of the shares of capital stock, and the market or fair cash value of its debts, exclusive of those for current expenses, and adding these together, and taking from the sum the equalized valuation of all its tangible property, was proper, as showing the balance of the capital stock over and above the assessed value of the tangible property. We said in Hotel Co. v. Lieb,83 'The assessed valuation of the tangible property is deducted to avoid double taxation, and, when this is done, the residue apparently represents only the valuation of the intangible property.' So far as we know to the contrary, the capital stock, in the case at bar, may have exceeded in value the tangible property, or real and personal property, assessed by the assessor. It may have appeared to the board of equalization, by appropriate proof, that the stock assessed by it exceeded the value of the tangible property as locally assessed." 84

Though the shares of stock have no value, the capital stock may have a large value. Thus where the shares of a bridge company were worthless because the large bonded debt was greater than all the property and rights of the corporation, the court upheld an assessment of over one million dollars upon the capital stock. "If shares of stock in a corporation. are worthless because of its debts, the creditors take the place of the stockholders; and, if these debts have value, it is presumptively because there is an equal amount in value of corporate property from which payment can be made." 85

The corporations excepted from the provisions for assessment by the State Board of Equalization are as follows:

"This clause shall not apply to the capital stock, or shares of capital stock, of banks organized under the general banking laws of this State: provided, further, that companies and associations organized for purely manufacturing purposes, or for printing, or for publishing of newspapers, or for the improv

83 Hotel Co. v. Lieb, 83 Ill. 602; Glass Co. v. McCaleb, 81 Ill. 556. 84 Magruder, J., in Distilling & C. F. Co. v. Peo., 161 Ill. 101, 43 N. E. 779. 85 Baker, J., in Keokuk & H. Bridge Co. v. Peo., 161 Ill. 132, 43 N. E. 691, citing Pacific Hotel Co. v. Lieb, 83 Ill. 602.

ing and breeding of stock, shall be assessed by the local assessors in like manner as the property of individuals is required to be assessed." 86

The constitutional provision that taxation shall be uniform as to the class upon which it operates is not violated by this provision; it does not prohibit the legislature from classifying corporations for taxation.87

"The capital stock and franchises of corporations and persons, except as may be otherwise provided, shall be listed and taxed in the county . . . where the principal office or place of business of such corporation or person is located in this State. If there be no principal office or place of business in this State then at the place in this State where any such corporation or person transacts business." 88

The provisions of this chapter apply not merely to the excepted domestic corporations, but to all foreign corporations.89

§ 524. Indiana.

There is no franchise tax. The method of taxation of corporations is to ascertain the whole value of the property (tangible and intangible) and tax it like the property of individuals.

"For the purpose of taxation real property shall include all lands within the State and all buildings and fixtures thereon and appurtenances thereto excepting in cases otherwise expressly provided by law; personal property shall include all goods and chattels within the State, all ships, boats and vessels belonging to inhabitants of this State whether at home or abroad, and their appurtenances; all goods, chattels and effects belonging to inhabitants of this State situate without this 86 Ill. Rev. Stat. ch. 120, § 3, cl. 4.

87 Coal Run Coal Co. v. Finlen, 124 Ill. 666, 17 N. E. 11.

88 Ill. Rev. Stat. ch. 120, § 7.

89 A corporation formed by the consolidation of a domestic and a foreign corporation is taxable like a domestic corporation. Keokuk & H. Bridge Co. v. Peo., 161 Ill. 132, 43 N. E. 691.

[Chap. XXII. State, except the property actually and permanently invested in business in another State shall not be included; all indebtedness due to inhabitants of this State above the amounts respectively owed by them whether such indebtedness is due from individuals or corporations, public or private, and whether such debtors reside within or without the State; all shares in corporations organized under the laws of this State when the property of such corporations is not exempt or is not taxable to the corporation itself; all shares in banks organized in this State under any law of the United States, but in estimating the value of such shares deductions shall be made of the value of all real estate taxed to the bank; all shares in foreign corporations except national banks, owned by inhabitants of the State; all moneys; all circulating notes of national banking associations and United States legal tender notes and other notes and certificates of the United States payable on demand and circulating or intended to circulate as currency; all annuities and royalties; all interests owned by individuals in lands, the fee of which is in this State or in the United States, except as hereinafter provided. Property exempted from taxation by the laws of the United States shall not be included. Shares in corporations, all the property of which is taxable to the corporation itself, shall not be assessed to the shareholder. Lands sold by the State, including lands forfeited to the sinking fund, the university fund and all other trust funds, though not granted or conveyed, shall be assessed in the same manner as if actually conveyed. All lands reserved to or for any individual by any treaty between the United States and any Indian tribe or nation shall be liable to taxation from the time such treaty shall have been confirmed." 90

"All corporate property, including capital stock and franchises, except where some other provision is made by law, shall be assessed to the corporation as to a natural person in the name of the corporation. The place where its principal

90 Ind. Rev. Stat. 1901, § 8411.

office in this State is situated shall be deemed its residence, but if there be no principal office in the State then such property shall be listed and taxed at any place in the State where the corporation transacts business." 91

"Every franchise granted by any law of this State, owned or used by any person or corporation, and every franchise or privilege used or enjoyed by any person or corporation shall be listed and assessed as personal property." 92

The "capital stock" which is taxable is the capital of the company, not the shares of the stockholders. Since this capital is made up of all the property of the corporation, if it has no property except tangible property, taxed as such, it is not permissible to add anything on account of the capital stock.93 But unless it is clear that there is no property but the tangible property, there is capital stock to assess. The whole value of the capital stock, as found by the Board of Equalization, less the value of the tangible property, is to be assessed as capital stock.94

"If the capital stock exceeds in value the tangible property subject to taxation and assessed for taxation, then, to the extent of its value in excess of the value of the tangible property, it may be listed and assessed; for it is apparent that in such a case there is not double taxation. It cannot be assumed that the tangible property necessarily represents the value of the capital stock, for the business of a corporation owning comparatively little tangible property may be so profitable as to impress upon its stock a value much beyond its tangible property; or it may be the owner of a franchise which gives the stock a value much greater than that of the tangible property of which it is the owner." 95

91 Ibid. § 8422.

92 Ibid. § 8435.

93 Hyland v. Brazil Block Coal Co., 128 Ind. 335, 26 N. E. 672.

94 Rev. Stat. § 8492.

95 Elliott, J., in Hyland v. Central Iron & Steel Co., 129 Ind. 68, 28 N. E. 308, 13 L. R. A. 515.

The valuation of the intangible property is to be made by the Board of Equalization.

"It is true that such board cannot legally assess capital stock, where the capital is invested in tangible property listed for taxation, unless such stock exceeds in value the property in which it is invested; but who shall determine the question as to whether the stock is of greater value than the tangible property? The board of equalization, we think, must decide that question. If it makes a mistake, and reaches a wrong conclusion, can it be said that its assessment is void? We think not. We think it is binding on the corporation assessed until set aside or vacated by appeal, or some other authorized, direct proceeding.'

$525. Iowa.

196

There is no franchise tax. Corporations generally are taxed upon their actual property, and the shareholders are also taxable on their shares at the principal office of the corporation. Even if this be regarded as double taxation it is admissible.97

"The property of all corporations for pecuniary profit shall be subject to taxation, the same as that of individuals." 98 "All property subject to taxation shall be valued at its actual value . . . and shall be assessed at twenty-five per cent. of such actual value. . . . Actual value of property as used in this chapter shall mean its value in the market in the ordinary course of trade.” 99

These provisions make it impossible to exempt the property of corporations from local taxation. 100 "The shares of stock of any corporation organized under the laws of this State, except those which are not organized for pecuniary profit,

90 Coffey, J., in Jones v. Rushville Nat. Gas Co., 135 Ill. 595, 35 N. E. 390. 07 Des Moines Water Co.'s Appeal, 48 Ia. 324; Cook v. Burlington, 59 Ia. 252, 13 N. W. 113.

98 Ia. Const. Art. 8, § 2.

90 Ia. Code of 1897, § 1305.

100 Davenport v. Chicago, R. I. & P. R. R., 38 Ia. 633.