Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1920-02-17
RULES AGAINST
DISCRIMINATION
BY TAX BOARD
Judge Cause Holds Bank
Should Not Pay Upon
Indebtedness.
INVOLVES S112,435 FUND

To prevent the Indiana tax law
from being interpreted so as to re-
suit in "an unfair discrimination
against the Fletcher Savings and
Trust Company of indianapolis, Judge
Cause Of the Henry county circuit
court today gave a decision in the
Marion county circuit court against
the state board of tax commissioners.
Judge Cause overruled a demurrer OF
the state tax board TO a complaint filed
by the Fletcher Savings and Trust Com
psny to prevent alleged double taxation.
He heard the case In Henry county after
1t was venued from Judge Louis Ewbank
of the Marion circuit court TO Hamilton
county and then venued to Judge Cause.
The bank alleged that the tax board
included In the gross value of the capital
stock Of the trust company $112. 1876 of
accrued interest on deposits. which the
bank alleges was a bona fde indebted
ness
DEDUCTION REFUSED
PLAINTIFF ALLEGES.
The bank claimed that the tax com
missiorers refused to deduct this item
the plaintifFs assessment
In holding that this Indebtedness
should be deducted Judge Cause held
"Of course money held by a trust
company or bank as a reserve, to take
care Of a contingency. whlcl may or
may not happen, would not be a debt
which should be deducted. as prov dee
by statute. and If this fund Is a reserve
held TO take care Of anticipated interest
on deposits It would not he n present
Indebtedness; but, although this fund
Is denominated a reserve. yet It IS spe.
cifcally alleged that 4. is for interest
which has accrued and that It consti-
tutes debt which does IN foct exist
Tho demurrer admits the truth Of this
allegation. and accepting the facts as
alleged 1t can not be said that this fund
is reserve which Is held for a con-
tingenCy, but Is a fund against which
an actual liability exists by virtue Of
the contractual relations between the
trust company and Its depositors. and Is
an indebtedness which should be de
Quoted.
"As 20 the deduction claimed for taxes
IT is generally held that taxes are not
debt and the liability therefor Is not
an Indebtedness, and Il does not seem
as Ii the legislature intended that the
duty to pay taxes should be classified
ae an Indebtedness which should be de-
Quoted from the gross value Of the cap
ital stock"
QUESTION or OWNERSHIP
INVOLVING LEASE
The court held that the real question
In the case is whether the bank In Ia.
resting SG330o0 Of its capital FUND IN
erecting a building on ground, upon
which 1t holds ninety nine year lease
with the privilege Of renewal for ninety
, nine more years, acquired an ownership
. IN real estate.
The court is OF the opinion that when.
ever bank or trust company shah have
acquired an ownership In real estate
then the amount of the investment IN
real estate which IS carried in the capital
stock account shall be deducted from the
gross valuation OF the capital
Continuing. the court said "rhe com.
plant alleges that $685.. 600 Of the gros.
capital account Of the bank Is invested
In the building. which Is erected on tbs
Land upon which IL holds a ninety min,
year lease, with privilege Of a renewa
for Ike term, and that the state board
bi its acts, Is seeking to subject this
| sum to taxation as a part Of its capita
cA'tA fdtANs NAtttdh 1t IS invested lE
real estate upon which taxes are col.
lected and, II Is claimed that II 1t is
subjected to taxation both as capital and
as real estate, it has the effect OF double
taxation.
at IS conceded that Il the bank has nc
quired an ownership IN real estate ther
the money invested In this buildlns
should be deducted from the capital &C
count but the board contends that tn,
/ bank has not acquired an ownership II
tho real estate on which it holds the
ninety nine year lease and upon which /,
has erected building at cost Of 5000
000"
Judge Cause then gave an exhaustive
discussion on the words "own,' owner
and Ownership" as defined by the stat
utes and court decisions. The court held
that 1t was the apparent intention OF the
legislature that II any money was IN
vested in property that was already bear.
Ing its burden OF taxation. then the
money as invested should be relieved.