CHAP. 382.—An ACT to amend and re-enact sections 8 and 9 of an act
entitled an act to raise revenue for the support of the government
and the public free schools, and to pay the interest on the public debt,
and to provide a special tax for pensions, as authorized by section
189 of the Constitution, approved April 16, 1898, as heretofore
amended. (H. B. 569.)

Approved March 20, 1916.

1. Be it enacted by the general assembly of Virginia, That
sections eight and nine of an act entitled an act to raise revenue
for the sypport of the government and public free schools, and
to pay the interest on the public debt, and to provide a special
tax for pensions, as authorized by section one hundred and
eighty-nine of the Constitution, approved April sixteenth, nine-
teen hundred and three, as heretofore amended, be amended and
re-enacted so as to read as follows:

Section 8. The classification under “Schedule C” shall be
as follows:

First. Bonds (except bonds of the United States), notes,
and other evidences of debt, including bonds of other States
than Virginia, bonds of counties, cities and towns located outside
of the State of Virginia, bonds of railroad and canal companies
and other corporations, bonds of individuals and all demands
and claims, however evidenced, whether secured by mortgage,
deed of trust, judgment, or otherwise, or not so secured.

The commissioner shall require each person, natural or arti-
ficial, residing in his district, city or town, to make out and
deliver to said commissioner a list in detail of the date, amount
for which originally given, but not the name of the debtor, the
dates and amounts of the credits thereon, the balance due, and
the time of payment of all bonds, notes and other evidences of
debt owing to such person in excess of one hundred dollars, and
a statement of the aggregate amount of all bonds, notes, and
other evidences of debt under one hundred dollars each. The
auditor of public accounts shall furnish the necessary blanks
for such lists and statements to the commissioner of the revenue.

This list and statement shall be signed and sworn to by
the tax-payer before the commissioner of the revenue or some
notary public, or some person authorized to administer oaths,
who shall certify that said list was signed and sworn to before
him. The commissioner shall sign the lists and determine the
value of the bonds, notes and other evidences of debt therein
enumerated, subject to an appeal from his valuation to the cir-
cuit, county or corporation court. The said list and statement
shall include bonds of railroad and canal companies, bonds of
counties, cities, towns, located outside of the State of Virginia,
and bonds of other States and corporations, bonds of in-
dividuals, and all demands and claims, however evidenced,
whether due or not, from debtors residing out of or within the
State, city or county, whether secured by a deed of trust or by
judgments or not, deducting from the aggregate amount thereof
all such bonds, demands or claims not otherwise deducted owing
to others as such principal debtor, and not as a guarantor, en-
dorser or surety; but not deducting any money that may be due
to others on account of the purchase of securities which are non-
taxable; but no bond, demand or claim constituting a part of
the capital as defined in this act of the business done out of
this State, or any capital used by any merchant or manufac-
turer, and taxed under this act shall be included in this section.
No credit shall be given for debts due nor deductions made un-
less such tax-payer shall append to said list an inventory show-
ing the persons and address to whom said demands or debts are
owing and the amount of each.

The list and statement herein provided for shall be delivered
by said commissioner to the clerk of the circuit, county or cor-
poration court of his county or city, who shall file the same in
his office, properly labeled, keeping the list for each year sepa-
rate. If any person, firm or corporation shall, with a view to
evade the payment of taxes, fail or refuse to make out and de-
liver under oath such list and statement as herein provided for
of any such bonds, notes or other evidences of debt, then the
omitted evidences of debt shall not be recoverable, by action
at law or suit in equity in any of the courts of this Common-
wealth or by any legal process, or by sale under deed of trust,
or otherwise, until they shall have been reported for assess-
ment, and the taxes paid thereon for the years that they should
have been paid, with an addition of fifty per centum of the
amount of said unpaid taxes; and the failure to make out such
list and statement to the said commissioner shall be taken as
prima facie evidence of the intention to so evade payment of
taxes.

But where in any action at law or suit in equity it is ascer-
tained that there are unpaid taxes and penalties on the evi-
dence of debt sought to be enforced, and the suitor makes affi-
davit that he is unable to pay these taxes and penalty, but is
willing for the same to be paid out of the first recovery on the
evidence of debt, the court shall have authority to enter as a
part of any judgment or decretal order in said proceedings that
the amount of taxes and penalties due and owing shall be paid
to the proper officer out of the first collection on said judgment
or decree.
Second. All capital of persons, firms and corporations em-
ployed in a trade or business not otherwise taxed; and, in case
of a corporation when all of such capital is taxed by this State,
the shares of its stock in the hands of individual shareholders
shall not be further taxed for State purposes. But real estate
belonging to such persons, firms and corporations shall not be
held to be capital, but shall be listed and taxed as real estate.

“Capital,” as used in the tax laws, shall be construed “net
assets,” as hereinafter defined. |

“Net assets” with reference to persons, firms and corpora-
tions engaged in a business subject by the laws of this State
to a tax on capital, shall be construed to mean the gross assets
of such person, firm, company or corporation less such deduc-
tions as are hereinafter set out.

The gross assets are defined as follows:

(1) The money realized from the sale of shares of stock
or the money adventured in the business.

(2) The inventory of stock on hand.

(3) All raw materials for use in the business whether at
the place of business, in storage, or elsewhere.

(4) Accounts receivable.

(5) Bills receivable.

(6) All machinery and tools not taxed as real estate.

(7) Money on hand and on ‘deposit.

(8) All other property of any kind whatsoever, including
all choses in action, equities, demands and claims.

The deductions which may be allowed in ascertaining “net
assets” are as follows:

(1) Salaries due officers and employees on the pay-roll.

(2) Interest charges due and accrued.

(3) Money borrowed represented by notes or other obli-
gations contracted within the period of six months prior to
February first, may be allowed as a further reduction, provided
that all money so borrowed can be clearly shown to be repre-
sented by property enumerated in the return of gross assets.

The excess of the gross assets over the deductions, as above
defined, shall be deemed and treated as “net assets” which
shall, wherever the laws of this State require a tax on capital,
be taxed at the rate of seventy cents per. hundred.

When the amount.of such aforesaid borrowed money and
other deductions are in excess of the “net assets” as hereinbe-
fore defined, then such excess shall be assessed and taxed as
capital.

Every person, firm and corporation engaged in a business
whose capital is subject by the laws of this State to taxation,
is hereby required to keep accounts showing the above items,
which shall at all times be open to the inspection of the com-
missioners of the revenue, the examiners of records, local boards
of review, and the State advisory board on taxation; and every
such person, firm or corporation shall be required to make a
return under oath to the commissioner of the revenue, on forms
prescribed by the auditor of public accounts, showing the items,
of gross assets as above ‘defined, and also the items of deduc-
tions as above defined, and shall also furnish a list under oath
to the commissioner of revenue giving the names, addresses
and amounts of all indebtedness deducted as authorized above,
and shall further certify that such. indebtedness was made in
the usual course of business and is represented in the gross
assets returned as above.

Nothing herein shall prevent cities and towns of this Com-
monwealth from imposing a license tax on merchants, mercan-
tile firms or corporations, based on their purchases or other-
wise, In pursuance of their respective charters, or of the gen-
eral laws of the State for the government of cities and towns.

Where any person, firm or corporation domiciled and doing
business in this State maintains a branch of such business out-
side of this State, no part of the capital of such person, firm or
corporation permanently invested in any such branch of its
business, nor any intangible assets, arising from business orig-
inating at any such branch and transacted outside of this State.
shall be considered as situated in this State for the purpose of
taxation or be assessed with taxes in this State—any statutory
provisions or rule of construction to the contrary notwithstand-
ing—it being the intent and purpose of this provision to exact
of citizens of this State no higher or greater tax than that
exacted of non-residents doing business in this State.

Third. The value of the principal or personal estate and
credits other than money under the control of a court receiver
or commissioner, in pursuance of an order, judgment or decree
of any court, or in the hands or under the control of an exe-
cutor, administrator, guardian, trustee, agent, or other fidu-
ciary; and the principal of personal estate and credits other
than money deposited to the credit of any suit and not in the
hands of a receiver or other fiduciary.

Fourth. All money other than money used or employed in
any trade or business not otherwise taxed on deposit with any
bank or other corporation or firm or persons, or in the posses-
sion or under control of the owner, whether such money be
actually in or out of this State and belonging to a citizen o/
this State, which shall include certificates of deposit of any
bank, banking association, trust or security company; provided.
that money as herein defined shall not be liable to taxation by
any of the counties, cities, towns, school districts or other local
sub-divisions of this State. All money under the control of a
court receiver or commissioner in pursuance of an order, judg-
ment or decree of any court or in the hands or under the con-
trol of an executor, administrator, guardian, trustee, agent, or
other fiduciary; and all money deposited to the credit of any
suit, and not in the hands of a receiver or other fiduciary.
Fifth. All shares of stock of corporations or joint stock
companies, except such corporations and joint stock companies
all of whose capital is taxed by this State, or which pay a fran-
chise tax in this State, and banks, banking associations, trust
and security companies, and insurance companies, which are
otherwise taxed in this State.

Sixth. All bonds of counties, cities and towns, or other po-
litical sub-divisions of this State.

Sec. 9. The taxes on intangible personal property shall be
as follows: On all property embraced in classes one, three and
five in this schedule, there shall be a tax of sixty-five cents on
every hundred dollars of the assessed value thereof, and on all
property embraced in class two of this schedule, there shall be
a tax of seventy cents on every hundred dollars of the assessed
value thereof, which shall be paid into the State treasury and
applied to the payment of the expenses of the government. And
any city in this State may levy a tax on such property assessed
to residents therein at a rate not to exceed thirty cents on the
one hundred dollars on the assessed valuation thereof; and the
board of supervisors of any county may levy a district road
tax on such property assessed.to residents in any magisterial
district proposed to be taxed for district purposes to be used
exclusively for the construction and repair of public roads and
bridges located within the magisterial district in which said
levy is laid at a rate not to exceed thirty cents on the one hun-
dred dollars of assessed valuation thereof, but this clause shall
not be considered to authorize the board of supervisors of any
county to levy such tax against the residents of any incorpo-
rated town within such magisterial district which maintains its
own roads; and any incorporated town in this State which
is exempt by statute or by the express provisions of its charter
from the payment of district road taxes, or which maintains its
own roads, free of expense to the magisterial district, may
levy a tax on such property assessed to residents therein at a
rate not to exceed thirty cents on the one hundred dollars of as-
sessed valuation thereof.

On all property embraced in class four in this schedule the
tax shall be as provided by law. On all property embraced in
class six in this schedule there shall be a tax of thirty-five cents
on every one hundred dollars of the assessed value thereof,
which shall be paid into the treasury of the State. Provided,
however, that from and out of the tax on all such property
paid to and retained by the State for the expenses of the State
government there shall be set aside ten cents on every hundred
dollars of the assessed value thereof, which shall be applied tc
the support of the public free schools of this State. Provided,
further, however, that in the event any tax-payer shall fail,
without just cause shown, to return for taxation any intangible
personal property under the provisions of this schedule within
the time prescribed by law, and it is ascertained thereafter that
any such property has not been returned for taxation, it shall
be assessed when discovered, and taxed at the full rate of taxa-
tion provided for real estate in this State, which shall include
the State rate and the local rates and levies of the county, dis-
trict, town or city wherein the owner or tax-payer has his legal
residence.

The provisions of section eight and of this section of this
schedule shall apply with equal force to any person or cor-
poration representing in this State business interests that may
claim a domicile elsewhere, the intent and purpose being that
no non-resident person or corporation either personally or
through any agent, shall transact business here without paying
to the State a corresponding tax with that exacted of its own
citizens, and all bills receivable, obligations or credits and other
intangible assets arising from the business done in this State
are hereby declared assessable within this State and at the busi-
ness domicile of said non-resident person or corporation, his or
its agent or representative.

The provisions of this act shall apply to the assessment and
collection of State taxes and local levies in the year nineteen
oa and sixteen, and thereafter until otherwise provided

y law.