116 N.C. 441 | N.C. | 1895
The Act of 1893, Ch. 296, section -39, provides that all corporations therein named “in addition to the other property required by this Act to be listed ” shall pay a tax on its capital stock. As the mode of ascertaining the amount which shall be taxed as capital stock, subsections 3, 4 and 5, provide that the market value, or if no market value, the actual value of the aggregate shares of the company shall be taken as a basis, and from -that sum the amount of the assessed value of its real and personal property, listed for taxation, shall be deducted and the difference if any shall be taxed as capital stock. It is stated in the “ case agreed ” that the actual value of the aggregate shares of stock of the defendant corporation is $809,334, and that the assessed value of its real and per
The power to levy these distinct taxes simultaneously is laid down in 1 Cook on Stock and Stockholders, Sec. 561, and cases there cited ; 2 Redfield on Railways, 3rd. Ed., p. 453, cited and approved by this Court (Smith, C. J.) in Belo v. Commissioners, 82 N. C., 415; Worth v. Railroad, (Ashe, J.) 89 N. C., 301, 305. 1 Desty Tax., 348, 2 Thomp. Corp., 2810. Jones v. Davis, 35 Ohio St., 474, 476, People v. Coleman, 126 N. Y., 433, 437. State v. Petway, 55 N. C., 396, 406. “Especially is it important to distinguish a tax on shares of stock from tax on the capital stock,” says 1 Cook, supra, section 563 citing Porter v. Rockford, 95 Ill., 561, and numerous cases in Note 2 to that section. In Belo v. Commissioners, supra, on page 418, the same distinction is clearly laid down and additional authorities given by Smith, C. J.
Originally the tax upon the shares of stock was collected of the individual shareholders at their several places of residence. Buie v. Commissioners, 79 N. C., 267. But under that method, many shares failed to be listed for taxation. Besides the shares of non-resident owners, except those of National Banks, escaped taxation in this State under the ruling in Railroad v. Commissioners, 91 N. C.,
From this summary it will be seen that the State is within its taxing power in the provisions of Chapter 296 of the Acts of 1893. It levies, 1. A tax upon the real and personal property of corporations. 2. Upon the shares which are the personal property of the shareholders but requires them to be listed and collected through the agency of the corporation. 3. It levies no tax upon franchises and dividends. 4. It does not tax the entire capital stock, but only the excess of its total value above the value of the real and personal property which the corporation lists for taxation.
The capital stock belongs to the corporation. The shares or certificates of stock are entirely a different matter. They belong to the shareholders individually, and under the Constitution must be taxed ad valorem like other “property belonging to the holder, independently of the taxation upon the corporation, its franchises, &c.” Smith, C. J., in Belo v. Commissioners, 82 N. C., on page 419, citing Cooley Const. Lim., 169, and Field on Corporations, 521, &c. He
To tax only the real and personal property of the corporation would leave, as we have said, untaxed that large part of its capital stock which represents its good will, its trade-mark, the profitableness of its business, all of which are property, as much protected by the laws and as capable of being turned into money as the real and personal property which the corporation owns. To tax the whole of the capital stock, in addition to the tax upon the real and personal property, would be, to the extent of the tax on the latter, double taxation, of the same kind as the tax on mortgaged property and a tax at the same time on the mortgagor’s notes in the hands of the mortgagee, but there is nothing in either case to restrict the legislative power to so decree. Here, however, there is no double tax, but simply a tax on so much of the real and personal property of the corporation as is located in this State and a tax on the value of its capital stock in excess of the amount of realty and personalty which is listed for taxation here. The tax on the shares is a separate matter, and is a tax on the shareholders on their property whether they reside in or out of the State collected through the medium of a quasi statutory garnishment on the corporation. “It has long been the common, if not the only mode in many States, and indeed is the only mode to collect taxes on the shares of non-resident shareholders.” Banks’ Commonwealth, 9 Wall, 353, 361, approved in Delaware R. R. Tax, 18 Wall, 206, 230; 2 Thomp. Corp., 2849.