Chapter 88. To amend section 5219 of the Revised Statutes of the United States
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CHAP. 88.— An Act To amend section 5219 of the Revised Statutes of the United States.March 25, 1926. [[S. 3377](/us/bill/69/s/3377).] [[Public, No. 75](/us/pl/69/75).] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*, That section 5219National banks.[R. S., sec. 5219](/us/rs/s5219/p1009), p. 1009, amended. of the Revised Statutes of the United States be, andTaxation of shares by States. the same is hereby, amended so as to read as follows:
" “Sec. 5219. The legislature of each State may determine and direct, subject to the provisions of this section, the manner and place of taxing all the shares of national banking associations located within its limits. The several States may
(1)tax saidAlternative forms allowed. shares, or
(2)include dividends derived therefrom in the taxable income of an owner or holder thereof, or
(3)tax such associations on their net income, or
(4)according to or measured by their net income, provided the following conditions are complied with: “1.
(a)The imposition by any State of any one of the above fourAdopted form to exclude others. forms of taxation shall be in lieu of the others, except as hereinafter provided in subdivision
(c)of this clause. “(b) In the case of a tax on said shares the tax imposed shall notRate of assessment. be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State coming into competition with the business of national banks: *Provided*, That bonds,*Proviso*.Moneyed capital limited. notes, or other evidences of indebtedness in the hands of individual citizens not employed or engaged in the banking or investment business and representing merely personal investments not made in competition with such business, shall not be deemed moneyed capital within the meaning of this section. “(c) In case of a tax on or according to or measured by the netImposed on net income. income of an association, the taxing State may, except in case of a tax on net income, include the entire net income received from all sources, but the rate shall not be higher than the rate assessed uponLimitation. other financial corporations nor higher than the highest of the rates assessed by the taxing State upon mercantile, manufacturing, and business corporations doing business within its limits: *Provided*,*Proviso*. 224If tax imposed on income of corporation and also on individual dividends therefrom.*however*, That a State which imposes a tax on or according to or measured by the net income of, or a franchise or excise tax on, financial, mercantile, manufacturing, and business corporations organized under its own laws or laws of other States and also imposes a tax upon the income of individuals, may include in such individual income dividends from national banking associations located within the State on condition that it also includes dividends from domestic corporations and may likewise include dividends from national banking associations located without the State on condition that it also includes dividends from foreign corporations, but at no higher rate than is imposed on dividends from such other corporations. “(d) Taxed on dividends not greater than other income.In case the dividends derived from the said shares are taxed, the tax shall not be at a greater rate than is assessed upon the net income from other moneyed capital. “2. Shares of nonresidents payable where bank located.The shares of any national banking association owned by non-residents of any State, shall be taxed by the taxing district or by the State where the association is located and not elsewhere; and such association shall make return of such shares and pay the tax thereon as agent of such nonresident shareholders. “3. Real property not exempt.Nothing herein shall be construed to exempt the real property of associations from taxation in any State or in any subdivision thereof, to the same extent, according to its value, as other real property is taxed. “4. Taxes heretofore paid to States legalized.The provisions of section 5219 of the Revised Statutes of the United States as heretofore in force shall not prevent the legalizing, ratifying, or confirming by the States of any tax heretofore paid, levied, or assessed upon the shares of national banks, or the collecting thereof, to the extent that such tax would be valid under said section.” " Approved, March 25, 1926.