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In 1898 the State collected from this source $941,701.08; of which amount wholesale and retail liquor dealers paid $559,600, beer dealers $95,550, the remainder, $286,551, being paid by other occupations taxed. While the administration of this law does not appear to be thorough or systematic, the form of taxation seems to be generally satisfactory. The tax is payable to local collectors.

The property owned by those subject to occupation tax as above set forth is, of course, within the fixed limitations of the law, subject to ad valorem taxes on valuations for State, county, and municipal purposes.

CORPORATIONS.

The real and personal property of substantially all classes of corporations is assessed for taxation in the several local taxing districts, the same as other property, and subject to the same inequalities and discriminations in practice. This is required by the general law framed in accordance with constitutional limitations which render modification in the general property tax, and its administration as applied to corporations, peculiarly difficult.

Various special forms of taxation have, however, been adopted and applied to different classes of corporations which will be noted, the gross receipts tax appearing to be favored. Owners of shares of stock in a corporation which is required to list or return its capital and property for taxation are, generally speaking, not required to return such shares.

RAILROADS.

The method of taxing railroads in this State is the general property tax, pure and simple, supplemented by an additional tax on gross receipts.

The constitution provides that all railroad property lying or being within the limits of any incorporated city or town within the State, shall bear its proportionate share of municipal taxation, and further, that such property shall be assessed and taxes collected in the several counties in which said property is situated, including so much of the roadbed and fixtures as shall be in each county. In accord with these constitutional restrictions the law provides that every railroad company shall deliver annually to the assessor of each county and incorporated town or city a sworn statement of the real estate owned and the length and value per mile of the railroad, including the right of way, roadbed, superstructures, depots and grounds, shops, fixtures, and all personal property except rolling stock, all of which is listed in the county where situated.

The rolling stock is rendered in the county of the principal office of the company valued and equalized by the county commissioners' court in such county and returned to the State comptroller who apportions the value thereof to each county according to mileage of road. This valuation of rolling stock is then assessed by local assessors with the other property of the road.

Lately an attempt has been made to include something of franchise values with the values of property above referred to.

There appears to be no uniform method among assessors for the assessment of railroad property, each acting independently upon his own discretion. Such property is said to be rendered at whatever the local assessor will accept, and assessed at whatever the commissioners' court will agree to, the averages per mile for different roads ranging, in 1898, from $2,818 to $13,000, and usually at a portion only of its property value, and for much less than its value based upon stock and bonds. There is no State board of equalization, and valuations of different roads are very unequal, and those of the same road vary greatly in the different counties. As in the case of individuals under the property tax, each corporation strives for low assessments and corporations do not seem to object to this inequality.

The tax commission framed a bill providing for the assessment of railroad property upon the basis of the market value of stock and bonds, that being regarded as a fair measure of value as laid down by the United States Supreme Court, to be made by local assessors as required by the constitution, according to mileage within their respective counties. This the commission thought would be an improvement upon the present guesswork at property valuations, the constitutional provisions depriving the legislature of authority to create a State board for that purpose. The bill proposed, although considered at the last session of the legislature, was not adopted.

This property tax is supplemented by a State tax of 1 per cent upon the gross receipts from passenger traffic within the State, called an occupation tax. The tax commission recommended an extension of the gross receipts tax to freight as well as passenger traffic.

In 1898 the 9,540 miles of railway with rolling stock in Texas were assessed at $71,031,235, or an average of $7,445 per mile.

On this valuation this property paid to the State in taxes the following amounts: General State tax, 20 cents on the $100. State school tax, 18 cents on the $100.. One per cent of passenger earnings

Total to State.

$142,062.47 127,855.22 47, 004.37

316, 922.06

Adding to this the amount of county taxes at the average rate of 60 cents on each $100, amounting to $426,187.41, gives approximately the amount of taxes paid by the railroads of the State in 1898, $743,108.47.

In 1900 the number of miles was 9,784, and the total assessed value, including rolling stock, was $81,298,283, being an average of $8,308 per mile.

The total passenger earnings for year ending August 31, 1900, were $5,717,344 and the occupation tax thereon $57,173.44.

EXPRESS COMPANIES.

The special tax imposed on express companies is 14 per cent of the gross receipts from business arising and terminating within the State, which is the only tax they pay, except an ad valorem tax on a small amount of personal property, such as horses, vehicles, and office furniture taxed locally.

The tax on gross receipts paid by these companies to the State in 1898 was $11,833.31 and in 1900 $13,936.38.

OTHER SPECIAL TAXES.

Steamboat and stage companies are subject to a tax of 1 per cent on passenger earnings.

Sleeping car companies pay the highest gross receipts tax in the State, being 24 per cent on such receipts on business done within the State. They paid in 1898 $3,862.25, and in 1900 $4,573.51. They also pay to the State a tax of one-fourth of 1 per cent on the value of their capital stock in use in the State, based upon reports to the State comptroller of total capital stock, from which is deducted the value of all property other than rolling stock, which is valued according to the proportion of miles operated over within the State to total mileage.

Telegraph companies are taxed 1 cent on each full-rate message, and one-half cent on each half-rate message originating and terminating in the State. This tax was, in 1898, $7,695.67, and in 1900, $7,285.83.

Telephone companies are taxed 25 cents per annuin on each instrument in actual use, this tax amounting in 1898 to $2,485.75 and 1900 to $5,499.35. Insurance companies-life, fire, marine, accident, and other insurance companies are taxed on gross receipts from business done within the State. Each life insurance company and each life and accident insurance company pays 2 per cent on gross premium receipts, and each fire insurance company one-half of 1 per cent on gross premium receipts; each marine, health, live stock, guarantee, or accident insurance company pays 1 per cent on gross premium receipts.

The tax in 1898 was $100,613.61, and in 1900, $115,455.97.

Street car companies pay an occupation tax of $2 on each mile of track.

Gas companies pay an occupation tax of $35 in cities over 10,000, and in smaller towns $20, and the same rate is imposed on electric light and water companies. In 1898 electric light companies paid $1,861, gas companies $306, and water companies $1,065.

The tax commission proposed the substitution of a tax of one-half of 1 per cent on the gross receipts of these companies for the occupation taxes referred to, and the extension of the gross receipts tax to some other classes of business.

The taxation of gross receipts is not a new form of taxation in this State, and seemed to be favored by the tax commission.

The various corporations and classes of business paying special taxes as above stated also pay an ad valorem tax locally upon property.

BANKS.

The law for the taxation of the property of banks appears to be loosely administered. The method of listing and assessing such property is for the local assessor to require from the bank a list of the shareholders and the number of shares owned by each. The real estate is assessed to the bank and the shares to the individual holders thereof. Complaint is made that shares are not assessed at their true value, as the law requires, but as a rule the value of real estate when added to the assessed value of the shares of stock amounts to from about 50 to 75 cents on the dollar of the par value of the paid up capital, the average being, according to the judgment of the tax commission, about 65 cents on the dollar of the par value of the stock. It would therefore appear that through this laxity and discretion on the part of assessors they have practically attained a degree of justice toward banks as compared with other property that is exceptional in the administration of the general property tax in American States.

The law relating to the listing and assessing of national banks requires a sworn list of stockholders, with the name and residence of each. Shareholders are also required to render shares of stock owned by them at their actual value. This provision is not complied with as a rule, and the law points out no effective method for the ascertainment by the local assessor of the actual value, the matter being left to his estimate. The result is, with regard to all kinds of banks, that, as in the case of other kinds of property, but a portion of the value of property and assets is rendered for taxation. When assessed this property is taxed as other local and personal property. The tax commission gave this subject careful consideration, and proposed and formulated a law to provide a way by which the assessing officer could ascertain the full and true value of this class of property, but no legislative action has yet been taken upon it.

That assessors fail to reach and assess the large sums of money deposited in banks and held by taxable citizens is vigorously set forth in the report of the tax commission, which gives the amount of individual deposits in the National banks of Texas, as shown by the reports made to the controller of the currency,

June 30, 1899, as $44,564.956.54, and in December, 1897, $41,326,131.81, while the money rendered for taxation in 1898 by individuals in the entire State was only $5,864,416. This does not take into consideration the deposits with the 167 private banks and bankers in the State, so that "it is safe to say that not one dollar of money out of ten in Texas is listed for taxation."

The resources of some of the national banks in some of the cities of the State exceed the total valuation for taxes of personal property in the counties where such cities are located.

There are instances, it is said, of the rendition of money for taxation at 50 cents on the dollar which have been accepted and approved by the commissioners' court after due discussion of the question. This is referred to by the tax commission as strongly illustrating the inequalities of valuation for taxation in the State.

The commissioners proposed laws providing for discovery and valuation of such property for taxation, and said:

"If those who have money and wealth and good dividend-paying securities can be reached for taxation, there will be no trouble about the other property holders coming up with their share of the debt of highest obligation."

They also cite the phillipic of ex-President Harrison against the evasions and frauds of holders of intangible securities. The commission, however, seem to fail to grasp the fact that the defects referred to and remedial difficulties are inherent in the general property tax system.

INCORPORATION AND FRANCHISE TAXES.

Every domestic corporation chartered before the passage of the recent franchise act is required to pay to the Secretary of State an annual franchise tax of $10, and every such corporation chartered after the passage of this act is required to pay $10 on incorporation, and in each succeeding year an amount graduating as follows:

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Foreign corporations authorized to do business prior to the passage of a recent act are annually required to pay $25 when their capital stock is $25,000 or less, and $100 when their capital stock is between $25,000 and $100,000. All foreign corporations authorized to do business in the State after the passage of this act are required to pay an annual franchise tax of $50 when that capital stock does not exceed $100,000, and in addition thereto a tax of $1 on every $10,000 of capital stock in excess of $100,000, but not exceeding $1,000,000.

SUPPLEMENTARY REPORT

ON THE

TAXATION OF CORPORATIONS IN MICHIGAN.

[Prepared under the direction of the Industrial Commission by GEORGE CLAPPERTON, expert agent.

Since the report on taxation in Michigan was prepared there have been some important developments in the experience of that State which are of special interest wherever taxation reform commands attention.

Michigan may be said to be passing through a transition period in taxation, or, as it has been designated, "an epidemic of equal taxation.'

The work of the State board of tax commissioners during the year 1900, in increasing the valuations of real and personal property taxed under the general law of the State, has been referred to. The total increase in such property valuations in 1900 over 1899 was $349,260,941, the increase of realty valuation being $180,594,302, and of personalty $168,666,639. The increase in property valuations both real and personal in 1900 over those of 1896 was $212,450,028. This increase is in property coming under the general property tax, and assessed and valued by the usual methods.

According to the report of the State board of tax commissioners for 1900, just issued, the total assessed valuation of property, real and personal, under the general law, was $1,317,450,028, divided as follows:

Real estate..

Personalty.

$1,006, 453, 013 310, 997, 015

The manner in which this materially increased assessment was distributed is shown by the following table:

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An examination of the assessed valuation of property in the cities of the State for the years 1899 and 1900 discloses the fact that the increase in the value of real estate in such cities for 1900 over 1899 was $45,347,232, while the increase in personalty was $87,309,936, making a total increase of valuation in the 78 cities of the State of $132,657,168. A further comparison shows that for the year 1900 the percentage of increase in the assessed valuations of real estate in 1900 over that of 1899 was 22, while that of personal property was 119.

The total taxes for 1900 upon these property valuations under the general law were $20,380,532.86, or $111,503.31 less than in 1899; the sum of $15,380,063.88 being derived from real estate, and $5,000,468.98 from personalty. The percentage of this total tax derived from real estate was 75.465, and from personalty 24.536, and the average rate of taxation per $1,000 of assessed valuations was substantially $15.47.

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