Chap. 332.—An ACT to amend and re-enact sections 8 and 9 of an act en-
titled 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 pro-
vide a special tax for pensions, as authorized by section 189 of the Constitu-
tion, approved April 16, 1903, as heretofore amended. [S B 24]

Approved March 21, 1922.

1. Be it enacted by the general assembly of Virginia, That sec-
tions eight and nine of an act entitled an act to raise revenue for the
support 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 Con-
stitution, approved April sixteenth, nineteen 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 corpora-
tions, 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 artificial,
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.

The list and statement shall be signed and sworn to by the tax-
payer before the commissioner of 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 list and determine the value of the bonds, notes and
other evidences of debt therein enumerated, subject to an appeal from
his valuation to the circuit 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 individuals, 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. There shall be
no deductions from the amount thereof on account of any bonds,
demands or claims owing to others as principal debtor, or otherwise.
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 manufacturer, and taxed under this act, shall
be included in this subdivision of this section.

The list and statement herein provided for shall be delivered by
said commissioner to the clerk of the circuit or corporation court
of his county or city, who shall file the same in his office, properly
labeled, keeping the list for each year separate. If any person, firm
or corporation shall, with a view to evade the payment of taxes, fail
or refuse to make out and deliver 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 saie under deed of trust, or
otherwise, until they shall have been reported for assessment, and
the taxes paid thereon for the years that they should have been paid,
with an addition of one hundred per centum of the amount of said
unpaid taxes; and the failure to make out such list and statement
to 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 ascertained
that there are unpaid taxes and penalties on the evidences of debt
sought to be enforced, and the suitor makes affidavit 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.

In every action at law or suit in equity in a court of record for
the collection of any such bonds, notes or other evidences of debt,
taxable hereunder, the plaintiff shall be required to allege in his
pleadings that such bonds, notes or other evidences of debt have
been reported for taxation and assessed for each and every year
on the first day of February of which he was the owner of the same.
and no judgment or decree of the court shall be valid unless it recites
that such allegation was made.

Second: All capital of persons, firms and corporations employed
in a trade or business not otherwise taxed; and in case of a corpora-
tion 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 defined as follows;

(1) The inventory of stock on hand, which shall include all raw
materials for use of the business, whether at the place of business, in
storage or elsewhere in the State.

(2) The excess of bills and accounts receivable over bills and ac-
counts payable.

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

(4) Money on hand and on deposit.

_ (5). All other property of any kind whatsoever, including all
choses in action, equities, demands and claims.

Capital used or employed in business as above defined shall, where-
ever the laws of this State require a tax on capital, be taxed at the
rate prescribed by law. |

Every person, firm or 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 commissioners of the revenue,
the examiners of records, local boards of review, and the State tax
board; and every such person, firm or corporation shall be required
to make a ieturn under oath to the commissioner of revenue, on
forms prescribed by the auditor of public accounts, showing the items
of capital as above defined, and also the bills and accounts payable
which were used as deductions in order to ascertain the amount
under section two in the above definition of capital and the names
and addresses of the parties to whom said bills and accounts are
due, and the various amounts constituting said indebtedness, shall
further certify that such indebtedness was made in the usual course
of business of said company, firm or corporation.

Nothing herein shall prevent cities and towns of this Common-
wealth from imposing a license tax on merchants, mercantile firms
or corporations, based on their purchases, in pursuance of their re-
spective charters, or of the general laws of the State for the govern-
ment of cities and towns.

Where any person, firm or corporation domiciled and doing busi-
ness in this State maintains a branch of such business outside of this
State, no part of the capital of such person, firm or corporation per-
manently invested in any such branch of its business, nor any in-
tangible assets, arising from business originating 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, notwithstanding—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.

The situs for the taxation of stock on hand, raw materials for
use in business, whether at the place of business, in storage or else-
where, and machinery and tools not taxed as real estate, as provided
in this schedule, shall be the county or incorporated community in
which they are physically located. Which items of capital shall be
taxed by such localities as other capital is taxed by localities, at the
rate prescribed by law, and not as tangible personal property, and it
shall be the duty of the said person, firm or corporation to make
returns of such capital, stating the county or city where located, to
the commissioner of the revenue at the point in the State wherein the
person resides, or wherein the principal office of the partnership or
corporation is located in this State; and if any of the said items
contained in classes one, three and four in the above definition of
capital be located in any county or city, other than in that in which
the said return is required to be made, then the commissioner of
the revenue to whom such return is made shall make two copies there-
of and shall forward one copy to the commissioners of the revenue
at the points where said property is located, and one copy to the
auditor of public accounts, and the commissioners of the revenue
receiving same shall enter upon their books such of said property
as may be located in their county or city for taxation, as other capital
is listed, and shall assess the same as required by section twenty-
three hundred and seven of chapter ninety-six of the Code of Virginia,
as amended.

Provided, however, that whenever any of the items in said clauses
1922. } ACTS OF ASSEMBLY. 555

one, three and four shall be located at a point or points other than
that in which the return is made, and whenever any deduction of
pills. and accounts payable shall be allowed and taxpayer, the entire
amount of such bills and accounts payable shall not be deducced
from the amount of capital assesed where such return is made,
but the same shall be distributed in such ratable proportion as the
value of the capital located in such other point or points shall bear,
to the entire amount. of capital assessed against the taxpayer. The
commissioner of revenue to whom the return is made shall certify
the proper ratable amount of such deduction to the commissioner of
the revenue at such other point or points, who shall accordingly
deduct said amount from the value of the property assessed in his
jurisdiction.

In making return of capital. in business according to the ‘method
defined above return shall be made as of February the first, provided
the taxpayer at his option may make return as shown by the average
of February the first of the current year and August first preceding.

Third: The value of the principal of personal estate and credits
other than tangible personal property, money, and the property em-
braced in class one of this schedule 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
executor, administrator, guardian, trustee, agent or other fiduciary ;
and the principal estate and credits other than tangible personal
property, money and property embraced in class one of this schedule
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 busmess not otherwise taxed on deposit with any bank or
other corporation or firm or person doing a banking business, or in
the possession or under the tontrol of the owner, whether such money
be actually in or out of this State and belonging to a citizen of this
State, which shall include certificates of deposit of any bank, banking
association, trust or security company bearing a total interest rate
paid or to be paid not exceeding five per centum per annum; provided,
that money as herein defined shall not be hable to taxation by any of
the counties, cities, towns, school districts or other local subdivisions
of this State.! All moneys 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 executor, adminis-
trator, guardian, trustee, agent, or other fiduciary; and all moneys
deposited to the credit of any suit, 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 franchise 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. tities and towns, or other political
subdivisions of this State.
Section 9. The taxes on intangible personal property shall be a:
follows:

On all property embraced in class one of this schedule there shall
be a tax of twenty 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 twenty cents on the one hundred
dollars of 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 dis-
trict 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 twenty cents on
the hundred 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 incorporated
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 dis-
trict 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 twenty cents on the one
hundred dollars of assessed valuation thereof.

On all property embraced in classes three and five of 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 of 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 hundred 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 incorporated town within such magisterial district which main-
tains 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 assessed valuation thereof.
On all property embraced in class four of this schedule there shall
be a tax of twenty cents on every one hundred dollars of the assessed
valuation thereof, which shall be paid into the State treasury and
applied to the expenses of the government. 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 to the support of the public
free schools of this State. Provided, further, however, that in the
event any taxpayer 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
taxation provided for real estate in this State, which shall include
the State rate and the local rates and levies of the county, district,
town or city wherein the owner or taxpayer has his legal residence.

Any person, firm or corporation, who shall, for the purpose of
evading taxation under the laws of this Commonwealth, within thirty
(30) days prior to the first day of February of any year, either
directly or indirectly, convert any intangible personal property or
money taxable under the laws of this State, into a form of property
which 1s non-taxable by this State, or, with like intent shall, either
directly or indirectly, convert such intangible personal property or
money into a form of property which is taxable by this State at a
lower rate than the intangible personal property or money so con-
verted, shall be taxable on such intangible personal property or money
as 1f such conversion had not taken place; and the fact that such
person, firm or corporation within thirty days after the first day of
February, either directly or indirectly, convert such property non-
taxable by this State or taxable at the lower rate by this State into
intangible personal property or money taxable at the higher rate
shall be prima facie evidence of intent to evade taxation by this State,
and the burden of proof shall be upon such person, firm or corpo-
ration to show that the first conversion was for the bona fide pur-
pose of investment, and not for the purpose of evading taxation
by this State.

The provisions of section eight and of this section of this schedule
shall apply with equal force to any person or corporation represent-
ing in this State business interests that may claim a domicile else-
where, 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 business domicile of said non-resident person or corporation, hi:
or its agents or representative.

No property which is embraced in class one of this schedule whict
is voluntarily reported for taxation to the commissioner of the reve
nue or the examiner of records, and the tax thereon paid on or before
December first, nineteen hundred and twenty-two, shall be assessec
with omitted taxes for any year prior to the year nineteen hundrec
and twenty-two.

The provisions of this amendatory act shall apply to the assess-
ment and collection of State taxes and local levies in the year nine-
teen hundred and twenty-two, and thereafter until otherwise provided
by law; provided that nothing contained in this act shall affect any
special taxes heretofore or hereafter imposed upon the property men-
tioned herein.

Z. The reduction in the rate of taxation prescribed by this act
shall not apply to the shares of stock of any bank, banking associa-
tion, trust or security company.