Such taxes to be in lieu of all other taxes paid upon their property or business. The taxes computed to be due by the Auditor General upon the business of the foregoing companies for the year ending July 1, 1900, are as follows: Telephone and telegraph companies.. INSURANCE FEES. $44,659 28 Section 7205 Miller's Statutes provides for an annual tax of two per cent on all premiums received in cash or otherwise by foreign life insurance companies or their agents on business done within this State. Section 7257 provides that foreign fire insurance companies, doing business within this State, shall pay a specific tax of three per cent on the gross amount of premiums received in money or securities during the year. Foreign fidelity and integrity insurance companies pay a specific tax of two per cent on the gross amount of premiums received. Co-operative and mutual life insurance companies of other states pay an annual fee of $25 and Michigan companies of like character a fee of $5. The amounts received by the State from the different classes of companies during the year ending December 31, 1899, are as follows: This class of companies pay a tax of one per cent on capital paid in. The amount received by the State for the year ending July 1, 1900, was $1,620.77. There is a marked distinction in the status of the four following companies: FAST FREIGHT LINES. In the case of these lines, of which the Blue Line is a type, the cars are virtually a part of the railway company operating them and in the appraisal of any railway system such cars are included in the value of the equipment of such railway. Most of the lines (of which there are but a few) are known by a color; as Blue Line, White Line, Red Line, etc., and regarding such lines the State under present conditions receives a proportionate benefit from such lines in the taxation of railway systems operating them, the organization itself being simply a co-operative arrangement for securing through freight over the particular lines which they represent. The Despatch Line companies also fall within this arrangement. 7 PRIVATE CAR LINES. These lines differ from the fast freight lines in that the cars are owned by private individuals or corporations distinct from the railway company itself and the cars are used by their owners in shipments of their own products. But by a uniform arrangement with the railway company, the owner is paid by the railway company a certain rate on a car mileage basis for the use of the car over its road, the railroad company paying such rate per mile, whether loaded or empty, but having the right to return such car to its home terminal loaded with any freight for which it is fitted and the owner in turn paying to the railroad company the usual freight rates for hauling its merchandise. These lines, of which the Armour Refrigerator Line and the Solvay Process Co.'s cars are types, are not considered as a part of the railway company's equipment and are not included in the appraisal of any of the systems in this State. It is claimed by the owners of such cars that they are not put in use for the purpose of producing a revenue and that as a fact the sum paid per mile for their use, which appears to be from six-tenths of one cent to one and one-half cents per mile, is only intended to cover the expense of the car itself and that it became necessary to furnish them for their own product by reason of the fact that such product required a car differing in size, shape or character from the ordinary freight car. But these cars have a value and many of them traverse the railway systems of this State. A blank has been prepared and a copy sent to each of the 350 companies in the United States, requesting the car mileage, the rate per mile, the gross receipts and expenses, etc., for the purpose of ascertaining the volume of business done in Michigan from which may be computed the value of the system and its proportion for Michigan. Unfortunately, however, but very few of these companies have reported. The law should be so amended as to require of railroad companies in this State, either a payment of the taxes upon such properties so used by them belonging to other outside corporations or a complete report of the property so employed by them with such detail as the State might require for a complete and fair assessment. The sleeping and drawing room car companies, of which there are but two operating in this State, the Pullman Co. and the Pullman Palace Car Co., come within this class and reports have also been requested of them. Under the present law, sleeping car, etc., companies are classed with fast freight lines which are required to pay a percentage tax upon receipts from business done wholly within this State, but the law is insufficient to meet the needs since the greater portion of the business done within this State is not done wholly within the State, i. e.. if a person go from Detroit to Niles via the Michigan Central, and occupy a sleeping or parlor car, the company must pay a tax upon its receipts from such person, but if such person go to Chicago instead, the State receives no tax upon the amount paid to the company. It is suggested that such private car lines and sleeping car, etc., companies be valued as a unit for the whole system and such proportion thereof be given to Michigan for taxation under the general laws as the car mileage in Michigan bears to the total car mileage of the system, dividing such Michigan portion among the counties or districts through which such cars operate, according to mileage in each district. CAR-LOANING COMPANIES. Generally they build or buy rolling equipment which they rent to railway companies and often contract with them to transfer the title of the cars to such railway company after an agreed amount has been paid upon them, as rental or at stated periods from the earnings of such equipment. There are said to be many of such loaning companies and that their business is extensive. The cars are usually marked with the name of the railway operating them, with a stencil on the corner of each car stating that they are owned or leased by the loaning company. The appraisal of the rolling stock of the railways is made up from the reports from the companies, but it does not appear from such re ports, whether the cars leased from the loaning companies are included or not, though it seems to be assumed that they are included. CAR SERVICE ASSOCIATIONS. These are merely arrangements made by the railway companies under which a bureau is formed in railway centres to look after the proper and expeditious movement of the cars, the demarrage charges, the proper loading and unloading of cars, etc. They bear no relation to the taxation of railway systems. Our laws, such as they are, for the taxation of this class of companies, seem to have been framed under the mistaken impression that car service and fast freight line associations, were foreign to the companies themselves. The properties of these companies, being a part of the railroad companies' holdings within the State and included in their reports, should not be taxed separately. It is believed, however, that to tax only the business of private car companies done wholly within the State is granting an exemption unnecessary. If these companies, under the decisions, were valued as units and Michigan's proportion arrived at by some method, it would be of great advantage to the State and just to the companies. As illustrating the vast amount of business done by these companies in the State, the following figures are suggestive: The total freight car mileage of the Michigan Central Railroad system, including all freight cars for the year 1899, was 207,742,296 miles and of that amount the private car mileage was 49,767,029 miles, or, in other words, nearly 25 per cent of all the car mileage over the Michigan Central system was done by these private car companies. If the same proportion applied to other railroads of Michigan, and like proportion of values obtained to Michigan cars, the average value of these private cars in Michigan for the year was not less than $2,000, 000, and from which Michigan received in taxes the insignificant sum of $42.67. A very large amount of business is done over the Michigan railroads by car-loaning companies, fast freight lines and sleeping car companies. This class of property, while nominally taxed, affords little revenue to the State. The rate fixed is 22 per cent upon gross receipts, computed by the Commissioner of Railroads, and derived from percentage or from loaning, renting or hiring these cars to any other railroad corporation, association, partnership or party. The amount computed to be paid and due to the State from this class of companies for the year ending July 1, 1900, was $42.67, and the amount actually paid, including arrears, was $82.60. Section 4011 Miller's Annotated Statutes. FRANCHISE FEES. Section 8574 Miller's Annotated Statutes provides that every corporation or association, incorporated or formed by or under any general or specific law of this State, upon filing articles of association with the Secretary of State, and every other foreign corporation or associa tion hereafter permitted to transact business in this State, not having previously filed articles of association, shall pay to the Secretary of State a franchise fee of one-half of one mill upon each dollar of authorized capital stock of such corporation or association, and a proportionate fee upon any and each subsequent increase thereof. No fee to be less than $5. Such fees, when received, to be paid into the State treasury and to be applied in paying interest upon the primary school, university and other educational funds. Franchise fees collected by the Secretary of State from the first day of August, 1899, to the thirtieth day of June, 1900, were. $130,998.43. PLANK ROADS. Section 6580 Miller's Annotated Statutes provides that each and every plank road company shall pay to the Treasurer of the State of Michigan an annual tax at the rate of 5 per cent on the net profits of said company for the year preceding, in lieu of all other taxes, the taxes to be computed for the year ending on the first Tuesday of January. The amounts received and paid into the State treasury for the year ending on the first Tuesday of January, 1900, were $1,149.20. INHERITANCE TAXES. A tax of 5 per cent is imposed upon the transfer of property, real or personal, of the value of $500 or more, in trust or otherwise, to persons or corporations not exempt by law from taxation. First, When the transfer is by will or by intestate laws of this State from any person dying seized or possessed of property while a resident of Michigan. Second, When the transfer is by will or intestate law of property within the State and the decedent was a non-resident of the State at the time of death. Third, When the transfer is of property made by a resident or non resident, when such non-resident's property is within the State, by deed, grant, bargain, sale or gift, from any contemplation of grantor's death, or intended to take effect after such death. Exceptions to the above rule are when the property or beneficial interest passes by such transfer to a father, mother, husband, wife, child, brother, sister, wife or widow of a son, or husband of a daughter, or to or for the use of any child or children adopted, or to any person to whom any such decedent, grantor, donor or vendor for not less than ten years prior to such transfer occupied the position of parent, or to any lineal descendant of such decedent, grantor, donor or vendor, such personal property shall not be taxable under the above law, unless it be personal property of the value of $5,000 or more. In such case it is taxable at the rate of 1 per centum upon the value of such property in excess of $5,000. The above taxes are paid to the treasurer of each county and by him to the State Treasurer to be applied in paying the interest upon primary school, university and other educational funds. The amount received during the last fiscal year from this tax was $4,579.22.* DEER LICENSE. Act 268, of the Public Acts of 1897, provides that any person who has been a bona fide resident of the State for six months last past may procure a hunter's annual license for himself by paying to the clerk of his county the sum of seventy-five cents, such hunting to be done during prescribed months and under the conditions fixed by law. Any non-resident of the State may procure a hunter's license from the clerk of some one of the counties, in which he proposes to hunt, by paying to the said clerk an annual license fee of twenty-five dollars. Such licenses are permitted for the use of firearms in hunting or killing deer during the deer hunting season. Such clerk shall pay over the funds so received to the county treasurer on the first days of March, May, September and December of each year, and the county treasurer shall forward all non-resident license fees and one-half of the resident license fees to the State Treasurer to be used in paying for the services and expenses of the State Game and Fish Warden, one-half of the resident fees to be retained by the county treasurer to be used as provided by the same act. The amount received by the State Treasurer from such fees during the year ending June 30, 1900, was $6,010.82. There are also some indirect taxes received by local treasuries, illustrating the different kinds of taxation in other manner than by the direct assessment and levy. Among the more important ones are the following: LIQUOR TAX. In all townships, cities and villages of the State there shall be levied a tax upon the business of manufacturing or selling distilled, brewed, malt or mixed liquors as follows: Upon the business of selling intoxicating or mixed liquors by retail, $500 per annum. *It may be stated that the law is of recent enactment, and its constitutionality having been questioned and not decided by the courts, fees have been withheld awaiting such adjudication. |