The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-04-25
EXTRA SESSION
FOR TAXES IS
UNNECESSARY
Intanglbles Ruling by Lutz
Held Likely to Bring
Court Action.
BOARD ALSO MAY ACT
Two Alternatives to Delay
Assembly Until Regular
Meeting Cited.
BY JAMES DOSS
Times stan Writer

Payment Of the intangibles tax
by pension funds, religious, educa-
tional, fraternal and charitable in
stitutions will not be a factor in
the calling of a special session of
the Indiana Legislature, it was de-
clsred emphatically today in in
formed sources.
The contention has been raised
that the opinion of Atty Gen.
Philip Lutz Jr. that payment OF
the intangibles tax on ,hese in
vestments is required is so far
reaching that it may force the call
ing of a special session.
However. it is pointed out that
it would be comparatively easy 10
tie up the question in the courts
for such a length of time that the
Legislature could straighten out
the law in regular session. An al
tentative would be for the State
Tax Board to go ahead and collect
the tax and then have the Legisla-
ture pass refunding act.
The whole problem OF the intan-
gibles tax law application has been
one of intent, it is pointed out. and
there is a general belief among
state officials that such new sources
that are affected by the ruling were
not contemplated as tax subjects
when the law was enacted.
Only 1885 Collection Likely
Under strict application of the
ruling such pension funds and SIM
liar intangibles investments OF re-
ligious. fraternal and educational
institutions would be liable for COL
lection of the 1888 and 1884 taxes
with penalties.
However, Philip Zoercher, State
Tax Board chairman, said today the
board is considering collecting only
the tax for 1885. Local officials al
ready. have been instructed to pro-
coed with the total collections, but
the order may be modified. Mr.
Zoercher said.
The tax board chairman said he
did not see how the state teachers
retirement fund could be classified
as coming under the ruling. In view
of the state aid factor and the
states interest in the fund, collec-
ton of an intangibles tax on the
teachers fund would be the same as
placing a tax on the state itself, he
pointed out.
Robert Hougham, executive sec
rotary of the retirement fund. in
tends to obtain a formal opinion
from Mr. Lutz on the funds status.
however.
Theory of Intent Is Basis
The intangibles tax is only 25
cents on each 500 of securities. or
= of l per cent. Federal bonds
and Indiana municipal bonds and
stocks in Indiana corporations are
exempt. The law provides a .penalty
of four times the tax plus 10 per
cent. but the state tax board has de-
cided to waive the penalties in any
event. regardless of whether taxes
for the two back years are collected.
Mr.. Lutz' ruling, following a Su-
preme Court ruling that the in
tangibles tax is an excise" and not
a property" tax, held that no one
is exempt from payment. unless
specifically mentioned in the law.
However. if the theory of intent
is applied to the whole difficulty and
the legislatures intent construed to
mean exemption of endowment
funds of colleges. hospitals. churches,
lodges and similar institutions.
litigation could tie up the matter
until the legislature met in regular
session.
Restraint of tile~ tax board in
friendly court action coald be taken
far enough that the time factor
would obviate the need of a special
session on this score alone.