Commonwealth v. Western Land & Improvement Co.

Citations

• 156 Pa. 455
• 26 A. 1034
• 1893 Pa. LEXIS 1371

Syllabus

<p>Taxation — Dividends—Land companies — Act of June 1, 1889.</p> <p>Under the act of June 1,1889, P. L. 420, a valuation of the capital stock of a corporation need only be resorted to as a basis for taxation, when no dividend has been made or declared by the corporation, or when that made or declared has been less than six per centum of the par value of the stock.</p> <p>During a tax year, a land and improvement company received from rents and sale of real estate $85,000, being 85 per cent of i the par value of its paid up stock, which it distributed among its stockholders in proportion to their respective holdings. The capital stock remained intact after the distribution. The court below found as a fact that the nature of the business in which the company was engaged precluded the possibility of estimating either gross or net earnings accruing during the tax year, with any reasonable degree of accuracy. A settlement was made against the company charging it with 42-J mills, which was at the rate of one half mill upon the capital stock for each one per centum of dividend. Held, that the settlement was proper.</p>