§ 2. Various Forms of Tax.-The tax also sometimes takes the form of an estate duty, or stamp tax on the probate of wills, letters of administration, bonds of administrators, and inventories. Looking over the whole field, and considering death duties as imposed by the different governments of the earth, said Justice White, the following appears: "Although different modes of assessing such duties prevail, and although they have different accidental names, such as probate duties, stamp duties, taxes on the transaction, or the act of passing an estate or a succession, legacy taxes, estates taxes or privilege taxes, nevertheless tax laws of this nature in all countries rest in their essence upon the principle that death is the generating source from which the particular taxing power takes its being, and that it is the power to transmit, or the transmission from the dead to the living, on which such taxes are more immediately rested."

§ 3. Distinction Between Various Taxes.-A distinction has been made, however, between an inheritance or succession tax and a probate or estate tax. There are, it has been said, two classes of death duties. One reaches the interest which ceased with stated in that opinion, to be the succession to all the rights of the deceased. It is of two kinds-that which arises by testament, when the testator gives his succession to a particular person; and that which arises by operation of law, which is called succession ab intestato; Bouvier's Law Dictionary, p. 1037. Such has been the meaning attached to the word 'inheritance' when used in our legislation with regard to succession taxes. In defining the sources from which public revenues were derived, in Code of 1858, section 538 (Shannon's Code, sec. 685), among them is included 'collateral inheritance taxes.' It is inconceivable that the framers of the code, by this use of the term 'inheritance,' intended to confine this tax to those taking as heirs the real estate of the ancestor, or to devolutions of property by operation of law, and exclude successions by will to either personal or real estate."

2 Knowlton v. Moore, 178 U. S. 41, 44 L. Ed. 969, 20 Sup. Ct. Rep. 747; Dixon v. Ricketts, 26 Utah, 215, 72 Pac. 947.

the death of the former owner, and is a tax on the transmission of the property; into this class fall probate and estate duties, the burden of which is borne by the estate. The other reaches the interest to which heirs, devisees, and legatees succeed on the death of the owner. This is a burden upon the right to receive, and is to be paid by the persons beneficially interested, that is, the heirs, devisees, or legatees.3 This distinction may assume importance, and this terminology prove a convenience, in considering some of the problems which inheritance taxation presents, but usually they are of little moment. To quote from the Connecticut court:

"However computed, the tax is an exaction from the estate of the decedent, whose stress incidentally falls on the legatees or distributees with more or less equal or unequal burden, according to the policy adopted by the state in fixing the scope of the exaction, the mode of ascertaining its amount, and of enforcing its collection. Nor is it material to the essence of the tax at what time it is ascertained and collected during the passage of the property, through the channel of the law, from the dead to the living-whether the property is tapped as it falls from the lifeless hand, or midway in its course, or as it passes into the grip of the new owner; whether it is called a probate, a succession, or a legacy tax. Such nomenclature is convenient. Its distinctions may be important for clear discussion of the policy of death duties and the mode of using this form of taxation, and an accurate conception of them may serve to throw light upon the actual intent of the legislature when language of doubtful meaning is used in determining the amount and manner of enforcing the tax. But they are of no practical importance in this case, and we do not con

3 Estate of Macky, 46 Colo. 79, 23 L. R. A., N. S., 1207, 102 Pac.

sider the questionable claim that the act before us imposes a legacy tax, as distinguished from a tax on the estate. It may be conceded, for the purposes of argument, that the duty imposed is more accurately termed a legacy tax." "

§ 4. Tax not Regarded as Charge on Property.—On the general proposition that an inheritance tax is not on the property, but on the transmission or succession, the authorities are agreed. The charge is not on the property itself, although the value of the property determines the amount of the tax, but rather upon the right or privilege to transmit or receive the property. It is the transmission or reception, not the thing transmitted or received, that is taxed. Important constitutional, as well as other, considerations flow from this characteristic of inheritance taxation, for if the tax is not on property, or if it is an indirect as distinguished from a direct tax, then it is not within the purview of certain limitations placed by the organic law upon the power of taxation.

sa Appeal of Nettleton, 76 Conn. 235, 56 Atl. 565.

In re House Bill No. 122, 23 Colo. 492, 48 Pac. 535; National Safe Deposit Co. v. Stead, 250 Ill. 584, 95 N. E. 973; Union Trust Co. v. Durfee, 125 Mich. 487, 84 N. W. 1101; Estate of Fox, 154 Mich. 5, 117 N. W. 558; Estate of Tuohy, 35 Mont. 431, 90 Pac. 170; Gelsthorpe v. Furnell, 20 Mont. 299, 39 L. R. A. 170, 51 Pac. 267; State v. Vinsonhaler, 74 Neb. 675, 105 N. W. 472; Neilson v. Russell, 76 N. J. L. 27, 69 Atl. 476; Eastwood v. Russell (N. J.), 81 Atl. 108; Estate of Davis, 149 N. Y. 539, 44 N. E. 185; State v. Ferris, 9 Ohio C. C. 298, 2 Ohio Dec. 299, affirmed 53 Ohio St. 314, 30 L. R. A. 218, 41 N. E. 579; State v. Guilbert, 70 Ohio St. 229, 71 N. E. 636; Nunnemacher v. State, 129 Wis. 190, 9 Ann. Cas. 711, 9 L. R. A., N. S., 121, 108 N. W. 627; Plummer v. Coler, 178 U. S. 115, 44 L. Ed. 998, 20 Sup. Ct. Rep. 829; United States v. Perkins, 163 U. S. 625, 41 L. Ed. 287, 16 Sup. Ct. Rep. 1073.

The tax is not upon the property itself, although its value is made the basis of taxation, but on the right of transmission, where, under the deed, grant or gift, the property is not to vest in possession or enjoyment until the death of the grantor, donor or settlor, or if not expressed, such intention is found: State Street Trust Co. v. Stevens (Mass.), 95 N. E. 851.

§ 5. Tax Considered as Charge on Succession.— Many authorities are coming to define the inheritance tax more specifically by saying that it is a tax on the right of succession, or the right of the heir, devisee or legatee to receive." This theory has been clearly elucidated by the Colorado court in holding that the inheritance statute of that state imposes a tax on the right of the beneficiaries to take, not on the

5 Estate of Hite, 159 Cal. 392, 113 Pac. 1072; Kochersperger v. Drake, 167 Ill. 122, 41 L. R. A. 446, 47 N. E. 321; Wieting v. Morrow, 151 Iowa, 590, 132 N. W. 193; Lacy v. State Treasurer (Iowa), 121 N. W. 179; Estate of Irish, 28 Misc. Rep. 647, 60 N. Y. Supp. 30; Estate of Linkletter, 134 App. Div. 309, 118 N. Y. Supp. 878.

"No decision has been pointed out to us wherein is discussed the specific nature of an inheritance or succession tax, as distinguished from that of a probate, estate or transfer tax, but that it is held that an inheritance or succession tax is on the right to receive the property": Estate of Macky, 46 Colo. 79, 23 L. R. A., N. S., 1207, 102 Pac. 1075.

"Inheritance taxes are not laid upon property, but upon the privilege or right of succession to it": State v. Handlin (Ark.), 139 S. W. 1112. "The tax under this statute is, once for all, an excise or duty upon the right or privilege of taking property by will or descent under the law of the state": State v. Hamlin, 86 Me. 495, 41 Am. St. Rep. 569, 25 L. R. A. 632, 30 Atl. 76.

"It must be borne in mind that the tax is not upon the property, but the right or privilege of acquiring it by succession. It is a condition upon which the person may take the estate of a deceased relative or testator by his will. . . . . It is not a tax upon the right of alienation, but on the privilege of receiving by inheritance or will or otherwise at the death of a former owner": State v. Alston, 94 Tenn. 674, 28 L. R. A. 178, 30 S. W. 750.

"Properly understood, it is not the right to transmit, but the right and privilege to receive, that is taxed. The right to dispose of property during the lifetime of the owner cannot be separated from the property itself, and therefore to tax the right of disposal by contract in the lifetime of the owner, even though to take effect at his death, is to tax the property itself. But the right to dispose of the property by will or descent, taking effect after the death of the owner, is not so closely connected with the right of property, and it is not so clear that such right may not be taxed. But, when the right to receive the property is considered, it is clear that the right is distinct and separate from the property itself, and the state may tax this right to receive property; and this is so whether the property is disposed of by the owner during his lifetime, or at his death. This right to receive property is under the control of the legislature, and it has the power to

property, nor yet on the right of the decedent to give. Hence it is found that legacies to a municipality for a hospital, and to the regents of the state university for an auditorium, being gifts to agencies of the state engaged in the discharge of governmental functions, are not subject to the inheritance tax, by reason of the rule that the property of a state or municipality, held for a public use, is impliedly exempt from taxation.

And the California court, construing the inheritance act as imposing a tax solely upon persons for the privilege of succeeding to property as heirs, devisees, or legatees, has affirmed that so much of the estate of the decedent as is lawfully diverted from them for the family allowance and homestead, and for the payment of debts and administration expenses, is not to be included in fixing the tax to be paid. The tax is on the succession, the net succession, and is measured by what the beneficiaries actually receive, not the full amount of the estate of which the decedent died possessed.' Other courts have taken the same view, namely, that the tax is imposed for the privilege of succeeding to the property of a decedent, and therefore can justly attach only as to so much property as actually passes to the heirs, devisees and legatees, after the satisfaction of such charges and burdens as may lawfully be satisfied in due course of administration."

regulate and lay such burdens thereon as it may see fit, within the provisions of the constitution": State v. Ferris, 53 Ohio St. 314, 30 L. R. A. 218, 41 N. E. 579.

"The most exact rule is that which regards the tax as upon the right to receive property, rather than on the right to dispose of it": Gelsthorpe v. Furnell, 20 Mont. 299, 39 L. R. A. 170, 51 Pac. 267.

• Estate of Macky, 46 Colo. 79, 23 L. R. A., N. S., 1207, 102 Pac. 1075.

7 Estate of Kennedy, 157 Cal. 517, 108 Pac. 280.

8 Appeal of Gallup, 76 Conn. 617, 57 Atl. 699; Morrow v. Durant, 140 Iowa, 437, 118 N. W. 781; Estate of Gihon, 169 N. Y. 443, 62 N. E. 561; Estate of Pepper, 159 Pa. 508, 28 Atl. 353,