| Show II I TAX ON STCK CfRTlfCATfS HOW AND WHEN STAMPS MUST BE USED Companies Taxed Only On Original Issues Stamps Must Be Placed On Transfer Certificates Washington June OOn the question ques-tion of that part of schedule A of the I act of June 13 ISiS imposing a taI ta-I on each original issue whether on organization I or-ganization or reorganization of certificates cer-tificates of stock It is held by the commissioner of interral revenue in a I circular issued today that the meaning of the words original issue as therein there-in used is limited and controlled by the words whether on an organization or reorganization and that therefore there-fore the only certificates of stock on vlich the tax of 5 cents on each hundred hun-dred dollars of face value or fraction thEreof is imposed by this act are those certificates issued on or after July 1 isis on the organization or reorganization reorganiza-tion of a company I is held further that in the case of a corporation having hav-ing for instance an authorized capital stock of Sl000000 of which it has Is sted only 5500000 prior to July 1 1SOS and on or after that date finds it necessary neces-sary to make one more additional irsue under the authority possessed by I I each additional issue thus made is an male original issue within the terms and j meaning of tht statute under construe tion and the certificates of such issue I tcn certfcates are subject to the stamp tax Where any original certificate Issued I is presented by the holder to the com pany or corporation for the issue I of another certificate or certificates in j lieu thereof the certificate or certifi I cates thereupon Issued to take the place I of the original certificate could not under I un-der the language and limitation of the statute above recited require any t easa ef1er alea I stamp as long as there is no sale or agreement to sell or memorandum of sale o transfer of any of those certificates cates Issued In lieu of the original I In case of sale where the evidence of tiansferis shown only by the books of j the company a tax of 2 cents is required I I 1 re-quired to be paid on each 100 of face I value or fraction thereof and ths stamp I I representing this is required to be i I placed upon such books I Where the change uf ownership is by j I transfer certificate that is to say the I executive authority to transfer Is i con I I tamed on the back of the stock certificate I i I cer-tificate which is I to ha transferred th3 I I I stamp must be placed on the transfer j certificate that is to say upon the sun j render certificate containing the transfer i trans-fer i ferIn In cases of agreements to sell or where the transfer is by delivery of the certificate assigned In blank there must be executed a memorandum thereof to i which the stamp is required to be affixed i I af-fixed i Under the ruling herein stsled in a I case that may be supposnd of a man who is the owner of a certificate for 100 I shares of stock and wishes to sell ten I I of them to another person UIP result i being thit one certificate would be Issued i Is-sued for the 10 shares sold and another additional certificate for the 90 shares I r ft et f I remaining with him the l result being that the 00 shares issued with the certificate cer-tificate for 10 shares sold in lieu thereof there-of does not require any stamp and the cerifcate for the 10 shares does not re quire a stamp representing the tax of 5 cents on each 100 or face value or I fraction thereof as It is not an original Issue The only stamp required with I reference to thse certificates is n stamp on the transfer of the shares sold representing rep-resenting payment of the tax of 2 cents I on each 510 of face value or fraction thereof In another case stated for illustration I Illustra-tion where a man holds several certificates cer-tificates for shares of stock aggrsgnting 100 shares and for his convenience I calls upon the company to Issue to him in lieu thereof one certificate for 100 shares tjisre being no stile or agcement to sell cr mcmorandtm of sale or delivery de-livery or transfer 0 this new certificate certifi-cate the statute does not require Ihe affixing of any stamp thereto |
