Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-02-14
The Sterling Amendments.

The wise and just amendments of the
intangibles tax law proposed by Sena-
tor Sterling, the author of the law,
ought to be quickly approved by the
eonferees on the District appropriations
bill.
The new law, if thus amended, will
still cover a more extensive scope of
taxable intangibles than any other in
the new classification of states impos-
ing a low-rate tax on certain intangi-
hes, in which the District now finds it
self. The typical and most important
of these states are Maryland, Pennsyl-
vania and Minnesota.
The intangibles tax law now taxes all
moneys and credits except the stock is
sued by District banks and other cor
porations, already taxed, and $500 of
savings deposits, not subject to check.
1t is not entirely clear that the exemp-
ton of stock issued by corporations
within the District, already taxed, COW
ers the stock of Cuisines companies
which by reason of or in addition to
incorporation receive no special fran
ehise or privilege" and which are taxed
as individuals. One of Senator Ster-
hng's amendments clears up this doubt
by specifically exempting the stock is
sued by these business companies. The
result of this Just amendment is to avoid
double taxation and gross discrimina-
tory taxation.
Under this law as thus amended the
stock of District corporations is exempt
from the intangibles tax in anybody's
hands, because in all cases except that
of business companies this stock is al
ready heavily taxed at the source
against the corporation itself in the tax
on gross earnings or capital stock, and
because in the case of the business COM
panies the law recognizes that the stock
certificates of corporations which "by
reason of or in addition to incorpora-
ton receive no special franchise or
privilege" represent no taxable values
distinct from the value of the realty
and personally owned by the corpora
ton.
The existing law says that such cor
porations shall be taxed as individuals
conducting business in similar lines are
taxed. These individuals are taxed on
no 81,
own. The documents which show the
owners of the business and the share
owned by each are not taxable property
or property at all, whether they take the
shape of partnership agreement or
stock certificates. Clearly partnership
agreement is not taxable property
neither are the stock certificates which
take its place if the partnership is con
verted into corporation. Unless the
corporation is of kind which by rea.
son of or in addition to incorporation
receives some special franchise or priv
lege the change adds no taxable val
ues to the holdings of the partnership
corporation, anu II IN ADDITION 10 taxa
tion of the realty and personality of the
partnership corporation, the stock Ger
tiicates which are mere indicia of own
ership in the corporation are taxed
there is clearly double taxation There
is also unjust discrimination between
individual owners and owners who have
incorporated. There will also be dis
eriminatory taxation in the tax on tan
gible personally which is paid directly
by the business companies and is NO
paid directly by the corporations taxed
on tAsir gross earnings or their capita
stock
This exemption from the intangible.
tax of the stock issued by local corpora
tions which are already specifically
taxed 10 made without exception in III,
states imposing the low-rate intangi
Lies tax. The law, for instance, doe
not apply in Maryland to "shares O
Maryland corporations; or in Penn
sylvania to shares of stock of corpora
tions subject to taxation upon capita