Michigan.

In 1899 the legislature of Michigan passed an inheritance tax law which was amended in 1903, the amendments covering all but one section of the act. The law, as a whole, has been sustained by the Supreme Court, but one or two minor provisions being declared unconstitutional. The amount of tax collected for the fiscal year ending June 30, 1903, was $164,572, the interest thereon being $10,002. The number of decedents where the transfers in connection with their estates were taxable was 272. The law provides:

A tax of five per cent shall be imposed upon the transfer of any property, real or personal, of the value of $100 or over to persons or corporations not exempt by law from taxation, except where the bequest passes to father, mother, husband, wife, child, brother, sister, wife or widow of a son, or the husband of a daughter, or to or for the use of any child or children adopted as such in conformity with laws of Michigan, or any person to whom decedent stood for not less than 10 years prior to such transfer in the mutually acknowledged relation of parent, or to any lineal descendant of such decedent.

In the aforesaid cases transfer of property shall not be taxable unless it is personal property of the clear market value of $2,000 or over, in which case the entire transfer shall be taxed at the rate of one per cent upon the clear market value thereof. Every such tax shall be and remain a lien upon the property transferred until paid. If tax is paid within 12 months from the accruing thereof, a discount of five per cent shall be deducted; if such tax is not paid within 18 months interest shall be charged at the rate of eight per cent from the time the tax accrued. All taxes levied under this act shall be paid into the State treasury and be applied in paying the interest upon the primary school, university and other educational funds, and the interest and principal of the State debt until the extinguishment of the State debt other than the amounts due to educational funds, when such taxes shall be added to and constitute a part of the primary school interest fund, in pursuance of and in compliance with Sec. 1 of Art. 14 of the Constitution of this State.

Missouri.

The law taxing collateral inheritances in Missouri went into effect August 20, 1899. Amendments were made thereto in 1901 and 1903, the latter amendment relating to fees of the county collector for collection of inheritance tax. The digest of the law follows:

All property, real or personal, within the jurisdiction of the State, belonging to resident or non-resident, which passed by inheritance to any party except father, mother, husband, wife, natural or legally adopted child, or direct lineal descendant of the decedent, unless given to some educational, charitable, or religious purpose exclusively, is subject to a five per cent tax. Where a party dies without a will and leaves no children, grandchildren, father, mother, or legally adopted child surviving him, and the heirs under the statute are his collateral relatives, such as brothers, sisters, nephews, nieces, etc., then the property becomes taxable. Property descending to parents and brothers and sisters and their descendants, that portion which goes to the parent is exempt from the tax, but that which goes to the others named is taxable. A rebate of five per cent is allowed upon taxes paid six months after death of deceased; if paid within 12 months no interest is charged but if not paid within that time the interest charged is 12 per cent a year. If cause is shown for extension of time of payment, interest is put at six per cent. The State has the first lien for the amount of the tax upon all real and other property subject

thereto.

Under certain conditions a proportion of the money received from the tax is credited to the fund in the treasury known as the "State seminary moneys," for the maintenance, etc., of the university of the State of Missouri. A proportion is also set apart for the fund known as the "educational fund."

The amount collected on the tax for the fiscal year 1903 is $142,564.

Montana.

The act establishing a tax on direct and collateral inheritances was passed March 4, 1897, and has not since been amended. Under the law, bequests of property are taxed five per cent, except when bequeathed to near relatives. Personal property to relatives is taxed one per cent on all amounts of $7,500 or over; collateral heirs pay five per cent on all amounts of $500 or over. Sixty per cent of tax goes to the State and 40 per cent to the county. A digest of the first sections of the law follows:

All property within the jurisdiction of the State, belonging to resident or non-resident, passing to heirs, other than father, mother, husband, wife, lawful issue, brother, sister, the wife or widow of the son, or the husband of a daughter, or any child or children adopted as such in conformity with the laws of the State of Montana, and any lineal descendant of such decedent born in lawful wedlock shall be taxed five dollars on every one hundred dollars. When the beneficial interest to any personal property passes to father, mother, husband, wife, child, brother, sister, wife or widow of the son, or the husband of a daughter, or any legally adopted child, or to any person to whom the deceased, for not less than 10 years prior to death, stood in mutually acknowledged relation of a parent, or to any lineal descendant born in lawful wedlock, the rate of tax shall be one dollar on every hundred dollars, provided that no estate valued at less than $7,500 shall be subject to tax. In all other cases, the rate shall be five dollars on every hundred dollars, provided that no estate valued at less than $500 shall be taxed. Taxes are due at death of decedent; if paid within 10 months, no interest shall be charged; otherwise, interest shall be 10 per cent a year; if taxes are paid within six months from date of accruing, a discount of three per cent shall be deducted from tax. The State shall receive 60 per cent of the tax for the use of the general fund and the county 40 per cent for the use of the general school fund.

The income from the collateral inheritance tax for the year 1903 amounted to $14,536.

Nebraska.

Chapter 54, Acts of 1901, taxes all inheritances passing by will or by the intestate laws of Nebraska; the law has not been amended. Although the law taxes lineal as well as collateral heirs, only sums in excess of large amounts are taxable and the rates are small so that the imposition of the tax has not proved to be an important factor as a source of revenue for the State. The total amount of tax collected up to March, 1904, was $4,189, the number of decedents for the year 1903 being 16. The persons taxed and rates imposed may be gleaned from the following:

All property within the jurisdiction of the State, whether belonging to resident or nonresident, is taxable. When the beneficial interests to any property pass to father, mother, husband, wife, child, brother, sister, wife or widow of the son or husband of the daughter, or any child or children adopted as such in conformity with the laws of the State of Nebraska, or to any person to whom the deceased for not less than 10 years prior to death stood in the acknowledged relation of the parent, or to any lineal descendant born in lawful wedlock, the rate shall be $1 on every $100 of the clear market value of such property received by each person; provided, any estate which may be valued at a less sum than $10,000 shall not be subject to tax, and all amounts in excess of $10,000 received by each person shall be subject to tax. When the beneficial interests pass to uncle, aunt, niece, nephew, or other lineal descendant of same, the rate shall be $2 on every $100 on sums received by each person in excess of $2,000. In all other cases the rate shall be as follows: On each and every $100 of the clear market value of all property and at the same rate for any less amount, $2; on all estates of $10,000 and less, $3; on all estates of over $10,000, not exceeding $20,000, $4; on all estates over $20,000, and not exceeding $50,000, $5; on all estates over $50,000, $6; provided, that an estate in the above cases which may be valued at a sum less than $500 shall not be subject to tax.

Taxes are payable at the death of decedent, and interest at the rate of seven per cent a year shall be charged for such time as taxes are not paid; provided, that if said tax is paid within six months from the accruing thereof interest shall not be charged.

New Jersey.

The Collateral Inheritance Tax law of New Jersey was approved May 15, 1894, as chap. 210. In 1898, a supplement to the act was passed (chap. 62) by which certain gifts and legacies were exempt from tax. The laws of 1902, chap. 217, amended that section of tax law relating to notification of State Comptroller to prosecutor of failure to pay. In 1903, the law was again supplemented (chap. 90), under which supplement taxes in remainder were to be immediately taxed. As will be seen from the following extract, the nature of the tax is purely collateral, direct relatives being exempt; all religious, benevolent, and charitable institutions are also excepted:

All property within the jurisdiction of the State, belonging to a decedent, is subject to a five per cent tax, except any estate which may be valued at a sum less than $500, which estate is not taxable; provided, that bequests left to the following persons, or for the following purposes, shall not be taxed: Father, mother, husband, wife, children, brother or sister, or lineal descendants born in lawful wedlock, or the wife or widow of a son, or the husband of a daughter; churches, hospitals and orphan asylums, public libraries, bible and tract societies, and all religious, benevolent and charitable institutions and organizations. Supplement of 1898 further exempts: Bequests to any Bible or tract society, or religious institution, boards of the church or organizations thereof, in trust or otherwise, not confined in their operations and benefactions to local or State purposes, but for the general good of the people interested therein, of the United States or of foreign lands, as the board of home and foreign missions of various church denominations, whether said societies, institutions, or boards are organized or incorporated under the laws of New Jersey or not. Taxes are payable at death of decedent; if taxes are paid within one year interest at the rate of six per cent a year shall be charged, but if not so paid interest at the rate of 10 per cent shall be charged; provided, that if said tax is paid within nine months from the accruing thereof no interest shall be charged but a discount of five per cent deducted.

The tax collected in 1903 amounted to $149,577, a decrease of $14,164 as compared with 1902.

New York.

The law taxing inheritances in the State of New York was passed June 10, 1885 (chap. 483). In 1887 the act was amended so as to include the property of non-resident decedents physically present within the State at the time of said decedent's death. Subsequent amendments

affected merely the manner of procedure in the assessment of the tax. In 1891 the law was further amended, and for the first time imposed a tax of one per cent upon personal property of any lineal descendant of the deceased, of an adopted child, or of any person between whom and the deceased the mutually acknowledged relation of parent and child had existed for 10 years or more prior to death. The former Collateral Inheritance Tax law was repealed in 1892 by chap. 399; law was reenacted and known as the Transfer Tax law. Four years later (1896) this law was repealed and re-enacted in substantially its previous form, and is, in substance, as the law exists at the present time. Amendments

which were made from 1896 to 1902 pertain particularly to the manner of procedure in collecting the tax and to certain other details in carrying out the provisions of the law. Chapter 41, laws of 1903, amended the Transfer Tax law so as to include real estate as taxable, equally with personal property, when same passes to persons in the one per cent class.

As the New York inheritance tax law is considered one of the best on the statute books of this country, similar laws of other States being modeled after it, and as it taxes lineal descendants as well as collateral heirs, it seems important that we should print certain sections of the law in extenso.

The General Tax Law of New York. Article X-Taxable Transfers.

§ 220. Taxable Transfers. A tax shall be and is hereby imposed upon the transfer of any property, real or personal, of the value of five hundred dollars or over, or of any interest therein or income therefrom, in trust or otherwise, to persons or corporations not exempt by law from taxation on real or personal property, in the following cases:

1. When the transfer is by will or by the intestate laws of this state from any person dying seized or possessed of the property while a resident of the state.

2. When the transfer is by will or intestate law, of property within the state, and the decedent was a nonresident of the state at the time of his death.

3. When the transfer is of property made by a resident or by a nonresident when such nonresident's property is within this state, by deed, grant, bargain, sale or gift made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death.

4. (Such tax shall be imposed) When any such person or corporation becomes beneficially entitled, in possession or expectancy, to any property or the income thereof by any such transfer, whether made before or after the passage of this act.

5. Whenever any person or corporation shall exercise a power or appointment derived from any disposition of property made either before or after the passage of this act, such appointment when made shall be deemed a transfer taxable under the provisions of this act in the same manner as though the property to which such appointment relates belonged absolutely to the donee of such power and had been bequeathed or devised by such donee by will; and whenever any person or corporation possessing such a power of appointment so derived shall omit or fail to exercise the same within the time provided therefor, in whole or in part, a transfer taxable under the provisions of this act shall be deemed to take place to the extent of such omissions or failure, in the same manner as though the persons or corporations thereby becoming entitled to the possession or enjoyment of the property to which such power related had succeeded thereto by a will of the donee of the power failing to exercise such power, taking effect at the time of such omission or failure.

6. The tax imposed thereby shall be at the rate of five per centum upon the clear market value of such property, except as otherwise prescribed in the next section. (As amended by chapter 284 of the Laws of 1897.)

§ 221. Exceptions and Limitations. When property, real or personal, or any beneficial interest therein, of the value of less than ten thousand dollars, passes, by any such transfer to or for the use of any father, mother, husband, wife, child, brother, sister, wife or widow of a son or the husband of a daughter, or any child or children adopted as such in conformity with the laws of this state, of the decedent, grantor, donor or vendor, or to any child, to whom any such decedent, grantor, donor or vendor for not less than ten years prior to such transfer stood in the mutually acknowledged relation of a parent, provided, however, such relationship began at or before the child's fifteenth birthday and was continuous for said ten years thereafter, or to any lineal descendant of such decedent, grantor, donor or vendor born in lawful wedlock, such transfer of property shall not be taxable under this act; if real or personal property, or any beneficial interest therein, so transferred is of the value of ten thousand dollars or more, it shall be taxable under this act at the rate of one per centum upon the clear market value of such property. But any property heretofore or hereafter devised or bequeathed to any person who is a bishop or to any religious corporation including corporations organized exclusively for bible or tract purposes shall be exempted from and not subject to the provisions of this act. There shall also be exempted from and not subject to the provisions of this act personal property other than money or securities bequeathed to a corporation or association organized exclusively for the moral or mental improvement of men or women or for charitable, benevolent, missionary, hospital, infirmary, educational, scientific, literary, library, patriotic, cemetery or historical purposes or for the

enforcement of laws relating to children or animals or for two or more of such purposes and used exclusively for carrying out one or more of such purposes. But no such corporation or association shall be entitled to such exemption if any officer, member, or employé thereof shall receive or may be lawfully entitled to receive any pecuniary profit from the operations thereof except reasonable compensation for services in effecting one or more of such purposes or as proper beneficiaries of its strictly charitable purposes; or if the organization thereof for any such avowed purpose be a guise or pretense for directly or indirectly making any other pecuniary profit for such corporation or association or for any of its members or employés or if it be not in good faith organized or conducted exclusively for one or more of such purposes. (As amended by chapter 88 of the Laws of 1898 and chapter 458 of the Laws of 1901.)

$222. Lien of Taxes and Payment Thereof. Every such tax shall be and remain a lien upon the property transferred until paid and the person to whom the property is so transferred, and the administrators, executors and trustees of every estate so transferred shall be personally liable for such tax until its payment. The tax shall be paid to the treasurer in a county in which the office of appraiser is not salaried, and in other counties, to the state comptroller and said treasurer or state comptroller shall give, and every executor, administrator or trustee shall take, duplicate receipts from him of such payment. If such duplicate receipts were received from a county treasurer such executor, administrator or trustee shall immediately send one of them to the state comptroller, and if received from the state comptroller he shall immediately send one of them to the state treasurer. The state comptroller or the state treasurer, as the case may be, receiving such receipt shall charge the officer receiving the tax with the amount thereof and seal said receipt with the seal of his office and countersign the same and return it to the executor, administrator or trustee, whereupon it shall be a proper voucher in the settlement of his accounts; but no executor, administrator or trustee shall be entitled to a final accounting of an estate in settlement of which a tax is due under the provisions of this act unless he shall produce a receipt so sealed and countersigned, or a certified copy thereof, or unless a bond shall have been filed as prescribed by section two hundred and twenty-six of this chapter. All taxes imposed by this article shall be due and payable at the time of the transfer, except as hereinafter provided. Taxes upon the transfer of any estate, property or interest therein limited, conditioned, dependent or determinable upon the happening of any contingency or future event by reason of which the fair market value thereof cannot be ascertained at the time of the transfer as herein provided, shall accrue and become due and payable when the persons or corporations beneficially entitled there to shall come into actual possession or enjoyment thereof. All taxes which, at the time the amendment to this section takes effect, have been assessed by an order of the surrogate, or which have accrued, in a county in which the office of appraiser is salaried, shall be paid to the state comptroller, as provided by this article. (As amended by chapter 284 of the Laws of 1897 and chapter 173 of the Laws of 1901.)

$223. Discount, Interest and Penalty. If such tax is paid within six months from the accruing thereof, a discount of five per centum shall be allowed and deducted therefrom. If such tax is not paid within eighteen months from the accruing thereof, interest shall be charged and collected thereon at the rate of ten per centum per annum from the time the tax accrued ; unless by reasons of claims made upon the estate, necessary litigation or other unavoidable cause of delay, such tax can not be determined and paid as herein provided, in which case interest at the rate of six per centum per annum shall be charged upon such tax from the accrual thereof until the cause of such delay is removed, after which ten per centum shall be charged. In all cases when a bond shall be given under the provisions of section two hundred and twenty-six of this chapter, interest shall be charged at the rate of six per centum from the accrual of the tax until the date of payment thereof.

§ 224. Collection of Tax by Executors, Administrators and Trustees. Every executor, administrator or trustee, shall have full power to sell so much of the property of the decedent as will enable him to pay such tax in the same manner as he might be entitled by law to do for the payment of the debts of the testator or intestate. Any such administrator, executor or trustee having in charge or in trust any legacy or property for distribution subject to such tax shall deduct the tax therefrom; and within thirty days there from shall pay over the same to the county treasurer or state comptroller, as herein provided. If such legacy or property be not in money, he shall collect the tax thereon upon the appraised value thereof from the person entitled thereto. He shall not deliver or be compelled to deliver any specific legacy or property subject to tax under this article to any person until he shall have collected the tax thereon. If any such legacy shall be charged upon or payable out of real property, the heir or devisee shall deduct such tax therefrom and pay it to the administrator, executor or trustee, and the tax shall remain a lien or charge on such real property until paid, and the payment thereof shall be enforced by the executor, administrator or trustee in the same manner that payment of the legacy might be enforced, or by the district attorney under section two hundred and thirty-five of this chapter. If any such legacy shall be given in money to any such person for a limited period, the administrator, executor or trustee shall retain the tax upon the whole amount, but if it be not in money, he shall