Chap. 576.—An ACT concerning taxation; to segregate for the purposes of
taxation, the several kinds or classes of property, so as to specify and
determine upon what subjects State taxes, and upon what subjects local
taxes, may be levied; to amend and re-enact sections 2205, 2206, 2207 and
2212 of the Code of Virginia; to amend and re-enact sections 8, 9, 10, 11,
17, 18, 19, 20, 21, 22, 28, 2914, 31, 33, 35, 36 and 36% of the tax bill, as
heretofore amended; to repeal section 2209 of the Code of Virginia; to
repeal an act entitled an act to raise revenue for the support of the gov-
ernment and to appropriate money for the construction of roads and
projects comprised in “the State highway system,” and to provide for an
additional fund for the maintenance of public free schools of primary
and grammar grades, from the first to the seventh, inclusive, and to pro-
vide for the prevention and eradication of tuberculosis among the people
of this State, and_to extend the work of the State board of health, ap-
proved March 16, 1918; to repeal an act entitled an act to raise addi-
tional revenue for the support of the government, approved March 23,
1918; to repeal an act entitled an act to raise revenue for the support of
the government and to appropriate money for the construction of roads
and projects comprised in the “State highway system,” approved Septem-
ber 5, 1919; to repeal sections 2 and 7 of the tax bill, in relation to real
estate and tangible personal property; to repeal an act entitled an act
to regulate the situs of taxation of bank stock, approved March 16, 1918;
to raise revenue for the support of the government and to provide a
minimum fixed appropriation of State revenue for public free school pur-
poses and to provide penalties for violations of this act. (H B 458}

Approved March 31, 1926.

Be it enacted by the general assembly of Virginia, in the manner
following, that is to say:

1. That sections twenty-two hundred and five, twenty-two hun-
dred and six, twenty-two hundred and seven and twenty-two hundred
and twelve of the Code of Virginia, be amended and re-enacted so as
to read as follows:

Section 2205. Segregaton of taxable real estate and tangible per-
sonal property for local taxation only.—All taxable real estate and all
taxable tangible personal property and the tangible personal property
of public service corporations (except rolling stock of corporations
operating railroads by steam) and also the capital of merchants are
hereby segregated and made subject to local taxation only.
On the real estate and tangible personal property or other taxes
assessed or extended for local purpose, and heretofore assessed for
State purposes, the commissioners of the revenue shall be paid by the
cities, counties, or towns not less than the commissions now allowed
by law for the assessment of State taxes on these subjects.

On the real estate and tangible personal property, or other taxes
heretofore received by the State but hereafter to be collected for local
purposes, the treasurers of cities, counties and towns shall be paid by
the cities, counties and towns the same commissions as now allowed by
law for the collection of State revenue; provided, that if there is a
collector of taxes in any city, the said commissions shall not be paid
the treasurer of such city on taxes collected by such city collector.

This section, as hereby amended, shall apply to the assessment
and collection of taxes for the year nineteen hundred and twenty-
seven, and thereafter until otherwise provided by law.

Section 2212. Every city and town of the Commonwealth is
authorized, when levying taxes for their purposes, upon property
which they are not prohibited from taxing by general law, and except
upon property upon which a maximum rate for local purposes is fixed
by general law, to impose in addition thereto, and in excess of, the
maximum rate of taxation which may now be imposed by each of them
under any existing statute, or statutes, a further and additional rate
of (not to exceed) twenty-five cents upon each one hundred dollars of
assessed value of such property; provided, however, the council of
any said city or town to which territory has heretofore been annexed
is authorized and shall have the right and power to impose the said
additional levy or rate hereinbefore provided for, any specific limita-
tions prescribed in charters, annexation acts or proceedings and fixed
by the vote of the people or otherwise to the contrary notwithstanding.

Provided further, that in incorporated towns at least thirty days
notice by publication in some newspaper published in the town or in
the county in which the town is located shall be given before such
increase is made in the tax rate, and at least one public hearing is held
by the taxpayers of said town to consider said increase.

Section 2206. Segregation for State taxation only of insurance
taxes, licenses on insurance companies, taxable intangible personal
property, and rolling stock of railroad companies.—Insurance taxes,
licenses on insurance companies, taxable intangible personal property,
rolling stock of all corporations operating railroads by steam, and all
other classes of property not hereinbefore specifically enumerated in
this chapter, shall be and the same are hereby segregated and made
subject to State taxation only. The capital of merchants shall not be
subject to State taxation, but may be taxed locally as provided by
the preceding section.

This section, as hereby amended, shall apply to the assessment and
collection of taxes for the year nineteen hundred and twenty-six and
thereafter until otherwise provided by law.

Section 2207. Rolling stock of railroads assessed by State cor-
poration commission; rate of taxation; how taxes paid.—The value
of rolling stock of all corporations operating railroads by steam and
doing business in this State, so far as the same is taxable in this State,
and segregated and made subject to taxation by the State only under
the preceding section, shall be assessed annually by the State cor-
poration commission.

The total annual rate for such segregated rolling stock shall be two
dollars and fifty cents on every one hundred dollars of the assessed
value thereof.

Said corporations shall pay into the State treasury the taxes due
under the assessment of rolling stock aforesaid on or before November
first of each year.

This section, as hereby amended, shall apply to the assessment
and collection of taxes for the year nineteen hundred and twenty-six
and thereafter until otherwise provided by law.

2. That sections eight, nine, ten, eleven, seventeen, eighteen,
nineteen, twenty, twenty-one, twenty-two, twenty-eight, twenty-
nine and a half, thirty-one, thirty-three, thirty-five, thirty-six and
thirty-six and a half of the tax bill, as heretofore amended, be amended
and re-enacted so as to read as follows:

Section 8. Taxation of intangible personal property and money.—
The classification under schedule ‘‘C’’ shall be as follows:

Subsection 1. Class 1.—Bonds, (except bonds of the United
States, bonds of the State of Virginia, and bonds of counties, cities
and towns or other political subdivisions of this State) 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; provided, however, that no property taxable under
class two shall be included in class one.

Subsection 2. Class 2.—All capital, not otherwise specifically
taxed or not specifically exempt from taxation, used or employed by
any person, firm or corporation, in any trade or business. But real
estate used or employed in such business shall not be held to be
capital, but shall be listed and taxed as other real estate. No machin-
ery or tools used in such trade or business shall be hereafter assessed
as real estate or ‘as capital. All such machinery and tools shall be
listed for local taxation, exclusively, and each city, town and county
is hereby authorized to make a separate classification for all such
machinery and tools and to fix the rate of levy thereon, but such rate
shall not be higher than the rate imposed upon tangible personal
property in such locality.

Capital as used herein is defined as follows:

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

(2) The excess of all bills and accounts receivable over bills and
accounts payable.

(3) All money on hand and on deposit.

(4) All other property of any kind whatsoever, including al
choses in action, equities, demands and claims.
958 ACTS OF ASSEMBLY. [

Every non-resident person, all foreign corporations and all partne
ships consisting in whole or in part of non-resident persons, doi
business in this State, are hereby declared to have a business domic
within this State and shall report the above items as capital used
employed in this State to the same extent as if they were residents
this State.

All money on hand and on deposit, bills and accounts receivab!
obligations, credits, demands and claims and all other intangib
assets used exclusively in connection with the business done in th
State or arising therefrom are hereby declared to be capital used |
employed within this State and at the business domicile of suc
foreign corporation, non-resident person or non-resident partnershi
its or their agents, or representatives, whether the physical evidenc
of such intangible assets are kept within the State or not; it being th
purpose and intent of this act that no non-resident person or partne
ship, and no foreign corporation shall engage in or transact busines
in this State without paying to the State a tax corresponding to bu
no greater than the tax exacted of citizens of this State and domesti
corporations engaged in similar business within the State.

The amount of the aforésaid intangible assets having a situ
within this State shall be determined by an allocation and separat
accounting when the books of such person, corporation or partner
ship show the amounts of such assets hereby declared to have a situ:
within this State.

Sub-section 4. Class 4.—All money other than money used 0!
employed in any trade or business 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 control of the owner, whether
such money be actually in or out of this State and belonging to a citi-
zen 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 pet
annum; provided, that money as herein defined shall not be liable to
taxation by any of the counties, cities, towns, school districts or other
local subdivision of this State. ;

All money under the control of a court receiver or commissioner 1
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 all money deposited to the
credit of any suit, not in the hands of a receiver or other fiduciary.

Sub-section 5. Class 5.—All shares of stock of corporations oF
joint stock companies except such corporations and joint stock com-
panies all of whose capital is taxed by this State, or which pay a fran-
chise tax in this State, and banks, banking associations, trust an
security companies, and insurance companies, which are otherwise
taxed in this State; provided, that all shares of stock of any corpora
tion organized to hold, or which holds, intangible assets, as a holding
corporation, are hereby declared to be taxable under class 5, unless
such intangible assets so held by such corporation are taxed by this
State to such corporation.
Sub-section 6. Class 6.—All bonds of counties, cities and towns,
or other political subdivisions of this State.

Sub-section 7. The tax on intangible personal property as defined
in this section shall be as follows:

On all property embraced in classes one and five of this schedule,
there shall be a tax of fifty cents on every one hundred dollars of the
assessed value thereof, which shall be paid into the State treasury and
applied to the expenses of the government.

For the year nineteen hundred and twenty-six, on all property
embraced in class two of this schedule; except the capital of mer-
chants, there shall be a tax of one dollar on every one hundred dollars
of the assessed value thereof, and for the year nineteen hundred and
twenty-seven and every year thereafter, there shall be a tax of eighty-
five cents on every one hundred dollars of the assessed value of such
property embraced in class two of this schedule, except the capital of
merchants; which shall be paid into the State treasury and applied
to the expenses of the government.

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
value thereof, which shall be paid into the State treasury and applied
to the expenses of the government.

On all property embraced in class six of 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 State treasury and
applied to the expenses of the government.

This section, as hereby amended, shall apply to the assessment
and collection of taxes for the year nineteen hundred and twenty-six
and for every year thereafter until otherwise provided by law.

Section 9. Income tax.—Subsection 1. Definitions——For the
purpose of this and the two following sections of this act and unless
otherwise required by the context, the word ‘“‘commission” means the
State tax commission. The word ‘‘auditor’’ means the auditor of
public accounts. The word ‘‘taxpayer’’ includes any person, cor-
poration, partnership, trust or estate subject to a tax imposed by this
act. The word “corporation” includes corporations, joint stock com-
panies, associations and all enterprises operated by trustees, the
interest in which is evidenced by shares of stock, whether with or
without par, face or nominal value. The word “partnership” includes
all co-partnerships, whether general or special, and whether limited
or unlimited, it includes also all joint enterprises. The word “‘in-
dividual’’ means all natural persons whether married or unmarried,
and also all trusts, estates and fiduciaries acting for natural persons;
it does not include corporations or partnerships acting for or in their
own behalf. The words ‘‘taxable year’’ means the calender year or
the fiscal period ending during such calendar year upon the basis of
which the net income is computed under this act. The words “‘fiscal
year’ mean an accounting period ending on the last day of any month
other than December. The word “fiduciary’’ means a guardian,
trustee, executor, administrator, committee, receiver or any other
person, whether individual or corporate, acting in any fiduciary
capacity for any person, trust or estate. The word ‘‘resident’’
applies only to natural persons and includes for the purposes of deter-
mining liability to the taxes imposed by this act upon or with reference
to the income of any taxable year, any person domiciled in the State
of Virginia and any other person who for six months or more of the
calendar year preceding that in which the tax is assessable maintained
his place of abode within this State. The word ‘‘dividend’’ means
any distribution made by a corporation, firm or partnership out of its
earnings or profits to its shareholders or members, whether such dis-
tribution be made in cash, or in other property, other than stock in
the corporation. The words “foreign country”’ or ‘‘foreign govern-
ment’’ mean any jurisdiction other than one embraced within the
United States. The words ‘United States’’ include the several states
of the Federal Union, the territories of Alaska and Hawaii, and the
District of Columbia.

Sub-section 2. Imposition of income tax.—A tax is hereby im-
posed upon every resident individual in this State, which tax shall be
levied, collected and paid annually upon and with respect to his entire
net income as herein defined, at rates as follows:

One and one-half per centum of the amount of net income not
exceeding three thousand dollars.

Two and one-half per centum of the amount of net income in excess
of three thousand dollars, but not in excess of five thousand dollars.

Three per centum of the amount of net income in excess of five
thousand dollars.

A like tax is hereby imposed and shall be levied, collected and paid
annually at the rates specified in this section upon and with respect
to the entire net income as herein defined, except as hereinafter pro-
vided, from all property owned and from every business, trade, pro-
fession or occupation carried on in this State by natural persons not
residents of the State.

The aforesaid tax shall be levied, collected and paid in the year
nineteen hundred and twenty-six upon and with respect to the taxable
income for the calendar year nineteen hundred and twenty-five and
for any taxable year ending during the year nineteen hundred and
twenty-five, and such tax shall be levied, collected and paid for every
year thereafter upon and with respect to the taxable income for the
preceding year.

Sub-section 3. Definition of income.—The term ‘‘income’’ as
used herein, includes gains, profits and income derived from salaries,
wages or compensation for personal services of whatever kind and in
whatever form paid, or from professions, vocations, trades, businesses,
commerce, or sales or dealings in property, whether real or personal,
growing out of the ownership, or use, or interest in such property; also
from rent, interest, dividends, securities or transactions of any busi-
ness carried on for gain or profit, or grains or pofits and income derived
from any source whatever, including gains or profits and income de-
rived through estates or trusts by the beneficiaries thereof, whether
as distributive or as distributable shares. The amount of all such
items shall be included in the income for the taxable year in which
received by the taxpayer, unless under the methods of accounting per-
mitted in this act, such amounts are to be properly accounted for as of
a different period; but the term “‘income’’ does not include the follow-
ing items, which shall be exempt from taxation under this act.

(a) The proceeds of life insurance policies and contracts paid
upon the death of the insured to individual beneficiaries or to the
estate of the insured.

(b) The amount received by the insured as a return of premium
or premiums paid by him under life insurance, endowment or annuity
contracts, either during the term or at the maturity of the term men-
tioned in ‘the contract, or at the surrender of the contract.

(c) The value of property acquired by gift, bequest, devise or
inheritance received during the year, but the income received from
such gifts, bequests, devises and inheritances shall be assessed under
the provisions of this act.

(d) Any amount received through accident or health insurance or
under the workmen’s compensation act as compensation for personal
injuries or sickness, and the amount of any damages received, whether
by suit or agreement, on account of such injuries or sickness.

Sub-section 4. Non-taxable income.—In computing income the
following items shall be held and deemed to be non-taxable by this
State:

(a) Interest upon obligations of the United States or of this State,
and interest upon securities issued under the provisions of the federal
farm loan act.

(b) Salaries, wages and other compensation received from the
United States by officers or employees thereof, and pensions received
from the United States or this State.

(c) Dividends received upon stock of national banks located in
this State, and dividends received upon stock of banks and trust
companies organized under the laws of this State.

(d) Dividends received from stock in any corporation, the in-
come of which was assessable for the preceding year under the pro-
visions of the income tax laws of this State; provided that when only
a part of the income of any such corporation was so assessable, only a
corresponding part of the dividends received therefrom shall be deemed
to be non-taxable.

Sub-section 5. Deductions allowed.—Taxpayers reporting income
as prescribed by this act shall be allowed the following deductions:

(a) All ordinary and necessary expenses paid or incurred during
the year in carrying on any trade or business, including a reasonable
allowance for salaries or other compensation for personal services
actually rendered in producing the taxable income; but no deduction
shall be allowed any taxpayer for any amount paid for salaries, wages
or other compensation for personal services unless there by reported
the name and address and amount paid each person residing within
this State to whom the amount of one thousand dollars or more shall
have been paid during the year.

(b) All interest paid within the year on existing indebtedness,.
except on indebtedness incurred or continued to purchase or carry
962 ACTS OF ASSEMBLY. [va.

obligations or securities, the interest from which is not or would not
be taxable under this act; provided, such payments are listed showing
the amounts paid and the names and addresses of the payees.

(c) Sums paid by the taxpayer within the year for all taxes im-
posed by this State, or any subdivision thereof, or any other State of
the United States, upon the property, profession, business or occupa-
tion, the income of which is assessable under this act, but not including
assessments for local improvements, or income, or inheritance taxes.

(d) Losses sustained during the taxable year and not compen-
sated for by insurance or otherwise, if incurred in trade or business,
the income from which is subject to taxation in this State.

(e) Losses sustained during the taxable year and not compen-
sated for by insurance or otherwise, if incurred in any transaction
entered into for profit, though not connected with the trade or busi-
ness, but in the case of a taxpayer other than a resident of the State,
only such losses shall be deductible as relate to transactions in real
property or in tangible personal property having an actual situs in
this State.

(f) Losses sustained during the taxable year of property not con-
nected with the trade or business (but in the case of a taxpayer other
than a resident, only of real property or tangible personal property
having an actual situs in this State), if arising from fire, storms, ship-
wrecks or other casualty or theft and not compensated for by insurance
or otherwise.

(g) Debts due the taxpayer and actually ascertained to be worth-
less and actually charged off within the year; provided said debts are
listed, showing the amounts, when due, and names of the debtors.

(h) The actual amount paid during the year for repairs to and
maintenance of buildings and machinery; provided, that no deduc-
tions shall be made for any repair which is chargeable to residence
property occupied by its owner, nor for depreciation thereof, and the
annual value of the estimated rental thereof shall not be included in
the income subject to taxation. ;

(i) All fire, tornado and casualty insurance premiums paid during
the year in connection with property or business.

(j) A reasonable allowance for the exhaustion, wear and tear of
property used in the trade or business, including a reasonable allow-
ance for obsolesence.

Sub-section 6. In computing income no deductions shall in any
case be allowed in respect of:

(a) Personal living or family expenses.

(b) Any amount paid out for new buildings or new machinery
for permanent improvements or betterments, or for any other capita!.
outlay made to increase the value of any property or estate. :

(c) Any amount expended in restoring property or in making
good the exhaustion thereof for which an allowance is or has been
made.

(d) Premiums paid on any life insurance policy. ;

Sub-section 7. Personal exemptions.—The following exemptions
shall be allowed to individuals reporting income as required by this
act.
In the case of an unmarried person, the personal exemption shall
be one thousand dollars; in the case of a husband and wife, living to-
gether, and in the case of a widow or widower with dependent minor
children, who for the purpose of this act shall be deemed the head of a
family, the personal exemption shall be two thousand dollars. For
each additional person other than the husband or wife dependent
upon and entirely supported by the taxpayer during the year, the
personal exemption shall be four hundred dollars. In computing the
amount of taxes payable by persons residing together as members of
a family, if a joint return is filed, the income of the wife and the income
of each child under twenty-one years of age, shall be added to that of
the father, or if he be not living, to the head of the family, and assessed
to him. The taxes levied thereon shall be payable by such husband
or head of the family, but if not paid by him may be enforced against
any person whose income is included in the assessment. A husband
and wife living together shall receive but one personal exemption of
two thousand dollars against their aggregate income, if a joint return
is filed, but a husband and wife not living together shall make separate
returns, and a husband and wife living together but having separate
incomes may make separate returns. In all cases where separate
returns are made by the husband and wife the personal exemption
allowed upon each shall be one thousand dollars.

Sub-section 8. Tax upon income of non-residents derived from
sources within this State——A non-resident individual receiving in-
come from labor performed, business done or property located in this
State, and income from labor performed, business done or property
located outside of this State, shall be taxable only upon the amount
of income received by such taxpayer from labor performed, business
done or property located within this State. The remainder of the
income received by him shall be deemed non-taxable by this State.

Sub-section 9. Rules for determining gain or loss.—For the pur-
pose of ascertaining the gain derived or loss sustained from the sale
or other disposition of property, real, personal or mixed, the basis
shall be the cost price of such property if the same was bought by the
taxpayer subsequent to March first, nineteen hundred and thirteen,
or the fair cash value of such property on March first, nineteen hun-
dred and thirteen, if acquired prior thereto. If, however, such prop-
erty was acquired by gift, devise or inheritance, subsequent to March
first, nineteen hundred and thirteen, the basis shall be the fair market
value of such property at the time when the same was acquired by
the taxpayer.

Sub-section 10. Exchange of property.—Where property is ex-
changed for other property, the property received in exchange shall,
for the purpose of determining the gain or loss, be treated as the
equivalent of cash to the amount of its fair market value, but when in
connection with the reorganization, merger or consolidation of a cor-
poration a taxpayer receives in place of stock or securities owned by
him, new stock or securities of the reorganized, merged or consolidated
corporation, no gain or loss shall be deemed to occur from the ex-
change, until the new stock or securities are sold or realized upon and
the gain or loss is definitely ascertained, until which time the new
stock or securities received shall be treated as taking the place of the
stock and securities exchanged.

Sub-section 11. Examination of federal returns—Whenever in
the opinion of the tax commission it is necessary to examine the federal
returns or any copy thereof of any taxpayer in order properly to audit
the return of such taxpayer, the commission, the commissioner of the
revenue or examiner of records shall have the right to examine such
return or any copy thereof and all statements, inventories and sched-
ules in support thereof.

Sub-section 12. The income of the taxpayer shall be computed
upon the basis of the taxpayer’s annual accounting period (fiscal year
or calendar year, as the case may be) in accordance with the method
of accounting regularly employed in keeping the books of such tax-
payer, but if no such method of accounting has been employed, or if
the method employed does not clearly reflect the true income of the
taxpayer, the computation shall be made upon the basis, and in such
manner, as in the opinion of the tax commission does clearly reflect
the true income. If the taxpayer’s annual accounting period is other
than a fiscal period, as defined in this act, or if the taxpayer has no
annual accounting period, or does not keep books, the net income
shall be computed on the basis of the calendar year. If a taxpayer
changes his accounting period from a fiscal year to a calendar year,
from calendar year to fiscal year, or from one fiscal year to another,
he shall report the fact to the commission and the income shall be
computed on the basis of such new accounting period, subject to the
following provisions:

If a taxpayer changes the basis of computing net income from
fiscal year to calendar year, a separate return shall be made for the
period between the close of the last fiscal year for which return was
made and the following December thirty-first. If the change is made
from calendar year to fiscal year, a separate return shall be made for
the period between the close of the last calendar year for which return
was made and the date designated as the close of the fiscal year. If
the change is made from one fiscal year to another fiscal year, a sepa-
rate return shall be made for the period between the close of the former
fiscal year and the date designated as the close of the new fiscal year.
If a taxpayer making his first return for income tax keeps his accounts
on the basis of a fiscal year, he shall make a separate return for the
period between the beginning of a calendar year in which such fiscal
year ends and the end of such fiscal year.

In all of the above cases the net income shall be computed on the
basis of such period for which separate return is made, and the tax
shall be paid thereon at the rate for the calendar year in which such
period is included; and the exemptions allowed in this act and the pro-
gressive steps in the rate of tax shall be reduced respectively to
amounts which bear the same ratio to the full exemptions and the full
progressive steps provided for herein as the number of months in such
period bears to twelve months.

Sub-section 13. Estates and trusts. 1. The tax imposed by
this act shall apply to estates and trusts, which tax shall be levied,
collected and paid annually upon and with respect to the income of
estates or of any kind of property held in trust, including:

a. Income received by estates of deceased persons during the
period of administration or settlement of the estate;

b. Income accumulated in trust for the benefit of unborn or un-
ascertained persons or persons with contingent interests;

c. Income held for future distributions under the terms of the
will or trust;

d. Income which is to be distributed to the beneficiaries period-
ically, whether or not at regular intervals, and the income collected
by a guardian of an infant to be held or distributed as the court may
direct; and

e. Income of an estate during the period of administration or
settlement permitted by sub-division three of this sub-section to be
deducted from the net income upon which the tax is to be paid by
the fiduciary.

2. The fiduciary shall be responsible for making the return of
income for the estate or trust for which he acts, whether such income
be taxable to the estate or trust or to the beneficiaries thereof. The
net income of an estate or trust shall be computed in the same manner
and on the same basis as provided in this act for individual taxpayers,
except that there shall also be allowed as a deduction any part of the
gross income which pursuant to the terms of the will or deed creating
the trust, is during the taxable year paid to or permanently set aside
for the United States, any state, territory, or any political sub-division
thereof, or the District of Columbia, or any corporation or association
organized and operated exclusively for religious, charitable, scientific
or educational purposes, or for the prevention of cruelty to children
or animals, no part of the net earnings of which inures to the benefit
of any private stockholder or individual; and in cases under paragraphs
d and e of sub-division one of this sub-section, the fiduciary shall
include in the return a statement of each beneficiary's distributive
share of such net income, whether or not distributed before the close
of the taxable year for which the return is made.

3. In cases under paragraphs a, b, and c of sub-division one, of
this sub-section, the tax shall be imposed upon the estate or trust with
respect to the net income of the estate or trust and shall be paid by
the fiduciary, except that in determining the net income of the estate
of any deceased person during the period of administration or settle-
ment there may be deducted the amount of any income properly paid
or credited to any legatee, heir or other beneficiary. In such cases,
the estate or trust shall be allowed the same exemption as is allowed
to single persons under sub-section seven, and in such cases an estate
or trust created by a person not a resident, and an estate of a person
not a resident shall be subject to tax only to the extent to which in-
dividuals other than residents are liable under sub-section eight.

4. In cases under paragraphs d and e of sub-division one of this
sub-section, the tax shall not be paid by the fiduciary, but there shall
be included in computing the net income of each beneficiary his dis-
tributive share whether distributed. or not, of the net income of the
estate or trust for the taxable year, or, if his net income for such tax-
able year is computed upon the basis of a period different from that
upon the basis of which the net income of the estate or trust is com-
puted, then his distributive share of the net income of the estate or
trust for any accounting period of such estate or trust ending within
the fiscal or calendar year upon the basis of which such beneficiary's
net income is computed. In such cases the income of a beneficiary,
not a resident, derived through such estate or trust, shall be taxable
only to the extent provided in sub-section eight hereof.

Sub-section 14. For the year nineteen hundred and twenty-seven
and for each year thereafter every corporation within this State which
does not make a return of income to this State, shall transmit to the
tax commission a copy of such informative return as is required by
the federal law, known as the revenue act, to be transmitted to the
commissioner of internal revenue at Washington, or to the collector
of internal revenue for the proper district. Such informative returns
shall in every way be treated with the same secrecy and inviolability
which is required with respect to returns of income.

Every corporation failing to transmit such copy of such informa-
tive return to the tax commission as herein required on or before the
time prescribed by this act for the filing of income returns by cor-
porations shall be liable to a penalty of not less than ten dollars and
not exceeding one hundred dollars for each such failure, and shall in
addition be compellable to file such copy by mandamus 1n a proceeding
instituted by the State tax commission in the circuit or corporation
court in the county or city wherein such corporation does business or
has an office.

Sub-section 15. Every individual having a gross income of one
thousand dollars or over, if unmarried, or if married and not living
with husband or wife, and every individual having a gross income of
two thousand dollars or over, if married and living with husband or
wife, and every head of a family as herein defined having a gross
income of two thousand dollars or over shall make under oath a return
stating specifically the items of his entire income and the items which
he claims as deductions and exemptions allowed by this act. Such
returns except in the case of fiduciaries shall be made to the com-
missioner of revenue of the county, city or district in which the in-
dividual resides, does business or has an office. If the individual is
unable to make his own return, the return shall be made by a duly
authorized agent. .

Sub-section 16. Every fiduciary (except receivers appointed by
authority of law in possession of part only of the property of a tax-
payer) shall make under oath a return for the person or estate or trust
for whom or for which he acts, as follows:

1. If he acts for a living person whose entire income from what-
ever source derived is in his charge and the net income of such indi-
vidual is one thousand dollors or over if single, or if married and not
living with husband or wife, or two thousand dollars or over if marriec

and living with husband or wife, or if the head of a family, as hereir
defined.
2. If he acts (a) for an estate of a deceased person during the
period of administration or settlement, whether or not the income of
such estate during such period of administration or settlement is
properly paid or credited to any legatee, heir or other beneficiary; (b)
for an estate or trust the income of which is accumulated in trust for
the benefit of unborn or unascertained persons, or persons with con-
tingent interests; or (c) for an estate or trust the income of which is
held for future distribution under the terms of the will or trust; and
the net income of such estate or trust is one thousand dollars or over.

3. If he acts (a) for an estate or trust the income of which is to
be distributed to the beneficiaries periodically; or (b) as the guardian
of an infant whose income is to be held or distributed as the court may
direct; and any beneficiary of such estate or trust receives or is en-
titled to a distributive share of the income of the estate or trust of
one thousand dollars or more. The return made by a fiduciary shall
state specifically the items of the gross income and the deductions,
exemptions and crédits allowed by this act. Under such regulations
as the tax commission may prescribe, a return made by one or two
or more joint fiduciaries shall be a sufficient compliance with the
above requirements. The fiduciary shall make oath that he has
sufficient knowledge of the affairs of the individual, estate or trust for
whom or which he acts to enable him to make return, and that the
same is, to the best of his knowledge and belief, true and correct.

Fiduciaries required to make returns under this act shall be subject
to all the provisions of this act which apply to other taxpayers, except
that fiduciaries shall make returns of income, intangible personal
property and money to the examiner of records in the manner pre-
scribed by law.

Sub-section 17. - All returns of income, intangible personal prop-
erty and money shall be made on or before the first day of July in
each year, except that returns of income, if made on the basis of a
fiscal year, shall be made on or before the fifteenth day of the fourth
month following the close of such fiscal year; provided, that for the
year nineteen hundred and twenty-six, no taxpayer shall be required
to file a return before August fifteenth. The returns heretofore re-
ferred to in this sub-section shall be made to the commissioner of the
revenue, except that in the case of corporations and partnerships the
returns of income shall be made to the tax commission as provided in
section ten of the tax bill, as hereby amended; and except that in the
case of fiduciaries, returns of income, intangible personal property
and money shall be made to the examiner of records in the manner
prescribed by law.

The tax commission may grant a reasonable extension of time for
filing income and intangible returns whenever in its judgment good
cause exists and shall keep a record of every such extension and the
reason therefor. Except in case of a taxpayer who is abroad, no such
extension shall be granted for more than six months.

Such income returns shall, so far as may be, set forth the same or
similar items called for in the blank forms of return prescribed by the
\nited States commissioner of internal revenue for the enforcement
of the act of congress, known as the “revenue act,”’ together with such
other facts as may be necessary for the proper enforcement of this act.

Blank forms of returns for income, intangible personal property
and money shall be supplied by the tax commission to the commission-
ers of the revenue, who shall deliver them to the taxpayers not later
than May first of each year and receive their returns. Each com-
missioner of the revenue shall audit returns of taxpayers as soon as
they are made to him and shall assess the amount of taxes which
appears to be due.

The tax commission, may in its discretion, prescribe an appro-
priate form of return for reporting both income and intangible per-
sonal property, including money, in which case all such returns shall
be kept under lock and key at all times when they are not in the per-
sonal possession of the commissioner of the revenue, the tax com-
mission, or some other person authorized to inspect the same. How-
ever, the assessments of intangible personal property and money shall
be made in a book to be prescribed by the commission, which shall be
a public record, a copy of which shall be kept on file at the clerk’s
office of the circuit or corporation court of the county or city.

The assessments of income shall be made in a separate book, to be
prescribed by the tax commission, all copies of which shall be kept
under lock and key by the commissioner of the revenue, the treasurer
and the auditor; respectively. Such books and returns showing in-
come shall not be inspected by any person save an officer or other
person duly authorized by law, or directed so to do by order of a court
of competent jurisdiction; provided, however, that in the event the
United States government or any other state allows this State’s
officials to examine its income tax returns, or any class thereof, then
this State, upon application by the proper authorities of the United
States or such other state, to the State tax commission, shall allow the
proper officials of the United States government, or of such other
state, whose official duties require them to make such inspection, to
inspect the income tax returns or such corresponding class of such
income tax returns made to this State. No officer or employee shall
give any information to any person other than those hereinbefore
enumerated, except in obedience to a decree or order of a court of
competent jurisdiction.

After the returns are received by the commissioner of the revenue,
he shall make out the income book and the intangible personal prop-
erty book. He shall make two copies of the income book and deliver
one to the auditor of public accounts and one to the treasurer of the
county or city. He shall make three copies of the intangible personal
property book and deliver one to the auditor of public accounts, one
to the county or city treasurer, and one to the clerk of the circuit
or corporation court of the county or city. Such book and copies shall
be made out and delivered, as aforesaid, on or before September first
of each year, except that for the year nineteen hundred and twenty-
six, such books and copies shall be made out on or before October first.

On or before December first of each year each individual assessed
with tax upon income and each taxpayer assessed with taxes upon
intangible personal property and money shall pay the taxes thereon
to the treasurer of the county or city. If such taxes are not paid on
or before December first, the treasurer shall add thereto a penalty of
five per centum and proceed to collect such tax and penalty as other
taxes are now collected.

As soon as the returns of intangible personal property, money and
income have been received by the commissioner of the revenue and
entered upon the assessment books, the commissioner of the revenue
shall forward such returns to the State tax commission. As soon as
practicable after such return is received by the tax commission, the
tax commission shall examine and audit it. If the amount of tax
computed by the tax commission shall be greater than the amount
theretofore assessed, the excess shall be assessed by the State tax
commission and a copy of the bill for the same shall be mailed to the
taxpayer and a copy transmitted to the auditor of public accounts.
It shall be the duty of the taxpayer to pay such additional tax to the
auditor of public accounts within sixty days after the amount of the
tax as computed shall be mailed by the tax commission. In such
case, if the return was made in good faith and the understatement of
the amount in the return was not due to any fault of the taxpayer,
there shall be no interest, penalty or additional tax, because of such
understatement, provided that the deficiency be paid within sixty
days after notice of the amount be mailed to the taxpayer. If the
payment be not made within sixty days, there shall be added to the
amount of deficiency, five per centum thereof, and in addition, interest
at the rate of one per centum a month for each month or fraction
of a month, calculated from the date of notice. If the understatement
is false or fraudulent with intent to evade the tax a penalty of one
hundred per centum shall be added, and interest on said tax and
penalty at the rate of one per centum per month shall be added to the
amount so due for each month or fraction of a month. Except as
otherwise provided in this sub-section, the interest provided for in
this sub-section shall in all cases be computed from the date the taxes
were due to the date of payment. Nothing contained in this para-
graph shall prevent the taxpayer from applying to the circuit court
of the county or the corporation or hustings court of the city wherein
he resides for a correction of the assessment made by the State tax
commission with right of appeal in the manner now provided by law.

If the amount of tax as computed shall be less than the amount
theretofore paid, the excess shall be refunded by the State tax com-
mission by warrant upon the auditor of public accounts. Such refund
shall be made only upon a certificate of the commission directed to
the auditor of public accounts.

Sub-section 18. All tax returns. required by law to be filed with
the commissioner of the revenue respecting income, intangible per-
sonal property or capital, shall be filed by the taxpayer with the com-
missioner of the revenue within the time required by this act, unless
the time for filing such returns be extended by the tax commission.
And upon all returns filed with or assessed by the commissioner of the
revenue after the time herein prescribed for the filing of returns, thé
commissioner of the revenue shall assess a penalty equal to ten per
centum of the amount of taxes assessable thereon, but in no case shall
such penalty be less than two dollars, and such penalty when so
assessed shall become a part of the tax and shall be collected in the
same manner as is provided by law for the collection of other taxes
by treasurers of counties and cities.

At any time after the time required by law for hling such returns
the commissioner of the revenue shall permit the examiner of records
to have access to his records and files for the purpose of determinin3
the names and addresses of such taxpayer, and it shall be the duty of
the examiner of records of the circuit wherein such taxpayer resides,
has an office or does business, to secure a return from such taxpayer,
or if such taxpayer refuses to make a return or fails to make such
return for fifteen days after the examiner of records calls upon him to
do so, the examiner of records shall from the best information he can
obtain make an estimate of the intangible personal property, money
and income of each such taxpayer and report the same and the result
of his investigations and the assessments thereon to the commissioner
of the revenue and send a copy of such report to the auditor of public
accounts and to the tax commission.

The commissioner of the revenue shall have authority to assess
taxes, penalties and interest upon such report of the examiner of
records, and such taxes, penalties and interest shall be collected in like
manner as is provided by law for the collection of State taxes by the
treasurers of the respective counties and cities.

Sub-section 19. This section, as hereby amended, shall apply to
the assessment and collection of taxes for the year nineteen hundred
and twenty-six and for every year thereafter until otherwise provided
by law; and, in so far as it relates to income taxes, it shall apply to the
assessment and collection of such taxes for the year nineteen hundred
and twenty-six upon income received or due but not received during
the year nineteen hundred and twenty-five and to the assessment and
collection of income taxes for subsequent years.

Section 10. Tax on income of corporations and partnerships.
Sub-section 1. Reports.—Every corporation and partnership organ-
ized under the laws of this State or doing business, owning property
or having an office within this State shall on or before August fifteenth,
nineteen hundred and twenty-six and on or before April fifteenth of
each succeeding year make a report to the State tax commission;
provided, that corporations and partnerships, whose accounting
period is a fiscal year as defined in sub-section twelve of section nine
of the tax bill, as hereby amended, shall make a return on or before
the fifteenth day of the fourth month following the close of such fiscal
year. Such reports shall be made on forms prescribed by the com-
mission, and shall contain such information as may be necessary for
the proper enforcement of this act.

Sub-section 2. Calculation of tax.—Every domestic corporation
organized under the laws of this State and every foreign corporation
doing business in this State (except public service corporations which
are now subject to a State franchise tax or license tax upon gross re-
ceipts, insurance companies, which pay a State license tax on gross
premiums and reciprocal or interinsurance exchanges which pay a
premium tax to the State as provided by law, and State and national
banks, banking associations and trust companies, and religious,
educational, benevolent and other corporations not organized or
conducted for pecuniary profit) shall pay an annual tax to be com-
puted by the State tax commission upon the basis of its entire net
income, as herein defined, derived from business done or property
located in this State, for the fiscal or calendar year next preceding.

Sub-section 3. Separate or consolidated returns of affiliated cor-
porations.—(a) Corporations which are affliated within the meaning
of this sub-section may, for any taxable year, make separate returns,
or, under regulations. prescribed by the commission, make a consoli-
dated return of net income for the purpose of this act, in which case
the taxes thereunder shall be computed and determined upon the
basis of such return. If return is made on either of such bases, all
returns thereafter made shall be upon the same basis unless permission
to change the basis is granted by the commission.

(b) In any case in which a tax is assessed upon the basis of a con-
solidated return, the total tax shall be computed in the first instance
as a unit and shall then be assessed upon the respective affiliated cor-
porations in such proprotions as may be agreed upon among them,
or, in the absence of any such agreement, then on the basis of the net
income properly assignable to each.

(c) For the purpose of this sub-section two or more corporations
shall be deemed to be affiliated (1) if one corporation owns at least
ninety-five per centum of the voting stock of the other or others, or
(2) if at least ninety-five per centum of the voting stock of two or more
corporations is owned by the same interests.

(d) In any case of two or more related trades or businesses liable
to taxation under this act owned or controlled directly or indirectly
by the same interests, the commission may, and at the request of the
taxpayer, shall, if necessary in order to make an accurate distribution
or apportionment of gains, profits, income, deductions, or capital
between or among such related trades or businesses, consolidate the
accounts of such related trades or businesses.

Sub-section 4. Where any corporation lable to taxation under
this act conducts the business, whether under agreement or other wise
in such manner as either directly or indirectly to benefit the members
or stockholders of the corporation, or any of them, or any person or
persons, directly or indirectly interested in such business by selling
its products or the goods or commodities in which it deals at more or
less than a fair price which might be obtained therefor, or where such
a corporation, a substantial portion of whose capital stock is owned
either directly or indirectly by another corporation, acquires and dis-
poses of the products of the corporation so owning the substantial
portion of its capital stock in such manner as to create a loss or im-
proper net income, the tax commission may require such facts as it
deems necessary for the proper computation provided by this act, and
may for the purpose of the act determine the amount which shall be
deemed to be the entire net income of the business of such corporatior
for the calendar or fiscal year, and in determining such entire ne
income, the tax commission shall have regard to the fair profits which
but for any agreement, arrangement or understanding, might be o:
could have been obtained from dealing in such products, goods o:
commodities.

Sub-section 5. Reports on basis of fiscal year—A corporatior
or partnership which reports to the United States treasury department
on the basis of its fiscal year, may report to the tax commission upon
the same basis, except as provided herein. Any corporation or part-
nership which has been permitted to change the period for which it
shall make its report, shall in its next report to the tax commission,
include its entire net income which has not been used or included in
measuring a tax to this State whether such income arose over a period
of more or less than one year.

Sub-section 6. Original and supplemental reports.—Every report
required by this act shall have annexed thereto the affidavit of the
president, vice-president, secretary, treasurer, assistant secretary or
assistant treasurer, and the chief accounting officer of the corporation
or member of the partnership to the effect that the statements con-
tained therein are true. Duplicate blank forms of reports shall be
furnished by mail by the tax commission to the taxpayer at least
thirty days before the time for filing returns, but failure to secure such
a blank shall not release any corporation or partnership from the
obligation of making any report herein required. The commission
may require a further or supplemental report under this act to contain
further information and data necessary for the computation of the
tax herein provided.

Sub-section 7, Taxation of corporations doing part of their busi-
ness in the State and part without the State.—If the entire business of
the corporation be transacted within the State, the tax imposed by
this act shall be based upon the entire net income of such corporation
for such fiscal or calendar year as defined herein, subject, however, to
any correction thereof for fraud, evasion or error.. If the business of
such corporation be transacted both within and without the State, the
tax imposed by this act shall be based upon the portion of such entire
net income as is derived from sales wherever made of goods, wares and
merchandise, manufactured, or which originated, in this State, and
from other business done or property located within this State, which
may be determined by an allocation and separate accounting when the
books of the corporation show income derived from business done and
property located within this State; otherwise, the tax imposed by this
act shall be on such proportion of the entire net income of such cor-
poration as the fair market value of the real estate and other physical
assets in this State on the date of the close of the taxable year and the
amount of the gross receipts in this State during that year, of such
corporation, bears to the total fair market value of all the real estate
and other physical assets within and without this State on the date of
the close of the taxable year and the amount of the total gross receipts
within and without the State during that year, of such corporation.
The term “gross receipts in this State”’ shall include all receipts from
persons, firms, corporations, partnerships and associations, who or
which are in this State, wherever paid, and all receipts from sales,
wherever made, of goods, wares and merchandise manufactured, or
which originated, in this State.

If any corporation believes that the method of allocation or appor-
tionment hereinbefore: prescribed as administered by the tax com-
mission has operated or will so operate as to subject it to taxation on a
greater portion of its net income than is reasonably attributable to
business or sources within the State, it shall be entitled to file with the
commission a statement of its objections and of such alternative
method of allocation or apportionment as it believes to be proper
under the circumstances with such detail and proof and within such
time as the tax commission may reasonably prescribe; and if the tax
commission shall conclude that the method of allocation or appor-
tionment theretofore employed is in fact inapplicable or inequitable,
it shall redetermine the taxable income by such other method of
allocation or apportionment as seems best calculated to assign to the
State for taxation the portion of the income reasonably attributable
to business and sources within the State, not exceeding, however, the
amount which would be arrived at by application of the statutory
rules for allocation or apportionment.

Sub-section 8. Rate of tax on corporations; individuals carrying
on business in partnership.—The tax imposed by this act on corpora-
tions shall be at the rate of three per centum of the entire net income
of the corporation or the portion thereof taxable within the State,
determined as provided by this act.

Individuals carrying on business in’ partnership shall be liable for
income tax only in their individual capacity, and no income tax shall
be assessable hereunder upon the net income of any partnership. All
such income shall be assessable to the individual partners; it shall be
reported by such partners as individuals upon their respective in-
dividual income returns, and it shall be taxed to them as individuals
along with their other income at the rates and in the manner herein
prescribed for the taxation of income received by individuals. There
shall be included in computing the net income of each partner his
distributive share, whether distributed or not, of the net income of the
partnership for the taxable year, or, if his net income for such taxable
year is computed upon the basis of a period different from that upon
the basis of which the net income of the partnership is computed, then
his distributive share of the net income of the partnership for any
accounting period of the partnership ending within the taxable year
upon the basis of which the partner’s net income is computed.

Sub-section 9. Penalty for failure to make report or return.—
Any corporation or partnership which fails to make any report or
return required by this act shall be liable to a penalty of not exceeding
one hundred dollars to be paid to the State, to be assessed and col-
lected in the manner provided for the assessment and collection of
taxes under this act, or in a civil action, at the instance of the tax
commission, and in addition such corporation or partnership shall be
compellable by mandamus to make such report or return. Any
officer of any corporation or any partner who makes a fraudulent
return or statement with intent to defeat or evade the payment of the
taxes prescribed by this act shall be liable to a penalty of not more
than one thousand dollars, to be assessed and collected in like manner.
If any corporation or partnership fails to make a return as herein
required and in the case of a corporation, fails to pay the tax thereon
within sixty days of the time required by, or under the provisions of
this act, there shall be added to the tax an additional penalty equal
in amount to twenty per centum of the said tax, but such penalty in
no case shall be less than ten dollars.

Sub-section 10. The tax commission may for good cause shown
extend the time within which any corporation or partnership is re-
quired by this act to make a report or return. If any report or return
required by this act be not made as herein required, the tax commission
is authorized to make an estimate of the net income of such corpora-
tion and of the amount of tax due under this act, from any information
in its possession, and to order and state an account according to such
estimate for the taxes, penalties and interest due to the State from
such corporation or partnership. All the authority and powers con-
ferred on the tax commission by law shall have full force and ‘effect
in respect of corporations and partnerships which may be liable
hereunder.

Sub-section 11. If any application for revision be filed with the
commission by a corporation against which an account is audited and
stated within one year from the time any such account shall have been
audited and stated, the commission shall grant a hearing thereon, and
if it shall be made to appear upon any such hearing by evidence sub-
mitted to it or otherwise, that any such account included taxes or
other charges which could not have been lawfully demanded, or that
payment has been illegally made or exacted of any such account, or
if it appears that the tax as originally assessed was less than should
have been exacted, the commission shall resettle the same according
to law and the facts by increasing or diminishing the taxes and other
charges, and adjust the accounts accordingly, and may, in its discre-
tion, release or modify the penalty imposed for failure to report as
provided in this act, and shall send notice of its determination thereon
to the corporation forthwith. If it appears from such reassessment
that such corporation shall have paid an excess of tax under this act
for the year for which such reassessment is made, the tax commission
shall credit such corporation with such amount, which shall be re-
funded in the same manner as that provided by this act for refunds to
individuals.

Sub-section 12. The tax commission shall audit and state the
account of each corporation known to be liable to a tax under this act,
as hereinbefore provided, and shall compute the tax thereon and pre-
pare duplicate bills, one of which shall be mailed to the corporation
and one certified to the auditor of public accounts.

Sub-section 13. Every report required herein shall contain the
postoffice address of the corporation and lines or spaces upon which
1926. | | ACTS OF ASSEMBLY. 975

the corporation shall enter its entire net income. Notice of tax
assessment shall be sent by mail to the postoffice address given in the
report, and the record that such notice has been sent shall be pre-
sumptive evidence of the giving of the notice and such record shall be
preserved by the tax commission.

Sub-section 14. The tax hereby imposed on corporations shall be
paid to the auditor of public accounts within thirty days after notice
of the tax has been given as provided in sub-section thirteen; provided,
that no tax shall be deemed to be due hereunder before December
first, nineteen hundred and twenty-six and September first of each
year thereafter. If such tax be not so paid, or in the case of additional
taxes, if not paid within thirty days after notice of such additional
tax has been given as provided herein, the corporation liable to such
tax shall pay, in addition to the amount of such tax, or additional tax,
five per centum of such amount, plus one per centum for each month
the tax or additional tax remains unpaid, but the State tax commission
upon submission to it of satisfactory proof that the failure to pay such
taxes, or additional taxes, within the time prescribed in this act, was
not wilful or evasive, may modify the exaction to not less than one per
centum for each month following the due date of the tax.

Sub-section 15. Warrant for enforcement of tax.—If the tax
imposed by this act be not paid within thirty days after the same
becomes due, the tax commission may issue a warrant under its
official seal directed to the sheriff of any county or the sheriff or ser-
geant of any city of the State commanding him to levy upon and sell
so much of the real and personal property of the corporation owning
the same, found within his county or city, as may be necessary for the
payment of the amount thereof, with the added penalties, interest and
cost of executing the warrant, and to return such warrant to the tax
commission and pay to the auditor of public accounts the money
collected by virtue thereof by a time to be therein specified, not less
than sixty days from the date of the warrant. Such warrant shall be
a lien upon and shall bind the real and personal property of the cor-
poration against whom it is issued from the time an actual levy shall
be made by virtue thereof, except as against a bona fide purchaser for
valuable consideration without notice of such levy. The sheriff or
sergeant to whom any such warrant shall be directed shall proceed
upon the same in all respects, with like effect, and in the same manner
as prescribed by law in respect to executions issued against property
upon judgments of a court of record, and shall be entitled to the same
fees for his services in executing the warrant, to be collected in the
same manner; provided, however, if the taxpayer shall file with the
commission or with the court having jurisdiction, a petition as pro-
vided by law for the correction of the assessment upon which the tax
has been based, and shall file therewith a bond, payable to the Com-
monwealth, with good security approved by the commission or by the
clerk of the court, as the case may be, in a penalty of at least twice the
amount of tax and penalty for which the warrant is drawn, and con-
ditioned upon the payment of the tax, penalty and costs, if his peti-
tion be denied, the commission or clerk, as the case may be, shall
certify the fact that such bond has been given to the officer executing
the warrant, who shall thereupon stay all proceedings on said warran:
until the determination of the matters alleged in said petition.

Sub-section 16. Action for recovery of taxes.—Action may be
brought at any time by the tax commission, in the name of the State
to recover the amount of any taxes, penalties and interest due, or tc
compel the filing of reports due, under this act.

Sub-section 17. Inviolability of income returns.—Except in

ccordance with proper judicial order or as otherwise provided by
law, it shall be unlawful for any tax commissioner, agent, clerk or
other officer or employee to divulge or make known in any manner the
amount of income or any particulars set forth or disclosed in any re-
port under this act. Nothing herein shall be construed to prohibit
the publication of statistics so classified as to prevent the identifica-
tion of particular reports and the items thereof, or the publication of
delinquent lists showing the names of taxpayers who have failed to
pay their taxes at the time and in the manner provided by law, to-
gether with any relevant information which in the opinion of the tax
commiss:on may assist in the collection of such delinquent taxes; or
the inspection by the attorney general or other legal representatives
of the State of any corporation which shall bring action to set aside or
review the tax based thereon, or against whom an action or proceeding
has been instituted in accordance with the provisions of this act.

Reports and returns, whether received by the commission under
this or any other section of the tax bill, shall be preserved for three
years, and thereafter until the commission orders them to be destroyed.

Any offense against the provisions of this sub-section shall be
punished by a fine not exceeding one thousand dollars.

Sub-section 18. This section as hereby amended shall apply to the
assessment and collection of taxes for the year nineteen hundred and
twenty-six and for every year thereafter until otherwise provided by
law; and, in so far as it relates to income taxes, it shall apply to the
assessment and collection of such taxes for the year nineteen hundred
and twenty-six upon income received or due but not received during
the year nineteen hundred and twenty-five and to the assessment and
collection of income taxes for subsequent years.

Section 11. Sub-section 1. If any person, firm or corporation
shall have hitherto failed for any tax year of the three tax years last
past, to make a proper return of his intangible personal property,
money and income, or to have the same assessed for taxation or to
pay the proper tax thereon at the time required by law, but shall make
a correct return of his intangible personal property, money and income
to the examiner of records, for the proper judicial circuit, within sixty
days from the time this act becomes effective, and shall pay the tax
due thereon within thirty days after the assessment of such tax, there
shall be added an additional penalty equal to five per centum of the
amount of said tax and interest upon such tax and penalty at the rate
of six per centum per annum from the time such tax should have been
paid until payment. If any such person, firm or corporation fails to
make a return of such intangible personal property, money and income
within sixty days of the time this act becomes effective, it shall be the
duty of the examiner of records to ascertain the amount of such in-
tangible personal property, money and income which should have
been assessed, and to report the same to the tax commission which
shall have authority to assess taxes thereon at the rate prescribed by
law for the year when such intangible personal property, money and
income should have been reported for taxation, adding thereto a
penalty of ten per centum of such tax and interest upon such tax and
penalty at the rate of six per centum per annum from the time such
tax should have been paid to the time of payment.

If any person, firm or corporation shall hereafter fraudulently or
with a view to evade the payment of proper taxes, fail or refuse to
make out and deliver to the proper assessing authority a list of his
intangible personal property, money and income, or with like intent,
list the same at less than its true value, then such property, money or
income, when discovered shall be listed and taxed for the proper
amount for each and every year when it was not so taxed, with addi-
tional penalty of one hundred per centum of such unpaid taxes, and
the failure to make out a return of income or any class of intangible
personal property as required by law, or the listing of such intangible
personal property, money and income at fifty per centum or less of its
actual value, shall be taken as prima facie evidence of intention so to
evade the taxes.

Every person, firm and corporation engaged in a business wherein
the capital is subject to taxation, is hereby required to keep accurate
book accounts showing the items which constitute such capital, which
books of account shall be at all times open to the inspection of the
commissioners of the revenue, examiners of records and the State
tax commission. Such persons, firms and corporations shall make re-
turns showing in detail the items of capital as herein defined, and also
the bills and accounts payable, which are claimed as deductions. No
credit shall be allowed for such deductions unless there be given the
names and addresses of the parties to whom such bills and accounts
are due, and the various amounts constituting the said indebtedness,
and unless the taxpayer certify that such indebtedness was contracted
in the usual course of business, and not for purposes of capital outlay.

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.

Any person, firm or corporation, who shall, for the purpose of
evading taxation under the laws of this Commonwealth, within thirty
days prior to the first day of any tax year, either directly or indirectly,
978 ACTS OF ASSEMBLY. [va.

convert any intangible personal property or money taxable under the
laws of this State, or with like intent shall, either directly or indirectly,
convert such intangible personal property or money into a farm of
property which is taxable by this State at a lower rate than the in-
tangible personal property or money so converted, shall be taxable
on such intangible personal property or money as if such conversion
had not taken place, and the fact that such person, firm or corporation
within thirty days after the first day of the tax year, either directly or
indirectly, converts 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 o1
intent to evade taxation by this State, and the burden of proof shall
be upon such person, firm or corporation to show that the first con-
version was for the bona fide purpose of investment, and not for the
purpose of evading taxation by this State.

When in any action at law or suit in equity it is ascertained that
there are unpaid taxes and penalties on the evidence of debt sought
to be enforced, and the suitor makes it appear to the court that he has
not paid or 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
penalty 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 bonds, notes or other evidences of debt, the plaintiff
shall be required to allege in his pleadings or to prove at any time
before final judgment is entered, (1) that such bonds, notes or other
evidences of debt have been reported for taxation and assessed for
each and every tax year on the first day of which he was the owner of
same, not exceeding three years prior to that in which the suit or
action is brought; or (2) that such bonds, notes or other evidences
of debt constituted a part of the capital employed in the business of
such taxpayer and were taxed as such; or (3) that the suitor has not
paid, or is unable to pay the taxes and penalties but is willing for the
same to be paid out of the first recovery on the evidence of debt; or
(4) that the bond, note or other evidence of debt sued upon is not
taxable hereunder in the hands of the plaintiff; and no judgment or
decree of a court of record shall be valid unless the allegation herein
required was made or unless proof was adduced of the same before
final judgment was entered.

Provided, however, that the title to real estate heretofore or here-
after sold under a deed of trust shall not be drawn in question upon
the ground that the holder of the notes secured by such deed of trust
did not list the same for taxation; and all judgments upon bonds,
notes and other evidences of debt entered before this act shall take
effect are hereby validated, legalized and confirmed, and are declared
to have the same force and effect as if they contained the allegation
herein required.

Sub-section 2. In all cases where under the laws of this State a
prosecution is authorized for violation of the revenue laws and in all
cases in which a penalty is imposed upon the taxpayer for failure to
comply with the requirements of the tax laws, the State tax com-
mission shall in its discretion have authority to accept offers made in
compromise of such prosecution, and in compromise or in lieu of such
penalties. The reason for the acceptance of such offers in compromise
shall be set out at length in the journal of the proceedings of the tax
commission, and shall constitute a part of its permanent records.

Sub-section 3. For the year nineteen hundred and twenty-six and
thereafter until otherwise provided by law, no county, city, town,
school district or political sub-division of this State shall impose any
tax on any intangible personal property, money or income; provided,
however, that on or before February first, nineteen hundred and
twenty-seven the auditor of public accounts shall i issue his warrant in
favor of each county, city and town in the State for an amount equal
to the amount of taxes assessed and collected in and for the year
nineteen hundred and twenty-five, by such county, city or town upon
intangible personal property, classes one and two, from residents
thereof, and there is hereby appropriated out of any funds in the
treasury not otherwise appropriated, a sum sufficient to pay the
amounts directed refunded to such counties, cities and towns by this
sub-section. In order to carry this provision into effect the treasurer
or other collecting officer of each county, city and town, shall on or
before October first, nineteen hundred and twenty-six, make a report
under oath to the auditor of public accounts upon forms prescribed
and furnished by him. This report shall show the respective amounts
of each of the above-mentioned classes of intangible personal property
assessed locally for the year nineteen hundred and twenty-five, the
rate of tax levied upon each such class, the amount of such taxes,
assessed, the amount collected, and the amount returned delinquent.

Sub-section 4. The taxes collected under the provisions of sec-
tions eight, nine, ten and eleven of the tax bill, as hereby amended,
shall be paid into the treasury for the support of the government.
All penalties imposed by the said section for failure to comply with
the provisions hereof, and all sums received in pursuance of offers in
compromise of prosecution for violation of the tax laws shall compose
and constitute a separate fund, which shall stand to the credit of the
tax commission on the books of the auditor of public accounts, which
fund shall be paid out by the auditor on warrant of the tax commission
for the enforcement of the tax laws, and the laws respecting the assess-
ment of persons, property, money and income.

Sub-section 5. In making reports required by sections eight,
nine, ten and eleven of the tax bill as hereby amended the status of all
persons, firms and corporations shall be fixed as of the first day of the
year for which the tax levied is to be imposed and the value of all
property reported for taxation shall be taken as of that date unless
otherwise specifically provided herein, except that in making return
of capital in business the taxpayer may at his option make such return
of the average amount of capital employed in business on such date
and August first next preceding.
Sub-section 6. If any clause, sentence, paragraph, or part of this
act, shall for any reason be adjudged by the court of final resort to be
invalid, such judgment shall not affect, impair, or invalidate the re-
mainder of this act but shall be confined in its operation to the clause.
sentence, paragraph or part thereof directly involved in the contro-
versy in which such judgment shall have been rendered. If such
clause, sentence, paragraph or part of this act, so declared to be in-
valid, shall relate to any administrative feature of this act, the State
tax commission shall have authority by proper resolution to adopt in
lieu thereof such administrative features as will in its opinion most
effectively carry out the true intent and purpose of this act as ex-
pressed herein or as modified by a decree or judgment of court. If
any such resolution or part thereof shall for any reason be adjudged
by the court of last resort to be invalid, the State tax commission shall
have the same authority by further resolution as is herein provided
in case any part of this act be so adjudged inoperative or invalid.

Section 17. For the purpose of this act the word ‘‘bank”’ shall
mean any incorporated bank, banking association or trust company
organized by or under the authority of the laws of this State, and any
bank or banking association organized by or under the authority of
the laws of the United States, doing business or having an office in this
State or having a charter which designates any place within this State
as the place of its principal office, whether such bank or banking associa -
tion be authorized to transact business as a trust company or not, and
any joint stock land bank or any other bank organized by or under
the authority of the laws of the United States upon the stock of which
this State is authorized to impose a tax.

The word “bank’’ as used herein shall exclude all corporations
organized under the laws of other States and doing business in this
State; it shall exclude corporations organized not as banks under the
laws of this State, and it shall exclude all natural persons and partner-
ships.

No tax shall be assessed upon the capital of any bank, but the
stockholders in such banks shall be assessed and taxed on their shares
of stock therein. Each bank aforesaid, on the first day of January in
each year shall make up and return to the commissioner of the revenue
of the county, district or city in which said bank is located, a report in
which shall be given the names and residences of all its stockholders.
and the number and actual value of the shares of stock held by each
stockholder. Irom the total value of the shares of stock of any such
bank, which shall be ascertained by adding together its capital, sur-
plus and undivided porfits, there shall be deducted the assessed value
of its real estate otherwise taxed in this State, or if the title to the
building in which any such bank, does its business, and the land on
which it stands, is held in the name of a separate corporation, in which
such bank owns all or a majority of the stock, and such real estate be
otherwise taxed in this State, then there shall be deducted from the
value of the shares of stock of such bank such proportion of the
assessed value of said real estate as the stock it owns in such holding
corporation bears to the whole issue of stock in such corporation; and
the actual value of each share of stock shall be its proportion of the
remainder. The owners of the shares of stock of such bank shall be
entitled to no deduction from the taxable value of their shares because
of the personal indebtedness of such owners, or for any other reason
whatsoever; provided, that it is declared to be the purpose and intent
of this section that when the affairs of any such bank are being wound
up under the provision of section four thousand one hundred and
twenty of the Code of Virginia, as amended, the assets of such bank so
being wound up shall continue to be and constitute the capital of such
bank and that no tax shall be assessed thereon as such capital.

Returns of such assets as of January first of each year shall be made
up by those having actual custody or control thereof as the same is
held and the commissioner of the revenue shall assess the tax thereon
against those holding said funds at the rate provided for the taxation
of money, and said assessment shall as to such funds be in lieu of all
taxes against those beneficially interested therein, but if any surplus
shall remain after payment of depositors and creditors in full, such
surplus, together with the names and residences of the stockholders
and the number of shares owned by them, respectively, shall then be
reported by the liquidating officer to the commissioner of the revenue
who shall ascertain the fair market value of such surplus assets and
assess against each stockholder in such bank for each year for which
no tax on stock has been paid, a proportionate tax on said surplus at
the rate prescribed in section eighteen of the tax bill as hereby amended
and such tax shall be paid by the liquidating officer into the treasury
before any distribution of such surplus to stockholders.

Section 18. It shall be the duty of the commissioner of the revenue
as soon as he receives such report to assess upon each stockholder
upon the actual value of the shares of stock owned by him a tax at the
rate of one dollar and ten cents on each one hundred dollars of the
actual value of such stock. The said tax shall be in lieu of all other
taxes whatsoever for State, county or local purposes upon the said
shares of stock. The commissioner of the revenue shall make out
three assessment lists, transmit one to the auditor of public accounts,
one to the bank and retain one. The assessment list so transmitted
to said bank, shall be notice to the bank of the tax assessed against its
stockholders and each of them, and shall have the legal effect and
force of a summons upon suggestion formally issued and regularly
served. The tax assessed upon each stockholder in said bank shall
be the first lien upon the stock standing in his name and upon divi-
dends thereof due and to become due, no matter in whose possession
found, and shall have priority over any and all liens by deeds of trust,
mortgages, bills of sale or other assignments made by the owner or
holder, and take priority over all liens by execution, garnishment or
attachment process sued out by creditors of the stockholders. The
bank shall hold the dividend or other fund belonging to the stockholder
and in its custody, at the time the assessment list is received or that
thereafter shall come under its control, and apply the same to the
payment of the tax assessed, and when thus applied shall be acquitted
and discharged from all liability to the stockholder for the money sc
disbursed.
Any incorporated town in this State in which any bank is located
may by ordinance require such bank to deliver to the commissioner
of the revenue, or other assessing officer of such town, a copy of the
report which such bank is required by this act to furnish to the com-
missioner of the revenue of the county, city or district, and any such
town may impose a tax not to exceed eighty-eight cents on each one
hundred dollars of actual value of the-shares of stock in such banks
so located in such towns; and it shall be the duty of the commissioner
of the revenue, or other assessing officer of such.towns in which such
banks are located, to extend the said tax against the stockholders at
the rate levied by the council or other governing body of the said town
not to exceed eighty-eight cents on each one hundred dollars of actual
value of such stock.

Section 19. Every bank on or before the first day of June in each
year, shall pay into the State treasury the State taxes assessed against
its stockholders, and into the treasury of the several incorporated
towns in which such banks are located the town taxes assessed against
its stockholders as herein provided. The treasurer, or other collecting
officer, of such town shall give to such banks paying town taxes dupli-
cate receipts upon forms to be prescribed by the auditor of public
accounts. Any bank paying for any year the tax herein prescribed
assessed by any incorporated town within the State shall be entitled
to credit upon the State taxes assessed against its shareholders for
that year to the extent of any town taxes paid by such bank for that
year upon its shares of stock, which credit shall be allowed by the
auditor of public accounts upon the presentation of the duly authen-
ticated receipt of the treasurer or other collecting officer of such town.
In no event, however, shall the credit for such town taxes exceed
eighty per centum of the State tax assessed against the stockholders
of such bank for that year.

Section 20. Should any bank fail to pay the tax asscased against
its stockholders, as provided by this act, on or before the first day of
June in each year, then, as soon thereafter as practicable the auditor
of public accounts shall transmit to the treasurer of the county or city
in which said bank is located, the copy of the assessment list furnished
him by the commissioner of the revenue, and it shall be the said
treasurer's duty to collect the taxes therein assessed, and to this end
to levy upon the stock of the taxpayer or so much thereof as is nec-
essary to pay said tax, and sell the same at public auction for cash
as chattels and other personal property are sold under execution.
He shall give to the purchaser a bill of sale made under his hand and
seal.

Section 21. The bank on presentation by a purchaser of his bill
of sale, shall cause the stock therein described to be transferred to
said purchaser, and he shall take a clear and unencumbered title to the
stock purchased. Should the taxes assessed against such stock-
holders be not paid or collected as hereinbefore provided, the lists
aforesaid shall stand and be treated and have the legal effect of tax
tickets regularly made out against each of said stockholders named in
said list as to which tax the right of levy and distress has accrued to
the Commonwealth, and the treasurer shall proceed to collect the
same by levy or distress, and possess, all and singular, the authority
and power conferred upon him by law to collect other State taxes.

Section 22. The bank which shall fail or neglect to comply with
the provisions of this act, shall be fined not less than one hundred nor
more than five hundred dollars, which fine shall be recovered upon
motion, after five days’ notice in the circuit, corporation or hustings
court of the county or city in which the said bank is located. Said
motion shall be in the name of the Commonwealth and presented by
the attorney for the Commonwealth, of the court in which the motion
is brought or made. The real estate of all banks shall be assessed on
the land books of the commissioner of the revenue, with the same
taxes with which other real estate is assessed.

This section and sections seventeen, eighteen, nineteen, twenty
and twenty-one of the tax bill as hereby amended shall apply to the
assessment and collection of taxes upon shares of bank stock for the
year nineteen hundred and twenty-seven and for every year thereafter
until otherwise provided by law.

Section 28. The State tax on the rolling stock of all corporations
operating railroads by steam doing business in this State, so far as the
same is taxable in this State, shall be at the rate of two dollars and
fifty cents on each one hundred dollars of the assessed value thereof,
to be applied to the support of the government of this State, and there
shall be no local levies assessed on such rolling stock. The rolling
stock of all corporations which now operate or which have heretofore
operated railroads by steam shall be taxed as if they continued to
operate railroads by steam, notwithstanding the fact that they have
changed or may change the motive power by which such railroads are
operated.

The State tax on the intangible personal property as assessed in the
section next preceding (other than bonds issued by counties, cities and
towns or other political sub-divisions of this State), owned by every
railway and canal corporation, shall be at the rate of fifty cents on
every hundred dollars of the assessed value thereof, the proceeds of
which shall be applied to the payment of expenses of the government.

The State tax on the money of every railway and canal corporation
shall be twenty cents on every one hundred dollars assessed value
thereof, which shall be applied to the support of the government, and
there shall be no local levies assessed on such intangible personal
property or money. .

The State tax on bonds issued by counties, cities and towns or
other political sub-divisions of this State, owned by every railway and
canal corporation, shall be at the rate of thirty-five cents on every one
hundred dollars assessed value thereof, the proceeds of which tax shall
be applied to the payment of the expenses of the government.

On the real estate, rolling stock (other than the rolling stock of
corporations operating railroads by steam), and tangible personal
property of every railway and canal corporation, there shall be local
levies at the same rate or rates as are assessed upon other real estate
and tangible personal property, located in such localities, the pro-
ceeds of which local levies shall be applied as is provided by law.
Every such railway or canal corporation shall pay to the State an
annual State franchise tax equal to one and one-half per centum upon
the gross transportation receipts, hereinafter specified, for the privi-
lege of exercising its franchise in this State, except that every such
railway corporation operating an electric railway or railways shall
pay to the State an annual State franchise tax equal to one and six-
tenths per centum upon the gross transportation receipts, herein-
after specified, for the privilege of exercising its franchise in this State:
which, with the taxes hereinbefore provided for, shall be in lieu of all
taxes or license charges whatsoever, upon the franchises of such cor-
porations and the shares of stock issued by them, and upon all their
property, as hereinbefore provided; provided that nothing herein
contained shall exempt such corporations from the annual fee re-
quired by section one hundred and fifty-seven of the Constitution or
from assessment for street and other local improvements, which shall
be authorized by law, or from the county, city, town, district, or road
levies hereinafter provided for other than a franchise tax; and, pro-
vided further, that nothing herein contained shall annul or interfere
with, or prevent any contract or agreement by- ordinance between
street railway corporations and municipalities as to compensation for
the use of the streets or alleys of such municipalities by such railway
corporation; and, provided further, that in the case of any railway
or canal corporation operated wholly within this State whose actual
operating expenses exceed its gross transportation receipts, the annual
State franchise tax shall be equal to one and three-sixteenths per
centum upon the gross transportation receipts.

The amount of such franchise tax shall be equal to one and one-
half per centum of the gross transportation receipts of such corpora-
tion for the year ending June thirtieth of each year, except that the
amount of such franchise tax on every railway corporation operating
an electric railway or railways shall be equal to one and six-tenths per
centum of the gross transportation receipts of such corporation for
the year ending June thirtieth of each year, to be ascertained by the
State corporation commission in the following manner:

(a) When the road or canal of the corporation lies wholly within
this State, the tax shall be equal to one and one-half per centum of the
entire gross transportation receipts of such corporation, except that
the amount of such franchise tax on every railway corporation operat-
ing an electric railway or railways shall be equal to one and six-tenths
per centum of the entire gross transportation receipts of such cor-
poration.

(b) When the road or canal of the corporation lies partly within
and partly without this State, or is operated as a part of a line or
system extending beyond this State, the tax shall be equal to one and
one-half per centum of the gross transportation receipts earned
within this State. Except that the amount of such franchise tax on
every railway corporation operating an electric railway or railways
shall be equal to one and six-tenths per centum of the gross transpor-
tation receipts earned within this State, to be determined as follows:

By ascertaining the average gross transportation receipts per mile
over its whole extent within and without this State, and multiplying
the result by the number of miles operated within this State; pro-
vided, that from the sum so ascertained there may be deducted a
reasonable sum because of any excess of value of the terminal facilities
or other similar advantages situated in other States over similar
facilities or advantages situated in this State.

The real estate and tangible personal property (other than the
rolling stock of corporations operating railroads by steam), of such
corporation, but not its franchise, shall be assessed on the valuation
fixed by the State corporation commission with county, city, town,
district and road levies at the same rate as real estate and tangible
personal property of natural persons are assessed with such levies.

No State tax, county, city, town, district or road levy shall be laid
on the net income of any railway or canal corporation, nor shall any
county, city, town, district, or road levy be laid on the gross trans-
portation receipts of any such company.

All the taxes and levies shall, until paid, be a lien upon the prop-
erty within this State of the corporation owning the same, and take
precedence of all other liens, or encumbrances.

Any such railway or canal corporation, or the State or any county
or city at the instance of the attorney general for the State or the
Commonwealth's attorney for any county or city, aggrieved by the
assessment and ascertainment of such taxes, may, within thirty days
after receiving a certified copy thereof, apply for relief to the circuit
court of the city of Richmond. Notice of the application setting
forth the grounds of complaint, verified by affidavit if the appeal be
taken by any such railway or canal corporation shall be served on the
State corporation commission, and on the attorney general, whose
duty it shall be to represent the Commonwealth, or, if the appeal be
taken by the State or any county or city, notice of the application,
setting forth the grounds of complaint, shall be served on such railway,
or canal corporation. If the court be of opinion that the assessment
or tax is excessive, it shall reduce the same, but if of the opinion that
it is insufficient, it shall increase the same. Unless the applicant paid
the taxes under protest when due the court, if the decision is adverse
to the applicant, shall, in disallowing the application, give judgment
against it for the taxes assessed by the State corporation commission,
and for a sum, by way of damages, equal to interest at the rate of one
per centum per month upon the amount of taxes from the time the
same were payable. If the decision is in favor of such railway or canal
corporation in whole or in part, appropriate relief shall. be granted,
including the right to recover any excess of taxes that-may have been
paid, with legal interest thereon, and the legally taxable costs of said
application from the State or local authorities, or both, as the case
may be, the judgment to be enforced by mandamus or other proper
process issuing from the court finally adjudicating the application.
If the decision be in favor of the State or any county or city, appro-
priate relief shall be granted and the court shall enforce its judgments
by mandamus or other proper process.

The supreme court of appeals may, subject to the provisions of
986 _ ACTS OF ASSEMBLY. [va.

article six of the Constitution, allow a writ of error to either party;
provided, however, that any steam railway company in which nine-
tenths of the stock of such company is owned by a city or county of
this State and which is operated at a loss, shall pay to the State an
annual State franchise tax of only five dollars.

This section as hereby amended, in so far as it relates to rolling
stock of corporations operating railroads by steam, and intangible
personal property, shall apply to the assessment and collection of taxes
for the year nineteen hundred and twenty-six and thereafter until
otherwise provided by law; in all other respects this section as hereby
amended shall apply to the assessment and collection of taxes for the
year nineteen hundred and twenty-seven and thereafter until other-
wise provided by law.

Section 291%. Tax on express companies.—Each and every one of
the said companies doing business in this State shall, on or before the
first day of December of each and every year, pay to the State and to
the several counties, cities and towns of the State wherein they may
have taxable properties located, the taxes levied on said property as
follows:

(a) The State tax on the intangible personal property (other than
bonds issued by counties, cities and towns or other political sub-
divisions of this State) owned by every such company, shall be at the
rate of fifty cents on every one hundred dollars of the assessed value
thereof, the proceeds of which shall be applied to the expenses of the
government, and there shall be no local levies assessed on such in-
tangible personal property.

(b) The State tax on the money of every such company shall be
twenty cents on every one hundred dollars assessed value thereof,
which shall be applied to the support of the government, and there
shall be no local levies assessed on such money.

(c) The State tax on bonds issued by counties, cities, and towns
or other political sub-divisions of this State, owned by every such
company shall be at the rate of thirty-five cents on every one hundred
dollars assessed value thereof, the proceeds of which tax shall be
applied to the payment of the expenses of the government.

(d) On the real estate and tangible personal property of every
such company there shall be local levies at the same rate or rates as
are assessed upon other real estate and tangible personal property
located in such localities, the proceeds of which local levies shall be
applied as is provided by law.

(e) Every such company, for the privilege of doing business in
this State, in addition to the annual registration fee and the property
tax as herein provided, shall pay an annual license tax as follows:

Said tax shall be equal to the percentage herein fixed’: upon the
gross receipts from operations of such companies and each of them
within this State. When such companies are operating partly within
and partly without this State, the gross receipts within this State shall
be deemed to be all receipts on business beginning and ending within
this State and all receipts earned in Virginia on business passing
through, into or out of this State; provided, unless otherwise clearly

shown, such last-mentioned receipts shall be deemed to be that portion
of the total receipts from such business which the entire mileage over
which such business is done bears to the mileage operated within this
State. The percentages above mentioned shall be as follows:

On all companies doing express business within this State, one and
thirteen-twentieths per centum.

The amount of taxes and licenses herein imposed, and authorized
to be imposed, shall be in lieu of all other taxes and licenses, State,
county, and municipal, upon all the property, franchises and privi-
leges of said companies; provided, that nothing herein contained shall
except the said companies from the payment of any motor vehicle
license or any motor vehicle fuel tax, heretofore or hereafter imposed
by law.

This section, as hereby amended, shall apply to the assessment and
collection of taxes for the year nineteen hundred and twenty-seven and
for every year thereafter until otherwise provided by law, except that
as to intangible personal property this section, as hereby amended,
shall apply to the assessment and collection of taxes for the year
nineteen hundred and twenty-six and for every year thereafter.

Section 31. The State tax on the intangible personal property
(other than bonds issued by counties, cities and towns or other politi-
cal sub-divisions of this State) owned by corporations which operate
steamships, steamboats, or other floating property for the transporta-
tion of passengers or freight, shall be at the rate of fifty cents on every
hundred dollars of the assessed value thereof, the proceeds of which
shall be applied to the expenses of the government, and there shall be
no local levies assessed on such intangible personal property.

The State tax on the money of every such company shall be twenty
cents on every one hundred dollars assessed value thereof, which shall
be applied to the support of the government, and there shall be no
local levies assessed on such money

The State tax on bonds issued by counties, cities and towns or other
political sub-divisions of this State, owned by every such company
shall be at the rate of thirty-five cents on every one hundred dollars
assessed value thereof, the proceeds of which tax shall be applied to
the payment of the expenses of the government.

On the real estate and tangible personal property of every such
company there shall be local levies at the same rate or rates as are
assessed upon other real estate and tangible property located in such
localities, the proceeds of which local levies shall be applied as is pro-
vided by law.

Every such company for the privilege of doing business in this
State, in addition to the annual registration fee and property tax,
shall pay an annual State license tax as follows:

Said tax shall be equal to two per centum upon the gross receipts
from the operation of such companies, and each of them, within this
State. When such companies are operated partly within and partly
without this State, the gross receipts within this State shall be deemed
to be all receipts on business beginning and ending within this State
and all receipts earned i in Virginia on business passing through, into,
or out of this State; provided, that unless otherwise clearly shown

such last mentioned receipts shall be deemed to be that proportion of

the total receipts from such business which the entire line mileage over

teat said business is done bears to the mileage operated within this
tate.

This section as hereby amended shall apply to the assessment and
collection of taxes for the year nineteen hundred and twenty-seven,
and for every year thereafter until otherwise prov-ded by law, except
that as to intangible personal property this section, as hereby amended,
shall apply to the assessment and collection of taxes for the year nine-
teen hundred and twenty-six and for every year thereafter.

Section 33. Each and every sleeping car, parlor car, and dining
car company doing business in this State shall, for the privilege of
doing business in this State, pay a license tax as follows:

Each and every sleeping car, parlor car, and dining car company
operating a mileage and doing business within this State shall pay a
license tax of three dollars and fifteen cents, for each and every mile
of track over which it operates its cars in this State.

The taxes herein imposed shall be in lieu of all other taxes, State,
county and municipal, against such companies except that they shall
be required to pay to the State the annual registration fee.

This section as hereby amended shall apply to the assessment and
collection of taxes for the year nineteen hundred and twenty-seven
and for every year thereafter until otherwise provided by law.

Section 35. The State tax on the intangible personal property
(other than bonds issued by counties, cities and towns or other political
sub-divisions of this State) owned by every incorporated telegraph or
telephone company owning or operating telegraph or telephone lines
in this State shall be at the rate of fifty cents on every hundred dollars
of the assessed value thereof, the proceeds of which shall be applied
to the expenses of the government, and there shall be no local levies
assessed on such intangible personal property.

The State tax on the money of every incorporated telegraph and
telephone company owning or operating telegraph or telephone lines
in this State shall be twenty cents on every one hundred dollars
assessed value thereof, which shall be applied to the support of the
government, and there shall be no local levies assessed on such money.

The State tax on bonds issued by counties, cities and towns or other
political sub-divisions of this State, owned by every incorporated
telegraph or telephone company owning or operating telegraph or
telephone lines in this State shall be at the rate of thirty-five cents on
every one hundred dollars, assessed value thereof, the proceeds of
which tax shall be applied to the payment of the expenses of the
government.

On the real estate and tangible personal property of every incor-
porated telegraph and telephone company owning or operating tele-
graph or telephone lines in this State, there shall be local levies at the
same rate or rates as are assessed upon other real estate and tangible
personal property, located in such localities, the proceeds of which
local levies shall be applied as is by provided law.
This section as hereby amended shall apply to the assessment and
collection of taxes for the year nineteen hundred and twenty-seven,
and for every year thereafter until otherwise provided by law, except
that as to intangible personal property this section, as hereby amended,
shall apply to the assessment and collection of taxes for the year
nineteen hundred and twenty-six and for every year thereafter.

Section 36. Each telegraph company and firm, or person, operat-
ing the apparatus necessary to communicate by telegraph, shall, for
the privilege of doing business between points within this State, pay a
license tax as follows, to-wit: Two dollars and twenty-five cents per
mile of line of poles or conduits owned or operated by any company,
firm or person in this State, and an additional charge of three and
one-eighth per centum of the gross receipts of the company, firm or
person received (or due, though not received), from business done
within this State during the year ending the thirtieth day of June.

The specific license tax to be paid by every corporation, person
or association, for the privilege of operating the apparatus necessary
to communicate by telephone, shall be, when the gross receipts do not
exceed fifty thousand dollars, and when the number of miles of poles
do not exceed six hundred miles, and a majority of the stock or other
property of such company is not owned or controlled by any other
telephone or telegraph company whose receipts exceed fifty thousand
dollars, a sum equal to one and one-sixteenth per centum of the gross
receipts of such corporation, person or association from business done
within this State during the year ending the thirtieth day of June
preceding; when the gross receipts from business done within this
State during any such year are in excess of fifty thousand dollars, of
the number of miles of poles exceed six hundred or a majoirty of the
stock or other property of such company is owned or controlled by any
other telephone or telegraph company whose receipts exceed fifty
thousand dollars, the license tax shall be a sum equal to one and one-
sixteenth per centum of such receipts up to fifty thousand dollars and
an additional sum equal to two and one-half per centum of such re-
ceipts exceeding fifty thousand dollars, and, in addition, a sum equal
to two dollars and twenty-five cents per mile of line of poles or con-
duits, owned or operated by such corporation, person or association
in this State; provided, that no license tax shall be charged against
any telephone company, chartered in this State for the privilege of
prosecuting its business when such company is purely a local mutual
association, and does not charge others for transmitting messages over
its line or lines, and is not designed to accumulate profits for the
benefit of, or to pay dividends to, the stockholders or members thereof.

The license tax to be paid by any firm or person, not incorporated,
transacting a telegraph or telephone business, or owning or operating
a telegraph or telephone instrument, line or conduit, shall be assessed
by the commissioner of the revenue for the district or city wherein
the principal office of such firm or persons is located, or in which such
firm or person resides.

This section as hereby amended shall apply to the assessment and
collection of taxes for the year nineteen hundred and twenty-seven,
and for every year thereafter until otherwise provided by law.
Section 3614. The State tax on the intangible personal property
(other than bonds issued by counties, cities and towns or other politi:
cal subdivisions of this State) owned by every corporation doing ir
this State the business of furnishing water or heat, light and power,
whether by means of electricity or gas, shall be at the rate of fifty
cents on every hundred dollars of the assessed value thereof, the pro-
ceeds of which shall be applied to the expenses of the government,
and there shall be no local levies assessed on such intangible personal
property.

The State tax on the money of every corporation doing in this
State the business of furnishing water or heat, light and power,
whether by means of electricity or gas, shall be twenty cents on every
one hundred dollars assessed value thereof, which shall be applied to
the support of the government, and there shall be no local levies
assessed on such money.

The State tax on bonds issued by counties, cities and towns or
other political subdivisions of this State, owned by every corporation
doing in this State the business of furnishing water or heat, light and
power, whether by means of electricity or gas, shall be at the rate of
thirty-five cents on every one hundred dollars assessed value thereof,
the proceeds of which tax shall be applied to the payment of the ex-
penses of the government.

On the real estate and tangible personal property of every cor-
poration doing in this State the business of furnishing water or heat.
light and power, whether by means of electricity or gas, there shall be
local levies at the same rate or rates as are assessed upon other real
estate and tangible personal property, located in such localities, and
proceeds of which local levies shall be applied as is provided by law.

Every corporation coming within the provisions of this and the
preceding section shall pay to the State an annual State franchise tax
equal to one and one-eighth per centum of its gross receipts, for the
privilege of exercising its franchises in this State, which, with the
taxes hereinbefore provided for, shall be in lieu of all State taxes or
license charges whatsoever upon the franchises of such corporation,
and the shares of stock issued by it, and upon all its property as here-
inbefore provided; provided, that nothing herein contained shall
exempt such corporation from the annual fee required by section
one hundred and fifty-seven of the Constitution, or from assessments
for street and other local improvements, which shall be authorized by
law, nor from the county, city, town, district, or road levies; provided,
that any city or town may impose a license tax upon such corporation
for the privilege of doing business therein, which shall not exceed one-
half of one per centum of the gross receipts of such business accruing
to such corporation from said business in such city or town; and, pro-
vided further, that from the amount of any such license tax there shall
be deducted any sum or sums paid by such corporations to such city
or town as a merchant’s license tax, and license taxes; and, provided
further, that nothing herein contained shall annul or interfere with or
prevent any contract or agreement by ordinance between such cor-
porations and municipalities as to compensation for the use of the
streets or alleys of such municipalities by such corporations.
The real estate and tangible personal property of such corporation,
but not its franchise, shall be assessed on the valuation fixed by the
State corporation commission with county, city, town, district and
road levies, at the same rate as real and personal property of natural
persons are assessed with such levies.

No State tax, county, city, town, district or road levy shall be laid
on the net income of any such corporation, nor shall any county, city,
town, district or road levy be laid on the gross receipt of any such
company. .

All taxes and levies shall, until paid, be a lien upon the property
within this State, of the corporation owning the same, and take pre-
cedence of all other liens or encumbrances.

Any such corporation, or the State or any county or city, at the
instance of the attorney-general of the State, or of the Common-
weath’s attorney for any county or city aggrieved by the assessment
and ascertainment of such taxes, may within thirty days after re-
ceiving a certified copy thereof, apply for relief to the circuit court of
the city of Richmond. Notice of the application setting forth the
grounds of complaint, verified by affidavit, if the appeal be taken by
such corporation, shall be served on the State corporation commission,
and on the attorney-general, whose duty it shall be to represent the
Commonwealth, or if the appeal be taken by the State or any county
or city, notice of the application, setting forth the grounds of complaint
shall be served on such corporation. If the court be of the opinion
that the assessment or tax is excessive, it shall reduce the same, but
if of the opinion that it is insufficient, it shall increase the same. Un-
less the applicant pay the taxes under protest when due, the court,
if the decision 1s adverse to the applicant, shall, in disallowing the
application, give judgment against it for the taxes assessed by the
State corporation commission, and for a sum, by way of damages,
equal to interest at the rate of one per centum per month upon the
Amount of the taxes from the time same were payable. -If the de-
cision is in favor of such corporation, in whole or in part, appropriate
relief shall be granted, including the right to recover any excess of
taxes that may have been paid with legal interest thereon and the
legally taxable cost of said application from the State of local authori-
ties, or both, as the case may be, the judgment to be enforceable
by mandamus or other proper process issuing from the court finally
adjudicating the application. If the decision be in favor of the State
or any county or city, appropriate relief shall be granted, and the
court shall enforce its judgment by mandamus or other proper process.

The supreme court of appeals may, subject to the provisions of art-
icle six of the Constitution, allow a writ of error to either party.

This section, as hereby amended, shall apply to the assessment and
collection of taxes for the year nineteen hundred and twenty-seven,
and thereafter until otherwise provided by law, except that as to in-
tangible personal property this section, as hereby amended, shall
apply to the assessment and collection of taxes for the vear nineteen
hundred and twenty-six and for every year thereafter.

.3. That section twenty-two hundred and nine of the Code of
992 ACTS OF ASSEMBLY. [vA

Virginia; an act entitled an act to raise revenue for the support of the
government and to appropriate money for the construction of road:
and projects comprised in ‘“The State highway system,’’ and to pro
vide for an additional fund for the maintenance of public free school:
of primary and grammar grades, from the first to the seventh, in.
clusive, and to provide for the prevention and eradication of tuber
culosis among the people of this State, and to extend the work of the
State board of health, approved March sixteenth, nineteen hundrec
and eighteen; an act entitled an act to raise additional revenue for the
support of the government, approved March twenty-third, nineteer
hundred and eighteen; an act entitled an act to raise revenue for the
support of the government and to appropriate money for the con.-
struction of roads and projects comprised in the “State highway
system,’ approved September fifth, nineteen hundred and nineteen:
sections two and seven of the tax bill, in relation to real estate and
tangible personal property; and an act entitled an act to regulate the
situs of taxation of bank stock, approved March sixteenth, nineteen
hundred and eighteen, be, and the same are all hereby repealed; and
all acts or parts of acts general, special, private or local, and all charter
provisions contained in the charter of any city or town, in conflict
with this act, are hereby repealed to the extent of such conflict; but
it is expressly provided that the repeals mentioned in this section
shall not become effective until the beginning of the tax year be-
ginning in the year nineteen hundred and twenty-seven, except that
the repeals mentioned in this section, in so far as they relate to sub-
jects of taxation taxed by sections eight, nine, ten and eleven of the
tax bill as hereby amended shall be effective for the tax year beginning
in the year nineteen hundred and twenty-six.

4. That nothing contained in this act shall be construed as re-
pealing or in any way affecting an act entitled an act to raise revenue
to provide increased facilities for the valuation of the properties of
certain classes of public service companies for rate making purposes,
and for the performance of other functions of the State corporation
commission, and to appropriate the revenues provided by this act for
carrying out the purposes of the same, approved March twentieth,
nineteen hundred and twenty-four; or an act entitled an act pro-
viding for the assessment and taxation of stock cars, furniture cars,
fruit cars, refrigerator cars, meat cars, oil cars, tank cars, and other
similar cars used in this State and owned by corporations or individuals
having no domicile within the State, approved March seventeenth,
nineteen hundred and sixteen.

5. That the special taxes prescribed by the following provisions
of this section are hereby imposed and shall be levied upon the prop-
erty and subjects of taxation hereinafter specified for the year nineteen
hundred and twenty-six only;

Upon the gross transportation receipts of every railway and canal
corporation in this State, not exempt from taxation by virtue of its
charter, and of every railway and canal corporation incorporated
under the laws of any other State and doing business in this State, the
additional tax shall be as follows;
(a) When the road or canal of the corporation lies wholly within
this State the additional tax shall be equal to one-sixteenth of one per
centum of the entire gross transportation receipts of such corporation;
and,

(b) When the road or canal of the corporation lies partly within
and partly without this State, or is operated as a part of a line or
system extending beyond this State, the additional tax shall be equal
to one-sixteenth of one per centum of the gross transportation re-
ceipts earned within this State, to be determined in the manner pro-
vided. for by chapter four hundred and eighty-five of the acts of
the general assembly of Virginia for the year nineteen hundred and
sixteen.

For the privilege of doing business in this State every company
doing express business on any railroad, steamboat or vessel in this
State, and all refrigerator, oil, stock, fruit and other car loaning and
other car companies, operating upon the railroads of this State, except
sleeping car companies, dining car, drawing room car and palace car
companies, there shall be an additional tax of three-twentieths of one
per centum upon the gross receipts from the operations of such com-
panies within this State, to be determined as provided for by the
provisions of chapter one hundred and forty-one of the acts of assembly
of Virginia for the year nineteen hundred and fifteen, relating to the
taxation of express companies, refrigerator, oil, stock, fruit and other
car loaning and other car companies, operating upon the railroads in
this State.

Upon each incorporated telegraph company doing business in this
State and owning and operating a telegraph line in this State there
shall be an additional license tax of twelve and one-half cents per mile
of line of poles or conduits owned or operated by the company in this
State, and an additional charge of one-fourth of one per centum of the
gross receipts of such company in excess of fifty thousand dollars from
business done within this State during the year ending the thirtieth
day of June.

Each incorporated telephone company doing business in this State
and owning and operating a telephone line in this State shall pay an
additional license tax equal to one-fourth of one per centum of the
gross receipts of such corporation in excess of fifty thousand dollars
from business done within this State during the year ending the
thirtieth day of June preceding, and a sum equal to twenty-five cents
per mile of line of poles or conduits owned or operated by such cor-
poration in this State. Provided, however, that this tax shall not
apply to any telephone company chartered in this State when such
company is purely a local mutual association, and does not charge
others for transmitting messages over its line or lines, and is not de-
signed to accumulate profits for the benefit of, or to pay dividends to
the stockholders or members thereof. In computing the taxes im-
posed by this section on telegraph and telephone companies, the pro-
visions of chapter one hundred and fifty of the acts of assembly of
Virginia, for the year nineteen hundred and ten, shall be applied.

Each corporation doing in Virginia the business of furnishing
994 ACTS OF ASSEMBLY. [ VA.

water, heat, light or power, whether by means of electricity or gas,
shall pay to this State an additional annual State franchise tax equal
to one-sixteenth of one per centum of its gross receipts, to be deter-
mined in the manner provided for by chapter four hundred and
seventy-two of the acts of assembly of Virginia for the year nineteen
hundred and sixteen.

The taxes provided for by this section shall be assessed, deter-
mined and collected as other State taxes on the same property and
subjects of taxation are assessed, determined and collected, and shall
be paid into the treasury of the State as are other taxes of the same
kinds and applied to the general expenses of government.

The taxes provided for by this section shall be in addition to any
other taxes upon the property and subjects of taxation upon which
these taxes are imposed which are now or may hereafter be provided
for by any statute or act of the general assembly, any statutory pro-
vision or rule of construction to the contrary notwithstanding.

The provisions of this section shall apply to the assessment and
collection of the taxes herein provided for, for the year nineteen hun-
dred and twenty-six, but not thereafter.

6. That the special taxes prescribed by the following provisions
of this section are hereby imposed and shall be levied upon the prop-
erty and subjects of taxation hereinafter specified for the year nine-
teen hundred and twenty-six and every year thereafter until other-
wise provided by law:

Upon every deed, deed of trust, mortgage, lease, contract or agree-
ment, upon which a State tax is now imposed by section thirteen, of
the tax bill, an additional tax of two cents upon each one hundred
dollars of consideration, to be levied and collected as set forth in said
section and subject to such exceptions as are therein provided.

6%. That the special taxes prescribed by the following provisions
of this section are hereby imposed and shall be levied upon the prop-
erty and subjects of taxation hereinafter specified for the years nine-
teen hundred and twenty-six and nineteen hundred and twenty-seven
only:

Every person, partnership, company or corporation, which con-
tracts on his, their or its accounts to issue policies, contracts or agree-
ments for life, fire, marine, surety, guaranty, fidelity, employer’s
liability, liability, credit, health, accident, live stock, plate glass, tor-
nado, automatic sprinkler, burglary, steam boiler, and all like insur-
ance, shall pay an additional tax of one-eighth of one per centum upon
the gross amount of all premiums, assessments, dues and fees collected,
received or derived, or obligations taken therefor, from business in
this State during each year. The provisions of chapter seventy-seven
of the acts of the general assembly of Virginia of nineteen hundred and
fifteen shall be applied in computing and collecting this tax, provided
that nothing herein shall be construed to apply to fraternal bene-
ficiary associations, as defined in chapter one hundred and seventy-
one of the Code of Virginia, nineteen hundred and nineteen, defining
and regulating fraternal beneficiary associations, orders or societies.

The taxes provided for by this and the preceding section shall be
assessed, determined and collected as other State taxes on the same
property and subjects of taxation are assessed, determined and col-
lected, and shall be paid into the treasury of the State as are other
taxes of the same kinds and applied to the general expenses of govern-
ment.

The taxes provided for by this and the preceding section shall be
in addition to any other taxes upon the property and subjects of
taxation upon which these taxes are imposed which are now or may
hereafter be provided for by any statute or act of the general assembly,
any statutory provision or rule of construction to the contrary not-
withstanding.

The provisions of the next preceding section shall apply to the
assessment and collection of the taxes therein provided for for the
year nineteen hundred and twenty-six and every year thereafter until
otherwise provided herein.

7. Minimum fixed appropriate of State revenue for public school
purposes.—The general assembly having segregated for the purposes
of taxation, the several kinds or classes of property, so as to specify
and determine upon what subjects State taxes and upon what sub-
jects local taxes may be levied, there is hereby made, in conformity
with section one hundred and thirty-five of the Constitution of Vir-
ginia, a fixed appropriation of State revenue in a sum equal to the
revenue which would be raised by an annual tax on property of ten
cents on every one hundred dollars of the assessed valuation thereof,
if such tax were levied, which fixed appropriation shall be annually
applied to the public free schools of the primary and grammar grades,
for the equal benefit of all the people of the State, to be apportioned
on a basis of school population, the number of children between the
ages of seven and twenty years in each school district to be the basis
of such apportionment. The appropriation hereby made shall be in-
cluded in the appropriations made for public free school purposes in
each biennial general appropriation act and shall not be construed as
in addition to such appropriations except to the extent that they may
be less, for any year, for the purposes stated in this section, than the
fixed appropriation hereby made. This section shall be effective for
the appropriation year beginning in nineteen hundred and twenty-six
and for every appropriation year thereafter.

8. Real estate and tangible personal property, except the rolling
stock of corporations operating railroads by steam, having been segre-
gated by this act for local taxation exclusively, beginning with the tax
year of nineteen hundred and twenty-seven, the following provisions
are hereby enacted to be effective for the tax year beginning in nine-
teen hundred and twenty-seven and for every tax year thereafter
until otherwise provided by law.

9. The auditor of public accounts shall continue to furnish to the
assessing officers in the State the forms and land and personal property
books necessary for the assessment of real estate and tangible personal
property, as now provided by law, charging the counties and cities for
whose benefit such forms and books are furnished the actual cost
(hereof, or the actual cost of so much thereof, as relate to the assess-
996 ACTS OF ASSEMBLY. [vs

ment of real estate and tangible personal property segregated for loca
taxation exclusively, which cost shall be calculated by the auditor o
public accounts and a statement showing it transmitted along witl
the forms and books so furnished. It shall be the duty of the office
receiving such forms and books forthwith to deliver such statemen
to the board of supervisors of the county or the council of the city
and the board of supervisors or council shall promptly pay into thi
State treasury the amount shown by such statement to bedue. Upor
failure so to pay for sixty days after the receipt of such statement
the attorney for the Commonwealth of the county or city involved
upon request of the auditor of public accounts, shall apply to the cir.
cuit court of the county or the corporation court of the city fora man-
damus to compel such payment. The form of the land and persona!
property books and the forms of interrogatories and other forms shall
continue to be prescribed by the auditor of public accounts as pro-
vided by existing law, except where such authority is by law conferred
upon the State tax commission.

10. No copies of the land assessments or books shall be sent to
the auditor of public accounts by the land assessors under section
twenty-two hundred and forty-seven of the Code of Virginia and the
copy heretofore required to be so sent shall not be made.

11. Each commissioner of the revenue shall be furnished by the
auditor of public accounts with three copies each of the blank land
books instead of the four copies each, as provided by the existing laws,
and the commissioner shall make out the original and only two copies
of the land books instead of the three copies now required by law.

12. Four copies of the blank personal property book shall be
furnished each commissioner of the revenue as now provided and one
copy shall be returned to the auditor of public accounts:as provided
by section twenty-three hundred and forty-two of the Code of Vir-
ginia, unless different books be prescribed by the State tax commission
for the assessment of tangible and intangible personal property, in
which case three copies of the blank tangible personal property book
and four copies of the blank intangible personal property book shall
be furnished to each commissioner of the revenue, who shall return
one copy of the intangible personal property book to the auditor of
public accounts; but no copy of the land book shall be returned to the
auditor as provided by that section; and no copy of the tangible per-
sonal property book shall be returned in case a separate book is pre-
scribed for this purpose; but every commissioner of the revenue, after
the completion of his land and tangible personal property books shall
forward to the auditor of public accounts a copy of his recapitulation
sheets of the same.

13. Forms for the assessment of omitted taxes shall continue to
be prescribed and furnished by the auditor of public accounts, as pro-
vided by section twenty-three hundred and thirty-three of the Code
of Virginia as amended.

13. The copy of the abstract of land grants mentioned in section
twenty-two hundred and seventy-seven of the Code of Virginia need
not be transmitted to the auditor of public accounts.
14. No land assessor, assistant land assessor, commissioner of the
revenue, examiner of records or other tax-assessing officer shall receive
any compensation out of the State treasury for assessing, or in con-
nection with assessing, any property for local taxation exclusively.
All such compensation shall be as provided by law, but shall be pay-
able out of the local treasuries only.

15. Mineral lands, and the improvements, fixtures, and machin-
ery thereon shall be assessed solely by the commissioners of the reve-
nue in the manner prescribed by law. No mineral assessors shall be
appointed or employed by the State corporation commission, and the
provision of law requiring commissioners of the revenue to certify to
the State corporation commission a copy of the mineral land assess-
ments is hereby repealed. All powers and duties of the State cor-
poration commission relating to the assessment of mineral lands, and
the improvements, fixtures, and machinery thereon, are hereby abro-
gated.

16. Wherever the law provides for a proceeding on behalf of the
Commonwealth in relation to the assessment or erroneous assessment
of real estate or tangible personal property, such proceeding may
hereafter be instituted and prosecuted in the name and for the benefit
of the county or city concerned.

17. Wherever the law provides for a defense on behalf of the
Commonwealth to any proceeding in relation to the assessment or
erroneous assessment of real estate or tangible personal property,
including mineral lands, such defense may be made in the name of the
county or city concerned on behalf of such county or city, and the
county or city may make such motions as the Commonwealth is now
authorized to make.

18. Changes made by a circuit or corporation court, or by any
local board of equalization, in land or tangible personal property
assessments need not hereafter be certified to the auditor of public
accounts.

19. Wherever in this act it is provided that any of its provisions
shall not be effective until the year nineteen hundred and twenty-
seven, or the tax year beginning in nineteen hundred and twenty-
seven, the existing law shall continue in force until such provisions of
this act shall become effective as aforesaid.

20. Nothing in this act contained shall be construed to repeal any
former law in relation to taxation as to any offense committed against
the former law, or as to any act done, any penalty, forfeiture, or pun-
ishment incurred, or any right accrued, or claim arising under the
former law, or in any way whatever to affect any such offense or act
so committed or done, or any penalty, forfeiture, or punishment so
iia or any right accrued, or claim arising before this act takes
effect.

21. Taxes assessed by this act not to apply to certain corpora-
tions.—Nothing contained in this act shall be construed as imposing
any income or ad valorem tax upon any corporation whose income,
stocks, bonds, investments, capital or other intangible property is not
now subject to taxation in this State under the provisions of an act
entitled an act to amend and re-enact an act entitled ‘‘an act relating
to the situs for taxation of intangible property owned by corporations
which do no business in this State, approved March twenty-second,
nineteen hundred and sixteen,’’ approved March fourteenth, nineteen
hundred and eighteen.

22. All the provisions of law now in force or which may be here-
after enacted in relation to the correction of erroneous assessments of
State taxes shall be applicable to the assessments made by the State
tax commission.