White Bros. Lumber Co. v. Corp. Tax Appeal Bd.

Decision Date22 March 1923
Docket NumberNo. 57.,57.
Citation192 N.W. 570,222 Mich. 274
PartiesWHITE BROS. LUMBER CO. v. CORPORATION TAX APPEAL BOARD.
CourtMichigan Supreme Court

OPINION TEXT STARTS HERE

Certiorari by the White Bros. Lumber Company, against the Corporation Tax Appeal Board. Determination of Board affirmed.

Argued before WIEST, C. J., and FELLOWS, McDONALD, CLARK, BIRD, SHARPE, MOORE, and STEERE, JJ.J. M. Harris, of Boyne City, for plaintiff.

Merlin Wiley, Atty. Gen., and Samuel D. Pepper, Clare Retan and Leonard Coyne, Asst. Attys. Gen., for defendant.

WIEST, C. J.

This is certiorari to the Corporation Tax Appeal Board.

Plaintiff is a Michigan corporation, with $1,822,908.75 of its capital paid up, and a surplus of $3,468,616.75. Included in the surplus is $1,100,000, the value of shares of stock owned by plaintiff in the Beaver Cove Lumber & Pulp Company, of British Columbia, a corporation subsidiary to plaintiff. Plaintiff also owns water power rights, timber, and timber licenses in British Columbia. The entire capital of plaintiff company was originally invested in timber land, mill site, and water power in British Columbia.

In 1918, some of the stockholders of plaintiff company organized a subsidiary company under the laws of British Columbia, called the Beaver Cove Lumber & Pulp Company, for the purpose of manufacturing portions of the timber owned by plaintiff. This subsidiary company issued to plaintiff, in payment for a mill site and timber in British Columbia, $1,100,000, par value, of its capital stock. This stock is in the treasury of plaintiff company in this state.

The question presented is whether the plaintiff is liable for the annual privilege tax of 3 1/2 mills upon the $1,100,000 of stock so held by it, or only for the minimum fee of $50.

Act No. 85, Public Acts 1921, provides:

Sec. 4. Every corporation organized or doing business under the laws of this state, excepting those hereinafter expressly exempted therefrom, shall, at the time of filing its annual report with the Secretary of State of this state, as required by section seven hereof, for the privilege of exercising its franchise and of transacting its business within this state, pay to the Secretary of State, an annual fee of three and one-half mills upon each dollar of its paid-up capital and surplus, but such privilege fee shall in no case be less than fifty dollars nor more than ten thousand dollars. * * *

Sec. 5. * * * * The term ‘surplus,’ as used in this act, shall be taken and deemed to mean the net value of the corporation's property, less its outstanding indebtedness and paid-up capital. * * * None of the property or capital, of any corporation subject to paying the privilege fee prescribed in section four which is located without the state of Michigan, and none of the capital or surplus of such corporation represented by property exclusively used in interstate commerce, shall in any case enter into the computation of the net amount of the authorized capital, or the capital and surplus, as the case may be, upon which the computation of the privilege fees shall be made. * * *'

Plaintiff contends that the stock of the British Columbia Company is capital and property located without the state of Michigan, and it is the purpose of the act to subject to the privilege fee only that portion of the capital and surplus of a Michigan corporation owned and used in Michigan.

In behalf of the defendant it is contended that the situs of the shares of stock...

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5 cases
  • Udylite Corp. v. Mich. Corp. & Sec. Comm'n, 5.
    • United States
    • Michigan Supreme Court
    • October 13, 1947
    ...The Bright Nickel stock thus became a part of the capital or surplus of the Udylite Corporation (White Bros. Lumber Co. v. Corporation Tax Appeal Board, 222 Mich. 274, 192 N.W. 570), and under our view of this case it was properly included in the computation of appellant's privilege fees. A......
  • In re Truscon Steel Co.
    • United States
    • Michigan Supreme Court
    • March 29, 1929
    ...for convenience the theory of business situs. The same question has been before us on four occasions: White Bros. Lumber Co. v. Corporation Tax Appeal Board, 222 Mich. 274, 192 N. W. 570;Saginaw Manufacturing Co. v. Secretary of State, 226 Mich. 1, 196 N. W. 616;In re Pantlind Hotel Co., 23......
  • In re Pantlind Hotel Co., 68.
    • United States
    • Michigan Supreme Court
    • October 1, 1925
    ...Tested by our decisions, we must answer in the negative. We have here the inverse of the situation in White Bros. Lumber Co. v. Corporation Tax Appeal Board, 222 Mich. 274, 192 N. W. 570. There a Michigan corporation owned the stock of a British Columbia corporation and we held, under this ......
  • In re Dodge Bros., Inc.
    • United States
    • Michigan Supreme Court
    • February 14, 1928
    ...corporation, were held to have situs at domicile of the owner and to be subject to the privilege tax. In White Bros. Lumber Co. v. Tax Appeal Board, 222 Mich. 274, 192 N. W. 570, capital stock of a foreign corporation, owned by a domestic corporation, was held to have situs at the domicile ......
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