National Tax Association

NOTES AND NEWS ITEMSSource: The Bulletin of the National Tax Association, Vol. 3, No. 8 (May, 1918), pp. 201-205Published by: National Tax AssociationStable URL: http://www.jstor.org/stable/41785223 .

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BULLETIN OF THE NATIONAL TAX ASSOCIATION 201

nually as of value on first of April. Real prop- erty listed every odd numbered year as of value of first of April preceding assessment and as- sessed annually. (Laws, 191 7, Ch. 228.)

Ohio: Real property assessed annually between first day of January and first day of February. (Laws, 1917, p. 38.) Listing of all property made between second Monday of April and first Monday of June, annually. Valuation of all such property for taxation shall be made as of the day preceding the second Monday of April, annually. (Laws, 1917, p. 30.) Oklahoma: All taxable property as soon as

practicable on or after the fifteenth of January shall be listed and assessed as of the first day of January in each year. (Session Laws, 191 5, p. 142.) Oregon: Assessments of property owned on

March first at the hour of one a. m. shall be made in counties the first Monday in March of each year and completed the second Monday in September. (Tax Laws, 1917, Sec. 3586.) Pennsylvania: Division of county into assess-

ment districts. Subordinate assessors assess and value and file list of persons taxable upon occupa- tions before the first Monday in November trien- nially. Assessment of personal property made annually on or before December 31. (Laws, 1917, p. 1 130.) Rhode Island: Corporations assessed June 1. Tax payable July 1. Otherwise no uniform date

of assessment. (Pub. Laws, 19 12, Ch. 769.) South Carolina: The duty of persons to return real and personal property between January 1 and February 20 in 1906, and every fourth year there- after, with value as of the first of January. Lists laid before township boards . of assessors on the first Tuesday in March. (Tax Laws, Abstract, 1905, Sees. 42, 69, 86.) South Dakota: All real and personal property assessed with reference to its value on the first

day of May. (Taxation Laws, 1914, Sec. 2057.) Tennessee: For all property the basis of assess-

ment shall be as of the tenth of January ; per- sonal property assessed annually; real, every two years. (Laws, 1907, Ch. 602; 3; 5 [1].) Texas: All property shall be listed for taxa-

tion between January 1 and April 30 of each year with value as of the first day of January. (Civil Statutes, 1914, v. 4, Art. 7508.) Utah: Tax levy in cities during July. County

auditors prepare assessment rolls second Monday of September. Property list made before first Monday of May. Property assessed as of the first day of January. (Laws, 1909, Ch. 63, Sec» 2516.)

Vermont: All property assessed under the gen- eral tax law is assessed as of April 1, on an ab- stract which is not completed and filed until May i to 30, which abstract shows valuation of prop- erty as of April 1. (Vt. G. L., Sec. 697; 703.)

Virginia: Commissioner for each district in the several counties, and the commissioner for each city, shall commence, annually, on the first day of February, or at such time as the auditor shall designate, the assessing of property. Per- sonal property assessed the first day of February in each year, except as otherwise provided by law. Corporation assessment the first day in January of each year. Personal interrogatories of each taxpayer are made on or before April 1, annually. (Tax Laws, 1915, Preface, p. v; Code, 1904; Se£s. 455» 491 ; as amended, 1915, Ch. 147.)

Washington: All real and personal property is subject to assessment upon valuations fixed as of the first day of March at twelve o'clock meridian. (Revenue Laws, 1907, p. 3.)

West Virginia: All property, both real and per- sonal, shall be assessed as of the first day of April of each year. (Assessment Laws, 191 5, Sec. 12, p. 9.)

Wisconsin: Assessor of each assessment dis- trict shall begin on the first day of May in each year, or as soon thereafter as practicable, and pro- ceed to make assessment of the real and personal property. (Tax Laws, 191 2, Sec. 18, p. 7.)

Wyoming: County assessors make assessment of all property the first Monday of February of each year. Personal property to be listed on the first day of April of the current year. (Rev. Laws, 1910, 2327; p. 14.) List of land plats filed first Monday of April in each year. (Rev. Laws* 1910, 2324; p. 13.) (Tax Laws, 1910, 1265; p. 14.)

NOTES AND NEWS ITEMS

TAX LEGISLATION IN KENTUCKY IN 1918

The subject of taxation occupied a prom- inent place on the program of the recently adjourned session of the Kentucky legisla- ture. A summary of the tax laws enacted has been published by the Kentucky Tax Reform Association with the approval of the state tax commission, from which we quote as follows :

" Some apprehension was felt that at- tempts would be made to amend or repeal the tax laws adopted at the special session

of the legislature in 1917 by the opponents of the classification system, but the straight- forward and comprehensive report issued by the state tax commission, showing the satisfactory operation of the new laws, and a personal letter addressed to each member by the president of the state tax league convinced the members of the general as- sembly that it would be unwise to interfere with enactments which had enabled prop- erty owners to make accurate returns for the first time in twenty-five years without fear of confiscation, and the resultant in- crease in revenue from new sources could

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202 BULLETIN OF THE NATIONAL TAX ASSOCIATION

not be disregarded by the opposition ; and the only bill introduced to repeal the classi- fication clause was never reported by the committee. " As indicative of the temperament of the legislators generally and the disposition to give the new laws a fair trial, the only tax laws enacted were those suggested by the state tax commission for the purpose of strengthening the new system and provid- ing for the better administration of same. " The appropriation for the expenses of the state tax commission was increased from $15,000 to $50,000, very properly, and is still much less than in other states. " The law was changed to leave out the state auditor as an ex-officio member of the tax commission and permit the appointment of all three members, to devote their entire time to the work. " A law was passed abolishing the office of county assessor and substituting ' county tax commissioners,' subject to qualifications and re-election - a very wise provision - as heretofore about the time an assessor ac- quired the necessary information about the property in his county he had to retire and give place to a new official.

"The supervisor and state revenue agents have been placed under control of the tax commission, instead of the auditor, and the motor vehicle department also comes under the supervision of the tax commission.

" A law requiring the annual meeting of county tax commissioners in Frankfort will be of great advantage for instruction, com- parison, and uniformity in assessments. " The tax commission was given author- ity to extend the time for the reports of corporations to December 31. " Provision was made for the appoint- ment of one county tax supervisor (board of equalization) in each magisterial dis- trict. " A law was passed designating the ap- plication of exemptions of $250 for heads of families to household and kitchen fur- niture first. " The budget system of appropriation was adopted, which should greatly conserve the state revenue. The old plan was to make appropriations without regard to the revenue and trust to the iatter to meet the former. Hereafter the apportionment for different purposes will be regulated accord- ing to the beforehand estimated available revenue and should put a stop to deficits.

" The apportionment of the levy for state purposes was simplified by making it in cents instead of percentages. This will save much time and expense in avoiding the intricate calculations necessary under the former law. It is, for instance, much easier to figure 4 15 cents out of the 40 cent tax rate for general expenses,' than to calculate on the basis of ' twenty-one fifty-fifths of 40 cents,' as the former ap- portionment required; and the amount for each purpose is relatively unchanged.

"Laws were passed relating to the assess- ment of property in the state owned by non-residents, to require pipe lines to re- port on oil production, and others relating to local taxation but affecting only the latter, and it may be stated that all the tax legislation was constructive and desirable and a confirmation of the confidence placed in the new system. " As the legislature will not meet again until 1920, there will be ample time to de- termine the best methods of administering the new laws and secure greater uniformity in assessments - to obtain rulings on mooted questions and acquaint taxpayers with the advantages of the new system."

Commenting upon this legislation in a letter to the editor, Mr. P. N. Clarke, sec- retary of the Kentucky Tax Reform Asso- ciation, says: " The most significant innovation - and one the National Tax Association has long advocated - is the abrogation of the office of county assessor and the substitution of county tax commissioners. This is a radical change and we hardly know how it was accomplished. " The new law provides for a sort of civil service examination and appointments and retention on the merit system, the per- petuation in office for faithful service, and complete supervision by the state tax com- mission, which assumes the responsibility. It removes the objection of elective selec- tion where the office of assessor was for- merly bestowed as a political favor and generally on some object of sympathy and in order to gather votes for more important officials.

"It is a great stride forward towards rational assessments and removes one of the greatest obstacles that has blocked the way oí uniform taxation.

" The constitution prohibits the removal

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BULLETIN OF THE NATIONAL TAX ASSOCIATION 203

of any incumbent until the term for which he was elected expires, and the present as- sessors must be temporarily retained, and if found competent may be reappointed (which was forbidden by the old law). This must have a salutary effect on their conduct in the administration of their office. " The result will be of interest to the entire country and, if successful, will be epochal in the annals of tax reform."

MUNICIPAL ACCOUNTING AND DEBT ADMINISTRATION

[The following extract from the 19 17 report of the New Hampshire Tax Commission is of interest. The earlier steps taken by New Hamp- shire in the progress toward decent municipal accounting and debt administration were de- scribed in the Bulletin for February, 191 7, and November, 191 7. This is a movement which de- serves only praise and the example of New Hampshire is worthy of imitation by other states. The Editor .]

" That the accounting officers in muni- cipalities in the state shall in due time adopt a uniform system of bookkeeping and reporting was made obligatory by c. 57, Laws 1917. " Work in this direction has been going on for the past two years with gratifying results. Considerably more than one-half of the towns have voluntarily adopted the system prepared in the office of the tax commission, and the other towns are ar- ranging to come in line at the beginning of the new year.

"It is unnecessary to argue in favor of a simple analysis of accounts adapted to each and every town as against 235 differ- ent methods of handling the same items. " The expense of maintaining a town hall may as well be included under ť town hall expense ' as under 4 miscellaneous ex- pense/ also incidental highway expenses properly come in the 4 highway account ' instead of ' miscellaneous expense.' " The books and vouchers are so pre- pared that at any time the town treasurer and selectmen may know at a glance not only the total receipts but also the total payments charged against highways, police, or whatever.

"-At the end of the year the town report is completed by simply taking the footing of each column or account, and the neces- sity of separating all the vouchers and classifying the accounts no longer exists.

" Again, a summary of the expenditures of all the towns can be made which will show the total amount of money expended in the state for schools, highways, care of poor, etc., which now is not known and cannot be readily ascertained. " While this information may not be of great importance, it certainly will be of in- terest. " A business concern handling more than $7,000,000 a year would regard its book- keeping as a very important feature, and it is equally important to the taxpayers of the state that the $7,000,000 of their con- tributions be correctly accounted for and well managed. " Chapter 129, Laws 1917, relating to municipal finances, abolishes the creation of sinking funds to meet indebtedness and substitutes serial notes or bonds to be cared for by an annual levy without vote of the municipality. " The special investigation made under the direction of the tax commission in 1916 disclosed an indebtedness of $1,390,000 incurred under the municipal bond act of 1895, against which no sinking funds at all had been established. It further appeared that sinking funds accumulated to meet a certain indebtedness had been used for other purposes. " Provision for the payment of debt by definite amounts is a matter of compara- tively recent consideration not only in this state but in all states. " Municipalities and counties shall not issue notes payable on demand, nor shall they incur debt to provide for the current maintenance and operation expenses, ex- cept loans in anticipation of taxes as authorized by law.

"This exception refers to c. 21, Laws 1907, which is here quoted because it has been too little regarded. " 1 Cities may by a two-thirds vote of their city councils, and towns by a major vote of their legal voters in a legally warned town meeting, incur debts for tem- porary loans in anticipation of the taxes of the municipal year in which such debts are incurred, and expressly made payable therefrom by such vote; such loans shall be payable within one year after the date of incurrence and shall not be reckoned in determining the authorized limit of indebt- edness.'

"It has been the general practice of

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204 BULLETIN OF THE NATIONAL TAX ASSOCIATION

selectmen to borrow money on town notes whenever money is needed without much reference to their authority to bind the town, nor have lenders paid much atten- tion to the question of the legality of the notes. " This will be a serious question in the future, however, in view of the proper limitations imposed by chapter 129.

"It is needless to comment on the fact that current maintenance should not exceed current revenue, and that money borrowed in anticipation of taxes should be repaid within the year and from the taxes of that year. " Finally, the act fixes a definite debt limit not to exceed six per cent of the last assessed valuation, but this is so arranged that the limit is three per cent for a county, city, or town, two per cent for a school district, and one per cent for a precinct. " Debt for water supply may be incurred outside of the above limits. " From the standpoint of municipal finances, which concerns every person in the state, this chapter was the most impor- tant enactment of the present legislature."

ANOTHER TAX REFORM ASSOCIATION The following is an extract from the

prospectus of the recently incorporated Kentucky Tax Reform Association. Those who have followed the vigorous and suc- cessful campaign for better taxation in Kentucky will be glad to learn of the prog- ress and plans of the association.

" In order to consolidate and perpetuate the work of tax reform in Kentucky, members of the various tax committees and the state tax league have incorporated the Kentucky Tax Re- form Association on a permanent basis and will establish headquarters where information regard- ing all questions relating to taxation will be gathered and disseminated with a view of en- couraging the public to take an interest in such matters ' for the good of the state ' and the welfare of its citizens. " The founders and trustees of the organiza- tion embrace among their number many of those who have studied the principles of taxation for years and through whose exertions the present re- forms have been secured, and representing, as they do, every material interest in the state, agri- cultural, commercial, manufacturing, mining, and financial, it means that the movement is for the benefit of' all, and the progress and prosperity of the state more than all. " The specific purposes of the organization in- clude : " ist. The guarding of the new tax laws and their proper administration.

" 2nd. The proposal of further reforms to equalize and reduce taxation. " 3rd. To conserve the revenue from taxation by its economic expenditure.

"The Kentucky Tax Reform Association ex- pects to co-operate with the state tax commission in securing better laws and their rational enforce- ment, and by continuing the educational cam- paign for the dissemination of information on taxation to enlist the interest and support of the people on this important question."

The secretary of the association is Mr. P. N. Clarke, of Louisville. He writes that the Kentucky association would par- ticularly like to get in touch with similar organizations elsewhere and exchange its monthly bulletins.

MINE TAXATION IN ARIZONA AGAIN In the February Bulletin we printed

part of a letter from Mr. C. M. Zander, chairman of the Arizona tax commission, referring to certain mine tax cases. A more recent letter from Mr. Zander gives the following additional information:

" Since writing you last, the superior court of Gila County has reduced the assessed valuation of the Inspiration Mine $18,000,000 and has also reduced the assessed valuation of the International Smelter $2,000,000. The question of intangible values was involved in the assessment of the In- ternational Smelter, and the court found in its calculations something like $1,500,000 for the physical property and $500,000 more because of the fact that the Smelter had earned over $2,000,-

_ 000 for the year previous. The court did not, in its judgment, say anything about intangibles nor about physical values. It merely found the val- uation of the plant to be $2,000,000, which is more than the value of the physical property. The tax commission will appeal both cases to the supreme court in order that a definite determina- tion of the question of intangibles may be had and also to hold the valuations of both properties where they belong."

TAX RESTRICTIONS OF THE MONTANA CONSTITUTION

The editor has received a copy of a re- cent opinion of the attorney-general of Montana, which was issued in reply to an inquiry from the state tax and license com- mission as to whether the Montana consti- tution permitted classification in taxation. The opinion goes at length into discussion of the terms of the constitution and its in- terpretation by the courts, together with an analysis of court interpretations of similar sections of other state constitutions. The attorney- general concludes, in general, that

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BULLETIN OF THE NATIONAL TAX ASSOCIATION 205

the constitution requires uniformity and that classification is not permitted.

PROFESSOR ADAMS RESIGNS FROM WAR FINANCE COMMITTEE

Professor T. S. Adams, on account of his official duties in the treasury depart-

ment, which are taking his entire time, has found it necessary to withdraw from the committee on war finance of the American Economic Association. The other members of the committee will miss him, but appre- ciate the reasons which make his with- drawal necessary.

DECISIONS AND RULINGS

EDITED BY A. E. HOLCOMB

Foreign Corporations - License Taxes - Interstate Commerce. - The most recent action of the United States Supreme Court on this subject involves cases arising from the operation of Vir- ginia statutes. In the case of Armour & Co. v. Commonwealth of Virginia, , decided March 4, 1918, a statute of that state (Vir- ginia Code, Vol. 4, p. 594) was upheld which imposed a license tax graduated by the amount of purchases and from which manufacturers taxed on their capital who sold goods from their places of manufac- ture were exempted. Plaintiff, a foreign corporation selling goods from its agencies in the state, contested the validity of the tax as being repugnant to various provisions of the federal constitution. The lower court sustained the tax (118 Va. 242) and upon appeal its decision was affirmed.

It was held that there was ground for a valid classification as between those selling goods from the place of manufacture and those selling from stocks manufactured elsewhere and that no discrimination ex- isted repugnant to the " equal protection " clause.

It was further held that the interpreta- tion of the statute made by the court below removed all ground for complaint under the " commerce " clause as that court had held the tax to be applicable to both resi- dents and non-residents who sold goods from places other than where manufac- tured.

The error of the argument of complain- ants was held to lie in their confusing a tax amounting to a direct burden upon inter- state commerce flowing from the exercise of a power not possessed with an indirect burden arising from a statute passed in the exercise of a power clearly possessed. This

distinction, the court states, has been en- forced from the beginning and cites Netv York v. Roberts , 171 U. S. 658, and Rey - mann Brewing Co., 179 U. S. 445. The emphasis upon the want of power as ren- dering discriminatory statutes inherently void is noticeable.

In Dalton Adding Machine Co. v. Com - momvealth of Virginia and General Rail- way Signal Co. v. Commonwealth of Vir- ginia, decided April 15, 1918, the court follows the trend of the decisions reviewed in the April Bulletin.

In the first case the court found no diffi- culty in affirming the decision of the state court (118 Va. 563; 88 S. E. 167). The company had appealed from a decision im- posing a fine upon it for transacting busi- ness in the state without certificate of authority and payment of entrance fee re- quired by the state statute (Section 38 a, Chap. 53, Acts of Virginia, 1910). This fee was based upon the entire capital stock authorized and was graduated, depending upon the amount of such authorized cap- ital. The court held that as a material part of the business done was intra-state the tax was a valid exercise of the power of the state.

In the General Railway Signal Co. case the court finds more difficulty and even goes so far as to say that it deems it "on the border line." In this case the business was that of the installation of signal de- vices on a railway line for a distance of 147 miles in Virginia and a fine had been imposed for doing business without first obtaining a permit under the statute above referred to. It was held that this business was local and distinct from interstate com- merce, within the doctrine applied in Browning v. Way cross, 233 U. S. 16.

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