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Author: 
 
 Rhode Island. 
 
 Title: 
 
 Special report of the 
 Board of Tax... 
 
 Place: 
 
 Providence 
 
 Date: 
 
 1916 
 
MASTER NEGATIVE « 
 
 COLUMBIA UNIVERSITY LIBRARIES 
 PRESERVATION DIVISION 
 
 BIBLIOGRAPHIC MICROFORM TARGET 
 
 ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD 
 
 BUS INCSe 
 
 653 
 R34 
 
 Bhode Island. Board of tax commissioners. 
 
 ... Special report of the Board of tax commissioners, 
 made to the governor, on new sources of revenue, Jan- 
 uary 1, 1916 ... Providence, E. L. Freeman co., state 
 printers, 1916. 
 
 68 p. incl. tables. 23*". 
 
 At licad of title: State of Rhode Island and Providence plantations. 
 
 Inheritance tax. — Franchise and minimum corporatimi tax. — Tax on 
 savings deposits in national banks. 
 
 1. Taxation— Rhode Island. 2. Inheritance and transfer tax— Rhode 
 IsiandT 3. Corporations — Rhode Island. 4. Corporations Taxation. 
 I. Title. 
 
 Library of Conercss IIJ2431JV7 1916 
 
 16^078 
 
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 SPECIAL REPORT 
 
 Board of Tax Commissioners 
 
 MADE TO THS 
 
 GOVERNOR 
 
 ON 
 
 NEW SOURCES OF REVENUE 
 
 ^ ^ 171916 
 
 Inheritance Tax 
 ^ Franchise and Mlnfanum Corporation Tax 
 ^^'ax on Savings Deposits in National Banlcs 
 
 PROVIDBNCE: 
 I*. VBSncAN cOk, nM ^mnam 
 1910 
 
DG55 R3^ 
 
 LIBRARY 
 
 School of Business 
 
MAY - I 
 
 l^tatt of Slfoile jBland and Providnirr yiantatimu 
 
 SPECIAL REPORT 
 
 OF THS 
 
 Board of Tax Commissioners 
 
 MADE TO THE 
 
 GOVERNOR 
 
 ON 
 
 NEW SOURCES OF REVENUE 
 
 Japuary J, 1916 
 
 • • • « 
 
 « J- >»' >4 
 
 * ' » 4 » • » • • 
 
 Inheritance Tax 
 
 Franchise and Minimum Corporation Tax 
 
 Tax on. Savings Deposits in National Banks 
 
 PROVIDE NCE : 
 
 B. L. PBBBMAN GO., 8TATB PBINTBHS 
 1916 
 
\ 
 
 STATE OF RHODE ISLAND AID PROYIDEICE PLAKTATIOIS. 
 
 SCUnVB CHAMBI^ 
 
 Sbftbmbeb 29, 1915. 
 
 BoABD ov Tax Ck^maasioNsits, 
 Suae House, 
 
 Promdencef R. I. 
 
 Gentlemen: — In the annual report which your department is required by law 
 to make to the Governor for presentation to the General Assembly, I would 
 request that the question of increased levenueis for the State be given special 
 attention. I make tiiis suggeetioii in view of the increasing demands upon the 
 General Treasuiy due to the growth of the State's activities, and the necessity 
 for guarding against the impairmrat of the efficiency of the various departments 
 through the failure of the State f unds to meet tho rcquiregaepts of the situation. 
 
 I trust your Board will not confine itself entirdy to leoOfmendations for the 
 better assessment and odiectiofi W tasiei \)i4<ir^<^^ but that it will 
 
 also indicate such new sources of rev«nue*a8 wffl'yidd -the destred increase, tend to 
 more equitable distribution of the. tax, burden, and be in lire with the logical 
 development of the system of ta^patipA iDausur?*t<ed with the enactment of the 
 Tax Act of 1912. 
 
 I also suggest, if there is sufficimt time at your disposal, that your Board outline 
 some method or methods for providing the General Assembly, early in the session 
 and in convenient form, with information regarding the receipts and disburse- 
 ments of the various State Departments. 
 
 Very truly yours, 
 
 R. LIVINGSTON BEECEMAN, 
 
 Governor. 
 
 J 653 
 
 SPECIAL REPORT ON NEW SOURCES OF 
 
 REVENUE. 
 
 In compliance with the request of your Excellency transmitted 
 to this Board September 29th, 1915, the following is respectfully 
 submitted: 
 
 Means for Raising Revenue. 
 
 There are two means by which the revenue of the state may be 
 readily increased. The first and more important is the development 
 of new sources of revenue; the second is by an increase in the rates 
 of taxation on property already assessed, or an increase in franchise 
 taxes, license fees and other charges made by the state for service or 
 privilege. 
 
 The manifest advantage in suppljdng additional revenue by the 
 development of new sources is that it results in a wider distribution 
 
 of the burden of taxation, thus tending to equalization, and mini- 
 mizes, or may relieve entirely, the necessity of increasing rates on 
 property or privilege which is and has been contributing to the 
 support of the state, to which the taxpayers have become accus- 
 tomed and to which they have adjusted themselves and their 
 business. 
 
 It is the opinion of the Board that there are available three sources 
 of revenue which should be developed before any general or per- 
 manent increase of rates is resorted to. 
 
 Inh^tance Tax. 
 
 In a consideration of the available sources of revenue for this state 
 a tax on transfers by will or the intestate laws, the inheritance tax, 
 so-called, is unquestionably the most important and demands &:st 
 
4 
 
 BSPOBT OF BOABD OF TAX COMMISSIONEBS. 
 
 attention, because it is a necessary part of a well balanced state 
 revenue system, particularly if the system is based upon the general 
 property tax theory, and because of the amount of revenue which 
 may be obtained readily and economically without disturbing 
 business, and also because the inhmtanoe tax is approved by econo- 
 mists and administrators generally. 
 
 Attitude id Eccmomists and Courts. 
 
 Quotations from authorities passing favorable comitoent on the 
 
 inheritance tax as a just, convenient and proper means of providing 
 state revenue could be carried to aknost any length. While there 
 are of course condderable differences of opinion as to the reasons 
 for, and the methods to be employed in, imposing the tax, there 
 is a marked degree of agreement as to the justice^ practicability 
 and economic soundness of this method of taxation. A few quota- 
 tions are given as of possible interest in this connection: 
 
 "Fhmly intrenched in a long and honorable history, with the 
 endorsement of the leading economists of ancient and modern times, 
 and approved by the present practice of most civilized governments, 
 he would be indeed brave who should attempt to attack the theory 
 or validity of any sane inheritance tax from an economic standpoint. " 
 (The Inheritance Tax Law, Blakemore and Bancroft) . 
 
 "Modern states, more particularly in recent years, have largely 
 developed the system with varied scales and grades of duty, so that 
 it has come to be ahnost universally regarded as an essential constitu- 
 ent in any well arranged scheme of finance, and seems to be equally 
 approved by popular sentfanent and by the larger part of scientific 
 opinion. " (Public Fmance, p. 591 , Bastable) . 
 
 "The inheritance tax to-day scarcely needs defence. It is found 
 in ahnost every country; and the more democratic the country, the 
 more developed is the tax. " (Essays on Taxation, p. 133, Seligman) . 
 
 " • • • but after all due allowance has been made, there is 
 still left a broad field for an inheritance tax of undoubted equity and 
 expediency, as is proven by the testimony of all existing systems of 
 tax legislation (in other words, all convictions as to equity handed 
 
 *BBPOBT OF BOABD OF TAX COMMISSIONBBS. 5 
 
 down from the past), 'as also by cogent arguments of policy both as 
 
 regards taxation simply and as regards social expediency." (The 
 Science of Finance, p. 560, Cohn). 
 
 "A defence of the taxation of inheritances is superfluous. Its 
 
 existence in all but a few of the civilized nations and in all but a few 
 of the more backward states is its chief defence." "The modern 
 inheritance tax is the spontaneous product of democracy." (Pro- 
 ceedings First National Tax Conference, pp. 211, 220, Prof. Joseph 
 H. Underwood). 
 
 It would be a task of no little difficulty to find a recent report by 
 any regular or special commission upon the subject of state revenue 
 which did not approve unqualifiedly some form of inheritance tax- 
 ation as a part of the fiscal system. 
 
 The power of the state to regulate and even prohibit the devolution 
 of property upon the death of the owner has been the subject of 
 much discussion. The right of inheritance is considered by some to 
 be a natural right, and while the right of the state to regulate inherit- 
 ances is not denied it is affirmed that the state cannot abolish the 
 right of sucoessbn by uiheritance or bequest entirely. 
 
 David MacGregor Means (The Methods of Taxation, p. 215) 
 sustains the idea t^hat the right of inheritance is a natural right, 
 and claims that the rulings of courts to the contrary are based 
 upon a restricted view of the doctrine of natural rights. He says : 
 
 " So far as conmion usage is concerned, it cannot be denied that 
 men speak of the natural right of widows and children to retain the 
 house and goods, the title to which was vested in the dead father, 
 
 but the acquisition of which may have been accomplished through 
 the combined labors of all the members of the family. Historically, 
 as we have seen, family, rather than individual, ownership prevailed 
 in early time, and if we use the term 'natural' as meaning what 
 has been customary, it can hardly be denied that the surviving 
 members of a family have a natural right of inheritance. Nor, 
 within certain limits, does the result seem different if the tenn is 
 used in the sense of what ought justly to be; for it seems impossible 
 to disregard the claims of widows and children." 
 
6 
 
 BBPOBT OF BOABD OF TAX COMMISSIONXBB. 
 
 Continuing he argues that the inheritance tax is not a tax on the 
 transfer of property, but on the property itself, and objects to it on 
 both social and economic grounds. 
 
 "The general consent of the most enlightened nations has from 
 the earnest historical period recognized a natural ri^t m children 
 to inherit the property of their parents. " (United States vs. Perkins 
 • 163 U. S. 625). 
 
 The Supreme Court of Wisconsm, as quoted in "The Inheritance 
 Tax Law'* (p. 27, Blakemore and Bancroft): 
 
 "So clear does it seem to us from the historical point of view that 
 the right to take property by inheritance or will has existed in some 
 form among civilized nations from the time when the memory of 
 man runneth not to the contrary, and so conclusive seems the argu- 
 ment that these rights are a part of the mherent rights which govern- 
 ments, under our conception, are established to conserve, that we feel 
 entkely justified in rejecting the dictum so frequently asserted by 
 such a vast array of courts that these rights are purely statutory and 
 may be wholly taken away by the legislature. 
 
 "It is true that these rights are subject to reasonable regulation 
 by the legislature; . . . 
 
 Contmumg, these authors comment : ''We venture to suggest that 
 the attitude of the majority of our courts is more historical than 
 sensible, that no court in this country has ever actually upheld the 
 state m appropriating aU the property of a decedent for taxation, 
 and ifire doubt if any court ever will approve of such an outrage in 
 time of peace." 
 
 The opposite view, that the right of inheritance is not a natural 
 but a civil right, seems to be sustained by the weight of legal opinion 
 and to have the best historical foundation. 
 
 "The right of inheritance, or descent to children and relations of 
 the deceased, seems to have been allowed much earlier than the right 
 of devising by testament. We are apt to conceive at firet view that 
 it has nature on its side; yet we often mistake for nature what we 
 find estabhshed by long and inveterate custom. It is certamly a wise 
 and eflfectual, but clearly a political, establishment; smce the perma- 
 
 REPOBT OF BOABD OF TAX COIOflSSIONEBS 
 
 7 
 
 nent right of property, vested in the ancestor himself, was no natural, 
 but merely a civil, right." (Vol. 2, Blackstone's Commentaries, 10). 
 
 Probably the decision most often quoted sustaining this contention 
 is from Eyre vs. Jacob, 14 Gratt. (Va.) 422, 430, in which Judge Lee 
 says: 
 
 "The right to take property by devise or descent is the creature of 
 the law and secured and protected by its authority. The legislature 
 might, if it saw proper, restrict the succession to a decedent's estate, 
 either by devise or descent to a particular class of his kindred, say 
 to his lineal descendants and ascendants; it might impose terms and 
 conditions upon which collateral relations may be permitted to take 
 it; or it may to-morrow, if it pleases, absolutely repeal the statute 
 of wills and that of descents and distributions and declare that, 
 upon the death of a party, his property shall be applied to the payment 
 of his debts, and the residue appropriated to public uses. Possessing 
 this sweeping power over the whole subject, it is difficult to see upon 
 what ground its right to appropriate a modicum of the estate, call 
 it a tax or what you will, as the condition upon which those who take 
 the estate shall be permitted to enjoy it, can be successfully 
 questioned. "* 
 
 History. 
 
 The general application of this system of taxation is evidenced by 
 the fact that it is in use in all the principal countries of Europe, in 
 Australia and in Canada, and in all but six of the United States, in 
 Porto Bico and in Hawaii. 
 
 " The origin of the inheritance tax has usually been attributed to 
 the Emperor Augustus, who is known to have estaUished such a tax . 
 at Rome in the year 6 A. D."t The Romans appear to have bor- 
 rowed the idea from the Egyptians who had such a tax in 117 B. C. 
 
 The tax imposed by Augustus was a 5 per c^t. tax on inheritances 
 and bequests, limited in its application to Roman citizens, with 
 small exemptions and allowances for funeral expenses and, under 
 certain conditions, the exemption of the nearest relatives. 
 
 ■"For a list of decisions see "The Inheritance Tax Law," (Blakemore and Bancroft) Chapter 7; 
 •bo "The InhniteiiM Tax" (Max West). 
 fllM laheritanoe Tax. Max West. 
 
8 
 
 KEPORT OF BOABD OF TAX COM¥ISSION£BS. 
 
 Under different titles and in various forms^ taxation of inheritances 
 has come down to the present. During the Middle Ages certain 
 feudal dues were exacted, the relief and heriot, by the overlord. 
 
 "But the direct connection between these feudal dues and the 
 modern inheritance taxes is hard to trace. It is probable that the 
 older dues suggested the feasibility of the modem mheritance tax. 
 But no closer connection than that has been established. "* 
 
 Germany, Denmark, France, The Netheriands, some ot the 
 Italian cities and the Duchy of Mantau imposed various forms of 
 taxes on inheritances from the Fourteenth to the Seventeenth 
 Centuries. 
 
 "But while the influence of the medieval idea is stiU to beseen in a 
 few of the continental countries where the payment is regarded as 
 made for the privilege of succession, the tax is ahnost everywhere of 
 mdependent and comparatively recent origin. The inheritance tax 
 as now understood in most countries is essentially the product of 
 modem democracy. The inheritance tax is to-day found primarily 
 m democracies like those of England, Switzeriand, AustraUa and 
 Amenca."t 
 
 Federal Inheritance Taxation in the United States. 
 
 The Federal government imposed an inheritance tax at an early 
 period. The first act imposing a tax of this character provided for 
 a light graduated tax on mheritances other than those received by 
 wives, children and grandchildren. The act took effect in July, 1798, 
 and remained in force four years. A system of mheritance' taxes 
 was recommended to Congress in 1815, but the recommendations 
 were not adopted. In 1862 an inheritance tax was imposed as a war 
 revenue measure. This law was amended several times, and the 
 rates were raised in 1864. The law was repealed by act of July 14, 
 1870, the repeal takmg effect October 1st. 
 
 The income tax provision of the National Revenue Act of 1894 
 contained a provision for taxm g as mcome aU money and the value of 
 
 *Iiitrodiaetiaa to Public Finance, p. 303, Carl C Ptehu 
 fSamim oo Tuatioii. |>p. m. 122. SdigBMi. 
 
 REPORT OF BOARD OF TAX COMMISSIONERS. 
 
 9 
 
 all personal property acquired by gift or inheritance. This law 
 was annulled by the Supreme Court. The war revenue bill of 1898 
 contained a provision for taxing legacies and distributive shares; 
 it was amended in 1901 to ei^mpt certain bequests, and the act 
 as a whole was repealed in 1902. 
 
 Eariy State Inheritance Taxation. 
 
 P^insylvania was the first state to impose an inheritance tax; 
 
 the law which was passed in 1826, although amended several times, 
 remains practically as it was enacted. This law provided for a 
 uniform rate of 5 per cent, and an ex^ption of $250, and it did not 
 apply to the inheritances of a father, mother, husband, wife, child, 
 step-child, lineal decendant and daughter-in-law. The law recognized 
 the situs of personal inroperty as the domicile of the owner, and did 
 not impose a tax on the stock of domestic corporations owned by a 
 non-resident decedent, and did not tax the securities of a foreign cor- 
 poration owned by a non-resident decedent, even when such securities 
 were kept withiiu the state. 
 
 Louisiana was the second state to impose an inheritance tax. 
 The law was enacted in 1828, was repealed in 1830, revived in 1842, 
 and remained in force until 1877. The tax was imposed at the rate of 
 10 per cent, on property passing to non-resident aliens. An attempt 
 was made later, in 1894, to revive the statute of 1828, but the law was 
 declared unconstitutional. The constitution was amended in 1898, 
 limiting the power of the legislature in respect to inheritance taxation, 
 fixing the maximum rate at 3 per cent, for direct and 10 per cent, for 
 collateral heirs. Louisiana now has an inheritance tax law which 
 provides for a tax of 2 per cent, on direct heirs, with an exemption of 
 $10,000, and a 5 per cent, tax on collateral inhmtances with no exemp- 
 tion; the tax not to be operative, however, if it can be shown that the 
 property has borne its just share of taxes prior to donation or 
 inheritance. 
 
 Virginia in 1844 imposed a collateral inheritance tax on estates of 
 $250 or more passing to persons other than the decedent's father, 
 
10 
 
 WBPOiW OF BOABD OF TAX COM1CI88IONEBS. 
 
 mother, husband, wife, brothers, sisters, or lineal descendants. The 
 law required the rates to be fixed by the legislature at each session, 
 and the law was held to have been r^ed because the legislature 
 omitted to fix the rate in 1856. A collateral inheritance tax was 
 again imposed in 1860, and with vaiying rates and periodic susp^. 
 sions it continued in force until 1884, when it was repealed. A 
 collateral mheritance tax was reimposed in 1896. Parents, grand- 
 parents, husband, wife, brothers, sisters and lineal descendants were 
 exempt and also certain bequests for pubHc, educational, benevolent 
 and religious purposes. 
 
 Taxation of Direct and Collateral Heirs. 
 
 The following states adopted collateral mheritance tax laws which 
 did not provide for the taxation of direct heurs, m the order named : 
 
 Pennsylvania, 1826; Vhrginia, 1844; Maryland, 1845; North 
 Carolma, 1847; Alabama, 1848; Delaware, 1869; New York, 1885; 
 West Virginia, 1887; Connecticut, 1889; Massachusetts,' 1891 j 
 Tennessee, 1891; New Jersey, 1892; Ohio,* 1893; CaUfomia, 1893; 
 Make, 1893; Vermont, 1896; Iowa, 1896; Missouri, 1899; Arkansas,' 
 1901; North Dakota, 1903; New Hampshire, 1905; Kentucky, 1906; 
 Texas, 1907; Kansas,* 1915. 
 
 Eleven of the twenty-two states which originally unposed collateral 
 inheritance taxes have not extended the tax to direct heirs: 
 Alabama,t Delaware, Iowa, Kentucky, Maryland, Missouri, New 
 Hampshire, Pennsylvania, Texas, Vermont and Virgmia. 
 
 Eleven states which originally had collateral inheritance taxes 
 only have extended them to mclude direct heirs: Arkansas, Cali- 
 fornia, Connecticut, Massachusetts, Maine, New Jersey, New York, 
 N orth Carolina, North Dakota, Tennessee and West Virginia. 
 
 Two states, Kansas and Ohio, taxed direct inheritances originally, 
 but now restrict the tax to collaterals and strangers. 
 
 *Had law providing for a tax on direct inhexituiOM prior to date heie tiven. 
 tRepealed in 1868. 
 
 REPORT OF BOARD OF TAX COMMISSIONERS 
 
 11 
 
 There are twelve states which at present tax only collaterals: 
 Delaware,* Iowa, Kansas,* Kentucky, Maryland, Missouri, New • 
 Hampshire, Ohio, Pennsylvania, Texas, Vermont and Virginia. 
 
 Nineteen states have enacted laws imposing both direct and 
 collateral inheritance taxes at the same time: Colorado, Greorgia, 
 Idaho, Illinois, Indiana, Kansas, Michigan, Minnesota, Montana, 
 Nebraska, Nevada, Ohio, Oklahoma, Oregon, South Dakota, Utah, 
 Washington, Wisconsin and Wyoming. 
 
 Ohiot was the first state to tax all classes of property passing to 
 direct heurs and also the first to apply progressive rates. The law 
 which was passed in 1894 was held unconstitutional the year after 
 its passage because of the progressive feature and certain provis- 
 ions regarding the exemption of $20,000. In 1904 a direct inherit* 
 ance tax was imposed at the rate of 2 per cent, with a $300 exemption. 
 This act was repealed in 1906. At present collateral inheritances 
 only are taxed at 5 per cent, with an exemption of $200. 
 
 A tax on direct inheritances has been applied in t^e following 
 states in the order named: 
 
 New York, 1^91 — direct tax applied to personal property only, 
 extended to realty in 1903 ; Illinois, 1895 ; Connecticut, 1897 ; Montana,| 
 1897; North Carolina, 1897; Louisiana, 1898; Michigan, 1899— direct 
 tax applies to personal property only; Colorado, 1901; Nebraska, 
 1901; Utah, 1901 ; Washmgton, 1901; Or^n, 1903; Wiscomdn, 1903; 
 Wyoming, 1903; Ohio, 1904 — repealed 1906, collaterals only taxed 
 since 1906; California, 1905; Minnesota, 1905; South Dakota, 1905; 
 Arkansas, 1907; Idaho, 1907; Massachusetts, 1907; Oklahoma, 
 1907— invalid, new law 1915; West Virginia, 1907; Kansas, 1909— 
 repealed 1913, collaterals only taxed since 1915; Maine, 1909; 
 Tennessee, 1909; Arizona, 1912; Georgia, 1913; Indiana, 1913; 
 Nevada, 1913; North Dakota, 1913; New Jersey, 1914. 
 
 ^Delaware tuod <m]y •tnacen in blood, 1883-1800. EaooM tawd both direct and ooUatem 
 
 1909-1913. 
 
 fThe Louisiana law of 1828 provided for a tax on property passing to non-resident aliens 
 regardlesB of vriatimiBhip. The New York law of 1891-1008 taxed pereomalty paaeing to direct hein 
 tLaw appanntly intended to exempt real estate paanns to direct heirs, but the wording o ithe 
 
 statute is obscure, and by strict interpretation said real estate so passing is exempt to all ditec 
 heirs except fatlier. mother, husband and wife; these are taxed at the collateral rate of 5 per cent. 
 
12 
 
 BWOBT OF BOABD OF TAX C0MMI88I0NEBS. 
 
 The thirty states which at present tax both direct and collateral 
 mhentauc^ are Ari«m, Arkanaas, Califonria, Colonido, Connecticut, 
 Gec^gm, Idaho, Illinois, Indiana. Louisiana, Maine, Massachusetts. 
 Michigan, Minnesota, Montana, Nebraska, Nevada, New Jersey 
 New York North Carolina, North Dakota. Oklahoma, Oregon, South 
 D«J^ota. Tennessee, Utah, Washington, West Virginia, Wisconsin 
 and Wyoming. 
 
 Kansas and Ohio each luive had taxes on direct inheritances 
 Which have been repealed and never reenacted. Alabama had a 
 collateral inheritance tax, 1848-1868. The constitution of Alabama 
 adopted m 1901, imposes restrictions upon the legislature prohibiting 
 thetaxataonof inheritances of father, mother, husband, wife, brothers, 
 asters, children and lineal descendants, and limits the rate on t«able 
 mhentances to p^ cent. 
 
 The inheritance tax law of Kansas, adopted in 1909, was repealed 
 in 1913 apparently for purely poUtical reasons. In 1915 a law 
 mipofflng a tax on collateral inheritances was adopted. This law 
 provides for three classes; the first class, consisting of husband, wife 
 Imeal ancestor, lineal descendant, adopted child, lineal descendant of 
 same, son^-law or daughter-in-law, is not taxed; the second class, 
 brothers and sisters, is allowed an unconditional exemption of « 000 
 with rates from 3 to 12^ per cent.; third class. aU others, no exempt 
 tion and the rat« are from 6 to 16 per cent. It is further provided 
 that shares which net less than «200, after all deductions aUowed 
 are made, are not taxed. 
 
 ^« - ^eced by , 
 
 Inheritance tax laws have been declared unconstitutional in 
 m^te^ because of their failure to conform to the restrictions 
 «ri hmitations miposed by the rule laid down in their constitutions 
 that taxes shall be unifonn and equal according to value. 
 
 The difficulty under such constitutional restrictions, of formulating 
 an equitable mheritance tax, which according to modem ideas J 
 
 BBFOBT OF BOABD OF 1?AX COIOOSSIONEBS. 13 
 
 practice should provide for classified rates and exemptions as well 
 as reoogoUe degrees of relationship, is appar^t. The necesraty of 
 exempting small estates passing to direct heirs, and the desirabiUty 
 of progressive rates, and exemptions and classification in accord- 
 ance with degrees of relationi^p, impelled legislators to incorpo- 
 rate these features in their laws, and the courts when appealed 
 to on the grounds of constitutionality, while recognizing the right 
 of the law- makin g body to unpoee inheritance taxes, in numerous 
 cases declared the laws unconstitutional. The constitutional limita- 
 tions on the law-making bodies applied to collateral as well as durect 
 inhmianoes. 
 
 In New Hampshire, after operating under a collateral inheritance 
 tax law for four years, 1878-1882, the law was declared unconstitu- 
 tional; later, in 1903, the constitution was amended, and the present 
 law taxing collateral inheritances was passed in 1905. 
 
 Minnesota seems to have had the greatest amount of difficulty 
 in complying with its constitutional provisions; the inheritance tax 
 laws of 1897, 1901 and 1902 were in turn declared unconstitutional, 
 and the law of 1905 survived aft^ considerable litigation. The 
 question seems to have been settled by an amendment to the con- 
 stitution in 1906 which extended the powers of the legislature in the 
 taxation of inheritances. 
 
 The Oklahoma law of 1907 was practically declared invalid, and 
 a new law was passed in 1915. Missouri attempted to tax collateral 
 inheritances in 1895, but the law was declared unconstitutional; 
 later, in 1899, a law taxing collaterals was passed and is still in force. 
 In South Dakota the law was declared unconstitutional, but upon 
 rehearing was sustained. 
 
 The direct inheritance tax law of Ohio was declared unconstitu- 
 tional because of progressive rates and the exemption of estates 
 of $20,000 or less, but the court ventured the statement that if that 
 exemption or any othar exemption had applied to every estate it 
 would have been valid; it was the inequality of the exemption, 
 not the fact of an exemption alone, which was the determining factor. 
 
14 
 
 BBPOBT OF BOABD OF TAX C01IHIS8I0MBBS. 
 
 Pennsylvania's direct inheritance tax law was declared uncon- 
 stitutional because of the exemption of $5,000. In Tomeasee a 
 similar objection was not sustained. 
 
 Tlie Wisconsin law of 1899 was declared unconstitutional because 
 the exemption depended upon the size of the entire estate and not 
 upon the separate shares. The Massachusetto Supr«ne Court on 
 the same point under a similar exemption said: 
 
 "The exemption in the statute under con«d«ation is certainly 
 large as an exemption of estates, but it is pecuHarly withm the discre- 
 tion of the legislature to determine what exemptions should be made 
 m apportwrnng the burdens of taxation among those who can best 
 bear theih, and we are not satisfied that this exemption is so clearly 
 unreasonable as to require us to declare the statute void."* " 
 
 In the same case the court sustained the ri^t to distinguish 
 between direct and collateral heirs and strangers in blood, both as 
 to rates and exemptions, saying that the principle had the sanction 
 of practice and rcsason. 
 
 Constitutional Difficulties at a Mfaiininni in Rhode Island. 
 
 The constitution of Rhode Island in relation to taxation says: 
 " and the burdens of the state ought to be fairly distributed among its 
 citisen8."t and "tiie general assembly shall, from time to time 
 I«mde for making new valuations of property, for the assessment 
 of taxes, m such maimer as they may deem best, "t 
 
 It is apparent that our legislature is free from most of the restric- 
 tions and limitations imposed by the constitutions in a number of 
 states, and that many of ti»e perplexing questions in regard to con- 
 stitiitionaUty which have arisen elsewhere are not lilndy to occur 
 in Rhode Island. 
 
 Cmwtb of Taxatkn of Inheritances in Recent Years. 
 
 After the passage of the collatwal inhrajtance tin law of Pennsyl- 
 vania in 1826 and the law taging the inheritances of non- resident 
 
 •Minot vs. Winthrop, 102 Man. ~~ ~ ~ 
 
 tArt. 1, Sec. 2. 
 tArt. rV. Seo. 16. 
 
 BXFOBT OF BOABD OF TAX OOMMISSIONEBS. 15 
 
 aliens by Louisiana in 1828, no further legislation on the taxation 
 of inheritances was adopted for sixteen years. In the next four 
 years Alabama, Maryland, North Carolina and Virginia imposed 
 collateral inheritance taxes. From 1848 to 1885 Delaware was the 
 <mly state to adopt legislation of this character. 
 
 The year 1885 may properly be considered as the date from 
 which the real development of inheritance taxation began in the 
 United States. Three states— Connecticut, New York and West 
 Virginia — adopted inheritance tax laws from 1885 to 1890. During 
 the period 1890-1900 inheritance taxation assumed a prominent 
 place in legislation, and sixteen states either adopted inh^tance 
 taxation for the first time or expanded their old laws. The next 
 ten years showed even a more rapid extension of this principle of 
 taxation, twenty-three states passed laws on the subject, and from 
 1910 to 1915 six more applied the system. 
 
 Twelve states have either incorporated inheritance taxes into thdr 
 fiscal systems or enacted new laws within the last three years, and 
 
 many states h^ve made important additions and amendments to 
 thek laws during the same period. 
 
 There are now but six states which do not tax inheritances in some 
 form: Alabama, Florida, Mississippi, New Mexico, Rhode Island 
 and South Carolina. 
 
 A Tax Upon the Tlraiisler of Property. 
 
 There has been much discussion as to whether the tax was upon the 
 property itself or upon the transfer of the property. The decided 
 
 weight of opinion, both legal and economic, is to the effect that it 
 is a tax upon the transfer. 
 
 Differences between the States in Qassificatkm of Heirs, Exemptions 
 and Rates. 
 
 There are wide differences betweoi the twelve states which do not 
 
 tax the inheritances of direct heirs, as to what transfers are taxed, 
 and as to the rates imposed and exemptions allowed. In some states 
 
16 
 
 BBPOBT OP BOABD OF TAX C01IMIB8I0NBB8. 
 
 graadparente, brothers and sisters, and lufcles and aunts are included 
 in the exempt class; in others the exemption is confined to father, 
 mother, husband, wife, adopted chUd and direct lineal descendants 
 of the testator. 
 
 Four states aUow no exemptions and have a flat rate of 5 per cent., 
 and their classifications of exempt heirs are not very dissimilar! 
 Delaware has four classes, four rates and a flat exemption of $500. 
 Texas has three classes, three progressive rates and exemptions of 
 12,000, $1,000 and $500 according to class. 
 
 In the states imposing a tax on direct inheritances the practices 
 are r&y dissimilar, classes, rates and exemptions varying between 
 wide limits. 
 
 California and Minnesota afford perhaps the best examples of 
 liighly differentiated classifications as to relationship, exemptions, 
 rates and the points at which the highest rates apply. 
 
 In Califomia in the dass of direct heirs are included lineal ancestors 
 of decedent, husband or wife, Imeal issue, adopted or acknowledged 
 chUd, lineal issue of either. In this class the exemption of widow or 
 minor child is $24,000 and $10,000 to others. The rate on $25,000 
 or less IS 1 per cent. ; $25,000 to $50,000, 2 per cent. The maximum 
 rate of 15 per cent, is reached at $1,000,000, and aU sums in excess 
 of this amount are taxed at this rate. CoUateral heirs are divided 
 into two classes, with exemptions of $2,000 and $1,000 according to 
 nearness of relationship. Strangera in blood are aOowed an exemption 
 of $500. The initial rates for these three classes are 3, 4 and 5 per 
 cent., respectively. The maximum rate in the case of collateral 
 heirs appHes to amounts over $1,000,000, and these rates are 26 and 
 30 per cent., respectively. The maximum rate applying to strangers 
 m blood is 30 per cent., but it appUes to amounts over $500,000. 
 
 In Minnesota the highest rate applies to inheritance! of over 
 $100,000 and m the case of a wife or lineal issue it is 3 percent.; 
 husband, adopted or acMowledged child or the issue of the same 
 per cent. The same rate applies to lineal ancestors, but the 
 exemption in that ease is but $3,000 instead of $10,000 as in the 
 
 BEPOBT OF BOABD OF TAX COMMISSIONEBS 
 
 17 
 
 first two classes. In the case of brother, sister, nephew, niece, son-in- 
 law or daughter-in-law the exemption is reduced to $1,000 and the 
 maximum rate is 9 per cent. In the next class, which ocnnprises 
 uncles, aunts or descendants of same, the exmnption is reduced 
 to $250 and the maximum rate is 12 per cent.; for strangers in blood 
 the maximum rate is 15 per cent. 
 
 Tennessee affords an example of the simpler classification. There 
 are but two classes; father, mother, husband, wife, child and 
 lineal descendants of decedent comprise the first dass. Estates 
 of decedents less than $10,000 are not taxed; estates of $20,000 or 
 less are taxed at 1 per cent., and estates of over $20,000 at 1}^ per 
 cent. The second class comprises all not named above; tiiere is 
 no tax on estates of less than $250, and for estates greater in value 
 the tax is 5 per cent. 
 
 The lowest initial rate applied in any state to direct heirs is 1 p^ 
 cent, and the highest 2 per cent. The lowest ultimate rate is 1 per 
 cent, and the highest 15 per cent, for the first class. As these classes 
 vary to a great extait, and as there is a great difference in the amount 
 of exemption allowed, the rates alone do not offer a very satisfactory 
 basis for comparison. ^ 
 
 Methods of Classifying Hdrs. 
 
 There are very wide differences between the several states in 
 methods of classification. In those states which are said to tax 
 collaterals only, we find considerable differences as to what constitutes 
 direct heirship. Some states include lineal ancestors, sons-in-law 
 and daughters-in-law in the ex^pt class, while others do not. In 
 the Kentucky law father, mother, husband, wife, lawful issue, 
 son-in-law, daughter-in-law, adopted child and lineal descendant of 
 decedent are exempt, and all others are taxed at the same rate and 
 the same exemption is allowed. 
 
 In Delaware the exempt class includes father, mother, grandfather, 
 grandmother, wife, husband, child, adopted child and lineal descend- 
 ants, but collaterals are divided into three classes and different 
 
18 
 
 BBPOBT OF BOABD OF TAX COIIMIBSIONEBS. 
 
 rates appHed, and "aU others" are taxed at still a different rate and 
 allowed less exemption than the other classes. 
 
 States taxing direct inheritances show a similar difference m classi- 
 fication. Arkansas taxes the mheritance of father, mother, husband, 
 wife, child, brother, sister, son-in-law, daughter-in-law, adopted or 
 acknowledged child at the lowest rates, distinguishmg between 
 manbers of this class as to exemptions, and places all others in the 
 second class. Tennessee limits the first class to father, mother, 
 husband, wife, child and lineal descendants, placing aU others in the 
 4Koond class. 
 
 Massachusetts affords an example of a wide extension of the 
 membership m the first class: husband, wife, lineal ancestor, Imeal 
 descendant, adopted child, lineal descendant of same, adoptive 
 parent, Hneal ancestor of same, son-in-law or daughter-in-law. The 
 second class is composed of brothers, sistei», of fuU or half blood, 
 nephews and nieces, all others being in the third class. In some 
 states uncles and aunts are in one class and great uncles and great 
 aunts in another. No general rule as to classification is found and 
 no two states seem to be exactly alike in methods of classification. 
 Some form of classification is found in all states imposing inheritance 
 taxes but one, and the principle is amply sustained both from the 
 legal said eeommdc standpoint. 
 
 Progressive Rates. 
 
 The question of the constitutionaKtyof the progressive inheritance 
 tax was settled definitely in cases brought under the Illinois statute 
 of 1895. This law providing for progressive rates to distant rela- 
 tions and strangers was upheld both by the state courts and the 
 Supreme Court of the United States.* The positive determination 
 of this question was followed by a rapid appUcation of the pro- 
 gresfflve principle in a number of states, and progressive rates are 
 now appHed to one or more classes in the following states : Arizona 
 Arkansas, Cahfomia, Colorado, Connecticut, Idaho, Illinois, Indiana 
 
 •KlHAMPMitt m Drake. 167 lU.. 122; Magoon va. Truat 4b Saviaci Bank, 170 U. S.. 288. 
 
 BBPOBT OF BOABD OF TAX COMMXSSIONEBS 
 
 19 
 
 Kansas, Maine, Massachusetts, Minnesota, Nebraska, Nevada, 
 
 New Jersey, New York, North Carolina, North Dakota, Oklahoma, 
 Oregon, South Dakota, Tennessee, Texas, Utah, Washington, West 
 Vurginia and Wisconsin. 
 
 The states imposing inheritance taxes which do not employ 
 progressive rates are: Delaware, Georgia, Iowa, Kentucky, Louis- 
 iana, Maryland, Michigan, Missouri, Montana, Ncfw Hampshire, 
 Ohio, Pennsylvania, Vermont, Virginia and Wyoming. 
 
 The imnciples of progressive rates, the classification of relationship 
 and the gradua^on of ^cemptions according to rdationship have 
 found such general application in the practices of the several states 
 that they do not seem to require further justification. 
 
 "To make a distinction between collateral kindred or strangers 
 
 in blood and kindred in the direct line in reference to the assessment 
 of such a tax, either by exempting the kindred in the direct line or by 
 imposing on collaterals and strangers a higher rate of taxation, has 
 the sanction of nearly all states which have levied taxes of this kind."* 
 
 The General Tendency. 
 
 Notwithstanding this great variation in details above referred to 
 a decided general trend is apparent. All states taxing direct in- 
 heritances allow some exemptions. These exemp^ons vary in 
 amounts for members of the first class from $3,000 to $24,000, and 
 there are but four states — ^Missouri, New Hampshire, Vermont and 
 Virginia — which do not allow some exemption, and these states do 
 not tax direct inheritances. There seems to be a considerable 
 agreement, so far as can be determined by the different practices, 
 that direct and collateral heirs and strangers in blood should have 
 different amounts of exemption allowed, dimishing as the degree of 
 relationship becomes more remote, and thirty of the forty-two states 
 taxing inheritances apply to a greater or less degree this principle. 
 
 Classification according to relationship is found in every state 
 taxing inheritances, except Utah, which has one class, an exemption 
 of $10,000 applying to the whole estate, and progressive rates. 
 
 *Miuot VB. Winthrop, 162 Mass. 
 8 
 
20 
 
 REPORT OF BOARD OF TAX COMMISSIONERS. 
 
 The great majority of states employ progressive rates varying both 
 in accordance with the amount of the inheritance and the remote- 
 ness of relationship. There is no uniformity of practice either as 
 regards the rate of progresaon or as to the point at which the maxi- 
 mum rate is applied, or as to what pomt in relationship the rate, or 
 exemption, or both, is changed. The general acceptance, however, 
 of the pnnciples that smaU inheritances to direct heirs should be 
 exempt, that the rates should be progressive both as regards the 
 amount of the inheritance and according to the degree of rektion- 
 fihip^ that exemptions should be graduated accordmg to relationship, 
 and^that the maxunum rate should apply to the excess over a certaiii 
 feed amount, is worthy of attention. 
 
 The Qii^fiofi of Situs for purposes ofl taxation and the Danger of 
 Double Taxation. ^ 
 
 Th&e is Kttle interstate comity m the taxation of inheritances, 
 and a resultant double taxation in many cases. The proper situs 
 of taxation for real estate is recognized as the location of the property. 
 The real difficulty appears in the taxation of transfers of intangible 
 property. Serious efforts have been made by some states to avoid 
 double taxation by the introduction into thdr laws of so-caUed 
 "reciprocal clauses, " which provide for a relief from taxation of 
 property taxed in another state in a similar manner; but if the rates 
 are dissimilar and the foreign rate is less they impose a tax at a rate 
 which represents the difference between the two rates. Some states 
 unpose the tax upon corporate securities owned by a non-resident 
 decedent kept within the state, whether the corporation is chartered 
 withm the state or not. In some mstances transfers of the securi- 
 ties of domestic corporations are taxed regardless of the physical 
 location of the securities or the domicile ot the decadent. These 
 states are actuated by a desire for revenue rather than by any con- 
 sideration of sound economic theory. Under existing conditions 
 double or even multiple taxation may readily occur. 
 
 In the formulation of an inheritance tax law certainly one of the 
 most difficult questions involved is the determination of the situs 
 
 REPOBT OV BOARD OF TAX COMMISSIOlpSBS. 
 
 21 
 
 at which the various classes of property should be taxed. In the 
 case of real estate the question is definitely settled; it is taxed 
 imiversally in the jurisdiction where it is located; but beyond this 
 nothing is positively determined. 
 
 The practice ui regard to real estate, so to as it applies to inherit- 
 ance taxation, seems to meet the requirements of justice and sound 
 economic principle, and there is no reason and apparently no desire 
 to change or modify it. But even here when ihexe is conversion of 
 the real estate in one state for the purpose of paying a legacy or 
 legacies, it has been held that the proceeds of the conversion were 
 intangible and liable to taxation at the domicile of the testator in 
 another state. 
 
 The real difficulty arises in the transfer of personal property, 
 and in this regard there is a bewildering diversity of practice 
 and opinion which results in double or multiple taxation in an 
 unjustifiable form, and annoyance and unnecessary expense in 
 administration. 
 
 In any conmderation of double or multiple taxation it is necessary 
 to determine the different kinds, and to separate those which are 
 bad and avoidable from others which are justifiable or unavoidable. 
 
 In its ordinary use the term ''double taxation'' is applied in such 
 a manner as to convey the idea of injustice and oppression, and so 
 well founded in the popular mind has this meaning become that any 
 system of taxation to which it may be applied is at once condemned 
 without considering the nature or effect of the double taxation. 
 
 An illustration of douUe taxation which is poriEectly just and proper 
 from both the economic and moral standpoint is afforded by the 
 usual local tax assessed in this state. The local tax and the state 
 tax are separate and distinct taxes at different rates on the same 
 property at the same time. This is a perfect example of a proper 
 double tax. This tax might be a multiple tax and still be perfectly 
 justifiable, and the only objection which could be properly made 
 would be on the grounds of expense or inconvenience, or some other 
 reason which has nothing to do with the tax itself. The test in 
 
22 
 
 BEPOBT OP BOABD OF TAX COHMISSIOiaBS. 
 
 this case is the amount of the tax, not how many times the tax 
 M assessed. If the citizens of a state prefer to raise the necessary 
 amount of revenue by several levies on the same ^opwty instead of 
 one, it may be expensive and inconvenient, but it is not unjust from 
 the eeoncmiie or moral standpoint. 
 
 A similar condition is brought about by a Federal and a state 
 income tax. There is no vaUd objection on the ground of double 
 taxation m this case. Real estate taxed in one state and the income 
 from It taxed in another-the domicile of the o*ner-^ also perfectly 
 justifiable legaUy and economicaUy. Double taxation of these 
 kinds is not objectionable and is probably unavoidable. 
 
 These statements relative to the taxation of personalty hold good 
 r^arding the ordinary forms of state and local taxation of property 
 generaUy. They do not apply, however, to inheritance taxes. If 
 an mheritance tax is held to be a tax on a civil right or privily it 
 should be levied but once. Taxes on the same inheritance by more 
 than one jurisdiction do not appear to be justifiable economically. 
 
 An example of objectionable and avoidable double taxation is 
 afforded by the taxation of wealth in one state and the evidences of 
 wealth in anoth«-. A corporation may be taxed upon its entire 
 property and the holders of its securities also taxed at their fuU 
 value by the same jurisdiction at the same time and rate, or these 
 securities may be scattered throughout many states and taxed 
 according to the domicile of the owners at approximately the 
 same rate. 
 
 As thwe are no constitutional limitations upon the levying of an 
 inheritance tax upon personal property both by the state in which the 
 property may be considered to be located and the state of domicile 
 of the former owner, double taxation may and does occur to a great 
 and even distressing extent. There are of course other considerations 
 than domicile of the former owner, and situs independent of such 
 donucde, which may detennine jurisdiction, but these two conditions 
 are the only ones used in the United States. Some states impose 
 nheritance taxes according to the situs of the physical property 
 
 BEPOBT OF BOABD OF TAX COmOSSIONEBS 
 
 23 
 
 others according to domicile, and still others according to the 
 location of the securities. The legal and constitutional right to 
 impose each of these taxes is clear and well established, and the 
 economic injustice is equally clear. 
 
 An example of the foregoing is furnished by a corporation incor- 
 porated and owning property in one state, a part or even the whole 
 of the stock and bonds owned by residents of another, and the secu- 
 rities kept in still a third state. This combination of circumstances, 
 by no means rare in practice, furnishes an opportunity for multiple 
 taxation. 
 
 ''No doubt it would be of great advantage to the country and to 
 the individual states if principles of taxation could be agreed upon 
 
 which did not conflict with others, and a common scheme could be 
 adopted by which taxation of substantially the same property in two 
 jurisdictions could be avoided, but the constitution of the United 
 States did not go so far, and a state was not bound to make its tax 
 laws harmonious in principle with those of other states."* 
 
 States which have large amounts of corporate property within 
 their jurisdiction, with the stocks and bonds of the corporation 
 owning the property held wholly or in large part by non-residents, 
 lean perhaps naturally to the theory that the situs of the property 
 should determine the imposition of the inheritance tax. This theory is 
 carried out in the laws of a number of states, and those maintaining it 
 argue in substance, in sustaining their position, that while the tax is 
 l^ally a tax upon the transfer of property and not upon the property, 
 the tax is nevertheless measured by the value of the property and 
 is usually made a lien upon it, and the burden falls ultimately upon 
 and is borne by the property. They argue further that taxation is 
 for the maintenance of government, and as the chief purpose of 
 government is the protection of property and the administration and 
 enforcement of the laws of property, therefore the tax which is borne 
 by property within a given jurisdiction shotild accrue to the use 
 of that jurisdiction, whether levied upon the transfer, devise, suooes- 
 sion, interest therdn, or property itself. 
 
 *Kidd VB. Alabama. 188 U. S. 730. 
 
24 
 
 KEPOBT OP BOARD OF TAX COMMISSIONEBS. 
 
 The difficulty of drafting and administering an inheritance tax 
 law based on this principle is generally admitted to be great and by 
 wme It 18 considered practicaUy insurmountable. Mr. Lawson Purdy 
 Pres.dent of the Department of Ta^es and Assessments for the CiS 
 of New Yorl^ in a discussion of the subject said that to administer a 
 teanrfer tax drafted thoroughly in accordance with this theory would 
 
 attempt has been 
 
 inade to adrnm^ter such a law the difficulties encountered have been 
 very considerable, to say the least. 
 
 The Coirect Principle. 
 
 The weight of authority, both legal and economic, in the United 
 btates does not seem to sustain this line of argument: 
 
 se^I ?L'?w*rr' ^^'^ ''oa^idered to be a tax on privUege it 
 aeems c «ir that the sovereignty which confers the privilege stould 
 unpose the tax. The great weight of authority in the S SteS 
 
 owner s domicilp snv^ 
 ^Sri P^"^ P'^'P^^y- the law of the place 
 
 The relative merits of imposing inheritance taxes according to the 
 situs of the personalty and the domicile of the former owner an> 
 aWy treated in the report of the Committee on Double Taxation and 
 atus for the purposes of taxation made to the Ninth National Tax 
 Confamce. The Committee says: 
 
 inh^L l>eKeye that the correct principle underlying taxation of 
 
 ^^i^T V^' 'u' ^'^'''•^ devolution of 
 
 V'"^ iaheritance tax thereon. If this principte 
 18 adopted most questions of situs with relation to inheritan^ tex! 
 
 the kws of the state m which it is situated. Personal prooertv 
 devolves m accordance with the laws of the state of domi iL of the 
 fonner owner. Applying the principle stated, it folJaL rtj 
 
 BBPOBT OF BOABD OF TAX OOMMISSlpNlIBS. 
 
 25 
 
 estate should be taxed by the state in which it is situated; personal 
 property by the state in which its former owner was domiciled." 
 
 A brief summary of the arguments sastainmg their conclusions 
 relative to personal property follows : 
 
 Against taxation of personal property according to situs: — ^Personal 
 property may be said to have a situs for taxation in several states 
 other than that of domicile. Extent of power to impose inheritance 
 taxes on personal property on ground of situs not det^mined, a 
 serious objection. Does not avoid double taxation. Difficulty of 
 drafting law based on taxation according to situ^. Administrative 
 difficulties and cost of collection. Large number of states may be 
 involved in settlement of one comparatively small estate. Involves 
 dealing with fractional parts oi estates rather than the whole. 
 Increases number and decreases sise of estates taxed. Difficulty in 
 apportioning indebtedness and exemptions. Annoyance, delay 
 and expense to taaq>ayers. Requires ancillary administration in 
 each state ndiere personal property is located. Burden to taxpayer 
 greater than resultant advantage to taxing state. Especially inappli- 
 cable when progressive rates are employed. InequaUties arise 
 between tax on residents and n<ni-reBidentB| favoring latter. Bad 
 effects on investments. 
 
 For taxation of personal property according to donucile: — Avoids 
 double taxation. Question of domicile sddom arises. Adjustment 
 of taxes not very difficult. In accordance with fundamental legal 
 theory. Reduces necessity for ancillary administration to a mini- 
 mum. Simplifies administration, avdds dday and expense to 
 taxpayers and state alike. Power to transmit or receive granted 
 or may be regulated by state of domicile, therefore state of domicile 
 should regulate tax. Deals with estates as a whole, but one set of 
 rates and exemptions to be adjusted and but one appraisal to be 
 made. Has less effect on investments. 
 
 Administration. 
 
 The practices as to administration show a great variation in tiie 
 
 several states. These are of minor consequence as they are 
 
26 
 
 BBPOBT OP BOABD OP TAX COMMISSIONEBS. 
 
 determined largely, if not entirely, by considemtioiis purely local 
 in character. Each state must necessarily comply, so far as pos- 
 able, with existing practices, and much may be found in the laws 
 of one state which is admirable, but which would be worse than use- 
 1^ if transferred to another. Administration must conform to 
 the conditions existing in the particular state to which it is to apply 
 and whUe much assistance may be derived from a careful study 
 of administrative methods in other states, very little, if anything 
 has been found which could be taken bodily and incorporated mU> 
 our law. 
 
 The Proposed Law, 
 
 The Board of Tax Commissioners has endeavored to ascertain, so 
 far as possible, the difficulties incident to the administration of in- 
 iMsritance tax laws in other states, and to so frame the proposed law 
 submitted herewith as to avoid them. Much oomphdnt is made 
 by admmistrators and trustees generally regarding what appear to be 
 unnecessaiy delays and expense in the settlement of estates due to 
 certam provisions, regarding the filing of inventories and the appoint- 
 ment of appraiser, found m the laws of some states, and an effort has 
 been made to avoid these difficulties entirely, if possible, and if not 
 to reduce them substantially. ' 
 
 Considerable annoyance has been caused m some states by imposing 
 upon the courts exercising probate jurisdiction the duty of assesmng 
 the inheritance tax. This appears to be wrong in theory and bad in 
 practice,asthe assessmentof taxesisnota judicial function. Except 
 m so far as probate courts are required to furnish certified copies of 
 documents, and to satisfy themselves that the required tax has been 
 adjusted m accord^ce with the hiw, no change in our probate laws 
 has been made, and no new duties, either expressed or impUed, have 
 been imposed upon the probate courts, by the proposed kw. 
 
 The provision found m some kws, which makes the tax a Hen upon 
 mtangible personalty, is severely criticised as putting a cloud upon the 
 title to securities ahnost, if not quite, impossible to trace, and adminis. 
 
 trators and trustees cannot transfer securities without exasperating 
 delays and uncertainties. These difficulties have been avoided by 
 allowing no lien for the tax upon personalty, but a fine is imposed 
 upon the transferring agency for the transfer of securities upon which 
 the tax has not been paid, and provision has been made for promptly 
 and easily ascertaining whether there is liability to the tax and whether 
 it has been paid or not. The state appears to be amply protected 
 by thisprovifflon, and the question of defective title to aecurilaes upon 
 which the tax has not been paid is removed. 
 
 The questions involving jurisdiction, which have in many instances 
 caused troublesome and expensive delays, it is anticipated will be 
 greatly reduced in number and importance by the provision of the 
 law fixiitg the domicile of the former owner as the situs for taxation 
 <^ personalty. This provision appears to be in line with the best 
 practice and thought on the subject. 
 
 The exiemption to members of the first class — $25,000 — is so large 
 that in very many cases, unless strangers in blood are involved, there 
 will be only a tax on the net estate to be adjusted, a flat tax of one- 
 half of one per cent, on the net estate in excess of $5,000. It is 
 confidently expected that this provision will prove of great advantage 
 in avoiding delay and expense in the administration «f small estates, 
 with no consequent loss to the state. 
 
 Ample time has been allowed for the payment of the tax before 
 interest is charged, and a substantial discount given for prompt 
 pasrment. The exemption allowed to members of the first class is 
 the largest and the rates upon legacies up to $100,000 to members of 
 the first class are the lowest provided in any state taxing direct 
 inheritances. 
 
 Provision is made for prompt appnusal in case of disagre^ent, and 
 
 for the adjustment of indeterminate taxes in a manner which appears 
 to amply protect the state and avoids delay and expense to the estate. 
 
 Non-resident deced^ts are taxed only upon laransfm of real 
 estate, or an interest therein, and ample provision has been made for 
 determining the exemptions to be allowed, and indebtedness to be 
 
 9 
 
28 
 
 BWOTT OF BOABD 0» 1!&Z OOlOflSSIONEBS. 
 
 deducted, in the determination of tlie net estate and legacies without 
 troublesome compUcations or annoying delays. Appeal may be 
 tabsn fnm dedsionB of the Board to the Superior Court sitting in 
 Providence. 
 
 Reasons for Its Adoption Entirely Fiscal. 
 
 The consideration given to the subject of Inheritance taxation in 
 compliance with your Excellency's request has been entirely fran the 
 standpomt of revenue. The propoeed law is recommended because 
 It provides a just and convenient means of raising revenue. The 
 proposed rates are so low and the esemptions so large that, in tho 
 h^t of the experience of other countries and other states, the law 
 inU hay» BO social tfeeto; as a controlling or limiting factor, either 
 m the accumulation or distribution of wealth, it wiU be negligible 
 Theratee and exemptions are such that they are justified on purely 
 fiMaoal grooiMb, even in the case of the highest rate applied to 
 strangers in blood. The draft of the proposed law fa herewith 
 submitted: 
 
 It w enacted by the General Assembly as follows: 
 on net esfaile-^late, ezcnvliQii. 
 
 J^TZUt ""f^ be «„1 iB hereby impoBed upon the net estate of 
 T^J^!^ «d "P« the Bet ertrte of no,»eBident decedents consisting 
 
 Such tax shall be imposed at the rate of one-half of one per oentom upon 
 the excess value of aU said estates owr «,000: PrcviM, that only «.ch pZ 
 poruon of «„i exemption of »6,000 Aril be flowed «t.te. of non-resident 
 d»jenta« the ^ of the red ptoperty 1^^ 
 
 ttewn. beM. to the entire ertrte whereyer located; and provided further, that 
 the e»euW, «hn«urtr«tor or trustee of such non-resident decedent's estate 
 T,T T, . Commissioners duly certified statements edaWtin* 
 
 the full and fmr caah value of the entire estate. If ««d rtatemsnti ne not fifed 
 as herem provided, no exemptim shaU be aUowed. 
 
 REPORT OF BOARD OF TAX COMMISS 
 
 Net estate, tiow ascertained. 
 
 Sbo. 2. The net estate of iwidentdeoedeiits for the asBBsnnent of 
 be asoertained by adding to the appiaind Yalue of tibe inventoried estate, as deter- 
 mined by the Board of Tax Gommissionen, all gains made in reducing intangible 
 
 property to possession, except shares of stock in any corporation and income accru- 
 ing after death, and deducting therefrom the amount of claims paid, all funeral 
 eKfmnfm and expenses of administration, allowance made for the support of widow 
 •ad family of the decedent during the settlement of the estate, as fixed by the 
 probate court according to law, the amount at death of all unpaid mortgages not 
 deducted in the appraisal of property mortgaged, and losses incurred during the 
 settlement of the estate in the reduction of intangible property to possession, except 
 shares of stock in any corporation: Provided, that no such deduction shall be made 
 for allowance for support of widow and family beyond the date upon which the tax 
 hereby imposed becomes payable. The net estate of non-resident decedents, for 
 the asnsnnNit of this tax, shall be ascertained by deducting from the appraised 
 Talae of the real property loeated in Rhode Island, as determined by the Board of 
 
 Tax OmmilnioiMn, such proportion of the indebtedness of the entire estate of 
 said non-resident decedent as the value of said real property and any tangible 
 
 personal property located within Rhode Island bears to the value of the entire 
 estate: Provided, that only the excess of such proportion of indebtedness over 
 and above the value of said tangible personal property shall be deducted from the 
 i^ypraised value of said real property; and provided further, that the executor, 
 administratar, or trustee, of sudi noBHKaident decedent's estate files with the 
 Board of Tax Ck>nmii8Bioneniduly cntffied statemente exiubilmg the full and fair 
 cash value of the eaiiie estate and the indebtedness for which said estate has been 
 adjudged liable. K said statements are not filed as her^ provided, only such 
 debts and expenses as are chargeable to the said real property under the laws of 
 this State shall be deducted. 
 
 Assessment, taxes payable, notice, certification, lien, deposit. 
 
 Sec. 3. The tax imposed by Section 1 of this act shall be assessed upon the 
 full and fair cash value of the net estate by the Board of Tax Conmiissioners as 
 h^einbefore provided and notice of the amoimt of said tax shall be mailed to the 
 executor, administraUHr, or trustee by said board, but failure to receive said 
 notice shall not excuse the non-payment of or invalidate said tax. The Board of 
 Tax Gommissionen diaH certify the amount ci such tax to the general treasurer 
 who shall receive and collect the taxes so assessed in the same manner and with 
 the same powers as are prescribed for and given to the collectors of taxes by 
 Chspter 60 of the General Laws and by any acts in amendment thereof or in 
 
30 
 
 BBPOBT OF BOABO OF TAX COMlIISSIONliBS. 
 
 addrt«»tl««to. 8«aht«4.U be due «dpayrfJe by the executor, adminis. 
 ^ JfZ ^ tomediately upon notification of the amount 
 
 «d rf not p«d wfthin thirty days thereafter shall bear interest at the 
 
 t V «u ^ ^''^ °f ^"<^'> notifiotion. Said 
 
 tax BhaD be paid direct to the general treasurer of the State for the uae of the State, 
 and shall be and remain aHea„ponthe«.t«teuntathe«BeAaBbepaid,an<^ 
 he executors, administrators, or trusteea d>aU be pe»onaIIy liable for ^Th tax 
 
 ^ '*""^'~«*"'«*"°^*».<»tn»tee may deposit 
 
 the ^anerri to«„rer a «un of mon^ sufficient in the opinion of the Board of 
 
 of Sectmn 1 of this act, and when said tax has been determined and oertilW a. 
 rfo,»a,d the general treasurer shaU repay to said executor, adminirtrator. or 
 tnistee the difference between the tax certified ..d the a™»nt *po«ted, ^ 
 ^^Zlt^ "^"^ i-PO-d ahan be di«*a.^ JZ.^ 
 
 Debte proved after payment, iwpeai fnni asMsowiiL 
 
 Smo. 4. Wh«iever debts shall be proved against the estate of a decedent after 
 the payment of the tax imposed by Section 1 of this act the sen.r.1 twaauier 
 ehaU upon receiving a certified copy of the of the pwhrte ooort « other 
 
 court o competent juririicti™. dHwing the proof of said debt.. «rfund such 
 
 -dminirtrator, or trustee without 
 Zll"fL » "dotation making appropriation therefor. Any executor, 
 •«>»»»«nrtor, or tmrtee nuiy M>pe.l from the assessment of said tax aa provided 
 m Section 27 of this act. « as provwea 
 
 Tax on transfer. 
 
 Sec. 5 A tax shall be and is hereby impoawl upon the transfer of any nroD- 
 erty, real, tangible, or intangible. « upon «v int«rt th«in or income tW 
 
 ftom. mtrurt or oth«nri», to person.. a-KH»«ti^ 
 upon the niJit to receive, in the frfkwring ease.: . 
 
 (I) When the transfer is by wiU or by the intertate law. of thi. Stat, of 
 leal, tangib e, or mtangible property &om «.y pe«m dying «i.ed and pos««d 
 thereof while a resident of the State. "pnnnmnoa 
 
 Nso-rcsident 
 
 8t^ ^ ^Tf^ ""^ * ^^^y Wn the 
 
 State «rf the deeed«t wa. a noweAlent of the State at the time of his death. 
 
 REPORT OF BOARD OF TAX COMMISSIONERSv < , 31 
 
 In contemplatioii of death. 
 
 (9) When the transfer is of real, tangible, or intangible property within the 
 State made by a resident, or of real property within the State made by a non- 
 resident by deed, grant, bargain, sale, or gift made in contemplation of death of 
 the grantor, vendor or donor, or intended to take effect in possession or enjoy- 
 ment at or after such death. Such tax shall be imposed when any such person^ 
 anoeiation, or ooipofation beoomes beneficially entitled, in possession or expect- 
 ancy, to any pnpertj, or interest therem, or the income therefrom by any such 
 transfer, whether made before or after the passage of Una act. 
 
 By appointmeBl. 
 
 (4) Whenever any person or corporation shall exercise a power of appoint- 
 ment, derived from any disposition of property made whether before or after the 
 passage of this act, such appointment when made shall be deemed a transfer 
 taxable under the provisions of this act in the same manner as though the property 
 to which such appointment relates bdonged absolutely to the donee of sodi power 
 and had been bequeathed or devised by such donee by wOl; and i^dienever any 
 person po ss essi ng sudi a power of appcnntment so derived shall omit or fail to 
 exercise the same within the time provided therefor, in whole or in part, a transfer 
 taxable under the provisions of this act shall be deemed to take place to the 
 extent of such omission or failure, in the same Tn^^nnftr as though the person 
 thereby becoming entitled to the possession or enjoyment ot the property to 
 which such power related had fuooeeded thereto by a wffl of the d<niee of the 
 power failing to eseraae soeh power, and shall take effect at ik» time of such 
 omission or failure. 
 
 Assessment, taxes payaUe, notice, certification, lien, liability. 
 
 Sec. 6. All taxes imposed by Section 5 of this act shall be assessed by the 
 Board of Tax Commissioners upon the full and fair cash value of the property 
 transferred at the rate hereinafter described and only upon the excess of the 
 exemption hereinafter granted, to be paid direct to the general treasurer of the 
 State, for the use of the State, and all executors, administaators, or trustees shall 
 be personally liable for any and all sudi taxes until the same are paid. Notice 
 of the amount of said taxes shaU be mafled to the executor, administrator, or 
 trustee, by said board, and upon request made to them to any other person by 
 whom said taxes are payable, but failure to receive said notice shall not excuse the 
 non-payment of or invalidate said taxes; and unless appeal is taken from such 
 assessment, as hereinafter provided, the amount of turn m aaeessed shall be 
 final. Said board shall certify the amount of such taxes to the general treasmcr 
 who shall fecehre and coOeet the taxes so Bssesied in the same manner and with 
 
mroafT of bqaw of tax gommissionbbs. ' 
 
 the iame powers as are prawribed for and given to the coUectorsof taxes bv 
 Cai^ter 00 <rf the Geoeral Laws, and by any acts in amendment thereof or in 
 addition thereto. Payment of the amount so certified shall be a discharge of the 
 tax. Said taxes shall be and remain a hen upon the property transferred, and 
 upon all property acquired by the executor, administrator, or trustee in substitu- 
 tion therefor while the same remains in his hands, until the said taxes are paid or 
 a bond mm as heronafter movided, but said Uoi shall not affect any tangible 
 or intangible pcnonal property after it has passed to bona fide purchaser for 
 vahie: Prmnded, however, tiiat nothing herein contained shall give the owner of any 
 •ecurities specified in Section 28 of this act the right to have the same transferred 
 to him by the corporation, association, company or trust issuing the saiUe, 
 until the certificate required by said Section 28 shaU have been filed as therein 
 provided. The Uen charged as afofesaid upon any real estate or sqiarate parcel 
 
 thereof may be discharged by the payment <rf an taxes due and to become due upon 
 said real estate OT siqpawte paiwl, or Iqr the filing and acc 
 provided in Section 11 of tiiis act, w by an order of the Boaxd of Tax Commis- 
 aooers tiaasfeRmg such lim to otiier real estate owned by the person to whom said 
 real estate or separate parcel thereof pa^es. The heir, devisee or otiier donee shall 
 be personally liable for the tax on such real estate, as well as the executor, adminis- 
 
 trator, or trustee; and if tiie executor, admiaistnrifflr, or trustee pays such tax, he 
 shaU, unless tiie same is made an eipense of administration by the wiU or otiier 
 inrtroment, have tiie rii^t to recover such tax from tiie heir, devisee or otiier 
 donee of such real ertate. 
 
 CbssUicatiQii, rates of taxation. 
 
 Sec. 7. When any property or any beneficial mt«est tiierein or ineome tiwre- 
 f rom ShaU pass to or few tiie use of any gnmdpaient, parent, husband, wtf e, child, 
 brother, sister, nephew, niece, wife or widow of tiie scm, or husband or widower 
 of tiie daufl^ter, ot any child adopted in conformity wHh the laws of Rhode 
 Wand, or of any otiier state or country, or any person to whom the deceased 
 for not less tiian ten years prior to death stood in the acknowledged reUtion 
 of a parent, or to any hneal descendant bom in lawful wedlock, tiie tax so 
 imposed ShaU be at the rate of one-half of one per centum upon all amounto 
 m excess of tiie exemption hereinafter qieeifiBd and not exceeding $50,000; 
 •t tiie rate of one per centum upon afl amounte in exeen of $50,000 and not ex- 
 «eeeding|250,000rattiierateofoneandone4iatf per centum upon all amounte 
 in exeess of $250,000 and not exceeding $500,000; at the rate of two per centum 
 1^ an amounte in excess of $500,000 and not exceeding $750,000; at the rate 
 Of two and one-half per centum upon all amounte in exoeas of $750,000 and not 
 
 Bxpom of boabd of tax coMiassio: 
 
 exeeeding $1,000,000; at the rate of three per centum i^Mm aB amounte in excess 
 of $1,000,000. 
 
 Sec. 8. When any property or any beneficial interest therein "/f income there- 
 from shaU pass to or for the use of any person not mentioned in Section 7 of 
 this act, or to or for the use of any body politic or corporate, the tax so imposed 
 shall be at the rate of five per centum iqion all amounte in excess of the 
 enmption hereinafter speoified and not eiiSseding $60*000; at the rate of six 
 per centum uptm all amoonte in exeess of $50,000 and not ese e ed ing $250,000; 
 at the rate of seven per centum upon all amounte in excess of $250,000 and not 
 exceeding $1,000,000; at the rate of eight per centum upon aU amounte in excess 
 of $1,000,000. 
 
 Exemptions. 
 
 Sic. 9. The following exemptions from the taxes imposed wider the pro- 
 visions of this act are hereby allowed: 
 
 (1) All property transferred to any corporatixm, association, or institution, 
 located in Rhode Island, which is exempt frcnn taxation 1^ charter or under the 
 laws of Rhode Island, or to any corporation, association, or institirtion, looated 
 outskie of Rhode Island, ^dik^ if oonskiered as k>eated within Kh^ 
 
 be exempt as aforesaid, or to any person in trust for the same, or to any city or 
 town in Rhode Island for pubUc purposes, shall be exempt. 
 
 (2) Property of a clear value of $25,000, to be taken out of the first $50,000 
 transferred to each of the persons mentioned in Section 7 id this act, shall be 
 emmpt: Provided, that the desoendante of sueh persons diall be allowed the 
 exemption of the person they repre s en t, per stirpes and not per caiMta. 
 
 (9) Piroperty of a dear vahie of $1,000, to be takien out of the first $50,000 
 transferred to any person or corporation other than the peisons mentioned in - 
 Section 7 of this act, shall be exempt: Provided, that the descendants of any such 
 person shall be allowed the exemption of the person they represent, per stirpes 
 and not per capita. 
 
 (4) In the case of the transfer of a non-resident deoedent's real p r op er ty 
 looated in Rhode Island, at of any interest therein, only soeh proportion of the 
 exemptions herein specified shi^ be aflowed as the value of the transferee's 
 share in said real property, or any interest therein, bears to the value of said 
 transferee's share in the entire estate of said non-resident decedent: Provided, 
 that the executor, administrator, or trustee of such non-resident decedent's 
 estete files with the Board of Tax Commissioners duly certified statemente 
 exhU^ting the full and fair cash value id the entire estate. If said statemente 
 are not filed as herein ptofided, no eaemption shaQ be allowed. 
 
34 BBPOBT OP BOABB OF TAX COMMISSIONERS. 
 
 Taies payable, when. 
 
 Stc. 10. AU taxes imposed by SeoOon 5 off this act, unless otherwise hmin 
 provided, shall be due and payable six nuntths after the date of the filing of 
 thdr bond by any executor, administrator or trustee first appointed, and if paid 
 within said period a discount of four per centum shall be aUowed and deducted 
 therefrom. If such tax is not paid within nine months from the accrual thereof 
 interest shall be charged and collected thereon at the rate of eight per centum per 
 annum from the time the tax accrues, unless by reason of dauns made upon the 
 estate^ neoessaiy litigation, or other unavcndable cause <rf delay such tax cannot be 
 determined aiul paid as herem provided, m which ease interest at the rate of six 
 per oentum per annum shall be chaiged upon such tax from the accrual thereof 
 unto the cause of such delay is removed, after which eight per centum per annum 
 shall be charged : Provided, that litigation to defeat the payment of such tax shall 
 not be considered necessary litigation. 
 
 Election to postpone payment in certain cases. 
 
 Sbc. 11. Any executor, administrator, or trustee, or any person or persons 
 beneficially interested in property chargeable with a tax under the provisions of 
 Section 5 of this act, may elect, with the approval of the Board of Tax Commi»- 
 sioners, not to pay the same until the perscm or persons beneficially interested shall 
 come into actual possessioii or oijqymait of such property; in wlueh case such 
 executor, administrator, or trustee, cw said person <» persons beneficiaUy interested 
 fliiall give bond to the genenl treasurer m a penal sum three times the amount of 
 the said tax with such sureties as the general treasurer may approve, conditioned 
 for the payment of the said tax and interest thereon at the rate of four per centum 
 per annum at such time or period as such beneficiaries or theur representatives 
 may come into actual possession or enjoyment of said property, and also with the 
 c<»idition that the oMigpr shall notify the Board of f Sftmmiifymff B 
 time or period of actual possession or enjoyment arrives. Said bond shall be 
 renewed every five years after the filing thereof. The acceptance of such bond by 
 the general treasurer shall discharge all liens for the tax covered thereby upon the 
 property of the decedent, and shall also discharge the executors, administrators, 
 or trustees from personal liabiUty for said tax, exo^t under the temis of said bond. 
 
 Debts proved after distributioii. 
 
 Sbc. 12. Whenever debts shall be proved against the estate of a decedent 
 after distribution of legacies from which the inheritance tax has been deducted in 
 compliance with this act, and the legatee is required to refund any portion of the 
 lega<7, a due proportion of said tax shaU be repaid to him by the executor, admin- 
 
 { 
 \ 
 
 BBPORT OF BOABB OV TAX CCMOfiaSIONEBS. 
 
 istrator or trustee if the said tax has not been paid into the State treasury; and-' 
 if the said tax has been paid into the State treasury the general treasurer shall 
 
 upon receiving a certified copy of the records of the probate court or other court of 
 competent jurisdiction showing the proof of said debts, refund such equitable 
 proportion of the tax to the executor, administrator, ot trustee without any further 
 act or nsohitioD malring appropriation therefor. 
 
 Life estates and remainders. 
 
 Stoo. 13. When any property cht interest therein oft mocmie there&om shall 
 pass or be limited for the life of another, or for a term of years, or to terminate on 
 the expiration of a certain period, the property of a decedent so passing shall be 
 appraised immediately after the death of the decedent, and the value of the sa^d 
 life estate, term of years, or period of limitation shall be fixed upon the combined 
 Anmican experience tables of mortality with interest at five pw centum par 
 annum; and the vahie of tiie remainder in said pn^Mrty so lunited diaU be ascer- 
 tained by deducting the value of the said life estate, term di years, or period of 
 limitation from the fahr cash value of the property so limited; and the tax on the 
 said estate or estates, remainder or remainders, interest or interests shall be 
 immediately due and payable, and remain a lien upon the entire property limited 
 until paid. 
 
 Contfaigeiit trantfcfs. 
 
 Sbc. 14. In i^praimig the vahie of any jmiperty, or interest tiiermn, or in^ 
 
 therefrom, to the boieficial enjosrment whereof there are persona presently 
 
 entitled thereto, no allowance shall be made in respect of any contingency upcm 
 
 the happening of which the property, or interest therein, or income therefrom might 
 
 be abridged, defeated or diminished: Provided, however, that in the event of such 
 
 contingency taking effect as an actual burden upon the interest of the beneficiary, 
 
 either in abridging, defeating, or diminishing the property, or interest therein, or 
 
 income therefrom as aforesaid, a return dull be made to the person pn^ierly 
 
 entitled thereto of a proportionate amount of the tax theretc^ore paid iqx>n said 
 
 property, in respect of the amount or value of the contingency when taking effect,. 
 
 or so much as will reduce the same to the amount which would have been assessed 
 
 in respect of the actual duration or extent of the interest enjoyed. Such refund 
 
 shall be made by the general treasurer, upon notification by the Board of Tax 
 
 Commissioners of the correct amount thereof, without any further act or resolur 
 
 tion makmg iq[>propriation therefor. The foregoing provisions shall not apply 
 
 to an estate for life at for years iHiidi can be abridged, defeated ot dimmished by 
 
 the act or omission of the legatee or devisee; sudi estates idiaU be taxed as if thm 
 
 were no possibihty of such abridging, defeating or diminishing. 
 10 
 
36 BBFOBT OF BOABD OF TAX COMMISSIONBBS. 
 
 J»c. 15. When property is transferred or limited, in trust or otherwiM. 
 «nd the nghte, interests, or estates of the transferees or beDefioiMie. «• depeDd- 
 "P°° contingencies or conditions whewby they be wholly or in part 
 created defeated, extended or rfmdprf, a t«t duJl be impo«rf upon ™,oh tran.. 
 fer at the lowert rate whieh on the happening of «,y said contingencies or con- 
 &t»n» would be po»Ue under the provision, of this act, and such tax so imposed 
 djan be due and payable forthwith by the executors or trustees out of the p«>p. 
 «ty tanrferred: Pr<mded, however, that on the happening of any continr«oy or 
 condition whereby said property or any part thereof i. t»naf.™d to a pen»n 
 who, under the provisions of this act, ia required to pay a tax at a higher wte 
 than thet« unpoeed. then ««h 4dl pay the diff«ence between the 
 
 TTIJlt? "T^ tax at the higher rrte, and the amount of such increased 
 *« shaU be eofowed and e<Jleeted as provided in this act. 
 
 ^. 16. Estates in expectancy which are contingent w defeasible and in 
 which proceedings for determination of the tax have not been taken or yA^m the 
 taxation thereof has been held in ab«y>«ie ahaO be tvpnmA at their fuU and 
 fair cash value when the pennns entitled thereto ahaD eome into beneficial enjoy- 
 «at or poeKMion thererf, withootdiBiinuticm for or on account of any valuation 
 h«tof0K, made of the particuhir ortate for the purpose of taxation upon which 
 •aid estate in expectancy may be limited. 
 
 Bequest* to executors. 
 
 Swj. 17. Whenever a dededentawKunts one or more exeeufaOT or tenstees and 
 m heu of theu- allowances or commissions makes a bequest or devise of property 
 to them which would otherwise be Hable to a tax under this act, or appointe 
 them his residuary legatees, and said bequests, devises or residuary legacies 
 Moeed what would be a reasonable compensation for their servieei, asdetermined 
 by hiw, such excess shaU be taxable under the provisions <rf tiiis aet 
 
 Dedodion and retenUon of tax in certain cases. 
 
 • ^\ the Win or Other instrmnent under which any gift or transfer 
 
 IS n»de Shan direct the taxes imposed by Section 5 of this act to be paid from the 
 residue or as an expense of administration, and the residue is suffident to pay sodl 
 taxes, the following provisions shaU apply. Any executor, admmistnrtor. 
 or trustee havmg in charge or in trust any legacy or property for distribution 
 subject to tax under Section 6 of this act shaU deduct the tax therefrom If 
 such legacy or p«,perty be not in monqr. he shan coHect the tax thereon upon the 
 appraund value thereof from the person entitled thereto. He shall not deUver 
 or be compeUed to deliver any specific legacy or property subject to tax under 
 
 t 
 
 BEPOBT OF BOARD OF TAX COBOnSSIONEB^*. ^ 37 
 
 Section 5 of this act to any person until he shall have collected the tax thereon. 
 If any such legaoy shall be payable out of real property the heir or devisee shall 
 deduct soeh tax therefrom and pay the same to the executor, administrator or 
 trustee and the tax shall remain alien or diarge on such real estate u^ktll sud tax is 
 paid, and the payment thereof shall be enforced by the executor, administrator 
 or trustee in the same manner that payment of the legacy might be enforced. If 
 any such legacy shall be given in money to any person for a limited period the 
 executor, administrator or trustee shall retain the tax upon the whole amount, but 
 if not in money he shall make appUcation to the Board of Tax CommiHsioners to 
 make an apportiODment, if the ease require it, of the sum to be paid into his hand 
 by sodi legatees, aiid for aiMhlMier Older r^tiveth^ 
 
 Legatees, distributees, or other donees shall be personally liable for the taxes 
 
 imposed by Section 5 of this act until the same are paid over by them to the 
 executor, administrator, or trustee; Provided, however, that if the will or other in- 
 strument directs the payment of such taxes from the residue or as an expense of 
 administration, the sud liability shall continue until the said taxes are received 
 the general treasurer or bmid is filed as provided in Section 11 of this act. 
 
 Tmuitn ef no»-tf iMf nt dccedeats. 
 
 Sec. 19. In the case of real property located in Rhode Island, belonging to the 
 estate of a non-resident decedent, the tax shall be assessed upon the full and fair 
 cash value of said property, as determined by the Board of Tax Commissioners, 
 remaining after deducting such proportion of the indebtedness of the entire 
 estate of said non-resident decedent as the VBhie of said real property and any 
 tangible personal property located within Rhode Island bears'to the value of 
 the entire estate : Provided, that only the excess of such proportion of indebted- 
 ness over and above the value of said tangible personal property shall be deducted 
 from the appraised value of said real property; and provided further, that the 
 executor, administrator or trustee of such non-resident decedent's estate files 
 with the Board <d Tax Commissioners duly certified statements exhibiting the 
 full and fair cash value of the entire estate and the indebtedness for whieh said 
 estate has been adjudged liable. If said statements are not filed as herein 
 provided, only such debts and expenses as are chargeable to the said real property 
 under the laws of this State shall be deducted. 
 
 Setttement of tax by agreement 
 
 Sbc. 20. The Board of Tax Commisffloners, with the approval of the attorney- 
 general, may effect such settlement of the amount of any taxes imposed by this 
 act as they shall deem to be for the best interests of the State, and the payment of 
 
38 
 
 BEPORT OF BOABD OF TAX COIOHSSIONISBS. 
 
 ^trr " •<f«» -rtWi«^on of such tax. The agree- 
 
 ment the executor, «launi8t»tor, or trustee to such settlement shaU be binlg 
 
 r°rw ^ """^'^^ *° » fraud, „r^ 
 
 m^rfeet error of such executor, administrator, or trustee: Howmr. that 
 
 settlement a. to any tax upon gifts or transfers of real eette when, ™> convey- 
 ance as made by such executor, administwtor, or truetee, diiUI be effeefad JL 
 the^^or persons receiving the real eetrte, or mte«»t therein, which is subject 
 
 Suvension of tax. when. 
 
 Jho. 21. Whenever it shaU be necessary in the settlement of any ertate to 
 «t»n property or funds for the purpose of paying the claim of «.y creditor, the 
 
 of the whole or a proportionate part of the t«t may be «»pended. by and wUh the 
 ^ val of the Bo«* of T«c Commi««.„^ to aw«t theX<^tion of such 
 
 "^ioie oi appiaisaL 
 
 Sw. 22. Every net estate, inheritance, devise, bequest, legacy or gift upon 
 wluch a ta^^ imposed under this act shaU be apprised at it. full andTair «»h 
 vah,e .mmedaatdy upon the deMh of the deced„ 
 
 l^t^*^' »^ "«* J-keritance. devise, bequest 
 
 ^or grft Aatt be of such a nature that its full and fair cash value cJot b; 
 
 P«wer of execator to sell. 
 
 Sec. 23. Every executor, administrator or trustee shaU have full power to 
 
 ^mt^K r *" by this act in the same manner as he 
 
 «|Jit^be enbtled by Uw to do for the payment of the debts of the testator or 
 
 Inventory aod aw«tol Hed wMh Bo«d of Commteteners. 
 
 «.d mtang.ble, of every decedent shaU be filed with the Board of tTcZL- 
 sioners by the executor, administrator or trurtee within three months after hi- 
 a^^mtment. If he neglect, or refuse, to file inventory and appraisal, he 
 ^bel»bletoap.n.ltyofnotmo,,than«,000,whichshau 
 BoMd of T«c Comm^Hmers for the use of the State upon petition to the Superior 
 
 BBfOST OF BOARD OF TAX COMMISSIONEBS 
 
 39 
 
 Court, and shall also be subject to removal as such executor, administrator or 
 trustee by tlie probate court or other court of competoit jurisdiction on motion 
 made in mich court by said Board of Tax Ck>mmifl8ionera. 
 
 Informatkm furnished Board of Tax Commiiwioners by probate clerk. 
 
 Sbc. 26. Every probate clerk shaU, within thirty days after the granting of 
 letters testamentary or letters of administration upon any estate, notify the Board 
 of Tax Commissioners of the name of the decedent, the name and address of the 
 executor, administrator or trustee appointed, the amount of the bond required by 
 the court, a certified copy of the will and testament of the decedent, a certified 
 <opy of the petition for administration of every estate, and any other inf cnrmatioii 
 which he may have oonooning the estate such decedent; and diall also furnish 
 forthwith such further informati<m from the records and files of his office as the 
 Board of Tax Commissioners may from time to time require. 
 
 Ppwcti BoMfd qf TmK ConiBriiwk>iiq»— reappratoaL 
 
 Sec. 26. If such inventory and appraisal filed in accordance with the provis- 
 ions of Section 21 of this act be considered by the Board of Tax Gommi88i<mera 
 to be an insufficient or incomplete statement of the pn^ierty, real, tangible and 
 intangible, of the decedent, the said Board of Tax Comminionen shall within 
 thirty dajrs after the fifing of said inventory and appraisal give notice to the 
 executor, administrator or trustee to appear before them for the purpose of 
 examination of and concerning such inventory and appraisal, and of and concern- 
 ing all matters appertaining to the estate and the value thereof of such decedent; 
 and if the executor, administrator or trustee fails to appear before said board after 
 due notice, or if after appearance and examination of such executor, administrator 
 or trustee said board still ocmsiderB such inventory and appraisal tobeaninsuffi- 
 oient and incomplete statement, or if such executor, administrator, or trustee 
 refuses or neglects to answer the questions propounded by said board in reference 
 to such inventory and appraisal of such estate, the said Board of Tax Commis- 
 sioners may appraise or appoint a^person or persons to act as appraiser or ap- 
 praisers. Such appraiser, being first sworn, or said board, shall forthwith give 
 notioeby mail to theexMnto, administrator or trustee and to all persons known 
 to haveaelaimcHrintereBtinthepriqpertytobeappraised^of theti^ 
 •the appraisal of sudi property, and shall at such time and plaoe'appraise the same 
 at its full and fair cash value as herein prescribed; and for that purpose said board 
 or said appraiser is authorized to issue subpoenas and to compel the attendance 
 of witnesses and to take the evidence of such witnesses, under oath if necessary, 
 oonoeming such property and the value thereof, such witnesses to receive the saow 
 fees as those nam paid to witnesses subpoensd to attend the Superior Court. 
 
40 
 
 BBPOBT OF BOABD OF TAX C0MMISSI0NEB8. 
 
 Sud. .ppra«r AM make report thereof and of such value in writing, together 
 witti a deposition of witnesses examined, if any such examination is reduced to 
 wntmg, to said Board of Tax Commissioners and such other faets m relation 
 thereto and to said matter as said board may order or r^. Such appraiser 
 shaU receive from said board a reasonable compensation for services «.d actua( 
 and necessi^ traveling e^^enses, payment thereof to be made out of the money 
 appropnated for the expensee of the Boad of Tax Commissioners. From such 
 "port of appraisal and other proof relating to such estate before said Boa«l of 
 Tax Commissioners, said board shall determine the value of the property upo» 
 which all taxes imposed by this act are computed and the amount of taxes to 
 which the same is liable; and if no appraiser be appoiated by said boaxd «i he«^ 
 mbefore provided the said board shaU determine the vah» of the property upon 
 which aU sa«i taxes are computed aodthe amount of taxes to which the same is 
 nable. 
 
 Appeal from assessment. 
 
 Sec. 27 An executor, administrator, trustee, legatee or other p^n 
 »«p.eved by the determination of the Board of Tax CommisBonew may, 
 withm three months after the payment of any tax to the general t»a«m„. an4 
 provided such tax has been paid under protest, apply to the Superior Court « 
 and for the county of Providence by a petition in equity against the Board of 
 Tax Comm«H»e,8 for the abatement of .Od tax or any part thereof; and if 
 
 Jl'TlT^ "^r^ ^'^ "Bessed, 
 
 I* «M wdw ui abatement of such tax or such portion thereof as was assesswl 
 without authority of law, and such order shall be subject to appeal in the 
 same manner as other equity causes. Upon a final decision ordering an abate- 
 ment of said tax or any portion thereof the genenJ treaaner shaU pay the amount 
 adjudged to have been illegaUy assessed, with interest at the rate of six per centum 
 ^r«mum. without «,y further act or resolution making any appropriation 
 
 Iraaitm tt secwWes— HaHlity. 
 
 8«c. 28. No banking association organised under the Uws <rf the United 
 States and located within this State, no corponrtion incaqKntod withm this 
 State, and no unincorporated association or joint stock company or buriness trust, 
 havmg certificates representing share, of stock and canying on business in this 
 State, shaU record a transfer of it, stock made by any executor, administrator, or 
 twste^ crisBue a new certificate for any such share of its stock at the instance of 
 any executor, administrator, or trustee-, or transfer any registered bond or otlMr 
 registered evidence of indebtedness at the instance of any executor, administrator. 
 
 BEFOBT OF BOABD OF TAX COlOaSSIOlOlBS. 
 
 or trustee, until a certificate authorising such transfer has been issued by the Board 
 of Tax Commissionen, and filed with the said corporation, association, company 
 or trust. Any such corporation, association, company or trust making such a 
 transfer without first obtaining the consent of the Board of Tax Commissioners 
 shall be liable for the amount of any tax wliich may be assessed on account of the 
 bequest or gift of such stock, bond or other evidence of iiiilfililiNlimw, together 
 with the interest thcterai, in an action to be t»ou|^t in the name <rf die general 
 treaaoier. The Board of Tax Commissioiiers shall not issue such a certificate 
 until aD taxes imposed on account of such bequest or gift has been paid, or the 
 payment thereof secured by bond or deposit as hereinafter provided. 
 
 Trust agreements not in contenqdation of death. 
 
 Sbc. 29. WheDever any person, during his life, shall appoint a trustee, 
 naming himself or others as beneficiaries, and providing for the administration 
 of said trust after his death, or providing for a termination of said trust and a 
 distribution thereof at his death, a transfer taxable under the provisions of this act 
 shall be deemed to take place upon the death of the creator of said trust, and all 
 persons or corporations acting as such trustee or trustees shall upon said death 
 file with the Board of Tax Commissioners a full aooount, showing the trust 
 agreement, if any, the amount of the trust property, the eztrat of the duration 
 of said trust, the manner provided for its termination, the name or names of the 
 beneficiaries, and any other information relating thereto which said Board of 
 Tax Commissioners may deem necessary for the proper assessment of the tax 
 thereon ; and any such trustee or trustees neglecting or refusing to file such account 
 shall be liable to a penalty of $1,000, which shall be recovered by the Board of 
 Tax Commissioners for the use of the State upon petition to tiie Supmor Court. 
 
 Oafans of crediton taxod in certain cases. 
 
 Sec. 30. The amoimt due upon the claim of any creditor against the estate of 
 a decedent arismg under a contract made after the passage of this act, if payable 
 by the terms of such contract at or after the death of the deceased, shall be 
 subject to the same tax imposed by Section 5 of this act iqxm a legacy of like 
 amount. The value <rf net estates of decedents or the value of legacies or dis- 
 tributive shares in the estates of decedents, for the purposes of taxation under the 
 provisions of Section 1 and Section 5 of this act, shall not be diminished by reason 
 of any claim against the estate based upon such a contract, except in so far as it 
 may be shown affirmatively by competent evidence that such claim was legally 
 due and pnyable in Uie Ule time of the decedent. 
 
42 
 
 KEPORT OF BOABD OF TAX COMMIS8IONXB8. 
 
 Final account allowed, when. 
 
 Stc. 31. No final account of any executor, administrator, or trustee shaU be 
 allowed by the court having jurisdiction thereof unless such acoount shows, and 
 the judge of the court finds, that all taxes imposed under the provisions of this 
 act upon any property or interest therein belonging to the estate to be setOed 
 by said account and th^ payable have been paid or that the payment of said 
 taxes have bem secured by bond or deposit as hereinbefore provided. The certifi- 
 cate of the Board of Tax Commissioners of the amount of said tax, and the receipt 
 of the general treasurer for the amount of tax so certified, shaU be ccmdusive as 
 to the payment of the tax to the extent of said certification. 
 
 Transfers taxed at highest rate, when. 
 
 Snc. 32. Whenever any executor, admmistrator, trustee or other person 
 hable for any tax imposed under the provisions of this act, refuses or neglects to 
 furnish the Board pf Tax Commissioners with any information which in the 
 opuuon of said Board is necessary for the proper computation of the taxes payable 
 hereunder, after having been requested so to do, said Board of Tax CJommissioners 
 
 ShaU certify such taxes at the highest rate at which thi^ could in any event be 
 computed. 
 
 Intestate estates. 
 
 Sbc. 33. If upon the decease of a person leaving an estate hable to a tax under 
 the provisions of this act, a will disposing of such estate is not offered for probate 
 or an application for administration is not made within three months after such 
 decease, the probate court upon apphcation by the Board of Tax Comnussioners 
 shall ^pomt an administrator thereof. 
 
 Double application of certain •^Tttenit. 
 
 Sk. 34. Sections 21, 22, 23, 24, 26, 28, 27, 28, 30, 31, 32 and 33 shall apply 
 to taxes miposed under the provisions of both Section 1 and Section 5 of this act. 
 Sec. 34. This act shall take effect April 1, 1916. 
 
 Franchise and Miniiiiimi Tax on Domcstte Cw^ 
 
 In changing the laws r^ulating taxation, where an mcrease in 
 revenue is the object, due consideration should be given to the equit- 
 able distribution of the new burden, and great care should be exercised 
 lest existing inequahties be retained or increased. 
 
 BEPORT OF BOARD OF TAX COMMISSlONEiiS. 
 
 43 
 
 Property or privilege which has not contributed at all, or has not 
 contributed its share to the public funds, should first be required 
 to contribute on a parity with that taxed before additional burdens 
 are placed on that akeady paying its full share. In this connection 
 your attention is respectfully directed to pages 16 to 18 and 24 to 
 29 inclusive of the report of this Board made to your Excellency on 
 January 15, 1915. 
 
 The condition precedent to Uability to the corporate excess tax 
 is the transaction of business for profit within the state, and many 
 domestic corporations are therefore not Uable to the tax. It appears 
 to the Board that it is entirely proper that such corporations should 
 not be liable to this tax, but it also appears that all domestic corpora- 
 tions not liable to, or not paying a corresponding amount under, the 
 present corporation tax, should pay a moderate franchise or minimiim 
 tax for the privileges enjoyed under our laws. The imposition of 
 such a tax is therefore recommended because while increasing the 
 revenues somewhat it will also tend to equaUze the taxes unposed 
 on corporations by the State. The draft of a law designed to 
 accomplish this result is submitted herewith: 
 
 It is enacted by the General Assembly as follows: ^ 
 
 Section 1. Chapter 769 of the Public Laws, passed at the January Session, 
 A. D. 1912, referred to as the "Tax Act of 1912," is hereby amended by adding 
 the following section: 
 
 "Sec. 49. Every corporation, jomt stock company or association incor- 
 porated in this State, all hereinafter referred to in this section under the term 
 'corporation' which pays no tax to the State or a tax less than two and fifty 
 one-hundredths dollars on each ten thousand dollars or fractional part thereof 
 of its authorized capital, eBsept religious, charitable and literary corporations, 
 and ezoq>t corporations the property of which is operated in this State by any 
 oorporatioii paying a tax upon gross earmngs as provided in Section 25 of this act , 
 shaU pay an annual franchise tax to the State upon its authorized capital stock 
 which when added to any tax paid by it in the same year to the State on its 
 corporate excess shall equal two and fifty one-hundredths dollars for each ten 
 thousand dollars or fractional part thereof of such authorised capital: Pronded, 
 however, that such tax shall not be assessed agamst any such corporation in the 
 year in which such corpwation is i&ooEporated. 
 U 
 
44 
 
 KEPOBT OF BOARD OP TAX COMMISSIONERS. 
 
 "Every such ccnporation which transacts no business for profit in this State 
 shall, on or before the first day of March in each year, return as of the thirty-first 
 day of December next preceding to the Board of Tax Commissioners, under oath 
 of its treasurer, or of a duly authorized agent or officer of such corporation, if 
 organized, and if not organized, under oath of someone authorised to act by the 
 incorporators: 
 
 "(1) The name of the coiporatira^ and the location (rf its principal office. 
 "(2) The amount of its capital authorized, and the amount outstanding, the 
 par value of its capital stock, and if there are different classes of stock, the amount 
 authorized and the amount outstanding of each class. 
 
 "The Board of Tax Commissioners, on the first business day of June in each 
 year, shall make up a list <tf all ixwpmations subject to a tax upon their franchises 
 as aforesaid, and shaU assess a tax upon each such corporation at such rate as 
 win when added to any tax which such corporation pays or is liable to pay to 
 the State in the same year equal two and fifty one-hundredths dollars for eacdi ten 
 thousand doUars or fractional part thereof of its authorised capital. And the 
 said board shall mter the amount of the tax aswssed against ea^ 
 tion, and shall certify to the correctness <rf sudi list and deUver a duly attested 
 eopy theroof as a puMie record to the general treasurer, who shall receive and 
 odlect the taxes so assessed, in the same manner and with the same powers as are 
 provided in sub-section (5) of Section 11 of this act. Said board shaU also 
 forthwith mail a notice of the amount of its tax to each such ooipot»tk>n, but 
 failure to receive said notice shaU not excuse the noiH»ymait of the tax. 
 
 "The tax aflseased as af(»esaid shaH be payable cm the first day of July next 
 after its assessm^t as aforesaid, and if not paid by the fifteenth day of such July, 
 diaH bear interest from the first day of such July at the rate of eight per centum' 
 per annum until paid. The general treasurer shaU, on the fifteenth day of July 
 in each year, make a list of aU corporations delinquent in the payment of their 
 taxes due and payable on the first of July of each year at years preceding under 
 this section, and shaU certify to the correctness of such list, and deKver the same 
 forthwith to the Board of Tax Commissionov. 
 
 "FaUure by any such corporation to make the returns or to pay the franchise 
 tax provided in this section for a period of three years after the first day of July 
 of the year in which any such payment was due and payaUe, shall oonstttate a 
 ground for the forfeiture by such ooiporatioii of its charter at law. In case of the 
 failure on the part of any such ocnporation to make the return or the payments 
 as aforesaid within the time specified in this section, the Board of Tax Commis- 
 sioneiB shall, on car before the first day of October in each year, report suchiaUure 
 to the attom^^enU, together with the name or names of every such dehnquent 
 
 REPORT OF BOARD OF TAX COMMISSIONERS. 45 
 
 corporation, and the attorney-general shall forthwith file his petition in the superior 
 court for the county in which such corporation is located, praying for the dissolu- 
 tion of such corporation, and the superior court may in the manner prescribed in 
 Section 27 to Section 30 inclusive of Chapter 213 of the General Laws, and amend- 
 ments thereof, decree such dissolution and have and exercise the powers and 
 jurisdiction conferred upon it in and by said sections of Chapter 213 and amend- 
 m^ts thereof.'' 
 
 Sbo. 2. This act shall take effect upon its passage, and all acts and parts of 
 acts inoottsistoiit herewith are hareby repealed. 
 
 Savings Deposits in National Banlcs. 
 
 Our present statute (Gen. Laws, Chap. 39, Sec. 3-4) requires the 
 
 payment of a tax of $4 per $1,000 on savings and participation 
 accounts in state banks and trust companies, a similar tax is 
 imposed upon the savings accounts and profits of savings banks, 
 the individual depositors are exempt from taxation on these 
 accounts and the tax is paid by the banks durect to the General 
 Treasurer. Similar accounts in national banks are not taxed by 
 the state, but the depositors are liable to local taxation thereon. 
 While these deposits are legally taxable in the local jurisdiction in 
 which their owner resides, the practical operation of this provision 
 of our tax law results in the escape from taxation of substantially 
 the entire amount of these deposits. Aside from any necessity for 
 revenue thelse deposits should be, in the interest of justice, subjected 
 to the same tax and as positive methods of collection as are applied 
 to similar deposits in other banks. 
 
 Savings deposits in national banks are successfully taxed in Ver- 
 mont and Connecticut. This method of taxing savings deposits in 
 national banks originating in Vermont has been sustained by the 
 courts of that state and by the United States Supreme Court. The 
 Connecticut law, modeled after that of Vermont and passed at the 
 last session of the legislature, has been accepted by the national 
 lianks of that state without exception. 
 
40 
 
 BBPORT OF BOABD OF TAX COMMISSIONBBS. 
 
 The amount of savings deposits in the national banks of this stote 
 IS substantial and at the rate applied to similar deposits in other 
 banks should yield a revenue of several thousand dollars. 
 
 The Board recommends the taxation of savings and participation 
 accounla m national banks as a necessary step towards the equalisa- 
 tion of the tax.on a class of property wWch furnishes approximately 
 one-fifth of the present state revenue. The draft of a law designed 
 to accomplish this result is submitted herewith : 
 
 U U enacted by the General AsaenMy at f Mam: 
 
 Section 1. Every peddent of this State having, on the last business dav of 
 June, an mterest bearing deposit in a national bank in this Stote shaU, within 
 twenty days thereafter, except as otherwise provided in this act, annuaUy wport 
 
 K """""^ and the name and location of such 
 
 bank to the Board of Tax Commi«uonei8 on bknks to be prep^ed «.d funushed 
 by said Board to such d^xtsitor upon aiq>Iication therefor. 
 
 a»c. 2. Such reports shaU be kept on file by said Board of Tax Conuniaaionere 
 for three years from and after the dates on which the taxes based thoeon become 
 due and payable to the State. Such reports shaU not be subject to the inspec- 
 tion of any person other than the members of the said Board of Tax Commi». 
 sioners and the employees in their office and the attorney-general. Any infor- 
 matK« contamed in such reporte shafl not be disclosed by any person authorized 
 to examme the same, except by the direction of a court of competent jurisdiction. 
 
 a*;. 3. Every person so having a deposit in a national bank as aforesaid 
 shall annually, except as otherwise provided in this act. pi^r a tax to the 
 State which ,s hereby assessed at the rate of fourwtenths of one per cent, amiually 
 upon the amount of such deposit so heW by such natkmal bank on thelast business 
 ^y of June; and no deductfen therefrom shaU be made on account of any exemp- 
 «»n. Notice of the «m«int of said tex and the amoUnt of the deposit on which 
 «udtox»Used ShaU bemailed to each depositor liable to such tax, except as otherw 
 wise provided in this act, by the Board of Tax Commissioners on the first 
 business day of September, and failure to receive «.ch notice d-dl not exc™« 
 such depositor from the papnent of the tox. S«d Board shaU also forthwith 
 certify the amount of said tox assessed ag^nst each depodtor and the amount of 
 the d^t on which said tox is based to the General Treasurer. The taxes 
 •mpoeed by thw section shall be paid to the General Treasurer annually for the 
 use of the Stote on or before the first day of October next foUowing the dates 
 
 BEPORT OF BOABD OF TAX COMMISSIONBBS. ' 47 
 
 whereon the reports provided for in the first section of this act are required to be 
 made. ^ . 
 
 Sec. 4. No other tax diali be assessed on such deposits in national banks or 
 against the depositors on acoount thereof. 
 
 Sec. 6. A depositor who willfully fails to make returns or to pay the taxes 
 provided in this act shall forfeit five per cent, of such deposit to the use of the 
 State for each month's delay in filing such return or in paying such tax. Such tax 
 and forfeitures may be recovered in an action on this statute commenced by the 
 General Ttk^amt in the name of the State in the Superior Court hoiden in the 
 County of Providenoe. 
 
 Bbc. 6. A person having any of the money, chattels, eflfects, goods, rights or 
 credits of said depositor in his possession may be summoned as trustee in any 
 action instituted under the preceding section. 
 
 Sec. 7. If the Board of Tax Commissioners or the court wherein such action 
 is pending for the recovery of such tax or forfeitures becomes satisfied that such 
 faflurewas not willful on the part of the depositor, said Board of Tax 
 Commissioners or said court may, in its ^liscretion, waive any part or all of such 
 p^ialty. 
 
 Sec. 8. If a national bank in this State so elects, it may pay to the State all 
 taxes provided in this act; and it shall be lawful for such bank to deduct such 
 taxes so paid from the interest or deposits then or thereafter held by it belonging 
 to the person from whom such tax becomes due. 
 
 Sec. 9. If a national bank makes the election provided in the preceding 
 section, it diall file with the Board of Tax Commissioners a stipulation getting 
 forth such fact. If such stipulation is filed on or b^ore the last business day 
 of June in any year, it shall take effect on said last named date and shall remain 
 in full force and effect until it shall thereafter be revoked as hereinafter 
 provided. No depositor in such bank shall be required to pay the tax or make 
 the returns hereinbefore specified, covering any annual period for which such 
 stipulation shaU remain in force. A national bank filing sueh stipulation may 
 tiiereafter revoke it by returning to the Board of Tax CommissionerB for can- 
 edlation the duplicate certificates issued by said board to said bank under Section 
 10 of this act, the revocation to take effect on the last day of the annual period 
 within which such certificates are returned for cancellation as aforesaid. When 
 such certificates are cancelled as aforesaid, said bank shall not thereafter be liable 
 to make the pajrments provided in said stipulati^ ensept for the annual period 
 in which such cancellation is made. 
 
 Sec. 10. Upcm 8U<di stipulation being filed, said Board of Tax Conmiissioners 
 shall issue in duplicate to the bank filing the same a certificate showing that it has 
 filed the aforesaid stipulation. 
 
48 
 
 BBPOBT OF BOABD OF TAX C01IMI88IONERS. 
 
 &c 11 Ev«y natkmal buk filing such stipulation shall thereupon become 
 U»We to the State to make returns and pay four-tenths of one per cent, of the 
 average wnount of such deposits held by such bank during each twelve months' 
 penod beginning with the last business day of June in which «ieh rtipulatSon 
 
 remains in force. 
 
 Stc. 12. If audi bank files a stipulation as hereinbefore provided it shall 
 on or before the fifteenth day of July, file with the General Treasurer and the Board 
 of Tax Commissioners a return verified by the oath of its president, cashier 
 or one of its directors, showing the average amount of such depotits for the twdye 
 months ending on the last business day of the preceding June, and shaU for each 
 annual period pay to the General Trmmm^t, on or before the first Monday in 
 August m each year, fouMenths of one per cent, of such average amount. The 
 General Treasurer d»U receive and collect the taxes assessed hereunder.', 
 
 aic. 13. Whenever in the opinion of said Board of Tax Commiseionen it 
 be for the best interests of the State so to do, they may publish a notice in 
 such newspaper or newspapers as they shaU designee, setting fartii tiiat flie bank 
 or banks th^ein named have filed or fafled to file a stipuUtion, or hive elected to 
 
 revokeoneaUeadyfiled;andmayinlikem«mernotifyalldepodtors having interest 
 deposits therein taxable under this act to file the proper returns as pro- 
 vided m the first section of this act and pay the tax assessed against such 
 dqxwitors mease such bank or banks shall fail to file a stipulation or Sect to 
 revoke one already filed; or that such depositors are absolved from making such 
 returns and paying such tax in case tile bank shall file a stqNilation or etect to 
 contmue one theretofore filed. 
 
 Sec. 14. The provisions of tiii, act shall apply to every person having an 
 mtaest bearing deposit in a national bank in this State on participation or in tiie 
 same manner as in savings banks. 
 
 Sec. 15. The provisions of tius act shaU not apply to any pr<^y in tiUs 
 State exempt by law from local ti«ation; nor to savings banks, trust companies 
 and savings banks and trust companies which have mterest bearing deposit^ 
 ui national banks; nor to interest bearing deposits of national banks in anotiier 
 national bank. 
 
 Sec. 16. Nothmg in this act shaU be oanstrued bb exempting from taxatkm 
 any deposit in any national bank, exo^t as bereinbefoie -provided. 
 Bmc. 17. This act duOl take effect from and after its passage. 
 
 REPORT OF BOARD OF TAX COMMISSIONERS. ^ ' ,^ 49 
 
 The Direct State Tax. 
 
 The direct state tax furnishes a necessary element of elasticity in 
 our revenue sycrt^. It presents a means ready at hand for increasing 
 or decreasing the state revenue positively and quickly with results 
 easily determinable within narrow limits. It also possesses the further 
 advantage, which should not be overlooked, of operating as a restrain- 
 ing influence upon expenditures. Each municipality will have to 
 bear some part of the burden, if it is found necessary to increase the 
 rate, and each would likewise be rdieved if any reduction wbs made. 
 
 Under present conditions an increase or decrease of one cent in 
 the present state tax rate on each $100 of locally assessed valuation 
 would increase or decrease the amount paid to the state by the 
 several cities and towns by approximately $70,000. An increase of 
 three cents in the rate would thus increase the state revenue approxi- 
 mately $210,000 and this increase, unless local rates w&e abnormally 
 high, would not cause imdue hardship. The difficulty is that this 
 increase in rate, if made, would not be equitably applied or even 
 i^pproximatdy so. 
 
 *The law requiring the assessment of all property for taxation at 
 its full and fair cash value is specific and clear. It is a well recognized 
 fact, however, ib&t various bases of valuation, as wdi as differ^t 
 percentages of the full value, are employed by the several municipali- 
 ties in the valuation of their property for taxation. The departures 
 fxom a strict application of the principle of full valuation for purposes 
 of assessment are all towards a valuation less than 100 per cent., 
 and as a result of these irregular practices we have valuations in some 
 localities as low as 35 or 40 per cent, of full value and in others as 
 high as approximately 100 per cent. 
 
 The practical difficulty in obtaining a just distribution of the 
 tax burden even in local assessment where anything b^t the full 
 value is used as a base, is well known, and the practice of compensat- 
 ing for a low valuation by a high rate is generally condemned. 
 Furthermore, undervaluations are muc^ more inimical to justice 
 with regard to municipalities and the state than between taxpayers 
 
50 
 
 BEPOBT OF BOAKD OF TAX COMMISSIONEBS. 
 
 in the same jurisdicUon. InequaUties in valuations of property 
 witlun the same municipality may be corrected by various means- 
 there is at least some remedy; appeal may be had to the assessinx' 
 authorities and if that faU, rea.urse may be had to the couZ 
 The state however has no remedy whatever at present for the loss 
 • of revenue thus sustained or for the shifting of the burden of the 
 state tax. As the municipaUties attempting to comply with the law 
 relative to the assisssment of property have no remedy for the 
 mequahty of burden imposed by such compliance, they are impelled 
 to equal or outdo, if possible, the others in undervaluation An 
 mcr««e in the direct state tax rate would exaggerate the bad 
 effects of these inequalities, and would also tend to increase the 
 mjustace, as the higher the rate the greater the advantage to be 
 gamed by undervaluation. 
 
 The injustice due to the present method, or rather lack of metht>d 
 IS so manifest that the necessity for some form of equalization of 
 local valuations, at least for the purpose of state taxation, is apparent. 
 I It 18 intended to increase the direct state tax rate, equali»tion seems 
 almost imperative. 
 
 The hme&mal effects of equalizing the valuations of the seveml 
 municipalities for purposes of state taxation would of necessity be 
 gradual. An mcrease in the total valuation of the state would 
 I«x>bably be innnediately apparent, but the full effect would not be 
 attamed until such time as a large amount of data could be coUected 
 and prepared for practical use. To make a systematic equalization 
 of lomlvaluationsfor the whole state withmayear, or even two years 
 would be an undertaking of such magnitude that the expense and the 
 unsetthng of local conditions involved would probably outweigh the 
 immediate benefits. Agradualreadjustment of local valuations upon 
 a umform basis could be consummated without great expense or 
 undue disturbance of local conditions, and would result in a more 
 just distribution of the burden of state taxation, and an increase in 
 revenue from that source which ultimately would be substantial 
 
 REPORT OF BOARD OF TAX COMMISSIONERS. 51 
 
 Piroposed Method for Preparing and Tabulating Fiscal Information 
 for Use of Legislature. 
 
 In compliance with the suggestion contained in the last paragraph 
 of your Excellency's communication of September 29th, 1915, the 
 Board has compiled and tabulated in detail the expenditures of the 
 several departments for the years 1913, 1914 and 1915; the total 
 revenue received by the State for the same period; the estimated 
 expenditures for 1916; and the estimated receipts and the several 
 sources from which the receipts are expected to be derived for 1916. 
 
 The tables are arranged with the idea of facilitating comparison 
 between actual departmental expenditures, both in total and in 
 detail; the estimated expenditures for 1916 have been classified in 
 the same manner as the expenditures for the three preceding years, 
 thus showing not only increases and decreases in totals, but also the 
 items to which the increases or decreases are properly attributable. 
 
 Certain data required for the completion of the tables is not avail- 
 able until January 10th; therefore the tables cannot be submitted 
 to your Excellency until such time after that date as is required for 
 tabulation and printing. 
 
 The form of the tables and the system of classification used are 
 such that this method of providing information regarding receipts 
 and disbursements early in the session of the General Assembly may 
 be very easily carried out in succeeding years, if it is deemed advisable. 
 The Board has endeavored to collect and tabulate in convenient 
 form for reference and comparison, for use early in January, material 
 which is usually not available until late in the session, if at all. It 
 is hoped that the members of the legislature may be saved much time 
 and annoyance, as well as labor, and the work of the finance com- 
 mittees of the two houses facilitated by the use of this material. 
 
 Appreciation. 
 
 The Board of Tax Commissioners gratefully acknowledges the 
 valuable assistance ruddered by state tax ofileials generally in the 
 preparation of the proposed inheritance tax law, and in the compila- 
 
 12 
 
52 
 
 BSPOBT OF BOARD OF TAX COMIUSSIONSRS. 
 
 tion of the accompanying tables showing the classifications of heirs, 
 rates and exemptions under the laws of the several states. The 
 Board also desures to give full credit to the reports of inheritance 
 tax authorities of other states, works on taxation, and other publi- 
 cations from which quotations have been borrowed, all of which 
 have been of great assistance. 
 
 The Board also wishes to express thanks for many valuable sugges- 
 tions offered by practicing attorneys and economists both withm and 
 without the State. While it is unpracticable to designate by name 
 and thank individually every one who has given generously of his 
 time and experience, the Board feels that its thanks are especially 
 due to Professor Charles J. Bullock of Harvard University, Professor 
 Edwin R. A. Seligman of Columbia University, and Professor 
 Henry B. Gardner of Brown University for many excellent suggestions 
 and much material aid. 
 
 BEPORT OF BOARD OF TAX COMMISSIONERS. 
 
 53 
 
 The following tables are intended to supply a brief resume of the 
 inheritance tax laws of the several states and territories of the 
 United States, showing classes, rates and the amoimt of exemptions. 
 
 Exemptions are classed as conditional and unconditional. Where 
 an amoimt is allowed as a specific exemption, in any and all events 
 it is designated ''unconditional," to distinguish from those cases in 
 which the shares of a decedent's estate are not taxed, provided the 
 same are less than or do not exceed an amount certain — ^that is, 
 where the exemption is conditional. 
 
 Where the words ''rate is on excess'' are found in a note following 
 the table of any state or territory, the rate per centum given in any 
 respective division applies to the higher or intermediate amounts and 
 not to the lower. The preceding rate, if any, applies to the lower 
 amount. 
 
54 
 
 REPOBT OF BOARD OF TAX COMMISSIONEBS. 
 
 INHERITANCE TAXES. 
 
 rstates asterisked (♦) exempt transfers to be itted for one or mote of the foUowing or Idadied 
 mJ^fcSil ] benevolent, religious, educational. Uterary. seientifie. eUte. county 
 
 ALABAMA. 
 
 IUtm and Exemptioxs. 
 
 Had collateral inheiitante tax 
 
 S,m^l84Ti8«Bf'''**^ only Constitution adopted 1901 aUows for collateral to 2U%. but has 
 irom 1848-1868. | never been made effective by statute. "» /«» «»■ 
 
 ARIZONA. 
 
 Grandfather, grandmother, 
 father, mother, husband, 
 wife, child, brother, sister, 
 son-in-law or daughter-in- 
 law. adopted or aeknowl- 
 edced child 
 
 1% on excess of $5,000. Transfers less than $10,000. not taxed. 
 
 Umsle, aunt, niece, nephew or 
 lineal descendant of same. . . 
 
 2% on excess of $2,000. Tianefers leas than $5,000. not taied. 
 
 
 Transfers 
 less than 
 $500, no tax. 
 
 $10,000 
 or lean, 
 3%. 
 
 $10,000 
 to $20,000. 
 4%. 
 
 $20,000 Over 
 to $50,000, 1 $50,000. 
 
 ^tJt^SS^ttn^'^^'^''^^^ Exemptionin3rdclassappliesonly 
 
 «.2i^l/t#°r ^'"^"jj Exemption applies to individual shares. EaempUon aimliea onlv whmt 
 payment of tax would reduce amount of transfer below exemption. mpim» only wbea 
 
 BEPOBT OF BOARD OF TAX COMMISSIONERS. 
 CALIFORNIA. « 
 
 55 
 
 Classbb. 
 
 R/iTES AND Exemptions 
 
 Husband, wife, lineal issue, 
 lineal ancestor of decedent, 
 adopted or aoknowledsed 
 child, lineal issue of either.. . 
 
 $24,000 to wife or 
 minor child, $10,000 
 to others, no tax. 
 
 1 
 
 $25,000 or less, 1%. 
 
 $25,000 to $50,000, 
 2%. 
 
 $50,000 to $100,000, 
 4%. 
 
 $1C0,000 to 
 $200,000, 7%. 
 
 1 
 
 $200,000 to 
 $500,000, 10%. 
 
 $500,000 to 
 $1,000,000, 12%. 
 
 Over $1,000,000, 
 15%. 
 
 Brother, sister, descendant of 
 same, son^n-law or daui^ter- 
 
 $2,000. no tax. 
 
 3% 
 
 6% 
 
 9% 
 
 12% 
 
 15% 
 
 20% 
 
 25% 
 
 
 Aunt, uncle, descendant of 
 
 $1,000, no tax. 
 
 4% 
 
 8% 
 
 10% 
 
 15% 
 
 20% 
 
 25% 
 
 30% 
 
 
 
 $500, no tax.! 5% 
 
 10% 
 
 15% 
 
 20% 
 
 25% 
 
 30% 
 
 30% 
 
 
 Rale is on excess. Exempti<m aiH3lies to individual shares. Exemption unconditional. 
 
 COLORADO. « 
 
 Father, mother, husband, wife, 
 child, brother, sister, 
 dau£hter>in-law or son-in- 
 law, ad(q>ted m acknowl- 
 edged relation of child, 
 
 $10,000 no tax. 
 If transfer does 
 not vest in per- 
 I>etuity exemp- 
 tion not allowed. 
 
 $100,000 
 
 or 
 less, 
 2% 
 
 $100,000 
 
 to 
 
 $200,000, 
 3% 
 
 Over 
 $200,000, 
 4 % 
 
 
 
 Unde. aunt, niece, nephew, or 
 EdmI descendant of same. . . 
 
 Transfers of 
 $500 or less, 
 no tax. 
 
 $20,000 
 or 
 less. 
 3% 
 
 $20,0C0 
 
 to 
 
 $50,000, 
 4% 
 
 $50,000 
 
 to 
 
 $100,000. 
 6% 
 
 Over 
 $100,000, 
 6% 
 
 
 
 Transfers of 
 
 $500 or less, 
 no tax. 
 
 $10,000 
 or 
 less, 
 4% 
 
 $10,0C0 
 
 to 
 $20,000, 
 5% 
 
 $20,000 
 to 
 
 $50,000, 
 6% 
 
 $50,000 
 to 
 
 $100,000 
 8% 
 
 Over 
 $100,000, 
 10% 
 
 Rate on whole amount of transfer. Exemption applies to individual shares. Exempti<Nl in 
 nd and 3rd classes applies only when shares do not exceed $500. 
 
 . CONNECTICUT.* 
 
 Fweat, grand-parent, husband, 
 wife. lineal descendant, 
 adopted child, lineal descend- 
 ant of same, adoptive pannt. 
 
 $10,000. 
 no tax. 
 
 $50,000 
 or 
 less. 
 1% 
 
 $50,000 
 
 to 
 
 $250,000, 
 2% 
 
 $250,000, 
 to 
 
 $1,000,000, 
 8% 
 
 Over 
 $1,000,000, 
 4% 
 
 
 Son-in-law or daughter-in-law, 
 stepchild, brother or sister, 
 full or half blood, descendant 
 
 $3,000. 
 no tax. 
 
 $25,000 
 or less. 
 3% 
 
 $25,000 to 
 $50,000, 
 5% 
 
 $50,000 to 
 $250,000. 
 6% 
 
 5250,000 to 
 $1,000,000, 
 7% 
 
 Over 
 $1,000,000, 
 
 8% 
 
 
 $500. 
 no tax. 
 
 $50,000 
 or less. 
 6% 
 
 $50,000 to 
 $250,000, 
 6% 
 
 $250,000 to 
 $1,000,000, 
 7% 
 
 Over 
 $1,000,000, 
 8% 
 
 
 Rate on wliole amount of transfer. Tax on net estate, 
 thnefore $13,500 is the greatest total exemption allowed. 
 
 as whole. 
 
56 KEPORT OF BOARD OF TAX COMMISSIONERS. 
 
 DELAWARE.* 
 
 ClAOSBS. 
 
 RaVBS AMD ExKXniONS. 
 
 Father, mother, graiidfather, 
 grandmother, wife, husband, 
 ehikl. adopted child, lineal 
 OMeendant of decedent 
 
 #■ 
 
 Not taxed. 
 
 Rjpther, sister, of whole or 
 half blood, or dewendant of 
 ■aine. 
 
 — i.- . 
 
 $500, no tax. 
 
 Over 
 »500, 
 1% 
 
 
 Aunt, uncle, or descendant of 
 same 
 
 $500, no tax. 
 
 2% 
 
 Great aunt, great uncle, or 
 descendant of same. . . 
 
 S500. no tax. 
 
 8% 
 
 
 5% 
 
 Tax on collaterala only. Exemption applies to individual shares. Exemption unconditional. 
 
 FLORIDA. 
 
 None. 
 
 Passage of act by legislature attempted in 1913. 
 
 GEORGU. ♦ 
 
 Father, mother, husband, wife, 
 child, brother, sistar, 
 daughter-in-law, adopted 
 fMiiL lineal deaoendsnt of 
 
 $5,000, no tax. 
 
 1% on excess. 
 
 
 AB othen 
 
 $5,000. no tax. 
 
 5% onoEoess. 
 
 Exemption applies to individual shares. Exemption unconditional. 
 
 IDAHO.* 
 
 Husband, wife, lineal issue, 
 lineal ancestor of decedent, 
 adopted or acknowledged 
 child, lineal issue of same . . . 
 
 $10,000 to widow or 
 minor child, $4,000 
 to others, no tax. 
 
 1 
 
 $25,000 or less, 1%. 
 
 ! 
 
 o 
 
 $50,000 to $100,000, 
 2%. 
 
 •»«» 
 
 Over $500,000, 3%. 
 
 Brother, sister, or descendant 
 <rf same, son-in-law. or 
 dao^ter-in-law 
 
 $2,000, 
 
 no tax. 
 
 
 2H% 
 
 3% 
 
 
 4>i% 
 
 Aunt, uncle, or descendant of 
 same 
 
 $1,500, 
 no tax. 
 
 
 4H% 
 
 6% 
 
 
 9% 
 
 Great aunt, great uncle, or 
 descendant of same 
 
 $1,000. 
 
 no tax. 4% 
 
 6% 
 
 8% 
 
 10% 
 
 12% 
 
 All 
 
 
 10% 
 
 l2H7c 
 
 l6% 
 
 Rate is on excess. Exemption appUeslto individual shares. Exemption unconditional. 
 
 REPORT OF BOARD OF TAX COMMISSIONERS. 57 
 
 ILLINOIS. ♦ 
 
 Classbs. 
 
 Rates ahd Exemptions. 
 
 Father, mother, husband, wife, 
 child, brother, sister, son-in- 
 law or daughter-in-law, 
 adopted or acknowledged 
 child, lineal descendant of 
 
 $20,000, no tax. 
 
 S 
 
 §^ 
 
 Over $100,000, 2%, 
 not upon excess. 
 
 
 Unde, aunt, niece, nephew, or 
 lineal descendant of same. . . 
 
 $2,000, 
 no tax. 
 
 $20,000 
 or less, 
 2%. 
 
 Over 
 $20,000. 
 
 4%. 
 not upon 
 exces3. 
 
 
 Transfers 
 less than 
 $500, 
 no tax. 
 
 $10,000 
 or less. 
 
 3%. 
 
 $10,000 
 to 
 
 $20,000, 
 4%. 
 
 
 $20,000 
 
 to 
 
 $50,000, 
 5%. 
 
 $50,000 
 to 
 
 $100,000. 
 6%. 
 
 Over 
 $100,000, 
 10%. 
 
 to idbar^leM^than $5^^™'*'***^ applies to individual shares. Exemption in 3rd class applies only 
 
 INDIANA. * 
 
 Husband, wife, Uneal issue, 
 lineal ancestor, adopted or 
 admowledged child, lineal 
 
 $10,000 to widow, 
 $2,000 to others, 
 no tax. 
 
 $25,000 or less, 1%. 
 
 o 
 
 «* 
 
 O 
 
 o 
 
 * 
 
 o 
 
 s 
 
 8 
 •» 
 
 a 
 
 fe5 
 
 Si 
 
 •»«» 
 
 Over $500,000, 3%. 
 
 Brother, sister, descendant of 
 same, son-in-law or daughter- 
 
 $500. no tax. 
 
 1H% 
 
 2H% 
 
 3% 
 
 3H% 
 
 4H% 
 
 Aunt, uncle, descendant of 
 
 $250. no tax. 
 
 3% 
 
 4H% 6% 
 
 7yi% 
 
 9% 
 
 Great aunt, gnat uncle, de- 
 scendant oil Mune 
 
 $150, no tax. 
 
 4% 
 
 6% 8% 
 
 10% 
 
 12% 
 
 
 $100. no tax. 
 
 
 6% 
 
 7H7o 10% UH% 
 
 15% 
 
 Rate is on excess. Exemption applies to individual sharas. Exemption unconditional. 
 
 IOWA. * 
 
 Husband, wife, father, mother, 
 lineal descendant, adopted 
 child, lineal descendant of 
 SUDB 
 
 Not taxed. 
 
 
 
 
 Estates ol $1,000 
 or less, BO tax. 
 
 Over 
 $1,000, 
 
 5% 
 
 Aliens, mm-fesidents of U. S 
 
 Estates of $1,000 
 or less, no tax. 
 
 Over $1,000. 20% except to brother or sister 
 of decedent, then 10%. 
 
 not ex^ $i*WO ^ " whole, but only when such estate does 
 
 - Britain ean be taxed only at 5% rate by decision of Iowa Supreme Court, on 
 •eeoant of OTwrting trsMj. ^ . 
 
5S 
 
 REPORT OF BOARD OF TAX COMMISSIONERS. 
 
 KANSAS. « 
 
 
 RaTM AMD EXKMPTIONS. 
 
 Husband, wife, lineal ancestor, 
 hneal descendant, adopted 
 child, lineal descendant of 
 aame, son-in-law or daugh ter- 
 itt-law 
 
 Not taxed. 
 
 
 Brother, sister .... 
 
 +^ 
 >i 
 
 s 
 S 
 
 «o" 
 
 ■ 
 
 First $25,000 or 
 fraction thereof. 
 3%. 
 
 Next $25,000 or 
 fraction thereof. 
 5%. 
 
 Next $50,000 or 
 fraction thereof. 
 
 Next $400,000, or 
 fraction thereof, 
 10%. 
 
 If 
 
 
 All others 
 
 Leas than $200, 
 no tax. 
 
 5% 
 
 7H% 
 
 10% 
 
 12H% 
 
 1«% 
 
 
 pSST.SSh'dSS^^i^^S^^ property within the 
 
 KENTUCKY. 
 
 Father, moOier. husband, wife, 
 towful isBue. son-in-law or 
 daught8r-ift..law, adopted 
 child, lineal descendant of 
 decedent 
 
 Not taxed. 
 
 ^"o****" $500, no tax. 
 
 Over $500, 
 
 Tax on collaterals only. Exen4>tion would seem to ai>ply to individaal sharas. 
 
 LOUISIANA. « 
 
 Oizect descendants or ascend- 
 
 Transfers less 
 
 $10,000 or 
 
 
 ants or surviving wife or hus- 
 
 than $10,000, 
 
 owr. 
 
 
 band of decedent. . 
 
 no tax. 
 
 2% 
 
 
 
 
 All others 
 
 No exemption. 
 
 All amounts. 
 6% 
 
 
 
 
 Exemption applies to individual shares, but only when such shares are less than $10 000 
 
 REPORT OP BOARD OF TAX COMMISSIONERS. 
 
 59 
 
 MAINE.* 
 
 Clasbm. 
 
 RAxm AJTD ExntmoMik 
 
 Husband wife, lineal ancestor, 
 lineal descendant. a4opted 
 child, adoptive parent, son-in- 
 him or dMightar-in>lftir 
 
 $10,000 to husband, 
 wife, father, mother, 
 child, adopted child, 
 adoptive parent, no 
 tax. $500 to others, 
 no tax. 
 
 $50,000 or less. 1%. 
 
 1 
 
 s 
 
 Is? 
 B 
 
 Over $100,000, 2%. 
 
 Brother, aiater, uncle, aimt. 
 
 $600. no tax. 
 
 4% 
 
 
 5% 
 
 
 $500, no tax. 
 
 5% 
 
 6% 
 
 7% 
 
 
 Exemption applies to individual shares, bat khus eoorts tax upon entire amount if otw exenm- 
 tattB ettatM and tax may be iqKm 6xoe« or noi m ooart irieases. 
 
 MARYLAND. 
 
 Father, mother, husband, wife. 
 chUdren, UamI deaoendants 
 
 Nottaxsd. 
 
 
 
 
 $500 to estate 
 as whole, 
 no tax. 
 
 Over $600. 
 6% 
 
 
 Tu on ooDstenk oalr. Bxamptian apfiliM to «ttate as wlioto. 
 
 BfASSACHUSETTS.* 
 
 Husband, wife, lineal ancestor, 
 lineal descendant, adopted 
 child, lineal desoendan^ of 
 same, adoptive parent, lineal 
 ancestor of same, son-inr4aw 
 or daughter-in4aw 
 
 $10,000 or less, to husband, 
 wife, father, mother, child, 
 adopted child, adoptive 
 parent, no tax. $1,000 or 
 less to others, no tax. 
 
 $50,000 or less. 1%. 
 
 $50,000 to $250,000. 2%. 
 
 $250,000 to $1.000.000, 3%. 
 
 Over $1,000,000, 4%. 
 
 
 
 Brother, sister, half or whole 
 blood, nieoe, nq;>faew. . . . . 
 
 
 K 
 
 II 
 
 $10,000 or 
 
 less. 2%. 
 
 $10,000 to 
 $25,000, 
 
 3%. 
 
 $25,000 to 
 
 $50,000. 
 
 5%. 
 
 $50,000 to 
 
 $250,000, 
 
 6%. 
 
 $250,000 to 
 $1,000,000, 
 7%. 
 
 Over 
 
 $1,000,000, 
 
 8% 
 
 
 1 
 
 < 
 
 H 
 
 ' $60,000 or 
 
 : less. 5%. 
 
 ' $50,000 to 
 • $250,000, 
 6%. 
 
 $250,000 to 
 $1,000,000. 
 7%. 
 
 Over 
 
 $1,000,000, 
 8%. 
 
 
 
 Rate is on exoeas. Exemption apphes to mdividual shares, but only when such shares do not 
 exceed $10,000 or $1,000, respectively, in class 1, and $1,000 in classes 2 and 3, but in no event 
 mini tax reduce the share below the exempted amount; i. e., $10,001 can be taxed only $1 00 op 
 no riian leas tha n $10,101.01 can be taxed at the 1% rate, when the transler is one emtitfcrd to a 
 
60 
 
 BEPOBT OP BOABD OF TAX COMMISSIONBB8. 
 
 MICHIGAN. « 
 
 CUASSBS. 
 
 Ratb^ AMD ExMnmcum. 
 
 Grand parent, parent, husband, 
 wikj child, brother, sister, 
 son-uk-law or daughter-in- 
 law, adopted or acknowledged 
 
 Transfers less 
 than $5,000 to 
 
 wife, less than 
 
 $2,000 to 
 otbuB, no tax. 
 
 95.000 or 
 ovwto wife, 
 $2,000 or 
 
 over to 
 others, 1% 
 
 
 
 All others 
 
 Lbm than $100. 
 no tax. 
 
 nooor 
 
 over. 5% 
 
 
 property in cla« 1. uiaa «iw in dan a. Tax appliaa only to personal 
 
 MINNESOTA. « 
 
 • 
 
 Wife, lineal im 
 
 $10,000, 
 no tax. 
 
 $15,000 oi 
 less. 
 1%. 
 
 '$15,000 to 
 $30,000, 
 
 '$30,000 tc 
 $50,000. 
 
 s%. 
 
 ►'$50,000 tc 
 $100,000. 
 
 > Over 
 $100,000, 
 3%. 
 
 Hudband, ad«»»ted or aoknowl- 
 •dsMl imS. fineal fene of 
 
 $10,000, 
 no tax. 
 
 
 2H% 
 
 3% 
 
 m% 
 
 4H% 
 
 T^wi^^l ancestor 
 
 $3,000. 
 no tax. 
 
 
 2H% 
 
 3% 
 
 
 4«% 
 
 Bnitiier. afeter. nephew, niece, 
 ■an in law ordaoghtaMn^aw. 
 
 $1,000. 
 no tax. 
 
 3% 
 
 4H% 
 
 6% 
 
 
 9% 
 
 Annt, uncle, or descendant of 
 
 $250. 
 no tax. 
 
 4% 
 
 6% 
 
 8% 
 
 10% 
 
 12% 
 
 AH others, except as below 
 
 $100. 
 no tax. 
 
 «% 
 
 7H% 
 
 10% 
 
 
 16% 
 
 PidiBe hospital, educational, 
 fultinua or charitable wgan* 
 featfooBwit^etato 
 
 $2,500, 
 no tax. 
 
 s% 
 
 S% 
 
 4% 
 
 6% 
 
 •% 
 
 Rate is on excess. Exemption appHee to indiWdual ahawfc Exemption oneondiliaMl. 
 
 MISSISSIPPI. 
 
 Num. 
 
 No Tax. 
 
 MISSOURI.* 
 
 Pather, mother, husband, wife, 
 adopted child, direct Ktvf>a| 
 descendant of testator. . . . 
 
 Not taxed. 
 
 
 
 
 All others 
 
 No exemption.^ 
 
 An amounts. 
 
 5% 
 
 
 Tax on eoHatenls only. No oaemption. 
 
 REPORT OF BOARD OF TAX COMMISSIONERS 
 
 61 
 
 MONTANA. 
 
 CijuMns. 
 
 Rins AMD EznanoNB. 
 
 Father, mother, husband, wife, 
 child, brother, sistar, son-in- 
 law or daughter-in-law, 
 adopted or acknowledged 
 child, lineal descendant of 
 dseedsnt. 
 
 Estates less 
 than $7,500, 
 no tax. 
 
 $7,500 or 
 over, 
 1% 
 
 
 
 Estates less 
 than $500, 
 no tax 
 
 $500 or 
 
 over, 
 
 5% 
 
 
 Exemption applies to estate as whole. Estates les^ than exemption not taxed in class 1. Exemp- 
 tion iiTdbus 2 applies tmly ?rlien estate li less than $500. Intention seems to have been to exempt 
 imI estate to direct heirs, but law exempts real .estate to all direct heirs except fether, mother, 
 huriiand and and taxes them at the ooUatend rate. 5%. 
 
 NEBRASKA. 
 
 Father, mother, husband, wife. 
 cUld. brother, rister, son-in- 
 law or daughter-in-law, 
 adopted or acknowledged 
 child, lineal descendant of 
 
 $10,000. 
 no tax. 
 
 Over 
 $10,000, 
 
 1% 
 
 
 Uncle, aunt, niece, nephew, or 
 BnMtl descendant of same. . . 
 
 $2,000, 
 no tax. 
 
 Over 
 $2,000. 
 2% 
 
 
 Transfers 
 less than 
 $500, 
 no tax. 
 
 $5,000 or 
 2%. 
 
 $5,000 to 
 $10,000. 
 8%. 
 
 $10,000 to 
 $20,000. 
 4%. 
 
 $20,000 to 
 $50,000. 
 6%. 
 
 Ovwr 
 $50,000, 
 •%. 
 
 Rate ia on excess. Exemption applies to individual shares. Exemption in 3rd class applies only 
 when slmies are leas than $500. 
 
 NEVADA. 
 
 Husband, wife, lineal issue. 
 
 lineal ancestor of decedent, 
 adopted or acknowledged 
 ohild, lineal issue of same. . . 
 
 $20,000 to widow or 
 minor child,$10,000, 
 to others, no tax. 
 
 $25,000 or less, 1%. 
 
 $25,000 to $50,000, 
 
 2%. 
 
 $50,000 to$100,000, 
 
 3%. 
 
 $100,000 to 
 $500,000. 4%. 
 
 Over $500,000, 5%. 
 
 Brother, sister, descendant of 
 same, son-in-law or daughter- 
 
 $10,000, no tax. 
 
 2% 
 
 4% 
 
 6% 
 
 8% 
 
 10% 
 
 Aunt, tmele, dssesndant of 
 
 $5,000, no tax. 
 
 3% 
 
 6% 
 
 9% 
 
 12% 
 
 15% 
 
 Great aunt, great uncle, de- 
 
 No exemption. 
 
 4% 
 
 8% 
 
 12% 
 
 18% 
 
 20% 
 
 
 No exemption. 
 
 5% 
 
 10% 
 
 15% 
 
 20% 
 
 25% 
 
 Rale fe on exoess. Exemption indies to individual 4iare«, Emnpiion unconditional. 
 
62 
 
 BSPOBT OW BOABD OF TAX CtmMtsuanm^ 
 NBW HAMPSHIBE.* 
 
 
 Ratks and Exemptions. 
 
 Father, mother, husband, wife, 
 brother, sister. lineal 
 meoendant, adopted child. 
 Bneal decendant of same, 
 MB-in^law or daushter4n-law. 
 
 Not taxed. 
 
 
 
 5%. No exraqilioa. 
 
 
 Tu on coUatenOs only. 
 
 NEW JERSEY.* 
 
 HtMbud, wife, ehild. ismie of 
 ■UM. adpiiled ehikl. isBue of 
 MOW. admowledfled ehild . . 
 
 $6,000, 
 no tax. 
 
 $50,000 
 or less, 
 1%. 
 
 $50,000 to 
 $150,000, 
 
 IH%. 
 
 $150,000 to 
 $250,000. 
 2%. 
 
 CHrer 
 $250,000, 
 3%. 
 
 Father, mother, brother, sister, 
 MO^B-Iawor daughter-in-law. 
 
 $5,000, 
 no tax. 
 
 2% 
 
 
 3% 
 
 4% 
 
 AUothen 
 
 Tnmafers 
 
 less than 
 $500, no tax. 
 
 8% 
 
 
 8% 
 
 6% 
 
 
 wht^siarjTLfh^TSfS?'^ E««ptionia8rddassappUesonly 
 
 NBW MEXICO. 
 
 Nojo. 
 
 No Tax. 
 
 NEW YORK.» 
 
 Father, mother, husband, wife, 
 ehild, bcother, sister, son^ii- 
 few or daughter-in-law, 
 •dopted or acknowledged 
 child. Imeal dwnimdant of de- 
 
 First 
 $5,000, 
 no tax. 
 
 Next 
 $50,000 
 or less. 
 
 1%. 
 
 Next 
 $250,000 
 or less, 
 2%. 
 
 Next 
 $1,000,000, 
 or leas, 
 
 8%. 
 
 Any greater 
 amount. 
 4%. 
 
 
 First 
 
 
 
 
 
 
 $1,000. 
 
 5% 
 
 6% 
 
 7% 
 
 8% 
 
 
 BO tax. 1 
 
 
 
 
 ■MPMtively, under N. y. Supreme Court deMuoo. »i.tfOi.oou m aeeond ebun 
 
 REPORT OF BOARD OF TAX COMMISSIONERS. 
 NORTH CAROLINA. * 
 
 63 
 
 Ratu AMD EmfpnoNa. 
 
 
 ||5 
 
 65 
 
 D,000. 
 
 Lineal issue, lineal ancestor, 
 
 husband, wife, adopted 
 alil]d. ^ 
 
 1 to T1 
 
 to 
 $2,00< 
 no tax 
 
 or lest 
 
 to$10< 
 
 
 $10,000 
 $5,000 
 child, 
 others. 
 
 $25,000 
 
 h 
 
 Brother, ditar, deeeendant of 
 
 No emnqiCiMi. 
 
 8% 
 
 4% 
 
 
 
 NoexM^itton. 
 
 
 6% 
 
 
 §1 
 
 8S 
 
 6% 
 
 7% 
 
 6% 
 
 8% 
 
 I 
 
 7% 
 
 9% 
 
 fExcept grandchildren, who have but one exempticm of the child they repceoMtt. 
 Rate is on excess. Exemption applies to individual ahaies. Exemptkm aacoDditional. 
 
 NORTH DAKOTA.* 
 
 Htuband, wife, father, mother, 
 Bneal descendant, adopted 
 child, lineal desoendant of 
 
 $20,000 to husband 
 or wife, $10,000 to 
 others, no tax. 
 
 $100,000 or less, 
 1%. 
 
 $100,000 to 
 $250,000, 2%. 
 
 Si 
 
 Over $500,000, 3%. 
 
 
 
 Brother, sister, son-in-law or 
 
 $500, no tax. 
 
 825,000 
 
 $25,000 
 
 to 
 
 $50,000, 
 2M%. 
 
 $50,000 
 
 to 
 
 $100,000. 
 3%. 
 
 $100,000 
 to 
 
 8500,000. 
 89<%. 
 
 Over 
 $500,000, 
 4H%. 
 
 
 Amit, nnde, deaoMdaat of 
 
 No eiomption. 
 
 8% 
 
 
 6% 
 
 7H% 
 
 9% 
 
 
 
 No exemption. 
 
 5% 
 
 6% 
 
 9% 
 
 12% 
 
 16% 
 
 
 Aliens. corporaticMoa not iBOOr- 
 
 No exemption. 
 
 25% 
 
 26% 
 
 25% 
 
 25% 
 
 25% 
 
 
 Rate is on exeeee. Exemption would seem to apply to estate as a uriiole. 
 
 OHIO.« 
 
 Father, mother, huaba 
 lineal daaoaMaat, 
 
 Boopiea 
 
 
 
 
 ohild 
 
 
 Not taxed. 
 
 
 
 $500^ no 
 
 Over $500, 
 
 
 
 6%. 
 
 
 Collateral tax only. Examptioa appiisa to aetata aa whole. 
 
BBFOBT OF BOARD OF TAX COMMIBSIONMBS* 
 
 OKLAHOMA. • 
 
 Baxm AMD Emraoim. 
 
 Father, mother, husband, wife, 
 child, brother, rister, son- 
 in-law or daughter-in-law, 
 adopted or acknowledged 
 ^na 
 
 $15,000 to widow, 
 $10,000 to ohikl, 
 $5,000 to otbera, 
 no tax. 
 
 $25,000 
 or less, 
 1%. 
 
 $26,000 to 
 $50,000. 
 
 2%. 
 
 $50,000 to 
 $100,000. 
 8%. 
 
 Over 
 $100,000, 
 4%. 
 
 
 t2W,iiotaz. 
 
 5% 
 
 6% 
 
 8% 
 
 
 
 
 Rate is on excess. Exanqytion ^;>plies to individual shares. Exemption unconditional. 
 
 OREGON. * 
 
 Gmidfather, gn&dmother, 
 father, mother, husband, 
 wife, child, brother, sister, 
 soii-in^wordaiiiditer>in-law. 
 adopted or adknowledgea 
 child, lineal descendant of 
 
 Transfers less 
 thw $10,000. 
 
 no tax. 
 U over f 10.000. 
 $5,000,' no tax. 
 
 1% on excess. 
 
 
 Uncle, aunt, aieoe. n^hew, 
 &Mdi dsMendant of same... 
 
 Transfers less 
 than $5,000, 
 
 no tax. 
 If over $5,000, 
 $2,000. no tax. 
 
 2% on excess. 
 
 
 Transfers less 
 than $500. 
 no tax. 
 
 $10,000 
 or less. 
 3%. 
 
 $10,000 to 
 $20,000. 
 4%. 
 
 $20,000 to 
 $50,000. 
 5%. 
 
 Over 
 $50,000, 
 6%. 
 
 Ibkto is on excess. Exemptioa applies to individual shares, with additional exemption in entirety 
 to transfers less than $10,000 in ebis 1. and $5,000 in class 2. Exemption in 3rd ehss applies only 
 when shares are less than $500. 
 
 PENNSYLVANIA. 
 
 Father, mother, husband, wife, 
 child, step-child, adopted 
 ehild, lineal descendants ot 
 decedent, dau|^ter-ui>law. . . 
 
 Not taxed. 
 
 
 
 
 Transfers less 
 than $250. 
 no tax. 
 
 $250 
 or over, 
 5%. 
 
 
 Collateral tax only. ExBnq>tion applies to individual shans, but mily when such shares are less 
 
 than $250. 
 
 None. 
 
 RHODE ISLANP. 
 
 ■ ■ ' ' ' ' ' ■ 
 
 Aet xeoonuquided by joint qwdal committee in 1910. 
 
 REPORT OF BOARD OF TAX COMMISSIONERS. 
 SOUTH CAROLINA. 
 
 65 
 
 CLA.BSE8. 
 
 Rans AMU Exmprnnm. 
 
 None. 
 
 No tax. 
 
 SOUTH DAKOTA.* 
 
 
 tax. 
 
 ess, 1%. 
 
 1 
 
 1 
 
 1100,000, 
 
 CO 
 
 
 s 
 
 $15,000 or I 
 
 
 
 o 
 
 
 
 SIO 000. 
 
 «»«^ 
 
 $30,000 
 
 2%. 
 
 
 Over $1( 
 
 Husband, Hneal ancestor, 
 
 adopted or acknowledged 
 child, lineal issue of same . . . 
 
 $10,000 to all 
 but lineal ancestor, 
 $3,000 to lineal 
 ancestor, no tax. 
 
 m% 
 
 2H% 
 
 3% 
 
 3Ji% 
 
 4H% 
 
 Brother, sister, descendant of 
 sams, sonwaw or daughter- 
 
 $1,000. no tax. 
 
 3% 
 
 
 6% 
 
 7H% 
 
 »% 
 
 Aunt, uncle, deaewidant of 
 
 $250, no tax. 
 
 4% 
 
 6% 
 
 8% 
 
 10% 
 
 12% 
 
 
 $100, no tax. 
 
 5% 
 
 7)4% 
 
 10% 
 
 12H% 
 
 15% 
 
 
 
 Rate is on excess. Exemption wplies to individual shares. Exen4>tion unconditional. Municipal 
 ooiporations alone exempt; $2,500 exemption allowed to hospital, o donat i o nal . leKgioiM and 
 eharitable institutions. 
 
 TENNESSEE.* 
 
 Father, mother, husband, wife, 
 child, lineal desoendants of 
 
 Estates less 
 than $10,000, 
 no tax. 
 
 $20,000 
 
 or less, 
 
 1%. 
 
 Over 
 
 $20,000, 
 
 1J4%. 
 
 
 
 E^states less 
 
 
 
 
 
 than $250, 
 
 $250 or over. 
 
 
 
 no tax. 
 
 5% 
 
 
 
 Rate apparently is not on excess. Exemption applies to estate as whdb, but only irbmu entire 
 estate is tess than $10,000 in class 1, and $250 in class 2. 
 
BBPOBT OF BOABD OF lAX. COlOflSSIONBBS. 
 
 TEXAS.* 
 
 
 
 fkllMr, motiMT. husband, wifiw 
 (Braek lineal dBBemdant of 
 
 Nottaaed. 
 
 lineal ascendant, biolher. 
 sister, lineal desoendaat oi 
 
 92,000, no tax. 
 
 $2,000 to $10,000, 
 
 2%. 
 
 $10,000 to $25,000, 
 
 2K% 
 
 $26,000 to $60,000, 
 
 3%. 
 
 $50,000 to $100,000, 
 
 $100,000 to 
 $600,000, 4%. 
 
 Over $600,000, 5%. 
 
 UnelB. aunt. IummI dewmdaat 
 
 si.ooo. 
 
 no tax. 
 
 3% 
 
 4% 
 
 5% 
 
 6% 
 
 7% 
 
 8% 
 
 
 $500. 
 notes. 
 
 4% 
 
 5H% 
 
 7% 
 
 
 10% 
 
 12% 
 
 Rate is on excess. Exemption anifiMto iiMtividual ahareo. Fixwmption unoonditional. Collateral 
 and lineal ascendant tax only. 
 
 UTAH. 
 
 No 
 
 S10.000. no 
 
 tl6,000or 
 8% 
 
 6% 
 
 Exemption applies to whole estate. 
 
 VERMONT.* 
 
 Ikftber. mothor. husband, wife, 
 Bneal descendant, step-child, 
 adopted child, child of either. 
 aoiMn-lawordaushter^nrbiw. 
 
 Not taxed. 
 
 
 
 
 No oaemptioii. 
 
 All amounts, 
 5% 
 
 Collateral tax only. * 
 
 VIBGINIA.« 
 
 Grandfather, grandmother, 
 father, mother, husband, 
 wife, brother, sister, lineal 
 
 Not taxed. 
 
 
 
 All otfMOT 
 
 No coemption. 
 
 All amounts, 
 5% 
 
 CoUataral tax only. 
 
 VMPOm OF BOABD OF TAX COMMISSIONERS. 67 
 
 WASHINQTON.« 
 
 
 Riina AMD Esonmom. 
 
 Father, mother, husband, wile, 
 lineal descendant, adopted 
 ehnd, lineal doaoendant of 
 
 $10,000, no tax. 
 
 1% on excess. 
 
 
 
 Collateral heirs to and includ- 
 ing tbe ^ degree of relar 
 
 No exemption. 
 
 $50,000 or 
 less, 
 
 3%. 
 
 $50,000 to 
 $100,000, 
 4M%. 
 
 Over 
 $100,000, 
 6%. 
 
 
 No ademption. 
 
 0%. 
 
 »%. 
 
 12%. 
 
 BateiaoomMfk BaM^teappHM to oMeaa whole. Bateof 2&%oikallaBanpaa]ediami. 
 
 WEST YIBGINIA.* 
 
 Wife, husband, child, lineal 
 dn^nffim^tor lineal ancestor 
 
 Brotlier, iirter (not half blood). 
 AnoUieni 
 
 Brttiitm UDOSM Banmrtioa ap^iBS to individual shaves. Exemption uneonditionaL 
 
 $15,000 to widow. 
 $10,000 to others, 
 no tax. 
 
 $25,000 or less, 1%. 
 
 i 
 
 5 
 
 $50,000 to $100,000, 
 2%. 
 
 $100,000 to 
 $500,000, 2M%. 
 
 Over $500,000, 3%. 
 
 No exemption. 
 
 3% 
 
 4H% 
 
 6% 
 
 7H% 
 
 9% 
 
 No^exemption. 
 
 5% 
 
 1H% 
 
 1 10% 
 
 13H% 
 
 16% 
 
 WISOONSIN.* 
 
 HiMbft"'^, wife, lineal issue, 
 lineal ancestor, adopted or 
 acknowledged child, lineal 
 
 $10,000 to widow, 
 $2,000 to others, no 
 tax. 
 
 $25,000 or less. 1%. 
 
 1 
 
 s 
 
 1^ 
 
 8^ 
 
 $50,000 to $100,000. 
 2%. 
 
 * w 
 
 Si 
 
 Over $500,000. 3%. 
 
 Brother, sister, descendant of 
 same, son4n-law or daughter- 
 
 $500, no tax. 
 
 1H% 
 
 2H% 
 
 3% 
 
 ZH% 
 
 4H% 
 
 AunV onolo* descendant of same 
 
 $250, no tax. 
 
 3% 
 
 
 6% 
 
 7H% 
 
 0% 
 
 Qieat aunt, great uncle, de- 
 
 S160, no tex. 
 
 4% 
 
 «% 
 
 8% 
 
 10% 
 
 12% 
 
 
 $100, no tax. 
 
 5% 
 
 7>i% 
 
 10% 
 
 
 1«% 
 
 
 R^tei. on excess Exemption applies to individual shares, Exemption most oomo oat of first 
 $^000.^iS£ii?Sw!^ Bmmption unconditional. 
 
68 BEPORT OF BOARD OF TAX COMMISSIONERS. 
 
 WYOMING. 
 
 ChkWBB. 
 
 Rates and Exbmptionb. 
 
 ntther, mother, hiubuid, wifs, 
 
 ehild, brother, sister, son-in- 
 law or daughter-in-law, 
 adopted or acknowledged 
 diila. lineal descendant of 
 
 tlO.000. 
 
 BOtML 
 
 Over $10,000. 
 3% 
 
 
 
 
 Transfers less than 
 9500, no tax. 
 
 9500 or ov«r, 
 
 6% 
 
 
 J 
 
 EzenavtiQB appiiw to iadividuml ahaiee. Eaemption in daae 2 aiqitlies <mly to ■hane kw than 
 $600. 
 
 AT.AairA 
 
 None. 
 
 No tax. 
 
 DISTRICT OF COLUMBIA. 
 
 None. 
 
 Aoi pawed Houae in 1810; failed in Senate. 
 
 HAWAH. 
 
 Famitt IniiiNuid, wife, child, 
 traadcMld. adopted child. . . 
 
 $6,000, no tax. 
 
 2% on excess. 
 
 
 
 $500, no tax. 
 
 5% Miexeeaa. 
 
 
 
 
 Exemption appliea to individual shares. Property passing to class 2 may also be taxed aa 
 ineome under inoome tax law; pnverty paaaing to elaaa 1 may not be ao taxed. 
 
 PORTO RICO. 
 
 Wife, child, grandchild, 
 adopted child 
 
 Not taxed. 
 
 
 Husband, lineal descendant. . . 
 
 $200, no tax. 
 
 $5,000. 
 
 or less, 
 
 1%. 
 
 $3,000 to 
 $20,000, 
 
 $20,000 to 
 $50,000, 
 
 2%. 
 
 Over 
 $50,000, 
 8%. 
 
 
 $200, no tax. 
 
 3%. 
 
 
 6%. 
 
 9%. 
 
 Rate is on excess. Exemption unconditional. 
 
 PHILIPPINE ISLANDS. 
 
 None. 
 
 No tax. 
 
^PTO OF TAX C-'«- 
 
MOV 1 71994