would be so obviously arbitrary and unreasonable as to be beyond the pale of governmental authority."

§ 22. Discrimination Against Nonresidents.—In imposing inheritance taxes a disposition is in some instances manifested to discriminate against nonresidents and aliens.19 The exemption usually accorded gifts to charitable institutions are generally denied where the gifts are to foreign corporations; and statutes thus excluding such corporations from the exemption do not abridge the privileges or immunities of the citizens of the United States, nor deny the equality of the laws. Foreign and domestic corporations naturally fall into two classes, and the legislature has not far to look to discover various valid reasons for favoring the latter. And corporations are not "citizens" within the meaning of the provision of the constitution of the United States that the citizens of each state shall be entitled to all the privileges. or immunities of the citizens of the several states.20

A collateral inheritance tax law exempting nephews and nieces of the decedent who are residents of the

19 Campbell v. California, 200 U. S. 87, 50 L. Ed. 382, 26 Sup. Ct. Rep. 182.

19 As to the right of an alien or nonresident, if not "aggrieved," to question the constitutionality of an inheritance tax statute, see Estate of Damon, 10 Cal. App. 542, 102 Pac. 684; Estate of Johnson, 139 Cal. 534, 96 Am. St. Rep. 161, 73 Pac. 425.

The equal protection of the laws is not denied by the New York statute imposing taxes upon certain bequests of personalty by a nonresident owning both real and personal property within the state, because, under the statute as construed by the state courts, the tax cannot be collected if the only property belonging to the decedent situated within the state is personalty: Beers v. Glynn, 211 U. S. 477, 53 L. Ed. 290, 29 Sup. Ct. Rep. 186.

20 Estate of Speed, 216 Ill. 23, 108 Am. St. Rep. 189, 74 N. E. 809, affirmed in 203 U. S. 553, 8 Ann. Cas. 157, 51 L. Ed. 314, 27 Sup. Ct. Rep. 171; Humphreys v. State, 70 Ohio St. 67, 101 Am. St. Rep. 888, 1 Ann. Cas. 233, 65 L. R. A. 776, 70 N. E. 957. The Ohio court holds that a statute imposing an inheritance tax upon foreign charitable cor

state does not conflict with the provision of the federal constitution that the citizens of each state shall be entitled to all the privileges and immunities of citizens of the several states; but, by virtue of that provision, the exemption must be accorded to nephews and nieces who are citizens of any of the sister states, leaving, as subject to the tax, all other nephews and nieces, aliens and citizens of the United States, who are not citizens of any particular state."1

§ 23. Discrimination Against Aliens.-There are, between the United States and many nations of the world, treaty provisions touching the transmission of property situated in this country to alien heirs, devisees, and legatees. The effect of such provisions on the right of the several states to impose inheritance taxes on transfers to aliens, and, in doing so, to discriminate against them, will be considered in a subsequent chapter.22 In the absence of any treaty restrictions, there is no doubt that a state may, in the exercise of its power to regulate the manner and the terms upon which real and personal property within its boundaries may be transmitted by last will and testament or by inheritance or succession, impose an inheritance tax upon transmissions of property within its dominion to aliens, even though no such tax is imposed on transmissions to citizens.2

23

The supreme court of the United States, in affirming a decision of the supreme court of Louisiana,

porations operating to some extent within the state, as to property received by them therein by gift, bequest or devise, is not unconstitutional as an unlawful discrimination against them or as denying them the equal protection of the law.

21 Estate of Johnson, 139 Cal. 532, 96 Am. St. Rep. 161, 73 Pac. 424, overruling Estate of Mahoney, 133 Cal. 180, 85 Am. St. Rep. 155, 65 Pac. 389.

22 Secs. 190-197, post.

23 State v. Poydras, 9 La. Ann. 165; Succession of Schaffer, 13 La. Ann. 113; Succession of Sala, 50 La. Ann. 1009, 24 South. 674; Prevost

wherein an early statute of that state imposing a succession tax on nonresidents of the state or of the United States was upheld in its application to a resident and citizen of France, saiu through Justice Taney: "The law in question is nothing more than an exercise of the power which every state and sovereignty possesses, of regulating the manner and terms upon which property real or personal within its dominion may be transmitted by last will and testament or by inheritance, and of prescribing who shall and who shall not be capable of taking it. Every state or nation may unquestionably refuse to allow an alien to take either real or personal property situated within its limits, either as heir or legatee, and may, if it thinks proper, direct that property so descending or bequeathed shall belong to the state. In many of the states of this Union at this day, real property devised to an alien is liable to escheat. And if a state may deny the privilege altogether, it follows that, when it grants it, it may annex to the grant any conditions which it supposes to be required by its interests or policy. This has been done by Louisiana. The right to take is given to the alien, subject to a deduction of ten per cent for the use of the state. In some of the states laws have been passed at different times imposing a tax similar to the one now in question upon its own citizens as well as foreigners; and the constitutionality of these laws has never been questioned. And if a state may impose it upon its own citizens, it will hardly be contended that aliens are entitled to exemption; and that their property in our own country is not liable to the same burdens that may lawfully be imposed upon that of our own citizens. We can see no objection to such a tax, whether im

v. Greeneaux, 60 U. S. (19 How.) 1, 15 L. Ed. 572, affirming 12 La. Ann. 577; Frederickson v. Louisiana, 64 U. S. (23 How.) 445, 16 L. Ed. 577.

posed upon citizens and aliens alike or upon the latter exclusively. It certainly has no concern with commerce, or with imports or exports. It has been suggested, indeed, in the argument, that, as the legatee resided abroad, it would be necessary to transmit to her the proceeds of the portion of the estate to which she was entitled, and that the law was therefore a tax on imports. But if that argument was sound, no property would be liable to be taxed in a state, when the owner intended to convert it into money and send it abroad.'' 24

§ 24. Exemption of Estates of Limited Value.Most, if not all, inheritance tax laws exempt from their operation estates below a certain value. A larger exemption is usually made in case of direct inheritances than is allowed to inheritances by collaterals or strangers. There is no constitutional objection to this form of inequality, and the validity of statutes creating such exemptions has been recognized repeatedly. It is peculiarly within the province of the legislature to declare what privileges shall be taxed and what exemptions shall be allowed; and obviously the exemption of small estates is not arbitrary or without reason, for thereby the tax is made to rest most lightly on those least able to bear the burden. The administration expenses alone, in the case of estates of limited value, are burdensome enough, being generally much larger proportionately than for large estates.25

24 Majer v. Grima, 49 U. S. (8 How.) 490, 12 L. Ed. 1168, affirming 12 Rob. (La.) 584.

25 Estate of Wilmerding, 117 Cal. 281, 49 Pac. 181; Estate of Stanford, 126 Cal. 112, 45 L. R. A. 788, 54 Pac. 259, 58 Pac. 462; Estate of Magnes, 32 Colo. 527, 77 Pac. 853; Appeal of Nettleton, 76 Conn. 235, 56 Atl. 565; Ferry v. Campbell, 110 Iowa, 290, 50 L. R. A. 92, 81 N. W. 604; State v. Hamlin, 86 Me. 495, 41 Am. St. Rep. 569, 25 L. R. A. 632, 30 Atl. 76; Minot v. Winthrop, 162 Mass. 113, 26 L. R. A. 259,

§ 25. Exemption of Charities.-The exemption from inheritance taxation of gifts to charitable, educational, or religious institutions, while perhaps of

38 N. E. 512; Union Trust Co. v. Wayne Probate Judge, 125 Mich. 487, 84 N. W. 1101; State v. Bazille, 97 Minn. 11, 7 Ann. Cas. 1056, 6 L. R. A., N. S., 732, 106 N. W. 93; Gelsthorpe v. Furnell, 20 Mont. 299, 39 L. R. A. 170, 51 Pac. 267; Pullen v. Commissioners of Wake Co., 66 N. C. 361; State v. Guilbert, 70 Ohio St. 229, 71 N. E. 636; State v. Alston, 94 Tenn. 674, 28 L. R. A. 178, 30 S. W. 750; State v. Clark, 30 Wash. 439, 71 Pac. 20; High v. Coyne, 93 Fed. 450.

A statute exempting transfers of personal property to lineals when it falls under two thousand dollars in value, and taxing the whole amount if the value is over two thousand dollars, is not unconstitutional: Estate of Fox, 154 Mich. 5, 117 N. W. 558.

In State v. Guilbert, 70 Ohio St. 229, 1 Ann. Cas. 25, 71 N. E. 636, the court says: "The specific complaint is that this act does not prescribe or preserve the rule of equality and uniformity of burden in taxation prescribed by the constitution, in that it exempts from its operation all inheritances which do not exceed three thousand dollars in value, and imposes the burden on such as are above that sum. We think there are two answers to this objection: The person who inherits six thousand dollars has three thousand dollars exempt; the person who inherits three thousand dollars has three thousand dollars exempt. They are on a perfect equality in that regard. The same reasoning applies where it happens that the smaller inheritance falls below three thousand dollars. As well might it be urged that the law which exempts from execution homesteads of the heads of families of one thousand dollars in value is invalid on the ground of inequality of privilege, because one debtor's homestead may not reach one thousand dollars in value, while that of another may. It is to be borne in mind that the act does not create a classification of persons for the purpose of imposing a tax on that class. It is not a tax on persons at all. If it is felt more by some than by others, this is owing merely to the fact of the differing circumstances which surround the different persons. No person nor no set of persons is selected arbitrarily or otherwise for the imposition of burdens or for relieving of burdens. But beyond this, when it is determined, as it was determined in State v. Ferris, 53 Ohio St. 314, 30 L. R. A. 218, 41 N. E. 579, that the tax is an excise tax, and, as in Hagerty v. State, 55 Ohio St. 613, 45 N. E. 1046, that the authority to impose the tax is conferred by the general grant of legislative power, then the selection of the subjects on which the tax will be imposed must be within the legislative competency. Those inheritances which do not exceed three thousand dollars in value are not embraced in the class included within the purview of the law, and unless it can be shown that such exclusion results in a violation of the rights of those who are included, or that such discrimination is forbidden by some provision of