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[G. L. c. 63, § 1 It is well settled that shares in a national bank located in another state owned by a resident of this commonwealth cannot be taxed by the city or town in which the owner resides.30 Shares in a national bank located in this commonwealth are taxable only for state, county, city or town purposes and are not subject to taxation for the benefit of incorporated subordinate districts in which the owners of the shares reside whether the district is in the same town in which the bank is located31 or in a different one. The aggregate capital stock of a national bank cannot be taxed to the bank; the shares can be assessed only as the property of the individual stockholders.33 In assessing the shares it is not necessary to deduct the proportionate part of the value of the shares which represents property of the bank which the state. could not tax directly, such as United States bonds.34 When a national bank holds stock in a state bank, the national bank cannot be taxed by the state as a stockholder of the state bank; but the stock of the state bank may be considered as an asset of the national bank in valuing the shares of the national bank for the purpose of taxing the stockholders. When however one national bank holds stock in another national bank, the former bank may be taxed as a stockholder of the latter; but the state cannot at the same time include such stock ownership as an asset of the former bank in valuing its shares for taxation to its stockholders, since in such case the same property would be taxed twice.35

The "fair cash value" of the shares is the market value, and not the value to be deduced by a comparison of the assets and liabilities. If there is evidence of the market price, evidence of the value so deduced is not controlling or even important.37 It is to be noted that under the Massachusetts statute the real estate of a national bank is subject to local taxation, and the value of the real estate is deducted from the value of the shares in

30 Flint v. Aldermen of Boston, 99 Mass. 141 (1868).

31 Rich v. Packard National Bank, 138 Mass. 527 (1885).

32 Little v. Little, 131 Mass. 367 (1881).

83 Owensboro National Bank v. Owensboro, 173 U. S. 664 (1899).

84 Van Allen v. Assessors, 3 Wall. 573 (1865); People v. The Commissioners, 4 Wall. 244 (1866); Evansville National Bank v. Britton, 105 U. S. 322 (1881); Palmer v. McMahon, 133 U. S. 660 (1890).

35 Bank of California v. Richardson, 248 U. S. 476 (1919).

se National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891).

* National Bank of Commerce v. New Bedford, 175 Mass. 257 (1900).

G. L. c. 63, §§ 1, 2, 3] taxing the shares. The valuation of bank shares is made by the local assessors and the remedy by appeal to the county commissioners or to the superior court is the same as in the case of ordinary local taxation.38 The bank and not the shareholders is the proper party to file the list, to petition for abatement and to take an appeal; but the list need not be a list of its property as required in ordinary local taxation as a prerequisite to an abatement; a list of its shares is all that is required.*0

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The right of the states to tax the real estate of national banks is expressly established by the federal statutes, and there would seem to be no valid constitutional objection to the taxation of the shares at their full value and taxation of the real estate as well. The states however have no power to tax the personal property of a bank, tangible or intangible, even if the bank is in the hands of a receiver and its shares are of no value,42 or to tax its franchise, or the aggregate value of its shares in excess of its tangible assets. A state may tax deposits in national banks as the property of the individual depositors, provided the tax is not levied in such a way as to discriminate against deposits in national banks as compared with other like property.""

Collection of Tax

SECTION 2. Every such bank shall pay the tax so assessed to the collector or other person authorized to receive it at the time when other taxes in the town become due. If not so paid, said tax, with interest thereon at the rate of twelve per cent per annum from the day when due, may be recovered from said bank in contract by the collector of such town.

SECTION 3. The shares of such banks shall be subject to the tax paid thereon by the corporation or by its officers, and the corporation and its officers shall have a lien on all shares in such bank and on all

23 National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891). "National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891); Adams v. New Bedford, 155 Mass. 317 (1891).

National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891). "Commercial National Bank v. Chambers, 182 U. S. 556 (1901). See, however, Albuquerque First National Bank v. Albuquerque, 208 U. S. 548 (1908). Rosenblatt v. Johnston, 104 U. S. 462 (1881).

43 Louisville Third National Bank v. Stone, 174 U. S. 432 (1899); Owensboro National Bank v. Owensboro, 173 U. S. 664 (1899).

"Clement National Bank v. Vermont, 231 U. S. 120 (1913).

[G. L. c. 63, §§ 3, 4 rights and property of the shareholders in the corporate property for the payment of said taxes.

The statutes in effect require the tax to be collected through the bank, by the town where the bank is located and at the rate prevailing in that town, but the proceeds are distributed as if the shares were taxable in the cities or towns where the owners of the shares dwell, in the same manner as other intangible personal property was taxable before the enactment of the income tax act. Although the bank is required to pay the tax, it makes that payment not in its own right, but as agent of the shareholders. The tax is not upon the bank but upon the shareholders.1

There can be no doubt that a state may require a national bank to pay the tax assessed upon its shareholders, if the bank may reimburse itself by collecting the proportionate amount of the tax from each shareholder. Such a method of collecting taxes on shares in corporations was in common use when the national banking act was first enacted, and it is not to be supposed that Congress intended to prohibit the states from using this well recognized method of collection."

Distribution of the Tax

SECTION 4. The cashier of every such bank shall make and deliver to the assessors of the town where it is located, on or before April tenth in each year, a statement on oath showing the name of each shareholder, with his residence and the number of shares belonging to him at the close of the business day last preceding April first, as the same then appeared on the books of said bank. If the cashier fails to make such statement, said assessors shall forthwith obtain a list of the names and residences of shareholders and of the number of shares belonging to each. They shall, forthwith, upon obtaining such statement or list, transmit a copy thereof to the commissioner; and shall, immediately upon the determination of the tax rate in such town for the year, give to the commissioner written notice thereof, and

1

A. J. Tower Co. v. Commonwealth, 223 Mass. 371 (1916).

2 Louisville First National Bank v. Kentucky, 9 Wall. 353 (1869); Lionberger v. Rouse, 9 Wall. 468 (1869); Waite v. Dowley, 94 U. S. 527 (1876); Aberdeen First National Bank v. Chehalis County, 166 U. S. 440 (1897); Covington v. Covington First National Bank, 198 U. S. 100 (1905); Citizens National Bank v. Kentucky, 217 U. S. 443 (1910).

'Louisville First National Bank v. Kentucky, 9 Wall. 353 (1869).

G. L. c. 63, §§ 4-7] also of the amount assessed by them upon the shares of each bank located therein.

SECTION 5. Said commissioner shall thereupon determine the amount of the tax assessed upon shares in each of said banks which would not be liable to taxation in said town according to chapter fifty-nine; and such amount shall be a charge against said town. He shall, in like manner, determine the amount of tax so assessed upon shares which would be so liable to taxation in each town other than that where the bank is located; and such amount shall be a credit to such town. He shall forthwith give written notice by mail or at their office to the assessors of each town thereby affected of the aggregate amount so charged against and credited to it; and they may within ten days after notice of such determination appeal therefrom to the board of appeal from decisions of the commissioner.

SECTION 6. At the expiration of ten days after said notice or upon being informed of the decision of the board of appeal, the commissioner shall certify to the state treasurer the aggregate amount of charges against, and credits to, each town, as so determined; and the treasurer shall thereupon withhold out of any sums payable by the commonwealth to any town against which a charge is certified, the amount of such charge, and shall allow or pay over to each town to which a credit is certified the amount of such credit.

SECTION 7. In such adjustment of charges and credits, one per cent upon the amount assessed and collected by each town shall be allowed to it for the expense of assessment and collection. No town shall in any year be allowed credits or payments under this chapter until the assessors have complied with its requirements and with section twenty-two of chapter fifty-nine, relative to the taxation of bank shares. No bank, the shares in which are liable to taxation under section one, shall be liable thereto under section fifty-eight, nor shall the shareholders be liable to taxation for their shares therein for any purpose, except under this chapter.

The object of the foregoing statutes is to ensure the application of the principle that intangible property is taxable at the domicile of the owner, which was firmly imbedded in the law when this method of taxing bank shares was established, and while the shares are taxed in the place where the bank is situated, in literal compliance with the requirements of Congress, the towns of the domicile of the shareholders receive the benefit

[G. L. c. 63, §§ 8, 9 inc. of the tax. It is a peculiar circumstance that bank shares are now the only remaining class of intangible personal property to which the principle of mobilia sequuntur personam still applies.

The list of shareholders required by section four is the only list which the bank is obliged to file as a prerequisite to an application for abatement of the tax on its shares.1 The provision at the end of section seven exempting the bank and the shareholders from other taxation cannot be construed to require the deduction of the value of shares in national banks owned by a domestic business corporation from the aggregate value of its capital stock in determining. the tax on its corporate franchise.2

Establishment of Exemptions

SECTION 8. The amount paid into the treasury annually, under this chapter, on account of shares in banks, which on April first are the absolute property of any savings bank liable to taxation under section eleven, shall be deducted from the taxes of such savings bank at the next payment by it to the commonwealth after the collection of the taxes on such bank shares. The commissioner may require a statement of all shares so owned by any savings bank, in a form aproved by him, signed and sworn to by the treasurer or like financial officer thereof. From such statement and other evidence, and subject to appeal by such corporation under section seventy-one, he shall determine the amounts to be deducted, and certify the same to the state treasurer upon the final determination thereof; but the amount so to be deducted from the tax payable by any savings bank shall not exceed, in any year, the amount of the tax assessed on account of that portion of its deposits invested in shares in such banks.

SECTION 9. The commissioner shall annually, as soon as may be after the first Monday in November, certify to the state treasurer the amounts assessed and collected for the year in respect of shares in such banks owned absolutely by any society or institution of the classes specified in clauses third and fourth of section five of chapter fiftynine, and the treasurer shall thereupon pay over such amounts to such society or institution owning such shares.

'National Bank of Commerce v. New Bedford, 155 Mass. 313 (1891).

2 A. J. Tower Co. v. Commonwealth, 223 Mass. 371 (1916).

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