returns from the company of it's
Intangible property, assessed the COM
pany with about $4,000 tangible per-
sonal property and about s1,000.000s
/ intangible property or capital The
company, feeling itself aggrieved by
this assessment. instituted its motion
before the Circuit Court of Campbell
/ County to he exonerated from taxes
on said intangible property. The Conn
monwealth commended that the COM
pany was assessa BILE not only for 1913,
with its capital employed in business.
bE1 also that 1t was assessabe with
c;0ital for every year during which
the company had been doing business
in Campbell County.
{ The Circuit Court of Campbell Coan-
I ty held, however. that the company
was only assessable with tangible prop
erty, and that, being a foreign cor-
/ poration, 1t was not assessable with
capital or intangible property in this
State The Commonwealth appealed,
Reversal of the order by the Supreme
Court of Appeals therefore. means
first, that the Commonwealth and
county of Campbell will recover a
/ large amount OF taxes, the amount to
the Commonwealth being about $17.-#
. 500, but from the standpoint Of the
/ Commonwealth, the most important
point lis the precedent which Is settled
| by this ca Sc to the effect that nom
(Cnntinued ON Second Bagel