Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1918-02-01
Would Change Bank Tax Law.

Senator Williams, of this county, has in
troduced an important BILL affecting the
rate of taxation. for State, countyland NUM-
cipal purposes. of the stock Of trust COM
panies and State and National banks,
located and doing business in Maryland.
In explanation Of his bill. Senator VIII
liams said:
THE bill will equalize the rate of taxa
ton for county, city and municipal pur-
poses of the stock of State and National
banks with the rate for said purposes paid
by trust companies located. and doing
business. in the State.
Under the present law all State and
National banks. and trust companies, To-
Gated, and doing business. in the State.
pay capital stock tax to the State and
to the several counties and Incorporated
towns in which they are located. The
valuation for the purpose of assessment
is ascertained by the State Tax Commits
sion by adding the amount Of capital
stock. surplus. and undivided profits to-
eether and then deducting from that
amount the assessed value of all real
estate owned by the bank. and dividing
that result by the number of shares Of the
corporation. On the valuation so ascer-
tanned a tax Of one dollar on each 500
is levied. dividing the proceeds therefrom
between the county and municipal gov
ernments in the same proportion as the
county rate of taxation bears to the town
rate.
Trust companies are excluded by the
present law from this privilege and pay
the full county rate and the full munich
pal rate on the assessed valuation of their
stock. Either the State and national banks
should pay this capital stock tax on the
same rate basis as trust companies now
do. or trust companies should pay on the
same rate basis as the State and national
banks. The bill introduced today would
place the trust companies of the State on
the same basis regarding the payment of
this tax as are State and national banks.
The gross receipts tax of 1-2 per cent.
now paid to the State by trust companies.
and not required to be paid by the State
and national banks. is not disturbed.
Trust companies in the counties and
in the cities Of the State. outside Of Balti-
more city, are. to all practical purposes,
State banks. and am reliably informed
that most Of the trust companies outside
of Baltimore city make no attempt to do
a trust business. Yet all of them pay to
the State the gross receipts tax Of 2 1-2
per cent. which is not done by State and
national banks, located and doing business
in this State. know of an institution that
last year paid gross receipt tax Of about
$500 on receipts Of about $4,000, of
which amount about $3.50 was from trust
business. However, no attempt is made
to disturb this tax. but the trust compa-
MES of the State should not be required to
pay the capital stock tax on a different
rate than that levied against the State and
national banks when the method of fixing
valuation is the same in both classes Of
financial and trust institutions, and when
the trust companies also pay an additional
2 1-2 per cent. tax on their gross earnings.
less the amount derived from the invest
ment of capital stock, surplus and undi-
vided profits"