United States Electric Power & Light Co. v. State

McSherry, J., delivered the opinion of the Court. We find no difficulty in affirming the judgment appealed from in this case. The appellant is a company incorporated under the laws of Maryland, and transacts its business within this State. It has a capital stock divided into shares, and owns real and personal property.

This real property has been duly assessed for taxation, and the valuation placed thereon has been deducted from the assessed value of the capital stock as required by sec. 141 of Art. 81 of the Code. The State taxes upon the company’s'real estate have been paid, and so also have the State taxes on its shares of . stock. In addition to these taxes the State levied under the , Act of 1890, ch. 559, a further tax of one-half of one per cent. * on the gross receipts of this "and other liké companies, and for a failure to pay this latter tax the pending suit was ⁷⁰ instituted. The defence relied on is that the gross receipt tax is a double tax upon the same property, and therefore unauthorized and illegal.

It is claimed to be a double tax because it is insisted that the yalue which the capital stock possesses after the assessed value of the real estate has been deducted, is such only as arises out of the ownership and operation of the franchises of the company, and as a tax on gross receipts is a tax on the franchise, a tax on the capital stock, whose value is the ownership and use of the company’s franchises, is an additional tax on the same thing. But this argument is obviously fallacious. The taxable value of shares of capital stock is fixed by f the State Tax Commissioner. He is required by the stat-j utes to deduct from the aggregate value of all the shares | of the capital stock of banks and other corporations the ; assessed value of the real estate owned by the company, i and to divide the residuum by the number of shares of the 'stock, and the quotient is declared to be the taxable value f of each share for State purposes of taxation.

Upon the | valuation thus ascertained the State tax is levied. But the tax is not a tax upon the stock or upon the corporation, but upon the owners of the shares of stock, though the officers of the corporation are made the agents of the State for the collection of the State tax. It is not material what assets or other property make up the value of the shares. Those shares are property, and under existing laws are taxable property.

They belong to the stockholders respectively and individually, and when for the sake of convenience in collecting the tax thereon, the corporation pays the State tax upon these shares into the State treasury, it pays the tax not upon the company’s own property, nor for the company, but upon the property of each stockholder and for each stockholder respectively, by whom the company is entitled to be reimbursed. Hence when the owner of the shares is taxed on account of his ownership and the tax is paid for him by the company, the tax is not levied upon or collected from the corporation at all. ⁷¹ The gross-receipt tax is quite another and a different thing. It is a tax imposed upon the corporation because