The Birmingham age-herald., 1916-01-02
WILL MAKE TEST OF.
 NEW FRANCHISE TAX. UPON CORPORATIONS.
Under New Law Tax Pay ment for Three Months Must Be Made
 Twice

Montgomery, January 1.-(Special 1.-The l case of HiX-Gravely Cigar company vs. l Teasley, probate judge of Montgomery 1 county, in q test of the validity of the corporation franchise tax law: that is. as to the manner of the collection of 1 taxes under that law, will be tried in ] the city court of Montgomery next week. It is probable that the case will be Eeard before the state supreme court in early January; for, on account of the fact that subdivision of section 16, 1 fixing the franchise tax on corporations, provided that no foreign corporation shall be entitled to sue on a contract in this state unless it's franchise tax is paid 50
 days after it is due, it appears necessary for the protection of property rights for this question to be settled at once by a court of last resort. And while the rul- ing substantially as quoted below, made l by the attorney general, would be a
 guidance for tax officials, it is said it could not, of course, be decisive of prop erty rights.
 The ruling of the attorney general was to the effect that these taxes are due and payable to the judge of probate on January 1, 1916, and are delinquent on January ?; that a license will be issued by the judge of probate for period of nine months, expiring September 30 1916, but the corporation will have to pay for
 a full year. that the license inspector has no duties in connection with the delinquency of the tax; that the judge of probate is entitled to fee of 50 cents for issuing the license, and a commits
 sion of 21a cents of the amount collected. It is said that the result of the holding is that corporations will be compelled to pay the same tax on October l, 1916, and that the last three months of the year will be duplicated. This results from the provisions of the law requiring all license
 taxes to run for a period of one year, beginning September 30 1916.
 The attorney general has suggested, as a practical solution of this question: the following:
 That the judges of probate issue li- censes for the period beginning January 1, and expiring September 30 1916, charg- ing therefor the tax for the entire year, according to section 16.
 "The question will be shortly submit- ted to the supreme court, and if it is held that the licenses should expire on December 31, 1916, publication will be made of such holding and the officials will be governed accordingly. If it should be held that three-fourths of the
 tax should be paid on January l, 1916, the other one-fourth will be refunded un- der the provisions of section 15 of the license act; or a policy may be worked out whereby a credit of the excessive amount may be given on the next year S license. If only three-fourths of the amount should be paid on January 1, 1916 and the court declares such pay
 ment unauthorized, foreign corporations might find their contracts jeopardized by the provisions of subdivision of section 16 prohibiting their doing business un- less the tax is paid within 60 days after it is due.''
 The outcome of this test case ~~>i! prob ably be watched with great deal of interest.