great railroad. All are regarded in a certain sense as franchises and so are annually taxed, but usually to a very small amount. IV. "In how far are they subject to a franchise tax?" A. They are subject to no franchise tax differing in principle from that applied, as above stated, to individuals (Erwerbsteuer). The amount of the original concession or franchise tax in the case of share railroads is 15.75-100 florins, or about $7.55 per annum, a trifling amount of little significance, except as maintaining the principle of a franchise tax. But there is also by law an additional annual tax on the enterprise (Erwerbsteuer), regulated according to its capital and extent, and reaching at the highest 1,575 florins in the case of the largest enterprises, and as the ordinary tax. V. "In how far is their stock taxed as personalty to its owners ?" A. Each share usually represents the nominal value of two hundred florins, with the exception (I believe) of the Nordbahn, where they are issued at the rate of one thousand florins per share. The issue of shares and of provisional certificates is subject to a stamp duty of fl. 1.25-100 for each fl. 200 of nominal value. At the same rate is taxed the issue of priority bonds issued by the company to their purchasers, except that when the bonds are temporary, having less than ten years to run, and are issued in a particular name, the rate of tax is reduced to fl. 1.25-100 for each fl. 400 of nominal value, that is to say, is reduced one-half. When the bonds or shares bear coupons calling for twenty florins or less, each coupon bears a stamp tax of seven kreuzers (3) cents). When the coupon calls for larger sums, their stamp duty amounts to about 3 per mile. These stamp duties properly affect the owner of the coupon, but are in fact usually assumed and paid by the company. There appears to be no annual tax upon shares, as such; but income from them is fully taxed to the owner at the income rate fixed by law. VI. "What taxes are levied on the receipts of the companies, whether net or gross?" A. Net receipts are ascertained as follows: All collections of money for transport, whether of passengers, baggage, freight, express goods, or other transport charges; and all sums derived from the letting, or rent, or other usufruct, of property which is not subject to other taxation-as to the land and house tax, for example-constitutes the gross receipts. From this aggregate may be deducted the sums disbursed(a) for expenses of the administration of the company; (b) for current running expenses; (c) for maintenance of the road, including repairs, replacement of perishable property, of rails, bridges; (d) all stamps and taxes paid in the course of their business, and generally all expenses incurred in conducting their enterprise, and for maintaining an efficient condition of all its parts. On the other hand, these may not be deducted from the gross income(a) their payments of interest; (b) the annual quotas paid for the liquidation of the capital, or of the bonded debt of the enterprise, nor any requirement of capital; (c) the fees paid to the directors for their services; (d) the contributions made by the company to the pension fund for their employees. The balance thus ascertained constitutes the net income of the enterprise. The average of these net sums for three years is taken as the net annual taxable income of the enterprise. From this the franchise taxes (Erwerbsteuer) are deducted. Upon the residue an income tax of five per cent. is fixed as the regular tax for the next tax period of three years. The taxes above mentioned are the regular legal rates, the ordinarium. But in late years the necessities of the treasury have increased.. The annual finance law now establishes the additional levy to be made on this property; so that, in fact, the present taxes are the double of the ordinarium, on income and franchise; that is to say, amount to ten per cent. on the net income, and in the case of the higher franchise to 3,150 florins (Erwerbsteuer.) N. B. The foregoing system is applied to the established and pros-perous roads. Exceptions are made by law in favor of young and unprofitable enterprises, which are sometimes relieved from some of these burdens by special enactments. *** * I have, etc., JOHN A. KASSON.. BRITISH AMERICA. ST. THOMAS, Ont., March 17, 1879.. C. F. Adams, Esq., Jr., Boston, Mass.: SIR In the first place, I beg leave to state that the taxation of railroads, railroad property, securities and personalty is at what might be called its minimum in Canada, and complaints of railway corporations of excessive taxation are of rare occurrence. In every case where an over assessment occurs, there is a municipaľ court of revision to which appeal may be made, and, if such appeal be overruled therein, application for relief may be made to the County Court Judge of the County in which the tax is levied, who is empowered to examine on oath all parties interested; and after hearing evidence as to value, his decision as to the proper assessment shall be final. The railway interests of the country are zealously protected by the Legislature. In reply to your questions, I shall answer them seriatim. First Question. "Upon what general recognized principle, if any, is the railway taxation of the State in question based?" Answer. There are no definite rules relating to taxation, except those laid down in the Assessment of Property Act of the Province of Ontario, 32 Victoria, Chapter 36. Section 7 of this Act reads as follows: "The real estate of all railway companies is to be considered as lands of residents, although the company may not have an office in the municipality, except in cases where a company ceases to exercise its corporate powers through insolvency or otherwise." And Section 33 reads: "Every railway company shall annually transmit on or before the first day of February, to the clerk of every municipality in which any part of the roadway or other real property of the company is situated, a statement showing, first, the quantity of land occupied by the roadway, and the actual value thereof, according to the average value of land in the locality, as rated on the assessment roll of the previous year; secondly, the real property, other than the roadway, in actual use and occupation by the company, and its value; and thirdly, the vacant land not in actual use by the company, and the value thereof, as if held for farming or gardening purposes; and the clerk of the municipality shall communicate such statement to the assessor, who shall deliver at, or transmit by post, to any station or office of the company, a notice addressed to the company of the total amount at which he has assessed the real property of the company in his municipality or ward, showing the amount for each description of property mentioned in the above statement of the company." Second Question. "In how far are the corporations taxed as holders of realty?" Answer. Real estate consists, under the Act, of the right of way and other lands acquired by the corporation for station grounds, shops and borrow-pits, and any lands requisite for the use and convenience of the railway proper. These lands are taxed pro rata with those adjoining, both in town and country, the assessor basing his estimate of value on the land itself, irrespective of the improvements on adjoining property. Superstructure, excepting buildings, is exempt from taxation; as are also rolling stock, engines, machinery, rails, sleepers, etc., etc., etc. I may here add, that it is provided by Act of Parliament that municipalities may, at their discretion, exempt railway property from taxation of every kind. This is accomplished by a simple resolution in the municipal council of the town or township in which the property in question is situated. Third Question. "In how far as holders of personalty?" Answer. Personalty is not ratable. Fourth Question. "In how far are they subject to franchise tax?" Answer. There is no franchise tax. Fifth Question. "In how far is their stock taxed as personalty to the owners thereof?" Answer. Their stock is not taxed, being exempt by clause 17, Section 9, Assessment Act of Ontario, 32 Victoria, Chapter 36, which reads as follows: Exemptions. The stock held by any person in any railway com pany." Sixth Question. pany, whether "What taxes are levied on the receipts of the comgross or net ?" Answer. No taxes are levied on the receipts of the company. Eighth Question. "How are the local taxes levied ?" Answer. Each municipality and school section collects its own taxes. County and township rates and statutory road labor are payable to the collector or township clerk, according to convenience. If paid to the latter, he remits the County rates to the Treasurer of the County. Ninth Question. "What process of appeal is provided in cases of excessive assessment ?" Answer. Court of revision, composed of members of the municipal council, and a further appeal to the Judge of the County Court. I have the honor to be, sir, Very respectfully your obedient servant, R. F. HARRIS, Claim Agent Canada Southern Railway. BELGIUM. LEGATION OF THE UNITED STATES, BRUSSELS, May 7, 1879. * Referring to your No. 31, asking for particu * * lars of railroad taxation in Belgium. * The Minister now proceeds to answer in detail the questions propounded. 1st and 6th. "On what generally recognized principle, if any, is the taxation of the railroads in Belgium based?" "What taxes are levied upon the receipts of the companies, whether net or gross?" The first article of the law of the 21st of May, 1819, upon the license duty, sanctions the following principle: No one can practise for himself, or any one in another's name, without having a license. An industry, or trade or shop is not exempted by Article III. of this law. The license is based upon the proportionate amount of profit which each industry may realize, taking into account its usefulness, more or less great. The workers of railroads are not by name indicated in the law of license duties. However, they are taxed by assimilation with con tractors for transports. The minimum duty is six francs, the maximum is 425 francs, in principal. The State collects besides 20 additional centimes upon this duty. The provinces and the parishes are authorized to add also some additional centimes, of which the amount varies according to their budget necessities. Such is the system of imposing the license duty on railroad workers, in so far as they are not constituted into joint stock companies or into companies with limited liability by shares. But in Belgium, the grantee railroad companies, all having a joint stock form, are taxed exclusively upon the annual profits. It is understood by profits the interest of capital employed, the dividends, and generally all amounts divided in any titles whatsoever, including those which are affected by the increase of the social capital, and the reserve fund. The duty is two per cent. upon these profits, independently of twenty additional centimes. No taxation is due, when the joint stock company closes its balance with a loss. Second Question.-"In how far are railroads taxed, as holders of realty?" The land necessary for the construction of conceded railroads for a service of public usefulness being acquired in the name of the State, which is the proprietor, the companies are only usufructuaries until the expiration of their grants of railroads. The surface of land occupied by the railroads, being assimiliated to the highways, is exempt from land tax. The buildings which are inherent to the works are also exonerated from taxation, to wit: the squares and stations, warehouses, workshops, guard-houses, and buildings used for lodgings for station masters. In short, the only landed property on which the land tax is exact |