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York, or any other person who maintains a permanent place ot abode within the state and spends in the aggregate more than seven months of the taxable year within the state. Relief is extended to persons who change their status from a resident to a non-resident or vice versa. Such person is required to file two returns, one covering the portion of the year he was resident and one covering the portion of the year he was non-resident. The exemptions which are allowed are to be divided rateably between the two returns.

The personal income tax law is further amended to provide that a trust, the distribution of the income from which is in the discrimination of the fiduciary, either as to the beneficiaries to whom payable, or as to the lands to which any beneficiary is entitled is taxable without deduction of any amount paid or credited to any such beneficiary. It is also provided that a trust created by an employer as a part of a stock bonus or profit-sharing plan for the exclusive benefit of his employees to which one or both contribute shall not be taxable, the employee to be taxable only on any amount distributed to him from such fund to the extent that the amount received exceeds the amounts paid in by him.

This state adds to the personal income tax law two new sections which relate to the exchange of property. It is provided that when property is exchanged for other property having a readily ascertainable market value, the property received in exchange shall for the purpose of determining gain or loss be treated as the equivalent of cash to the amount of its fair market value, if any, or if property received in exchange has a readily ascertainable market value, no gain or loss shall be recognized in the following cases: (1) when in a corporate reorganization, consolidation, or (2) when a person transfers any property to a corporation and because of such transfer is in control of such corporation by stock ownership acquired by the transfer of such property for stock of the corporation. When no gain or loss is realized in the exchange of property, the property received shall be treated as taking the place of the property exchanged. New York also amends the personal income tax law in the sections dealing with inventory and the time and place of filing returns by striking out in such sections references to the federal income tax law. The reason for this elimination is due to the frequent changes in the federal income tax law.

South Carolina in 1918 repealed her income tax law and in 1922 enacts a new one. This later law is based upon the federal law. South Carolina states that for the purpose of determining the amount of net income and for the purpose of fixing the amount of the income tax, all the provisions of an act of Congress of the United States of America, approved November 23, 1921, relating

to levy, assessment and collection of income tax and all the rules and regulations promulgated by the Department of Internal Revenue under such act are hereby adopted and enacted.

INHERITANCE TAX

Arizona at the special session remodeled its inheritance tax law, basing it, according to the state tax commission, upon the Wisconsin inheritance tax law. The percentage of rates in the Arizona law are, however, somewhat higher than in those of the Wisconsin act.

Louisiana, in special session September 1921, enacted a new inheritance tax law. The old law levied taxes on inheritances solely for the support of the public schools, the rate being two per centum on the value of the inheritance going to the immediate relative and five per centum on the amount to collateral heirs. The new law allows an exemption of $5,000 to direct descendants, $1,000 to a collateral heir and $500 to a stranger. Legacies and donations to charitable, religious or educational institutions located in the state are wholly exempt.

The rate of tax upon the value of the inheritance to a direct descendant is two per cent on amounts in excess of $5,000 up to $20,000 and three per cent on amounts in excess of $20,000; to a collateral heir five per cent on amounts in excess of $1,000 up to $20,000 and seven per cent on amounts in excess of $20,000; to a stranger five per cent on amounts in excess of $500 up to $5,000 and ten per cent on amounts in excess of $5,000.

Massachusetts amends its inheritance tax law relating to amounts taxable and the rates thereon as follows:

In class A, which consists of husband, wife, father, mother; child, adopted child, adoptive parent, grandchildren, the base or value is reduced from $1,000,000 to $500,000, but the rate of 5% remains the same; on excess above $500,000 and not over $750,000 the rate is increased from 5% to that of 5.5%; on excess above $750,000 and not over $1,000,000 the rate is increased from 5% to that of 6%; on excess above $1,000,000 the rate is increased from 6% to that of 7%, this latter being the maximum base and rate for class A.

In class B, which consists of lineal ancestor, except father or mother; lineal descendant, except child or grandchild; lineal descendant of adopted child, lineal ancestor of adoptive parent; wife or widow of a son; husband of a daughter, the base or value is reduced from $1,000,000 to $500,000, but the rate of 6% is unchanged; on excess above $500,000 and not over $750,000 the rate is increased from 6% to 7%; on excess above $750,000 and not over $1,000,000 the rate is increased from 7% to 9%, this latter being the maximum base and rate for class B.

In class C, which consists of brother, sister, half-brother, halfsister, nephew, niece, step-child or step-parent, the base or value is reduced from $1,000,000 to $500,000 and rate of 9% remains the same; on the excess above $500,000 and not over $750,000 the rate is increased from 9% to that of 10%; on the excess above $750,000 and not over $1,000,000 the rate is increased from 9% to that of 11%; on the excess above $1,000,000 the rate is increased from 10% to that of 12%, this latter being the maximum base and rate for class C.

In class D, which includes all others, the base and the rate is the same as in class C.

Mississippi gives the state more authority to compel a proper return both as to the value and the inventory of the taxable property of a decedent. Such legal action taken by the state to be valid must be instituted within six years from the death of the tax decedent.

New York establishes a new rule for determining the inheritance tax upon the estates of non-residents. The rule states that to fix the tax in the case of a transfer from a non-resident decedent determine (1) the fair market value of the aggregate transfer whether within or without the state, (2) the New York transfer and its fair market value, (3) the tax which would be imposed upon such aggregate transfer if taxed as a whole. The amount of the tax under the rule shall be such a part of what the tax would be upon the aggregate transfer as the New York transfer bears to the aggregate transfer, but without increasing the graded rate by the inclusion of property without the state and without taxing transfers of which the amount is not over $500.

This state makes taxable certificates of interest of corporations or of joint stock companies or associations including all dividends and rights to subscribe to the stock of such corporations. Property conveyed under a trust deed by the terms of which the donor may alter the amount or revoke the same, and property over which a non-resident donee exercises a power of appointment are made taxable under the inheritance law.

A new section is added by New York to its inheritance tax law. It provides for an optional commutation tax on non-resident estates based upon the value of the property taxable in the state, provided that it is proven to the satisfaction of the surrogate that the amount of the tax will not be decreased by the following method: the transfer on the estate of a non-resident decedent may be commuted and finally settled as between the state and all parties in interest by the payment to the state tax commission of the sum to be determined by such commission which shall in no case be less than two per centum upon the clear market value of all the property within the state and taxable under the inheritance tax law without deduction or exemption of any kind.

South Carolina enacts a new inheritance tax measure. For purposes of taxation "beneficial interests" are divided into three classes. Such interest passing to immediate relatives of the first class are exempt to the amount of $10,000, when passing to the husband or wife; $7,500 when passing to a minor child; $5,000 when passing to adult children and father and mother. On amounts in excess of the exemptions, the minimum rate is 1% and the maximum rate 6%, the latter being on all sums in excess of $300,000. The second class is allowed an exemption of $500. In each case the excess is taxed at the minimum rate of 2% and a maximum of 7%. This last being on all sums in excess of $300, . 000. The third class receives an exemption of $200 and the excess is taxed at a progressive rate, the minimum being 4% and the maximum 14%, the latter being on all sums in excess of $300,000. Such inheritance tax is payable to the state, the proceeds being for the use of the state and the law is administered by the state tax commission.

PUBLIC UTILITIES

New Jersey changes the date from March 1st to that of December 10th for the certification of the value of the real estate used for railroads or canals. The state board of taxation and assessments is required to certify such taxes to the county board of taxation and the date for the review of such taxes for the state board is changed from November to that of June.

North Carolina amends its law relative to the assessment of property and the collection of taxes of railroads by providing that railroads shall have the same right of appeal from any assessment, ruling, or order of the commissioner of revenue as is given other corporations.

North Carolina further amends its revenue law relating to privilege tax on railroads by declaring that it is the state's intention to levy such license or privilege tax only upon railroads for the privilege of engaging in intra-state commerce and not on the privilege of engaging in interstate commerce or upon the business of interstate commerce.

MISCELLANEOUS CORPORATIONS

Kentucky provides for the taxation of shares of corporations organized under the cooperative marketing act. The shares are taxed against the owner and the property of such corporation which is represented in the shares is not taxed. It is further provided that so much of the value of each share of stock as may represent the owner's proportion of crops grown by him and delivered to the association shall be exempt from taxation.

Maryland by a new provision imposes a penalty on any corporation which fails to pay to the state any franchise tax, capitai

stock tax, tax on assets and gross receipts. Tax due before November 1st of the year in which tax is imposed. The penalty is an additional amount of ten per cent, to be added to the tax due and unpaid. The attorney general is empowered to collect the tax, and failure to pay the added penalty is a forfeiture of the charter. This state also provides that the state tax commission shall ascertain the amount of capital employed in the state by each foreign corporation and certify the amount of such capital with the amount of franchise tax due to the comptroller of the treasury for purpose of collection. Such foreign corporations as default in the payment of the tax shall forfeit the right to do business in the state until all such taxes are paid.

The date is changed by Maryland for the payment of the franchise tax on corporations from September to May, and changes are also made in both the base and the rate on the capital stock. The new law is as follows: for each additional $2,000 or fractional part in excess of $50,000 up to and not greater than $100,000 the sum of $1.00; if the amount of such capital stock is more than $100,000, but not greater than $250,000, there shall be an additional annual franchise tax of $20; if capital stock is more than $250,000 and not greater than $500,000 there shall be an additional franchise tax of $20; if capital stock is more than $500,000 and not greater than $1,000,000 there shall be an additional franchise tax of $30; if capital stock is more than $1,000,000 and not greater than $10,000,000 there shall be an additional annual franchise tax at the rate of $50 for each additional million dollars or fractional part; and on every $5,000,000 in excess of $10,000,000 the additional annual franchise tax on such excess shall be at the rate of $100 for each $5,000,000 or fractional part.

The date for corporations to file their annual report with the state tax commission is changed by Maryland from March 1st to that of March 15th. This state also amends law relating to tax on gross receipts of certain corporations by taking guarantee and fidelity companies from the list of corporations subject to such tax.

Massachusetts also amends its corporation tax law by requiring a domestic corporation which is a subsidiary of or closely affiliated by stock ownership with a foreign corporation, and gives all payments made to such foreign corporation or its officers in excess of the fair value of the property or services given there for, to pay as a minimum tax one-tenth of one per cent of such corporation's gross receipts. Formerly such tax was $20 per one thousand on the corporate excess, for the taxable year from business assignable to the commonwealth. This same minimum tax shall in like cases apply to foreign corporations carrying on or doing business in the commonwealth. It is also required that in the list of shareholders of the corporations their residence shall be given by city or town and state.

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