8571. Taxation of property of manufacturing companies.

Manufacturing corporations are specially taxed in a number of States. In a few it is provided that such corporations shall pay an ad valorem tax upon the average value of its raw materials as part of its property.1

"Any person, firm or corporation, who purchases, receives, or holds personal property of any description for the purpose of adding to the value thereof by any process of manufacturing or by the combination of different materials, with a view to making gain or profit by so doing, and selling the same, shall be held to be a manufacturer for the purposes of this title, and he shall list for taxation the average value thereof estimated upon those materials only which enter into its combination or manufacture."2 Under such a statute the value of labor and fuel used in manufacture is not included.3 In a number of States it is expressly provided that the

1 Kan. Gen. Stat. ch. 158, § 58.

2 Ia. Code, § 1319.

3 Appeal of Iowa Pipe & Tile Co., 101 Ia. 170, 70 N. W. 115; see Dean v. Solon, 97 Ia. 303, 66 N. W. 182.

machinery and materials of a manufacturing company shall be locally taxed."

8572. Exemption of property.

Exemption from taxation is frequently granted to manufacturing companies, whether for a number of years or permanently.

In Tennessee manufacturing corporations are exempted from taxation on articles manufactured from the produce of the State, and in West Virginia on articles manufactured in the State.

In some States manufacturing establishments may be exempted from taxation for ten years after their establishment. In Alabama corporations for the manufacture of cloth or of ships are exempt for five years. In Delaware manufacturing corporations are exempt from the franchise tax. In Illinois they are assessed like individuals, instead of paying a tax on their capital stock like ordinary corporations.10 The same provision appears to be made in Kansas.11 In Louisiana a special license tax is imposed upon manufacturing corporations; 12 but for ten years from January 1, 1900, the legislature has exempted from local taxation the capital, machinery and other property employed in the manufacture of textile fabrics, yarns, rope, cordage, leather, shoes, harness, saddlery, hats, clothing, flour, machinery, articles of tin,

Ill. Rev. Stat. ch. 120, § 3; Kan. Gen. Stat. ch. 158, § 20; Me. Rev. Stat. ch. 6, § 14, cl. 3; Or. Misc. L. § 2742; Vt. Stat. of 1894, § 374; Wash. 1897, ch. 71, § 19; Mich. Stat. § 4161d; N. Dak. 1897, ch. 121, § 24; Mo. Rev. Stat. § 7538.

5 Tenn. 1901, ch. 174, § 23.

• W. Va. Code, ch. 29, § 43.

7 N. H. Stat. ch. 55, § 11; N. J. Gen. L. Boroughs, § 124 (five years);

R. I. Gen. L. ch. 44, § 5; Vt. Stat. § 365.

8 Ala. 1901, No. 1151, § 2.

Del. 1901, ch. 15, § 4.

10 Ill. Rev. Stat. ch. 120, § 3, cl. 4.

11 Kan. Gen. Stat. ch. 158, § 28.

12 La. 1898, No. 171, § 3, cl. 1.

copper and sheet iron, agricultural implements, and furniture and other articles of wood, marble or stone; soap, stationery, ink and paper, boat building and fertilizers and chemicals; provided that not less than five hands are employed in any one factory.1

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573. The Mississippi statute.

In Mississippi manufacturing companies are exempted from taxation as follows:

All permanent factories or plants of the kind hereinafter named which shall hereinafter be established in this State before the first day of January, 1906, shall be exempt from all State, county and municipal taxation for a period of ten years, to-wit: All permanent factories for working of cotton, jute, ramie, wool, silk, furs or metals; all permanent pork-packing and cold storage factories or plants, where the amount of capital invested shall not be less than ten thousand dollars; all permanent factories for manufacturing machinery, implements, or articles of use in a finished state and ready for consumer's use without additional process of labor; all permanent factories for making wagons, carriages, buggies, clothing or shoes, complete; all permanent factories for making barrels or boxes complete, whether coopered or loose, ready for transportation; all permanent additions or extensions, costing not less than ten thousand dollars, hereafter made before the first day of January, 1906, to any permanent factory or plant hereafter established under the provisions of this act. Any exemption claimed under this act shall commence from the date of the charter if the factory or establishment be a corporation; and from the date of beginning working operations if the same be an individual enterprise. Any factory which has been abandoned for not less than three years, and commencing operations within two years from November 1, 1896, shall be entitled to such exemption. A corporation or person claiming exemption

13 La. Const. Art. 230.

under this paragraph shall apply in writing to the Auditor of Public Accounts, giving full information as to the property proposed to be exempted, the kind of articles to be manufactured; and the Auditor, with the written advice of the Attorney-General, shall determine whether the property is exempt. The Auditor shall notify the assessor of the county or municipality, in writing, of his decision in the premises, stating the property to be exempted, and the date when the exemption begins and ends. A factory or manufacturer belonging to or being a trust, combine or pool, shall not enjoy exemption from taxation. All creameries established in this State within two years last passed from April 1, 1896, and all those which shall be established hereafter before January 1, 1896, shall be exempt from all taxation for ten years, under the terms and conditions of this act.14

All factories or plants of the kind hereinafter named, which are now in course of establishment or which shall hereafter be established in this State before the first day of January, 1910, shall be exempt from all State, county and levee taxation for a period of five years, viz.: All factories for working cotton, jute, ramie, wool, silk, furs or metals; all factories for manufacturing machinery, implements or articles of use in a finished state and ready for consumer's use without additional process of labor; all factories for making wagons, carriages, buggies, clothing or shoes complete; all factories for making barrels or boxes complete, whether coopered or loose, ready for transportation, and all creameries.

Any exemption under the provisions of this act shall commence from the date of the charter, if the factory, establishment or enterprise be owned by a corporation; and if an individual enterprise, from the date of the commencement of the work. A person or corporation claiming exemption from taxation under this act shall apply in writing to the Auditor of Public Accounts, giving full information as to

14 Miss. Code, § 3744, as amended by Act of March 23, 1896.

the property proposed to be exempted, the kind of articles to be manufactured, and the Auditor, with the written advice of the Attorney General, shall determine whether the property is exempt. The auditor shall notify the Chancery Clerk of the county in which such factory or enterprise may be located, in writing, of his decision in the premises, stating the property to be exempted and the date when the exemption begins and ends, and the Chancery Clerk shall record such statement in a book to be kept in his office for the purpose; and the Auditor shall record and preserve, in a record to be kept for such purpose in his office, all opinions so rendered by him and statements furnished to the Chancery Clerk relative to such exemptions.

The provisions in this act shall in no wise affect or impair any exemption granted to factories or other enterprises under the provisions of law heretofore in force in this State.

A factory or factories or other enterprises exempted from taxation under the provisions of this act, which may belong to, or being a trust, combine or pool, shall not enjoy such exemptions.

All cities, towns and villages are hereby authorized to encourage the establishment of such factories and plants within their respective corporate limits, by exempting the same from municipal taxation for a period not longer than ten years.1

574. The New Jersey statute.

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In New Jersey a manufacturing company at least fifty per cent. of whose capital stock is invested in manufacturing carried on within the State is exempt from the franchise tax; and if any portion of its capital stock less than fifty per cent. is so invested, it shall to that extent be exempt from the franchise tax.16

15 Miss. Act of March 6, 1900.

18 N. J. Corp. Supp. § 150; Standard U. G. C. Co. v. Atty. Gen., 46 N. J. Eq. 270, 19 Atl. 733, 19 A. S. R. 394; Norton N. C. & S. B. Co. v. Assessors, 53 N. J. L. 564, 22 Atl. 352; Edison Phonograph Co. v. Assessors, 55 N. J. L.