Jennings v. Commonwealth
| Decision Date | 01 February 1900 |
| Citation | 34 S.E. 981,98 Va. 80 |
| Court | Virginia Supreme Court |
| Parties | JENNINGS. v. COMMONWEALTH. ALLEN. v. SAME. |
TAXATION—CORPORATE STOCK—EXEMPTIONS.
Under Act Feb. 14, 1898 (chapter 342, § 8, par. 2), declaring that tax lists shall include certificates of stock in any incorporated company, but that no bond, demand, or claim constituting a part of the capital of a business done out of the state, or a part of the capital of a merchant or manufacturer, used in his business, shall be included therein, shares of stock in corporations, whether foreign or domestic, held by residents of the state, are taxable, whether taxed elsewhere or not; such stock not being a demand or claim constituting a part of the capital of a business done out of the state, within the meaning, of the act.
Error to corporation court of Lynchburg.
One Jennings and one Allen were separately convicted of violating the revenue laws, and they bring error. Affirmed.
Caskie & Coleman, for plaintiffs in error.
A. J. Montague, for the Commonwealth.
These two cases were argued and submitted at the same time, and, while they differ somewhat as to their facts, they depend upon the same question of law.
In the first case, Jennings was the owner of certain shares of stock in two corporations engaged in business in the state of West Virginia, where they were chartered, and where all their property is situated, and their capital is actually used and employed in mining coal and the manufacture of coke. All the property of these two companies is taxed in the state of West Virginia upon its value, and each corporation pays an annual license tax to that state. Their real estate is taxed as other real estate in West Virginia, and their other assets as other personal property; and the amount of their capital is ascertained by taking the aggregate value of all the personal property of the company, wherever situated, including money, credits, and investments, whether in or out of the state, —deducting from said money, credits, and Investments what they owe to others, as principal debtors.
In the case of Allen against the commonwealth, it appears that he is the owner of certain shares of stock in a domestic corporation engaged in the manufacture of tobacco in the city of Lynchburg; that the entire capital and assets of the company are actually used and employed in its business, and are taxed in the name of the company; that the assets of the corporation consist of lands which are taxed as are other lands of the commonwealth; that competitors of this company engaged in the same business in the city of Lynchburg conduct their business as partnerships, and are taxed accordingly.
It appears that, when plaintiffs in error were called upon by the commissioner of the revenue, they declined to list the shares of stock held by them as above stated; being advised that they were not liable to taxation under the laws of Virginia. Thereupon they were separately indicted for the alleged offense against the revenue laws of the state, and upon trial were sentenced to pay a fine of $30, whereupon the cases were brought before us upon writs of error.
That a corporation is a legal entity wholly distinct from its stockholders, and that the capital stock of the company, its franchises, capital, and assets, may be taxed, and a tax also laid upon the share of stock in the hands of the individual holders, is established by numerous decisions, and is, we believe, uncontroverted.
The points to be decided, as stated by counsel for plaintiffs in error in his brief, are: First, the shares of stock embraced in the terms "bond, demand, or claim, " used in the statute; secondly, do the shares in question constitute or represent a part of the "capital, ' as defined in the act, "of a business done out of the state"?
The answer to these propositions is to be found by...
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