Show VAT TAX MEN AND IN ACCORD months of negotiation lead to agreement on chan changes broadening method of state or local taxation of national banks NEW YORK months ot of conference and negotiation between an american bankers association special committee and the committee oatho ot tho of 0 states on ba bank taxation havo resulted in an agreement on a form of amendment to the federal statute dealing with state or local taxation of 0 national hanks banks that maintains the integrity of the protective protect iya principles of of ahe the section aud and to la satisfactory to the commissioners committee says saya the Amerl american can bankers association journal thomas B paton the organizations aga general counsel in making the announcement noun no coment says that previously proposed amendments to the statute which Is known as section have boon been opposed when it was tolt felt their terms would enable any state to place banks in a tax class by themselves he law as it stands today mr rat paton I 1 on says permits state or or local taxation ot of national banks or their shareholders holders in one or the other of the four following for forma ms we the shareholders upon thola saares a property tax the shareholders upon their dividends a personal income taxi tax the tha bank upon its 14 net income th the a bank according to or mea measured suied by its net income only ono one form ot of tax can be imposed except that the dividend tax may bo be combined with the th third rd or fourth form it if other corporations and shareholders are likewise taxed the conditions permitted are the tar on shares must bo be at no greater rate than on other competing moneyed capital the income tax on shareholder old era must be ba at no greater rate than on net income from other moneyed capital the tax on bank net income me must be at n no 0 higher rate than on other financial corporations nor tt the bb ee highest rates on mercantile and manufacturing fac turing corporations doing business within the state the tax measured by net bank is subject to the same came limitations as the tax on set met income lincome of the th bank but may include entire not net income from all sources states seek geek broader law national banks and their shareholders are taxed in indifferent different states under a diversity ot of systems ny stems lo ho says the V U S SSu supreme preme court has held bold that the tha low tate rate on intangible person al aU property Is in Tio violation lation ot of the tha pres ent law where it results in hi national I 1 bank shares share being taxed at t a rate greater than that assessed upon competing moneyed capital A number of of states unwilling to use the tha income methods permitted irad bd the aeterna alvo ofelt 0 either ber repealing the intangible albl tax laws law or r limiting taxation of national bank shares hares it at the intangible rate therefore they sought bought a broadening ot of the tha permissive provisions also mr paton points out a su preme prema court decision hold held a states excise tax on corporations invalid where it included income from federal and lodal local bonds la in the excise me mcatur mca asars cur bilea created ted doubt as an to some state banic excise taxes conferences eliav been held bold to j reach some agreement would protect the banks banka satisfy 06 tax cora commissioners ners and avoid a contest la in congress mr paton says from the standpoint of the tax authorities the main objectives have bave been an amendment which would permit certain states to retain their low rate tax upon intangibles and at the same time lima derive an adequate buts but not excessive revenue from national bank shares and an amendment which would permit certain states to tax corporations on their not net income excluding income from tax exempts and at the same time derive the same revenue from the banks as heretofore from the standpoint of f the banks it has been deemed imperative to maintain the protective principles q 0 section the changes agreed on in the proposed amendment the existing provision permitting taa taxation tion of bank shares no higher than the tate tata upon competing moneyed capital has haa been modified with respect to certain intangible tax states only by a provision under which instead of the moneyed capital limitation the tati shall not be greater than the rate upon the shares of other financial corporations nor upon the tha net assets of individuals vidu vi duals ils partnerships or associations employed in the banking loan or investment business nor higher than the rate asses assessed sod upon mercantile manufacturing and business corporations with head office ir litho iho state also alschu an hu added fifth fieth alternative alter nativo er ar missive method designated as a specific tax permits a state in place of an ad adva valoree valorem lorem tax on ban shares to add together total dividends paid the preceding year and the tha increase In creasa in capital sural surplus us and undivided profits less leas additions to capital or ou rp I 1 paid in by stock stockholders hoMers and to divide d this total by tho the number of shares the state may tax the shares based upon this amount but not to exceed the tha rate on other corporations in proportion to their not net profits this method la is designed for states which havo have heretofore taxed national bandill upon their entire net income from all sources at a proportionate rate to that assessed uon udon business corporations the amount which Is the basis of the tax la Is the equivalent of jf the entire not net income from all sources but be being ing assessed against the shareholder upon his hia property in the shares and not a tax upon tle ile bank it is riot not open to the objection si 09 an 0 04 income |