and except corporations otherwise provided for in this act, shall be assessed to the owners thereof, at the place where its principal business is transacted, the assessment to be on the value of such shares on the first day of January in each year; but in arriving at the total value of the shares of stock of such corporations, the amount of their capital actually invested in real estate owned by them, either in this State or elsewhere, shall be deducted from the real value of such shares, and such real estate shall be assessed as other real estate, and the property of such corporation, except real estate situated within the State, shall not be otherwise assessed."

Provision is made for statements showing shares issued and par value, authorized and paid in capital, value of real estate, dividends, gross and net earnings, surplus, and highest and average price of stocks. The assessor if dissatisfied makes own valuation.

The corporations described in the preceding sections shall be liable for the payment of the taxes assessed to the stockholders of such corporation, and may collect from them. 101

'Any person, firm or corporation, owning, or having in its possession, or under its control, within the state, with authority to sell the same, any personal property purchased with a view of its being sold, . . . shall be held to be a merchant for the purposes of this title; . . . The assessment shall be made at the average value of the stock during the year next preceding the time of assessing." 102

§ 526. Kansas.

There is no franchise tax. The property of a corporation is taxed to it directly. The real estate is taxed where it is situated. Specific chattels may be specifically listed for taxation or they may be taxed as part of the capital stock.

101 Ia. Code of 1897, §§ 1323, 1324, 1325.

102 Ibid. § 1318.

Property situated outside the State cannot be taxed, even if owned by a domestic corporation.103 "Every person designated by any . . corporation shall list all personal property subject to taxation of which such . . . corporation is the owner, lessee or occupant, having any interest in or exercising any control over any personal property, including all moneys in his possession or subject to his order, check or draft, and all credits due or to become due from any person, company or corporation, whether in or out of the county or State in which such person may reside or such company be located, except as herein otherwise provided." 104 Debts owing in good faith are deducted from credits.105

A merchant lists

the average amount of his stock kept for sale.106

No person shall be required to include in the list of personal property any portion of the capital stock of any company or corporation which is required to be listed by such company or corporation; but all incorporated companies except banks and banking associations, manufacturing companies and stockyard companies, shall be required to list by their designated listing agent, in the township or city where the principal office of such company is kept, the full amount of stock paid in and remaining as capital stock, at its true value in money, and such stock shall be taxed as other personal property; Provided, That such amount of stock of such companies as may be invested in real or personal property in the State of Kansas, which at the time of listing said capital stock shall be particularly specified and.given to the assessors for taxation, shall be deducted from the amount of said capital stock.107 This applies to foreign corporations.

There is no direct franchise tax, but the franchise is reached by taxing the shares of stock, which are taxed at their actual

103 Fisher v. Comrs., 19 Kan. 414.

104 Kan. Gen. Stat. ch. 158, § 12.

105 Ibid. § 16.

106 Ibid. § 54.

107 Ibid. § 28.

value, if any, after deducting the proper proportion of the capital stock already taxed. 108

Besides this property tax, it is open to the taxing power to impose a tax on business. "It is enough for the courts that both occupations and property are legitimate objects of taxation; that they are essentially dissimilar; that constitutional provisions regulating the taxation of one do not control that of the other; and that there are no constitutional inhibitions on the taxation of business, either by the legislature directly, or by municipal corporations thereto empowered by the legislaure."

19 109

527. Kentucky.

In Kentucky there is no franchise tax in the ordinary sense. A corporation is subject to both State and local taxation. Not only may the local taxing district tax the corporation upon its property, real and personal, but in the case of publicservice companies and other corporations having a special franchise that franchise is taxed locally at the valuation placed upon it by the State Board. 110

"All real and personal property within this State, and all personal estate of persons residing in this State, and of all corporations organized under the laws of this State, whether the property be in or out of this State,111 including intangible property, which shall be considered and estimated in fixing the value of corporate franchises as hereinafter provided, shall be subject to taxation unless the same be exempt from taxation by the Constitution, and shall be assessed at its fair cash value, estimated at the price it would bring at a fair voluntary sale."112

108 Ryan v. Comrs., 30 Kan. 185, 2 Pac. 156.

109 Brewer, J., in Newton v. Atchison, 31 Kan. 151, 1 Pac. 288, 47 A. R. 486, 488.

110 South Covington & C. St. Ry. v. Bellevue, 105 Ky. 283, 49 S. W. 23. 111 This provision is constitutional; Com. v. Union Refrigerator Co., 80 S. W. 490.

112 Ky. 1902, ch. 128, Art. 1, § 2. For these provisions for taxing franchises, see infra, § 615.

In taxing credits all actual debts of the corporation are to be deducted; but this does not include contingent liabilities; and therefore an insurance company cannot deduct its liability to policy holders, and is taxable on its reserve fund.113

It is expressly provided in the Constitution 114 that "the general assembly may, by general laws only, provide for the payment of license fees on franchises, stock used for breeding purposes, the various trades, occupations and professions, or a special or excise tax; and may, by general laws, delegate the power to counties, towns, cities and other municipal corporations, to impose and collect license fees on stock used for breeding purposes, on franchises, trades, occupations and professions." This license fee is quite independent of the property and franchise taxes, and may be laid on a corporation in addition to the latter taxes.115

528. Louisiana.

There is no franchise tax, but the "charter or franchise" is taxed as part of the property. The Constitution contemplates only two kinds of corporate taxation; property tax and license tax.116 The State tax is levied by the legislature, and the local taxing districts are permitted to levy a similar tax for local purposes. Property for purposes of taxation includes:. "All real estate with buildings and other improvements all railroads. . . all telephone and telegraph lines . . . all charters and franchises . . . all personal property . . . all rights, credits, bonds, and securities of all kinds, promissory notes, open accounts, and other obligations; all cash. The amount of cash on hand will not be offset or lessened because money is owed, or by liabilities of any kind, but must represent the full amount standing in the name of the person to be assessed or subject to his control . . . all moneys loaned at interest . . . all shares of stock in all banking companies or 113 Kenton Ins. Co. v. Covington, 86 Ky. 213, 5 S. W. 461.

114 Ky. Const. § 181.

115 South Covington & C. St. Ry. v. Bellevue, 105 Ky. 283, 49 S. W. 23. 116 Parker v. North B. & M. Ins. Co., 42 La. Ann. 428, 7 So. 599.

" 117

associations incorporated or unincorporated, chartered under the laws of Louisiana, or under the laws of any other State than Louisiana or under the laws of the National Government; and all other articles and things whatever possessing any money value. This enumeration shall not be construed so as to exempt from taxation any property or values not enumerated herein; provided that no articles or things hereinabove enumerated shall be assessed more than once in the same year.' All corporations except banks shall be assessed directly upon all property owned by such corporations, which is taxable under section 1; but unless three months' prior and continuous ownership can be shown in any holdings of national, State or municipal bonds, or stock in any other corporation whatsoever, then the market value of such holdings shall be assessed to such corporation as so much money in possession.' The sworn statement of condition made next preceding the date of listing shall be considered in making the assessment. Such corporations make a sworn statement of condition or of cost of their property, and of the earning capacity of the corporation, which said earning capacity shall form a basis of estimating the value of its charter or franchise.118 An estimate of the value of the franchise measured chiefly by the earning capacity is proper.119 The taxation of foreign corporations is regulated by the following constitutional provision:

"Corporations, companies or associations organized or domiciled out of the State, but doing business therein may be licensed and taxed by a mode different from that provided for home corporations or companies, provided said different mode of license shall be uniform, upon a graduated system, and said different mode of taxation shall be equal and uniform as to all such corporations, companies or associations that transact the same kind of business." 120 It would seem that the property

117 La. 1890, Act 106, § 1. To the same effect, La. 1898, Act 170. 118 Ibid. § 28.

119 Crescent City R. R. v. New Orleans, 44 La. Ann. 1057, 11 So. 681. 120 La. Const. Art. 242.