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REPORT, &c.

The Attorney-General, in obedience to a resolution of the Senate, requiring "his opinion whether the exemption from taxation granted by the 9th section of title 4th of chapter 13th of the first part of the Revised Statutes, to certain incorporated companies, extends so far as to exempt the lands and real estate of said companies from taxations," respectfully submit the following

REPORT:

The section referred to is in the following words: "If the president or other proper officer of any incorporated company named in the assessment roll, shall show to the satisfaction of the board of supervisors, at their annual meeting, within two days from the commencement thereof, by the affidavit of such officer, to be filled with the clerk of the board, that such company is not in the receipt of any profits or income, the name of such company shall be stricken out of the assessment roll, and no tax shall be imposed upon it. And the assessment of every monied or stock corporation authorized to make dividends on its capital, from which no such affidavit shall be received, shall be conclusive evidence that such corporation was liable to taxation, and was duly assessed." 1 R. S. 416, S. 9.

The language of this section is broad enough to include the lands and real estate, as well as the capital of incorporated companies; but there is reason to believe that such was not the intention of the Legislature. And the intention of the makers, rather than the letter of a statute, should govern in its construction.

The title of which this section forms a part, relates particularly to a tax on the capital of monied or stock corporations; and general words should be restricted in their operation to the particular subject for which the title provides, unless a contrary intention has been plainly manifested.

The first title of the chapter, section 1, declares that "All lands and all personal estate within this State, whether owned by indi

viduals or corporations, shall be liable to taxation." The second title specifies the place and manner in which the property of individuals and corporate bodies shall be assessed. And the third title provides for the collection of the taxes and the disposition of the moneys collected. Had the Legislature proceeded no farther, there would have been a complete system of taxation in relation to all tangible property; and the lands of incorporated companies would, beyond all doubt, have been subject to assessment.

But experience had shown that the stock owned by individuals in corporate bodies, could not be effectually reached by any general provisions for subjecting all personal property to the payment of taxes. The policy was consequently adopted, of relieving individuals from assessment on account of stock, (title 1, sec. 7; title 2, sec. 15,) and imposing a tax directly on the capital of the corporation. The general provisions of the three first titles, subjecting all real and personal estate to assessment, and directing the manner of levying and collecting the tax, were for the most part applicable as well to corporations as to individuals. But the assessment of the capital of a corporation, required further and special provisions, suited to that particular description of property. Those regulations were consequently reserved for a separate title. The adoption of that policy had nothing to do with the propriety of taxing the real estate owned by corporations: And the fourth title was not designed to interfere with that question, either the one way or the other. Lands are indeed mentioned, but only for the purpose of reducing the assessment on capital, by the amount which had been invested in real estate. Without such a provision, the corporation would in effect, be subject to a double assessment, so far as concerned its real estate. When, therefore, the Legislature in providing for a tax on capital, declare that a corporation shall, under certain circumstances, be exempted from the burden, the exemption should be understood to apply to the tax on capital only; and not be extended to the real estate of the company, which was not the subject in hand, and which had been fully disposed of in the previous titles of the chapter,

A further argument against extending this exemption beyond the capital of a corporation, will be found on recurring to the first title. The first section subjects "all lands" owned by corporations to taxation, "subject to the exemptions hereinafter specified." This specification is made in the fourth section, in which the Le

gislature evidently intended to include all the exemptions which were to be allowed. And those exemptions do not extend to the real estate of the corporations mentioned in the ninth section of the fourth title.

It may be further remarked in relation to this title, that the first section only subjects to taxation, those corporations "deriving an income or profit from their capital, or otherwise:" And the ninth section was not added so much for the purpose of declaring the exemption, which was clearly implied in the first section, as for the purpose of prescribing what proof should be made that the corporation was "not in the receipt of any profits or income." The president or other proper officer of the company was to furnish an affidavit of the fact on which the exemption depended, and the neglect to do so was declared to be conclusive evidence that the corporation was liable to taxation and had been duly assessed.

The Attorney-General is of opinion, that the exemption granted to those monied or stock corporations which are "not in the receipt of any profits or income," applies only to a tax on capital; and does not extend so far as to exempt the lands and real estate of such corporations from taxation.

Respectfully submitted.

GREENE C. BRONSON,
Attorney-General,

January 26, 1833.

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