Chap. 232.—An ACT to amend and re-enact subsection (c) of section 25 of th
Tax Code of Virginia and to add a new subsection to the said section 25 o
the Tax Code of Virginia to be designated (m), the said subsections bein
in relation to deductions allowed under the income tax law; also to amen
and re-enact sections 71, 72, 73, 77, and 91 of the Tax Code of Virginiz
which sections are in chapter 7 and 8 of the Tax Code of Virginia on th
subjects of intangible personal property and banks, banking associations an
trust companies. . [S B &

Approved March 16, 1928

1. Be it enacted by the general assembly of Virginia, That sub.
section (c) of section twenty-five of the Tax Code of Virginia be
amended and re-enacted, that a new subsection be added to the saic
section twenty-five of the Tax Code of Virginia to be designate
(m), and that sections seventy-one, seventy-two, seventy-three
seventy-seven and ninety-one of the Tax Code of Virginia be
amended and re-enacted, which said amended and re-enacted sec-
tions and the said new subsection shall read as follows:

Section 25. (c) Taxes paid by the taxpayer within the taxable
year, except income taxes, inheritance taxes, and taxes assessed
for local benefits of a kind tending to increase the value of the
property assessed. This subsection (c), as hereby amended, shall
be in force for the taxable year nineteen hundred and twenty-nine,
and for every taxable year thereafter until otherwise provided by
law.

(m) Contributions or gifts made by individuals within the tax-
able year to or for the use of: (A) The United States, any State.
territory, or any political subdivision thereof, or the District of
Columbia, for exclusively public purposes: (B) any corporation,
or trust, or community chest, fund, or foundation, organized and
operated exclusively for religious, charitable, scientific, literary, or
educational purposes, or for the prevention of cruelty to children
or animals, no part of the net earnings of which inures to the bene-
fit of any private shareholder or individual; (C) the special fund
for vocational rehabilitation authorized by section seven of the
Federal vocational rehabilitation act; (D) posts or organizations ot
war veterans, or auxiliary units or societies of any such posts or
organizations, if such posts, organizations, units, or societies are
organized in the United States or any of its possessions, and if no
part of their net earnings inures to the benefit of any private share-
holder or individual; or (E) a fraternal society, order, or asso-
ciation, operating under the lodge system, but only if such con-
tributions or gifts are to be used exclusively for religious, chari-
table, scientific, literary, or educational purposes, or for the preven-
tion of cruelty to children or animals, to an amount which in all
the above cases combined does not exceed fifteen per centum of the
taxpayer’s net income as computed without the benefit of this sub-
section. Such contributions or gifts shall be allowable as deduc-
tions only if verified under rules and regulations prescribed by the
department of taxation. !

This subsection, hereby added, shall be in force for the taxable
year nineteen hundred and twenty-nine, and for every taxable year
thereafter until otherwise provided by law.

Section 71. Shares of stock.—All shares of stock of corporations
or joint stock companies, except such corporations which pay a
franchise tax in this State; and except banks, banking associations,
and trust companies, and insurance companies, which are otherwise
taxed in this State.

The taxes on incomes and the taxes on franchises and licenses
imposed ‘by the laws of this State shall be in lieu of a specific
property tax on all property defined by this section, with the ex-
ceptions stated, whether owned by natural persons, estates, part-
nerships, associations or corporations of every kind and class, and
whether held in trust or not.

This section, as hereby amended, shall be in force on and after
the first day of January, nineteen hundred and twenty-nine.

Section 72. Bonds of counties, cities and towns, and other poli-
tical subdivisions of this State—All bonds of counties, cities and
towns, or other political subdivisions of this State.

The taxes on incomes and the taxes on franchises and licenses
imposed by the laws of this State shall be in lieu of a specific prop-
erty tax on all property defined by this section, whether owned by
natural persons, estates, partnerships, associations or corporations
of every kind and class, and whether held in trust or not.

This section, as hereby amended, shall-be in force on and after
the first day of January, nineteen hundred and twenty-nine.

Section 73. Capital of any trade or business of any person, firm
or corporation, except the capital of any trade or business which
capital is otherwise specifically taxed or specifically exempt from
taxation.—All capital of any trade or business of any person, firm
or corporation, except the capital of any trade or business which is
otherwise specifically taxed or specifically exempt from taxation.

Capital as used herein is defined as follows:

First. 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.

Second. The excess of all bills and accounts receivable over bills
and accounts payable.

Third. All money on hand and on deposit.

Fourth. All other taxable personal property of any kind what-
ever, including all choses in action, equities, demands and claims,
but excluding the property hereinafter specifically mentioned in
this section.
Real estate shall not be held to be capital under this section, but
shall be listed and taxed as other real estate.

Machinery and tools used in a manufacturing or mining busi-
ness taxable on capital under this section shall not be held to be
capital under this section, nor shall such machinery and tools be
hereafter assessed as real estate. All such machinery and tools
used in a manufacturing or mining business taxable on capital under
this section 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 im-
posed upon tangible personal property in such city, town, county or
district.

The shares of stock mentioned in section seventy-one of the Tax
Code of Virginia, as amended, and bonds of the political subdivi-
sions of this State mentioned in section seventy-two of the Tax
Code of Virginia, as amended, shall not be held to be capital under
this section.

Personal property, tangible in fact, used or employed in the
trades and businesses hereinafter specifically mentioned in this sec-
tion shall not be held to be capital under this section, but shall he
listed for local taxation exclusively and taxed as tangible personal
property, that is to say:

‘Amusement business, including theatres of every kind and class;
auctioneers; barbers, including beauty shops; bowling; billiard and
pool rooms; collection agencies; contractors, plumbers and steam-
hitters; educational institutions whose property is taxable under the
Constitution and laws of this State; garage business; hospitals;
hotels; laundries, including cleaning, pressing and dyeing estab-
lishments; lodging and boarding houses; motor vehicle carriers;
photographers; restaurants, including eating houses and cafeterias;
shoeshining business; taxi-cab business, including the business of
motor vehicle hiring; transfer business; and undertakers and fu-
neral directors.

This section shall not be construed to apply to any profession
which the State regulates by law, nor shall it be construed to in-
clude the business of farming. Property used or employed in such
professions, and in the business of farming, shall be taxable in the
actual form in which it may be, and not as capital.

On all capital defined by this section there is hereby annually
levied a tax of seventy-five cents on every one hundred dollars of
the actual value thereof.

This section, as hereby amended, shall be in force on and after
the first dav of January, nineteen hundred and twenty-nine.

Section 77. Moneyed capital coming into competition with the
business of national banks.—All moneyed capital coming into com-
petition with the business of national banks; provided, that bonds,
notes or other evidences of indebtedness in the hands of individual

citizens not employed or engaged in the banking or investment busi-
ness and representing merely personal investments not made in
competition with such business shall not be deemed moneyed capi-
tal within the meaning of this section.

On all moneyed capital defined by this section there is hereby
annually levied a tax at the same rate as is assessed upon the
shares of national banks located in this State, to-wit, a tax of one
dollar on every one hundred dollars of the value thereof, less deduc-
tion on account of real estate otherwise taxed in this State to the
same extent and under the same corresponding conditions as such
deduction is allowed in the assessment of such shares of national
banks located in this State.

No income tax shall be levied or assessed upon the net income
of the moneyed capital taxed by this section, any other provisions
of the laws of this State notwithstanding.

In computing moneyed capital under this section, the same
rules and methods enacted by chapter eight of the Tax Code of
Virginia on the subject of banks, banking associations and trust
companies shall be followed as far as possible, and sections sixty-
nine, seventy, seventy-one, seventy-two and seventy-three of the
Tax Code of Virginia, as amended, shall not be in any way applic-
able in computing such moneyed capital.

This section, as hereby amended, shall be in force on and after
the first day of January, nineteen hundred and twenty-nine.

Section 91. Rate of taxation of bank stock; disposition of as-
sessment lists by commissioner of the revenue; limited town taxa-
tion of bank stock—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 taxable value of the shares of stock owned by
him, a tax at the rate of one dollar on each one hundred dollars of
such 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 certify three
assessment lists, transmit one to the department of taxation, 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 be-
longing to the stockholder and in its custody at the time the as-
sessment 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 lia-
bility to the stockholder for the money so disbursed.

Any incorporated town in this State in which any bank is
located may, by ordinance, require such bank to deliver to the com-
missioner of the revenue, or other assessing officer of such town, a
copy of the report which such bank is required by this chapter to
furnish to the commissioner of the revenue of the county or city,
and any such town may impose a tax at a rate not to exceed eighty
per centum of the State rate of taxation on each one hundred dol-
lars of the taxable 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 town 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.

This section, as hereby amended, shall be in force on and after
the first day of January, nineteen hundred and twenty-nine.