Chap. 101.—An ACT to amend and re-enact section § of an act entitled an
act to raise revenue for the support of the government and public free
schools, and to pay the interest on the public debt, and to provide a special
tax for pensions, as authorized by section 189 of the Constitution, approved
April 16, 1908, as heretofore umended. [H B 51]

Approved March 6, 1918.

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

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

First: Bonds (except bonds of the United States), notes, and
other evidences of debt, including bonds of other States than Vir-
ginia, bonds of counties, cities and towns located outside of the State
of Virginia, bonds of railroad and canal companies and other cor-
porations, bonds of individuals and all demands and claims, how-
ever evidenced, whether secured by mortgage, deed of trust, judg-
ment, or otherwise, or not so secured. .

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

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

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

But where in any action at. law or suit in equity it is ascertained
that there are unpaid taxes and penalties on the evidence of debt
sought to be enforced, and the suitor makes affidavit that he is unable
to pay these taxes and penalty, but is willing for the same to be paid
out. of the first recovery on the evidence of debt, the court shall
have authority to enter as a part of any judgment or decretal order
in said proceedings that the amount of. taxes and penalties due and
owing shall be paid to the proper officer out of the first collection on
said judgment or decree.

Second: All capital of persons, firms and corporations employed
in a trade or business not otherwise taxed: and, in case of a corpora-
tion when all of such capital is taxed by this State, the shares of its
stock in the hands of individual shareholders shall not be further
taxed for State purposes. But real estate belonging to such persons,
firms and corporations shall not be held to be capital, but shall be
listed and taxed as real estate.

Capital as used in the tax laws shall be defined as follows:

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

2. The excess of bills and accounts receivable over bills and ac-
counts payable.
3. <All machinery and tools not taxed as real estate.

4. Money on hand and on deposit.

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

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

Every person, firm and corporation engaged in a business whose
capital is subject by the laws of this State to taxation, is hereby re-
quired to keep accounts showing the above items, which shall at all
times be open to the inspection of the commissioners of the revenue,
the examiners of records, local boards of review, and the State ad-
visory board of taxation; and every such person, firm or corporation
hall be required to make a return under oath to the commissioner
of the revenue, on forms prescribed by the auditor of public accounts,
showing the items of capital as above defined, and also the bills and
accounts payable which were used as deductions in order to ascertain
the amount under section 2 in the above definition of capital, and the
names, addresses, of the parties to whoin said bills and accounts are
due, and the various amounts constituting said indebtedness, and
shall further certify that such indebtedness was made in the usual
course of business of said company, firm or corporation.

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

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

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

Provided, however, that whenever any of the items in said clauses
one, three and four shall be located at a point or points other than
that in which the return is made, and whenever any deduction of
bills and accounts payable shall be allowed any taxpayer, the en-
tire amount of such bills and accounts payable shall not be deducted
from the amount of capital assessed where such return is made, but
the same shall be distributed in such ratable proportion as the value
of the capital located in such other point or points shall bear to the
entire amount of capital assessed against the tax payer. The com-
missioner of the revenue to whom the return is made shall certify
the proper ratable amount of such deduction to the commissioner of
the revenue at such other point or points, who shall accordingly de-
duct said amount from the value of the property assessed in his juris-
diction.

In making return of capital in business according to the method
defined above the return shall be made as of February the first pro-
vided the tax payer at his option may make return as shown by
average of February the first of the current year and August first
preceding. .

Third: The value of the principal of personal estate and credits
other than tangible personal property and money under the control
of a court receiver or commissioner, In pursuance of an order, judg-
ment or decree of any court, or in the hands or under the control of
an executor, administrator, guardian, trustee, agent, or other fidu-
ciary; and the principal estate and credits other than tangible per-
sonal property and money deposited to the credit of any suit and
not in the hands of a receiver or other fiduciary,

Fourth: All money other than money used or employed in any
trade or business not otherwise taxed on deposit with any bank or
other corporation or firm or persons, or in the possession or under
control of the owner, whether such money be actually in or out of
this State and belonging to a citizen of this State, which shall in-
clude certificates of deposit of any bank, banking association, trust
or security company; provided, that money as herein defined, shall
not be liable to taxation by any of the counties, cities, towns, school
districts or other local sub-divisions of this State. All money under
the control of a court receiver or commissioner in pursuance of an
order, 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 moneys deposited to the credit of any suit,
and not in the hands of a receiver or other fiduciary.

Fifth: All shares of stock of corporations or joint stock com-
panies, except such corporations and joint stock companies all of
whose capital is taxed by this State, or which pay a franchise tax
in this State, and banks, banking associations, trust and security
companies, and insurance companies, which are otherwise taxed in
this State.

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

9. This.act shall be in force on and after February first, nine-
teen hundred and nineteen.