corporation, but any and all other evidence of the full and true cash value of said property, both tangible and intangible, shall be received and considered in arriving at the value of the entire plant of such corporation. If there is no market value of the stock, then what it would bring at a fair voluntary sale, the value of the use of the property and the capability of use shall be considered, with other evidence. If neither of the foregoing methods are applicable to any given profit-producing unit, corporate plant or property, then the cost of duplication or other just means may be resorted to. This section shall control the State Board of Equalization as well as the county

29

"Where corporate property is so assessed as a unit, except where otherwise specially provided for in this act, the value of its real estate in this State and the value of its property beyond the limits of this State not used in the operation of its main business, if any, shall be deducted, and such realty in this State shall be assessed by the assessors in every respect as though owned by individuals or natural persons." 20 In arriving at the value of the property owned by any corporation, foreign or domestic, not only its tangible property, whether it be within the State or partly within and partly without this State, shall be looked to by the assessor and State Board of Equalization, but its intangible property, such as special privileges, rights of way, franchises, contract rights and obligations shall be considered, that is to say: The entire business, plant or enterprise of such corporation shall be valued as a unit, and every element, subject or consideration wherein the use is in inseparable combination with a whole of which it forms a part and which gives to the corporation property an added value for the purposes of income or sale shall be considered in fixing the value for taxable purposes. 30

The franchise tax, called a license tax, is imposed upon both

28 Ibid. § 60. 29 Ibid. § 60. 30 Ibid. § 61.

domestic and foreign corporations. Every domestic corporation with a capital stock of twenty-five thousand dollars or over pays to the State an annual tax of two cents on each thousand dollars of capital stock. Every foreign corporation which has a right to do business within the State pays an annual tax of four cents on each thousand dollars of capital stock; but where the par value of the shares is less than one dollar per share, the rate shall be two and one-half cents per thousand shares.32

516. Connecticut.

The method of taxing ordinary corporations in Connecticut is a very simple one. The real and personal property are to be taxed like the property of an individual. Therefore all foreign corporations are taxed upon their property within the State; and the same is true of such domestic corporations as by some particular provision of their charters are not taxable upon their capital stock.

"The whole property in this State of every corporation whose stock is not liable to taxation, and which is not required to pay a direct tax to this State in lieu of other taxes, and whose property is not expressly exempt from taxation, and the whole property in this State of every corporation organized under the law of any other State or country, shall be set in its list and liable to taxation in the same manner as the property of individuals.” 33

"The real estate of [such corporations] shall be set in the list of the town in which such real estate is situated, and the personal estate shall be set in the list of the town in which such corporation has its principal place of business, or exercises its corporate powers; . . . and the stockholders of any corporation, the whole property of which is assessed and

31 Ibid. § 64.

32 Ibid. § 65.

33 Conn. Gen. Stat. 1902, § 2328.

taxed in its name, shall be exempt from assessment or taxation for their stock therein." 34

Shares of the capital stock of any bank, national banking association, trust, insurance, investment and bridge company pay to the State Treasurer one per cent. on the market value of each share less the real estate.35 Every such corporation has a lien on the shares for the amount of the tax, which is paid directly by the corporation.3

36

The capital stock thus taxed does not mean the money actually paid in by the shareholders, or the par value of the shares. "The capital stock of a corporation was not regarded in the strict technical sense, as a fixed sum of money paid in or agreed to be paid in by the stockholders, but it was regarded as consisting of all the substantial property, real and personal, owned and possessed by the corporation." 37

"To bring a shareholder within the benefit of the statutory exemption, he must show that the real estate, by reason of which he claims it, is not only owned by the company, but owned by it as a part of its capital and surplus. Real estate may be held by a corporation to respond to particular liabilities for the benefit of creditors, which it is sufficient, and not more than sufficient, to meet. In this shareholders have only a remote and subordinate interest. Other funds, and perhaps other real estate may be held by the same corporation, which are set to the account of capital and surplus. In these investments, the creditors being otherwise provided for, the shareholders have a direct and substantial interest. It is to real estate of this latter description only that the statute refers."

138

"The real question is whether such real estate be part of that capital, or capital and surplus, representing, at the date of

34 Ibid. § 2329.

35 Conn. Gen. Stat. § 2331.

36 Ibid.

37 Torrance, J., in Security Co. v. Hartford, 61 Conn. 89, 101, 23 Atl. 699.

38 Baldwin, J., in Appeal of Barrett, 73 Conn. 288, 47 Atl. 243.

the return to the town assessors, the excess in value of the net assets, above the amount of corporate debts and liabilities, in which the shareholders are directly interested.39 It is this excess or 'surplus of corporate property' which is treated as equitably owned by the shareholders, and mainly builds up the market value of their shares.40 Land acquired and held for the purpose of responding to particular liabilities, whether through action by the corporation or by force of statutory requirements, would not be a part of such capital or surplus to any greater extent than that of its value after deducting the amount of such liabilities." 41

In the absence of express exemption by statute, the value of the real estate could not be deducted, even if the result were double taxation.42

Under the statute, the amount to be deducted from the value of each share is that proportion of its value which the total investment in such real estate as forms part of the capital stock bears to the entire surplus of assets over liabilities.43

The tax thus required to be paid by the stockholders is not in the strict sense a tax on the corporation at all.

"The tax in question is, in form, one against the corporation.44 In substance, it is one against each of its non-resident stockholders, to be paid by it in their behalf.45 It is imposed only on corporations 'whose stock is liable to taxation, and not otherwise taxed.' It is measured by the number of shares held by non-residents, and the value of each share. These shares do not belong to the corporation, and a tax on their value is virtually a tax against their owners.46 Where all the

39 Batterson's Appeal, 72 Conn. 374, 376, 44 Atl. 546.

40 Batterson v. Town of Hartford, 50 Conn. 558, 562; Security Co. v. Same, 61 Conn. 89, 23 Atl. 699.

41 Baldwin, J., in Appeal of Cutler, 74 Conn. 35, 49 Atl. 338.

42 Toll Bridge Co. v. Osborn, 35 Conn. 7.

43 Batterson v. Hartford, 50 Conn. 558.

44 State v. Royce, 68 Conn. 311, 36 Atl. 48.

45 Batterson v. Town of Hartford, 50 Conn. 558, 560.

46 Oliver v. Washington Mills, 11 All. (Mass.) 268, 273.

shares in a corporation are massed for purposes of assessment and taxation, this can be regarded as merely a convenient mode of ascertaining the value of its own property.47 No such construction can be given to a statute which fastens only upon such shares as are held by a particular class of persons. That now in question does no more than make the defendant the pay-master as respects the state. The non-resident shareholders owe the tax, as respects the corporation. The original law of 1866 was therefore careful to provide (section 2) that every insurance company paying the tax which it imposed should 'have a lien upon the stock of such non-resident stockholders for the reimbursement of said sums so required to be paid.' In Gen. Stat. § 3917, a similar lien is given 'upon the stock of each non-resident stockholder,' with the added words 'to the extent of one per cent. of the value of his stock as contained in said list.' The list to which reference is thus made is that to be returned under the preceding section, which, as now amended, makes the sum 'required to be paid' 11⁄2 per cent. of the value of the stock." 48 And therefore there is no exemption on account of non-taxable property of the corporation, such as government bonds. "As to the claimed exemption upon bonds of the United States: The tax is not upon the property of the corporation; it is explicitly upon the shares; that is, upon the right of the shareholder to receive his proper proportion of the net profits earned by the exercise of the corporate franchise, and of assets remaining after payment of debts upon dissolution. That he is not the owner of any portion of the government bonds or of any other property held by the corporation; that his right is a distinct and independent property in himself, quite separate from the ownership of the corporation of its assets, and that the state may assess a tax against him upon it at its full value, notwithstanding the fact that the corporation is the owner of un

47 Nichols v. New Haven & N. Co., 42 Conn. 103, 120.

48 Baldwin, J., in State v. Travelers' Ins. Co., 70 Conn. 590, 40 Atl. 465, 66 A. S. R. 138.