Evening journal., 1922-02-11
TAXABLE STATUS
OF fire COMP ANY
Attorney-General Townsend
Gives Opinion Exempting
Brandywine Co.
DOES NOT APPLY
TO DISTRIBUTION

terudN gave an opinion 10 STATE "a
Commissioner Jester as to the tax
able status Of the Brandywine Fire
Company for the year 1921. Under
the statement OF facts submitted,
Mr.. Townsend is OF the opinion that
its invested capital is exempted from
tax. He adds that his opinion docs
not cover the taxable status OF the
corporation for the year 1929. or the
taxable status OF individuals who
may have received money from the
company by way OF distribution or
dissolution. The opinion Is as fol-
lows:
Wilmington. Del.
Feb. 10, 1922.
NJ. Howard Jester. Esq.
State School Tax Commissioner.
Wilmington. Delaware.
My Dear Mr.. Jester: Under date
Of February 3. 1922. you asked for
my opinion as to whether or not
Brandywine Fire Company is ex-
empt from the payment OF taxes for
the year 1924 under the provisions
Of AN Act to Provide Revenue for
School Purposes" being Chapter Q,
Volume 30 Delawau Laws.
Your letter and enclosures estab-
ish the following facts:
III 1.-Brandywine Fire Company
4fwas organized as a corporation not
for profit. the object Of the organi-
Ezation being the extinguishment Of
klhres. No capital stock was issued 10
the members.
2.-The moneys paid by the city
o the company under the contracts
hereinafter referred to. were used
o purchase equipment for the COM
pany and TO pay the wages Of two
OF its members.
3.-There were no net earnings
which Injured 20 the benefit OF the
members.
4.-Prior TO the establishment Of
he new fire department for the city
Of Wilmington. the company. for
several years. contracted with the
city. al a stipulated sum. TO protect
he property OF the city against fire
5.-The company owned its own
& building. and Il had no revenues ex-
= n cept fees. dues and fines, and the
]zx money received from the city.
M Nv opinion has reference solely
f 10 taxes from the year 1921 and is
5# based solely upon the foregoing
81 statements Of fact. The law APP
'< plicabie to such facts is as follows
Section z. Of the above mentioned
+ Act provides that for the privilege OF
Exercising its franchise in this state
in a corporate or organized capac-
ed itv. every corporation doing bust
III sess in the State. except corpora
#Ntions hereinafter specified" shal
- nav 10 the Tax Department FOL
w. school purposes, an annual tax a
|Nthe rate Of two and one-half Mill'
n upon each dollar OF the actual value
> 81 that portion Of It's capital Onclud
1< Inc surplus OF undivided profits
used and invested in this State dur
ing the preceding calendar year. Tn
6 words above quoted-"except cor
porations hereinafter specified -
mean the corporations exempted b.
Section Of said Act. The onl.
clause in Section which could re
4 ueve the Company Is set forth II
& paragraph 4. which Section an'
paragraph. for the purposes Of thi
opinion. may be read as follows;
Sec. Q. Conditional and other Ex
emptions: The following organiza
81. lions shall be exempt from taxation
under this article:
>z corporations organ
zea for charitable
purposes no part Of tn
net earnings Of which inures to IN
+. beneht Of any private stockholder o
a Individual.
Under the foregoing statements q
81 facts and provisions Of law, Brandy
wine Fire Company would be e'
empt as "a corporation organized 10
charitable purposes, no part Of who's
' lnet earnings inure to the benefit {
Many individual"
might further add that Will
every presumption OF law is again
exemption. yet II the above stat
lments Of fact be correct. and pa
.Aticularly II no part OF the net carr
~ ngs inures 10 the benefit OF any II
dividual member. such an exemptio
v Is so much within the spirit OF II
13 81 exemption section OF the law as
strengthen the conclusion that par
|' graph OF Section would opera
<I as a specific exemption OF Brand
'1' wine Fire Company.
<<E II. however, during the year 10:
W the company had earning which fl
& - ured to the benefit OF its member
then the company would be subje
<,l o lax on invested capital for the YET
49, i92l.
~ This opinion does not cover: "a
MM The taxable status OF the corpor
~ tion for the year 1922; or Cb)-Tl
3& axable status OF individuals wi
n r. may have received moneys from n
corporation either by way OF div
4 kI sends. distribution upon dissolutio
X| |or otherwise.
Yours very truly.
GYLVESTER ID. TOWNSEND, Jl
Attorrtorr- n "a