State v. Davis

• Decision Date: 08 February 1913
• Docket Number: 18,451
• Citation: 88 Kan. 849,129 P. 1197
• Parties: THE STATE OF KANSAS, ex rel. John S. Dawson, as Attorney-general, etc., Appellant, v. FRANK H. DAVIS et al., as Administrators, etc., Appellees
• Court: Kansas Supreme Court

129 P. 1197

88 Kan. 849

THE STATE OF KANSAS, ex rel. John S. Dawson, as Attorney-general, etc., Appellant, v. FRANK H. DAVIS et al., as Administrators, etc., Appellees

No. 18,451

Supreme Court of Kansas

February 8, 1913

Decided January, 1913.

Appeal from Shawnee district court, division No. 1.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. INHERITANCE TAX--Two Jurisdictions--Double Taxation--Construction of Statute. Where a statute is open to either construction, one preventing the exaction of an inheritance tax upon the same property in two jurisdictions should be favored over one having the contrary effect.

2. INHERITANCE TAX--Same. A provision of a statute that an inheritance tax (otherwise collectible upon property situated in this state, owned by the resident of another state at the time of his death) shall not be exacted where a similar tax has been paid in the state of the decedent's residence, provided the laws of that state contain a like exemption, applies in any case where no such tax would be imposed by such laws upon similar property there situated owned by a resident of Kansas at the time of his death, however much the two exemptions may otherwise differ.

3. INHERITANCE TAX--Tax Paid in New York--Exempts Same Property in Kansas. The Kansas statute provides in substance that ordinarily an inheritance tax shall be collected with respect to property in this state owned by the resident of another state at the time of his death; but that if a similar tax has been paid in such other state it will not be exacted here, provided a like exemption is made by the laws of such other state in favor of estates of citizens of this state. The laws of New York provide in substance that upon the death of a nonresident of that state owning property having a situs there, an inheritance tax shall be collected in all cases upon such of it as is tangible, and in no case upon any of it that is intangible, including in that term stock of a corporation. Held, that where a resident of New York dies owning stock in a Kansas corporation, the fact that an inheritance tax has been paid thereon in New York is a bar to the collection of one here.

John S. Dawson, attorney-general, and F. P. Lindsay, special assistant attorney-general, for the appellant.

Ferry, Doran & Dean, of Topeka, for the appellees.

OPINION

MASON, J.:

A resident of New York died while owning stock in a corporation organized under the laws of Kansas. Action was brought in this state against his administrators to compel the payment of an inheritance or succession tax upon the transfer of the stock. Judgment was rendered in their favor, and the state appeals.

Where a resident of another state dies owning property in Kansas, our statute ordinarily requires the payment of a succession tax here. If, however, the laws of the state of his residence impose a tax of like character and of equal or greater amount, which has actually been paid, no payment is required here, provided the laws of that state make "a like exemption . . . in favor of estates of citizens of this state." (Gen. Stat. 1909, § 9266.) Shares of stock are regarded as situated in the state of incorporation. (37 Cyc. 1562.) The stock here involved was subject to a tax of like character in New York, which was duly paid, to an amount greater than that claimed here. Upon the death of a nonresident of that state owning property there, whether or not it is liable to a succession tax elsewhere, a tax is collected on account of the tangible property, but none is exacted with respect to that which is intangible, including corporate stock. The sole question in dispute is whether this condition of the New York law amounts to "a like exemption" to that of the Kansas statute.

The section of the Kansas statute on the interpretation of which the controversy turns, reads as follows:

"Property of a resident of the state, which is not therein at the time of his death, shall not be taxable under the provisions of this act if legally subject in another state or country to a tax of like character and amount to that hereby imposed: Provided, Such tax be actually paid, guaranteed or secured in such other state or country. If, however, such property be legally subject in another state or country to a tax of like character but of less amount than that hereby imposed, and such tax be actually paid, guaranteed or secured as aforesaid, such property shall be taxable under this act to the extent of the excess for which such property would otherwise be liable hereunder over the tax thus actually paid, guaranteed or secured. Property of the estate of a nonresident decedent, which is situated in the state at the time of his death, if subject to a tax of like character with that imposed by this act by the law of the state or country where decedent had his residence, shall be subject only to such portion of the tax hereby imposed as may be in excess of such tax imposed by the laws of such other state or country: Provided, That a like exemption is made by the laws of such other state or country in favor of estates of citizens of this state, but in such cases no exemption shall be allowed until the tax provided for by the law of such other state or country shall be actually paid, guaranteed or secured in accordance with law." (Gen. Stat. 1909, § 9266.)

The first part of the section relates to the taxing of property in other states owned by a resident of this state at the time of his death. If a succession tax is collected in the state where the property is located, it is waived here, irrespective of what would be the rule of the other state if the conditions were reversed. This provision is for the benefit of residents of this state. Whether other states legislate in a similar way for the advantage of their citizens does not affect the matter. The second portion of the section relates to the taxing of property in this state owned by a resident of another state at the time of his death. If a succession tax is collected in the state of the decedent's residence, it is waived here only in case the laws of that state make a like exemption in favor of...