New Britain Herald Newspaper, April 10, 1919, Page 5

P A SRR B G E e TO THE PUBLIC: The fact that the New Britain Trust Company pays no taxes direct to the city of New Britain has recently been used as a basis for groundless attacks in the local news and advertising columns claiming that the company is a “tax dodger.” In these attacks the facts are misrepresented either wilfully or through ignerance, for this company under the law is liable for no local taxation, being the owner of no real estate. Banks are not liable to the local taxing authorities on their personal propesty, such as fur- niture and fixtures, cash, notes, etc, but instead are obliged te pay a tax to the state of Connecticut on the market value of their shares as fixed by the state board of equalization, and the tax so paid is distributed by the state to the towns in which the stock is owned, New Britain’s share of this being in our case about $5.000 per vear. In support of our statements we give below a copy of an opinion on this question furnished by Attorney John H. Kirkham, “New Britain Trust Company, “New Britain, Conn. “Gentlemen: “For a great many years the statutes of Connecticut have provided two methods of taxation upon different classes of corporations. One class of corporations pays a direct tax upon its real and personal property in the same manner as an individual. The other class of corporation pays an indirect tax based upon the value of its capital stock, which ‘indirect tax is paid to the state and a portion thereof is remitted by the state to the towns. Among the corporations paying this indirect tax are banks and trust companies. The statute which provides for the ipdirect taxation of banks and trust companies provides also that their real estate located in the state shall be subject to taxation in the town where it is located and that the amount paid for the local taxation of such real estate shall be deducted from the amount paid to the state under the indirect tax. Ordinarily therefore it is quite immaterial to a bank or trust company, so far as the amount of taxes which it pays is concerned, whether it pays the indirect tax only or also pays a real estate tax which is deducted from the indirect tax. The amount of taxation against the bank or trust company is ordinar- ily the same in either case. It is merely a question of whether it is paid in the first instance to the town where the real estate is located or paid first to the state of Connecticut and a portion of it returned to the town. 'At any rate the statutes are clear that none of the pro- perty of a bank or trust company pays a direct tax of the town, except its real estate. The personal property of a bank or trust com- pany including not only its money and credits, but also its fixtures, furniture and other personal property, is exempt from taxation to the town where it is located, the indirect tax to the state being in lieu hereof. “These questions of the taxation of corporations of the class of banks and trust cmpanies have been settled by the supreme court of Connecticut and particularly in the following cases: “Middletown and Portland Bridge Company vs. Middletown, 77 Conn. “Middletown National bank vs. Middletown, 74 Conn. 450. “In these decisions the court has said that certain classes of corporations are not taxed directly for property owned, butindirectly by a tax laid upon the shareholders and the value of the property for which it is thus indirectly taxed is substantially measured by the value of its capital stock, and that there is no provision in the General Statutes for the listing, assessing and taxing of property of a stock corpora- tion, except the special provisions for the listing, assessing and taxing of all property owned by corporations whose stock is not liable to taxation in the same manner as the property of individuals and the other sections providing for a tax upon the stock of certain corporations in lieu of all other taxes except taxes on real estate. “My conclusions as to the taxes of The New Britain Trust Company are: “l. It would make no difference in money to your company of you were taxed locally, because any tax you pay locally is deduct- able from your state tax. “2, You are not taxable on your personal property and not being the owner of real estate are not liable to any local tax. “Yours truly, ¢ “J. H. KIRKHAM.” This company pa}"s all lawful taxes wherever due and trusts that with these facts made public unwarranted or malicious attacks will cease, New Britain Trust Company By F. G. VIBBERTS, April 8th, 1919, Vice-President.