are assessed upon their tangible property by the township assessor just as individuals are. In case the value of the capital stock and franchise of any such corporation exceeds that of the tangible property listed for taxation, the excess is assessed to the corporation by the county board of review. If no tangible property is returned or found and the capital stock has a value, it is assessed at its true cash value. If the value of the tangible property is greater than that of the capital stock and franchises, no assessment is made by the county board of review.' State and national banks (but not savings banks) are excepted from the operation of this law. The shares of such institutions are assessed to the owners thereof by the township assessor. A statement concerning the financial condition of each bank is required to be furnished the assessor to enable him to determine the true cash value of the capital stock. From this is deducted the value of real estate and other tangible property which is assessed to the bank as a corporation, and the shareholders are assessed personally for the remainder. Building and loan associations are also exempt from taxation as corporations. But the shareholders must pay taxes upon the true cash value of their shares. Those who have not borrowed money are charged with the true value of their shares, and must list them with other chattels. Those who have borrowed are taxed on the value of their real estate which is pledged as security.3 Foreign bridge and ferry companies are assessed by the township assessor upon the actual value of their property, 'Laws of Taxation, 1901, sect. 74. Ibid., sects. 60-1. Ibid., sect. 89. This law was adopted after two unsuccessful experiments: (1) to assess each stockholder on the fair cash value of his paid-up stock (Rev. Siat., 1881, sect. 6373); and (2) to assess the association as a unit upon the total amount of money paid in, less the amount loaned out. (Laws, 1887, p. 40.) which is estimated by taking into consideration the tangible property and the character of the business as indicated by the gross receipts.' (b) Corporations assessed by the State Board of Equalization. The corporations assessed by State officers are without exception transportation companies (domestic and foreign). The confusion, inequality, and injustice arising from the conflicting claims and acts of different taxing districts has made this centralization inevitable. The meaning of the term railroad has been extended so as to include not only steam railroads, but all street railways and clevated or underground railroads, whatever the power by which their vehicles are propelled. The statements and schedules which must be returned are somewhat more elaborate than those prescribed in 1872; but the grouping of the tangible property into four classes remains the same. No detailed method of making the assessments is laid down in the law. The State Board of Tax Commissioners is not bound by the returns made by the railroads. They take into consideration all the elements which are usually considered in fixing the value of any kind of property, that is, the tangible property, the earning capacity, the condition of the property, the expense of operation, the value of the stock, the amount of bonds issued, et celera. From statements made in the judicial decisions upon this question it may be inferred that "the mileage rule" is used in determining what proportion of the total value of an interstate railroad should be assessed for taxation in Indiana. Telegraph, telephone, express, and sleeping-car companies, 'Laws of Taxation, 1901, sect. 72. 'Laws of Taxation, 1901, sects. 76–88. Laws, 1951, p. 121. Ibid., sect. 129. 'Pittsburg, etc., Ky. Co. v. Backus, 133 Ind. Reports, 546. 'See note 5 above, also 154 U. S. Reports, 421. "fast freight" lines, and pipe-line companies not wholly situate in one county, are required to return to the Auditor of State annual statements similar to those demanded of railroads with some other items peculiar to their business.' In making the assessment the State Board of Tax Commissioners first ascertains the true cash value of the entire property owned by such an association or corporation by adding to the market value of the aggregate shares (or to the actual value of the capital, in case there are no shares of stock) the total amount of mortgages upon the property. This is the "gross value." To ascertain the true cash value of the property in Indiana, they deduct from the gross value the assessed value of the real estate situate without the State and not specifically used in the general business of the company; of the remainder they take that proportion which the mileage operated by the company in Indiana bears to the total mileage operated. This gives the entire value within Indiana. From this is deducted the assessed value of all the real estate, structures, machinery and appliances within the State subject to local assessment. The residue is assessed by the Board to the company and apportioned among the counties on the mileage basis. A similar apportionment is made among the townships of the respective counties. The county auditor adds to the value apportioned, the valuation assessed locally upon real estate, structures, machinery, et cetera, and extends the total upon the tax duplicates.+ (c) Corporations paying a business or excise tax. In the third class of corporations mentioned above there are only 1 Laws of Taxation, 1901, pp. 131-8. Ibid., pp. 138-140. 'In the case of a pipe-line company, it is the proportion of the length, size and value of its pipe lines. Laws of Taxation, 1901, pp. 14c-1. See page 293 above. two kinds-foreign insurance companies and foreign and domestic navigation companies. The tax on foreign insurance companies is a continuation of that imposed in 1873. The tax on navigation companies is the latest phase of legislation on this subject. Every domestic navigation company and every owner of any ship or other vessel registered in Indiana under the navigation laws of the United States, is required to pay annually into the treasury of the State a sum equal to three cents per net ton of registered tonnage of all vessels owned. The capital stock of any such company is not taxed as in the case of other corporations; but all personal property owned by it, excepting vessels and other actual tangible property outside the State, is subject to taxation at the place where the home office is situated.2 The tax laws of 1891 and 1893 met with opposition from a large and influential class of citizens and tax-payers. But their constitutionality was sustained in all the courts from the lowest to the Supreme Court of the United States.3 The corporations, as a rule, no longer resist their enforcement, though protesting that they are unjust. While the tax law is still imperfect, it has improved the financial standing of the State, and has distributed the burdens of taxation more equitably. The increase of 143 per cent. in the assessed value of railroads and 168 per cent. in the value of telegraphs for 1891 was very pleasing indeed. But the increase in the ten years since has not been so encouraging. In fact, the assessment of railroads for 1901 was 1 See page 290 above. Laws of Taxation, 1901, sect. 67. 'Laws, 1901, pp. 185-6. If this law should be tested in the courts of the United States, it would, in all probability, be held unconstitutional. 3 141 Ind. Rep'ts, 281; 144 Ind. Rep'ts, 549; 154 U. S. Rep'ts, 421; 166 U. S. Repts, 185; 163 U. S. Rep'ts, 1. 4 See page 276, foot-note 4, for figures. $4,000,000 less than it was in 1891. In the meantime the railroad mileage in the State had increased from 1890 to 1900, 454 miles, which would represent an investment of at least $12,000,000. Still more important is the fact that the years 1900 and 1901 were the most prosperous the railroads had enjoyed for many years.3 In the case of unincorporated telephone companies the valuation is made by the local assessors, generally at a figure below that fixed by the State Board on similar incorporated companies. The method of assessing banks is not satisfactory. The cause of the dissatisfaction is found in the fact that the authorities differ in the way of arriving at their value. In some counties the total of the capital stock, surplus and undivided profits is taken as the basis of valuation; in others, the capital stock alone is taken. The assessments varied in 1901 all the way from $40 to $283 per share. The banks in large cities and manufacturing districts were assessed at a lower rate than those in the small towns. The best remedy for this may be found in clothing the State Board of Tax Commissioners with supervisory or direct administrative authority over the assessment of banks. 'Assessment of corporate property 1901: Railroad Companies..... Street Railway Companies... Telephone Companies Telegraph Companies... Express Companies.. Pipe-line Companies.... Total.. 2 Statistical Abstract of the U. S., 1901, pp. 390, 393-4. $156,973,151 7,746,452 4,436,663 2,514,812 1,881,140 872,811 8,883,582 $183,308,611 This criticism loses some of its force by the recent action of the State Board of Tax Commissioners, raising the assessment of steam railroads for 1902 above that of 1901, $5,824,836. Still, the present assessed value is only $1,758,818 in excess of that of 1891. *State Tax Commissioner Parks M. Martin in the Indianapolis News, Feb. 6, 1902, p. 13. |