2. Penalty for violation. Any offence against subdivision one of this section shall be punished by a fine of not exceeding one thousand dollars or by imprisonment not exceeding one year, or both, at the discretion of the court, and if the offender be an officer or employee of the state he shall be dismissed from office. and be incapable of holding any public office in this state for a period of five years thereafter.

3. Information to federal and state officials. Notwithstanding the provisions of this section the commissioner of revenue, may permit the United States commissioner of internal revenue, or the proper officer of any state imposing an income tax upon the income of individuals, or the authorized representative of either such officer, to inspect the income tax returns of any individual or may furnish to such officer or his authorized representative an abstract of the return of income of any taxpayer or supply him with information concerning any item of income contained in any return, or disclosed by the report of any investigation of the income or return of income of any taxpayer; but such permission shall be granted or such information furnished to such officer or his representative, only if the statutes of the United States. or of such other state, as the case may be, grants substantially similar privileges to the proper officer of this state charged with the administration of the personal income tax law thereof. 1921, c. 34, s. 805.

940. Regulations. The commissioner of revenue may from time to time make such rules and regulations, not inconsistent with this act, as he may deem necessary to enforce its provisions. 1921, c. 34, s. 806.

ART. 13. MISCELLANEOUS PROVISIONS.

941. Unconstitutionality or invalidity. If any clause, sentence, paragraph, or part of this act shall, for any reason be adjudged by any court of competent jurisdiction to be invalid, such judg ment shall not affect, impair, or invalidate the remainder of this act, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered. No caption of any section or set of sections shall in any way affect the interpretation of this act or any part thereof.

1921, c. 34, s. 900.

942. Disposition of income tax. The commissioner of revenue shall, on or before the twenty-fifth day of each month, pay into

the state treasury to the credit of the general fund, all taxes, interest and penalties collected by him under this article during the preceding calendar month as appears from the return made by him to the state treasurer.

1921, c. 34, s. 901.

943. Counties and towns not to levy income taxes. No city, town, township, or county shall levy any tax on income, or inheritance tax.

1921, c. 34, s. 902.

SUBCHAPTER III. TAX ON PROPERTY OR THE AD
VALOREM TAX.

Article V, Sec. 3, of the Constitution provides: "Laws shall be passed taxing by a uniform rule all moneys, credits, investments in bonds, stock, joint stock companies or otherwise; and also all real and personal property at its real value in money."

Article V, Sec. 6.-"The total of the state and county tax on property shall not exceed fifteen cents on the one hundred dollars value of property, except when the county property tax is levied for a special purpose and with the special approval of the General Assembly, which may be done by special or general act: Provided, this limitation shall not apply to taxes levied for the maintenance of the public schools of the state for the term required by Article IX, Sec. 3 of the Constitution: Provided further, the state tax shall not exceed five cents on the one hundred dollars of property."

Article VII, Sec. 7.-"No county, city, town or other municipal corporation shall contract any debt, pledge its faith or loan its credit, nor shall any tax be levied or collected by any officers of the same except for the necessary expenses thereof, unless by a vote of the majority of the qualified voters therein."

Article VII, Sec. 9.-"All taxes levied by any county, city, town or township shall be uniform and ad valorem upon all property in the same, except property exempted by this Constitution."

The equation of taxation between property and poll was abrogated by the tax amendment to the Constitution adopted in 1920. The decisions on that subject are not applicable to the Constitution, since the amendment became effective in 1921.

The rate fifteen cents on the hundred dollars of property is subject to several modifications, and it can hardly be considered an

effective limitation. This rate must be exceeded if necessary to maintain a six months' public school in each school district. Art. IX, Sec. 3, Constitution.

Counties may, with legislative permission, levy tax in excess of 15-cent rate for special purposes and necessary expenses. The terms "necessary expenses" and "special purposes" have been defined by our Supreme Court. They include the cost of building courthouses, jails, homes for the aged, roads, municipal buildings; and the payment of prior debts incurred for the necessary expenses of government.-Hightower v. Raleigh, 150 N. C. 569, 65 S. E. 279; Davis v. Lenoir, 178 N. C. 668, 101 S. E. 260.

Cities and towns are given authority to exceed this limitation (See Sec. 892), and it is not likely that there are many subdivi sions of the state wherein the 15-cent rate is not exceeded.

So much for the rate of the property tax. It must be imposed upon citizen or individual and corporation alike. But the method of estimating the value of the property of the individual and the corporation, and the method of collecting the tax, are necessarily different.

A state tax on property will be found, when one be levied, in Schedule "A" of the Revenue Act. Authority to counties, other municipalities and subdivisions of the state, to exceed the 15-cent limit will be found in the Municipal Finance Act, in the charters of many towns, and in many general and special acts too numerous to mention here.

The state prescribed, in the Machinery Act, Chap. 38, Laws of 1921, the method of assessing the value of all property for taxation; and the values so fixed are the basis for all taxation, whether it be state, county, municipal or special taxing district. It becomes important to give the method prescribed by said act for assessing the property of corporations for taxation.

"The property of à corporation shall be given in by the presi dent, cashier, treasurer, or other person appointed for that purpose." Conclusion Sec. 31, Machinery Act.

ASSESSMENTS BY COMMISSIONER OF REVENUE.
ART. 14. PRIVATE CORPORATIONS.

944. Reports from corporations. 1. What report contains. Hereafter, except in the case of such corporations as are especially

mentioned by name in other sections of this or the revenue act, and required to make statements in other forms, it shall be the duty of the president, chairman, or treasurer of every corporation having capital stock, every joint-stock association, or limited partnership whatsoever, now or hereafter organized or incorporated by or under any law of this state, to make a report in writing to the commissioner of revenue on or before the first day of July of each year, stating specifically:

First. Total authorized capital stock.

Second. Total authorized number of shares.

Third. Number of shares of stock issued.

Fourth. Par value of each share.

Fifth. Amount paid into the treasury on each share.

Sixth. Amount of capital stock paid in.

Seventh. Amount of capital on which dividend was declared. Eighth. Date of each dividend during said year ending with the first day of May.

Ninth. Amount of each dividend during the year ending with the first Monday in said month.

Tenth. Highest price of sales of stock between the first and fifteenth days of May; highest price of sale of stock during the year aforesaid; average price of sales of stock during the year.

2. Appraise capital stock. In said report one of the following named officers of such corporation, limited partnership, or jointstock association, namely, the president, chairman, secretary, or treasurer, after being duly sworn or affirmed to do and perform the same with fidelity and according to the best of his knowledge and belief, shall estimate and appraise the capital stock of said company at its actual value in cash on the first day of May, after deducting therefrom the assessed value of all real and personal estate upon which the corporation pays tax, and the value of the shares of stock legally held and owned by such corporation in other corporations incorporated in this state and paying taxes on its capital stock in this state, as indicated or measured by the amount of profit made, either declared in dividends or carried into surplus or sinking fund; and when the same shall have been so truly estimated and appraised they shall forthwith forward to the commissioner of revenue a certificate thereof, accompanied by a copy of their said oath or affirmation, signed by them and attested by magistrate or other person duly qualified to ad minister the same.

3. Deductions made. Every such corporation may also show a deduction from the total amount of its capital stock, surplus, and undivided profits, the total amount of its actual investment in bonds of this state, and of the United States, and of the Federal farm loan bank, and bonds of the joint-stock land bank, which have been held as a continuing investment by such corporation for a period of not less than three months prior to the day on which such report is required by law to be made.

4. Appraisal revised. If the commissioner of revenue is not satisfied with the appraisement and valuation so made and returned, he is hereby authorized and empowered to make a valua tion thereof, based upon the facts contained in the report herein required or upon any information within his possession, and to settle an account on the valuation so made by him for taxes, penalties, and interest due the state thereon, of which such settle ment immediate notice shall be given to such corporation by the commissioner of revenue with the right to the company dissatisfied with any settlement so made against it to appeal to the superior court in term-time of the county in which such company has its principal place of business in this state, and thence to the supreme court of this state.

5. Appeal allowed. But before such company shall be allowed to exercise the right of appeal it shall, within twenty days after notice of such settlement, file with the commissioner of revenue exceptions to the particulars to which it objects, and the grounds thereof, and the commissioner of revenue shall hear said exceptions, after ten days notice of such hearing given by the commissioner to said company; and if he shall overrule any of said exceptions, then such company, if it desires to appeal to said supe rior court, shall, within ten days thereafter, give notice to the commissioner of revenue of such appeal to said superior court, and the commissioner shall thereupon transmit to said superior court a record of said settlement, with the exceptions of the company thereto, and all decisions thereon, and all papers and evidence considered in making said decision. The said cause shall be placed on the civil docket of said superior court, and shall have precedence of all other civil actions, and shall be tried under the same rules and regulations as are prescribed for the trial of other civil causes. The cause shall be entitled, "State of North Carolina, on the relation of the commissioner of revenue, against such company." Either party may appeal to the supreme court from the judgment of the superior court, under the same rules and