Edward Terry Sanford

“ Every corporation, association, joint-stock company and insurance company, 'created or organized in the United States,' shall pay a special excise tax, as prescribed, with respect to the carrying on or doing business. ”

“ This opinion is based primarily upon the view that the Income Tax Act, considering its purpose, did not show a clear intention to impose upon the trustees as an 'association' a double liability in reference to the dividends on stock in the corporation that itself paid an income tax, when considered as 'trustees' they were by another provision of the Act exempt from such payment. ”

“ The trustees have full and complete powers of management; but no power to create any liability against the certificate holders. There are no meetings of certificate holders; but they may, by written instrument, increase the number of trustees, remove a trustee, appoint a new trustee if there be none remaining, modify the declaration of trust in any particular, terminate the trust, or give the trustees any instructions thereunder.
The Haymarket Trust is strictly a business enterprise. ”

“ And thereby, in our opinion, the intention of Congress is plainly shown to extend the tax from one imposed solely upon organizations exercising statutory privileges, as theretofore, to include also organizations exercising the privilege of doing business as associations at the common law. ”

“ And their books show the 'dividends' disbursed to shareholders. The amount of the present tax was assessed by the Collector by taking the fair value of the assets of the Association over its liabilities, and calling the difference its capital stock.
It is true that, generally speaking, in the technical sense, the capital stock of a corporation is a sum fixed by its corporate charter as the amount paid or to be paid in by the stockholders for the prosecution of the business of the corporation and the benefit of its creditors. 1 Cook on Corporations (7th Ed.) ”

“ One might almost say that they are a device under which parties make their own corporation code. Business concerns so organized have come to occupy a large field in industry and in finance. At least two substantial text-books have been written on the law concerning such organizations and dealing with their advantages for general business purposes. ”

“ Nor does the language of the Act in this respect call for the application of the established rule that in the interpretation of statutes levying taxes their provisions are not to be extended by implication beyond the clear import of the language used, and in case of doubt are to be construed most strongly against the Government and in favor of the taxpayer. ”

“ They are not organized under any statute; and they derive no power, benefit or privilege from any statute. The Massachusetts statutes, however, recognize their existence and impose upon them, as 'associations,' certain obligations and liabilities. ”

“ The words, 'now or hereafter organized under the laws of the United States or any State or Territory' appear in the Act of 1916 in precisely the same place with reference to the preceding words 'every corporation, joint-stock company or association' as in the Act of 1909, and are separated from them in like manner by the phrase 'and every insurance company,' followed by the like comma. ”

“ A corporation owning and renting an office building is engaged in business within the meaning of an excise statute. Flint v. Stone-Tracy Co., supra, page 171 (31 Sup. Ct. 342) ; Zonne v Western Syndicate, supra, at page 190 (31 Sup. Ct. 361) .
4. It is urged, however, by the trustees of the Crocker Association that they are not subject to an excise tax under the Act of 1918, because the tax imposed on a domestic 'association' is measured by 'the fair average value of its capital stock' ”