In case of bond or note secured by mortgage, one in strument only sub ject to stamp duty. Certificate to stamp duty. of (No. 335.) Under section 160 of the act of June 30th, 1864, it is provided that whenever any bond or note shall be secured by a mortgage, but one stamp duty shall be required on such papers, provided that the stamp duty placed thereon shall be the highest rate required for said instruments, or either of them. If the bond, note or notes, (where more than one bond or note accompanies the mortgage,) require a higher stamp than the collateral instrument, the stamp or stamps must be such as are appropriate to the bond, note, or notes. If the mortgage requires the higher stamp, as can seldom happen, the stamp must be such as is appropriate to the mortgage. When the instrument requiring the higher stamp is appropriately stamped the other is exempt. (No. 336.) As a certificate of stock is neither money, nor property, within stock not subject the meaning of the word, as used in the act of Congress, a receipt for the same, (of the form furnished by you,) is not chargeable with stamp duty. (See Schedule B.) Stamp duty on rental is contingent. (No. 337.) Where the rental of a lease is contingent, as in the case of a leases when the certain share of oil being stipulated as rent for the use of wells, as just an estimate as possible under the circumstances should be made of the probable amount of annual rent to be received, and the stamps be affixed in accordance therewith. I may remark, that if a fair and just estimate be made of the amount, with a view to attain as accurate result as the circumstances will allow, it is all that can be done by the parties, and the law will exact no more. In case of a future litigation between the parties, it will be to the interest of the person seeking to enforce the contract that the stamp shall be large enough to preclude all question as to the intent being to affix the proper stamp; for if the stamp should represent a value so far below that of the rent as to raise a presumption of fraud, the court trying the cause might refuse to admit the lease in evidence. Stamps on bills of lading and receipts, (No. 338.) Bills of lading or receipts (other than charter party) for any goods, merchandise, or effects to be transported from any port or place in the United States, to be delivered at any other port or place in the United States, are chargeable with a stamp duty of When issued for two cents. Where receipts are issued for the benefit or use of the benefit of the the United States government, no stamp duty is chargeable where payment of the same would be a direct charge on the treasury of the United States. U. S. not taxable. (No. 339.) Copies of instru ments stamped under sect. 163. When unstamped instruments are rendered operative by a compliance with section 163 of the act of June 30, 1864, in order to make a certified copy of the record evidence, it will be necessary that the instrument be re-recorded. (No. 340.) made on articles Under the act of June 30, 1864, articles manufactured or pro- max by railway duced by any railroad for their own use on or after July 1st, are companies for their liable to tax; and by section 173 all such articles which were on own use. the 1st of July in the possession of such railroad or its agents, which had not previous to that date been subjected to use, are equally liable. (No. 341.) A life lease sub A life lease of lands is subject to stamp duty as a conveyance, ject to stamp duty and the assignment of such lease is equally liable. (No. 342.) as a conveyance. Extent of an execution upon real to stamp duty. The extent of an execution by a sheriff upon real estate is not a conveyance, nor liable to stamp duty as such. Under the estate not subject terms used in the excise law, there must be a contract of sale as an essential element of a conveyance. (No. 343.) Funds in hands estimated as part Where sums were held by a person deceased in trust, and such of a deceased pertrust fund was held by the deceased separate and distinct from son as trustee, not his own property, such trust fund should be deducted in estimat- of his estate. ing the value of the estate to determine the amount of stamp duty on the letters of administration. If invested as his Where the deceased invested such trust fund in his own name, private estate, the without any designation as trustee, so that the executor or ad- rule is otherwise. ministrator cannot separate it from his individual estate without the aid of extrinsic evidence, it is not to be deducted. (No. 344.) Liability to take A butcher selling from a shop or stand, may sell other articles Butchers. than butcher's meat. If his sales from both sources do not amount to $1,000, his license fee is $5. If they exceed that license. sum, it will be $10. A dealer who sells butcher's meat, must take license as a butcher, although not liable to license as a dealer because his sales do not exceed $1,000. A farmer, who A farmer, who Liability of farkills for his own use is not liable, although he may occasionally sell a portion to his neighbor. A butcher licensed to sell from a cart, cannot, under such license, sell other articles, but is confined to butcher's meat clusively. (No. 345.) ex The tax imposed on transportation companies by section 103, is upon the gross receipts; and the canal tolls paid to the State of New York cannot, therefore, be deducted. 18 * (No. 1.) THE INCOME TAX. Income tax. Dividends from which the deduc "SIR: I have the honor to acknowledge the receipt of your letter, 7th instant, relative to the assessment of income tax. You make two points: "1st. That the deduction of income from sources named in tion of 3 per cent. Section 91, on which a tax of 3 per cent. has been already paid, has been made to is to be made in ascertaining the amount of taxable income and cent. additional in the rate of tax thereon, and is then to be excluded from all furcase the total in- ther computation. be taxed 2 per come of the party amounts to$10,000. "2d. That there is no authority of law for requiring an additional two per cent. upon portions of income derived from the sources above named, when the taxable income of the person proves to be in excess of $10,000. "I think you have not fully weighed the provisions of the law, or its manifest intent. Section 90 divides into two classes the taxable incomes of persons residing in the United States : one, *whose annual gains, profits, or income exceed $600, and do not exceed $10,000, is liable to a duty of 3 per cent. on the excess over $600; the other, whose income exceeds $10,000, is liable to a duty of 5 per cent. on the excess over $600. Previous sections of the law impose a tax of 3 per cent. on payments of interest and dividends by specified corporations, on salaries of United States officials, and on income derived from advertisements. Section 91, in its first clause, provides 'that in estimating said annual gains, profits, or income, whether subject to a duty as provided in this act of three per centum or five per centum, all other national, State, and local taxes * shall be first deducted.' In its second clause it provides that salaries or payments from the United States, and interest or dividends from banks and other corporations, the taxes on which shall have been assessed and paid by said banks and other corporations, and income from advertisements, upon which specific, stamp, or ad valorem duties shall have been assessed or paid, shall also be deducted. * 'You hold that all the income from all these sources shall be first deducted in determining the taxable income and the rate of tax. I cannot see that the law justifies your opinion. It certainly The letters without signature were written or dictated by the editor of this manual. does not so provide in terms. The 91st section gives to every person residing in the United States an absolute deduction of other national, State, and local taxes paid by him. The 11th section of the act of March 3, 1863, as if to make this distinction more emphatic, provides 'that in estimating the annual gains, profit, or income of any person under the act to which this act is an amendment, the amount actually paid by such person for the rent of the dwelling-house or estate on which he resides shall be first deducted from the gains, profits, or income of such person.' “This office has also authorized, as by the equity of the statute, a deduction, in this as in all cases, of necessary repairs, &c., upon the property yielding the income. These comprise all the deductions authorized by law or equity to be made in determining the amount of taxable income and the rate of tax. The second clause of section 91, which is wholly independent of the first, is distinct in form, and on no reasonable construction can be made to mean more than it expresses, authorizes the deduction of income received from the other sources therein named, but for a reason expressed therein, viz: that the taxes due thereon have been assessed and paid. This interpretation exhausts the phraseology, and gives the reason for the deduction-not as a means of determining the rate of tax, but to avoid re-imposition of three per cent. tax. Your claim ignores facts, and assumes, what cannot be granted, that there is but one class of deductions. There are two. One consists of those which are absolutely exempt from taxation, without reference to the amount of income, and which are first deductions, and are made in estimating the income and the rate of tax. The other consists of those which have been already taxed, which may be taxed an increased rate in case the taxable income exceeds $10,000, and which are simple deductions, either absolute or contingent, as the case may be. "Your construction, besides not being literal, would have the obviously unjust effect of relieving from 5 per cent. taxation one class of citizens whose chief sources of income are made taxable under section 91, and of imposing 5 per cent. on the same amount of income derived from rents, professions, trades, commerce, and stocks and bonds not reached by section 91. This, surely, cannot be considered the intent of Congress, whose division of income, of all persons residing in the United States, is into two great classes, with a rate of taxation proportioned thereto, and whose fundamental idea is, or should be, equality of taxation upon the citizens. "There is one other consideration which bears heavily against your construction. Congress imposed a duty of 12 per cent. on that portion of income derived from United States securities, but that source of income is not named in section 91 among those to be deducted. Hence, were your construction correct, the patriotic citizen with a gross income exceeding $10,000, one-half of which is derived from United States securities, would be placed at a disadvantage, and made to pay 5 per cent. on the remainder; while another with like gross income, one-half of which is derived from the sources named in section 91, which you propose to deduct in ascertaining the taxable income and the rate of tax, would escape with but 3 per cent. on the remainder. And this, too, while Coal land leases treated as "convey Congress at every point manifestly sought to put the holders of government securities in a better position than any other class of citizens. Your construction must be wrong, or Congress has wholly failed to do what it manifestly and in the clearest language intended. The construction of this office is natural and reasonable. It is in harmony with the general scope of the law. It is reasonable, in placing upon one footing all residents of the United States whose taxable incomes are over $10,000, and in maintaining the broad distinction of rate expressly enacted in section 90, and in harmonizing that with the merely directory provisions of section 91. “Where taxable income is ascertained to be in excess of $10,000, it becomes liable to a 5 per cent. tax, and must be made to bear it, whatever its sources. If some of them have already paid 3 per cent., at the hands of corporations paying interest or dividends or otherwise, 2 per cent. additional must be imposed upon them as a necessary means, and the only practicable means, of carrying out the mandatory provisions of the law. To fail to require this, would be to make the law an engine of inequality and oppression. This, I am sure, you are too good a citizen to desire. "I am, very respectfully, your obedient servant, "EDWARD MCPHERSON, "Deputy Commissioner." (No. 2.) SIR: Your letter of February 5 was duly received, but as a deciances," and sub- sion upon the stamp duty required upon "coal land leases," or upon ject to stamp duty assignments thereof, has been withheld for careful consideration, yours, with other letters upon the same subject, has not been answered ere this. as such. In reply thereto I have the honor to state that those leases are construed to be "conveyances," and as such to be stamped under head of " conveyance," as per Schedule B," in the act of July 1, 1862. The assignment of such a lease should also be stamped under the head of "conveyance," as above, the consideration paid being the measure of stamp duty. If the consideration in such an assignment is $33,000, the stamp duty required is $60. In the case presented of a price per ton of coal mined, there being nothing in the contract to indicate more accurately its probable value, the practical difficulty of ascertaining the value will be met, should it arise, by the resident revenue officers. Very respectfully, EDWARD MCPHERSON, To J. BRISBIN, Esq., Superintendent, &c. (No. 3.) Powers of attor ney to be used SIR: The communication from the honorable Secretary of State, abroad not subject under date of January 14, and the letter of C. F. Hagedorn, esq., to stamp duty. consul of Baden, dated Philadelphia, January 10, have been considered, and I respectfully submit the following reply: |