The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-09-05
RAILROAD CASH NOW
ON HAND NOT TAXABLE
Judge Payne Rules Earnings Actual
Property Of United States and Not
Subject TO State Revenues.

The question as to the taxing ny
the state of the cash on hand in the
matter of railroad earnings seems to
be settled by the ruling of Judge Jonn
Barton Payne. general counsel for the
railroad administrator Before the
government took over the operation
OF the roads, cash on mana was TAX :
able as other MONIES or Things OF
value owned by private individual
or corporation. Since, however, tne
United States has become the pro-
rprietor of the railroads. ali such cash
on hand belongs to the government
solely, and is, therefore, NOT taAaoie
tor any purpose.
The letter sent out by the general!
counsel to ali railroad tax agents
carries requirement that whenever
tax return calls for the amount OF
cash on hand" the agent must make
report of none subject to tax with
the notation that all such cash is &C
tually the property of the United
States government, and, Tier efore, not
subject TO taxation.
Judge payne's letter follows
lin -the future handling Of tax mat
tiers in connection with railroad prop
erty under federal control you VIII
kindly bear in mind the following.
ana De governed accordingly
Whenever TAX return calls Tor
the amount of cash on hand you VIII
report none subject to tax with
notation that all such cash Is actually
the property vi the United States gov
eminent, and, therefore, not subject
to taxation. (See section IL. act or
congress, approved March FL, 1879
Where a report OF gross receipts
or net earnings Is made as oasis
for fixing LAX valuation, notation
should be added showing. approx
mate amount thereof due 10 the IN
creased freight and passenger rates.
and request made of taxing authori-
ties. where those authorities have
discretionary power in dealing with
such questions that this amount be
dlsregarded IN arriving al proper
basls for taxation, because said pro
i.ortIon added nothing Ito the value
Of the property. but was merely
wartime emergency measure adopted
by the government tsee section ~,
paragraph :, act of congress approved
March ii. 1870. and no state or sub
division thereof should attempt 10
deplete or weaken the federal treasury
by reason OF same. which would be
the direct result Of faJure TO make
due allowance for such increase III
gross receipts,
You should procure rubber
stamp reading to the effect that your
1aN return II made for and IN behalf
OF the United States government
which is liable fer any tax levied
therein. and stamp same on tax re-
turns where deemed advisable,
You will report promptly. either
by wire, If urgent. or By letter 10 the
general counsel any notice OF pro-
posed increase, stating whether in
your opinion same IS justified as com
pared with assessments OF privately
owned property. etc, and what action
or assistance from US, II any, Is de-
sired. furnishing name. title and ad-
dress Of persons TO be communicated
with, date Of hearing and any sug-
gestions you may have 70 offer
With such Information at hand, II II
is deemed advisa hle SO 10 do letter
will he written the tax re representative
Of the road Tor roads, involved, In
the nature OF specific Instructions
concerning the particular tax board
.o be met A.so upon request an
effor; VIII be made 10 learn in ad-
vance from such board the amount
Of the proposed raise for what this
information may be worth in prcpar-
ing 10 contest II.
Where new assessment or improve
ment districts are contem p|ated which
wsii materially u Affect the property
under government control from a fax
or assessment standpoint {see direc-
tor generals circular No 441. and
Especially where the boundaries Of
such districts indicate THAI it may
result IN the railroad carrying an UNI
fair portion Of the burden, you should
promptly report same. together with
u {r.sY