is that only which is equally applicable to all. Fixed tangible property, being referable only to the state in which it is situated, should be deducted from the whole value of the business before dividing the excess; though tangible property which is used throughout the business may be divided with the excess. In the same way if good-will is greater in one state than in another, it should be subtracted and separately taxed. The balance, the corporate excess, may properly be divided among the states in proportion to the amount of business done or capital invested in each.

VI. TAXATION OF PROPERTY HELD BY FIDUCIARY Where the legal title, or any other legal interest in property, is in the hands of a fiduciary, two special problems arise: first, may the property be taxed as if it were the ordinary property of the fiduciary; second, may a tax be levied upon the beneficiary. The different classes of fiduciaries require somewhat different treatment, and will be considered separately.

In the case of real estate, as has been seen, each interest may be taxed separately or all together in the name of the paramount owner. This is true as well of legal and beneficiary interests as of distinct legal interests; the place of taxation always being the situs of the land. Thus, the situs of land held by a trustee to secure an issue of bonds might tax the land in the name of the trustee.159 The beneficiary, on the other hand, might be taxed on his equitable interest; thus a nonresident member of a real estate trust which held land in Massachusetts might be taxed in Massachusetts upon his equitable interest in the land.160

The trustee of personal property being the complete legal owner of it, it would naturally be expected that the property should be taxed exactly as if it were his own. It has accordingly been held that a trustee of personal property is taxable on it at his domicile,161 although the property may be situated outside the state,' or although the beneficiaries be nonresident.163 Thus stock in a 159 Frankfort v. Fidelity T. & S. V. Co., 111 Ky. 667, 64 S. W. 470 (1901) (semble). Kentucky had no statute allowing the taxation of a mortgage interest.

160 Kinney v. Treasurer, 207 Mass. 368, 93 N. E. 586 (1911).

162

161 Higgins v. Commonwealth, 126 Ky. 211, 103 S. W. 306 (1907); Walla Walla v. Moore, 16 Wash. 339, 47 Pac. 753 (1897).

162 Guthrie v. Pittsburgh C. & S. L. Ry., 158 Pa. 433, 27 Atl. 1052 (1893).

163 Price v. Hunter, 34 Fed. 355 (1888); Davis v. Macy, 124 Mass. 193 (1878);

New York corporation, standing in the name of a New York broker who holds the certificate for a nonresident owner, is taxable in New York.164 In New York and a few other states, however, where both the property and the beneficiaries are outside the state, a resident trustee will not be taxed; though the power of the legislature by a change in the law to tax him is not doubted.165 The power of the state of his residence to tax the beneficiary of a trust cannot be doubted,166 though in some states it has been held that without the aid of a statute it will not be done.167 In Kentucky it has been held that property held in trust cannot be taxed where the trustee resides, but only at the domicile of the beneficial owner.168

There seems to be no ground for distinguishing a testamentary trust from any other; and it has been held in a well-reasoned decision in Maine that nonresident trustees for nonresident beneficiaries, appointed in a will of a resident decedent, after they had removed the property outside the state, were not taxable, notwithstanding the origin of the trust.169 In a Pennsylvania case,170 however, a trustee under the will of a deceased resident of New York changed his domicile to Pennsylvania, taking the trust property with him. He changed an investment after his removal. The court held that he was taxable upon the investment made in Pennsylvania, but not upon the trust property which had come into his hands in New York; the remarkable ground for the distinction being, that as to the latter property he was not a trustee under the Pennsylvania law. He assuredly was owner of the property, though he held it, to be sure, in trust; and it would seem that the origin of his title was immaterial.

Detroit v. Lewis, 109 Mich. 155, 66 N. W. 958 (1896); Carlisle v. Marshall, 36 Pa. 397 (1860).

164 Matter of Newcomb, 71 App. Div. 606, 76 N. Y. Supp. 222 (1902) (affirmed 172 N. Y. 608, 64 N. E. 1123) (1902).

165 People v. Tax Commissioners, 21 Abb. N. C. (N. Y.) 168 (1888); Goodsite v. Lane, 139 Fed. 593 (1905).

166 Keeney v. New York, 222 U. S. 525 (1912); Augusta v. Kimball, 91 Me. 605, 40 Atl. 666 (1898) (semble); Hunt v. Perry, 165 Mass. 287, 43 N. E. 103 (1896); Selden v. Brooke, 104 Va. 832, 52 S. E. 632 (1906); Wise v. Commonwealth (Va.), 95 S. E. 632 (1918); Brooklyn Trust Co. v. Booker (Va.), 95 S. E. 664 (1918).

167 Anthony v. Caswell, 15 R. I. 159, 1 Atl. 290 (1885).

168 Boske v. Security T. & S. V. Co. 22 Ky. L. Rep. 181, 56 S. W. 524 (1900).

169 Augusta v. Kimball, 91 Me. 605, 40 Atl. 666 (1898).

170 Lewis v. Chester County, 60 Pa. 325 (1869).

Ownership of tangible property by a trustee does not, of course, prevent its taxation at its situs.171

The case of the executor or administrator is more complicated than that of the trustee, in that he holds his title as an officer of the court. It is therefore necessary to decide between two places of taxation: his domicile, and the jurisdiction of the appointing court. The domicile of a beneficiary is of course immaterial.172

For the reason indicated, the courts usually hold the situs of the estate to be in the court which appointed the executor or administrator who holds it; in case of principal administration, the domicile of the deceased,173 and in case of ancillary administration the state of appointment,174 even though the domicile of the executor or administrator is elsewhere.175

Under the Massachusetts statutes it appears to be held, contrary to the general rule, that the state of administration can tax the property only if the executor or administrator is domiciled there; if he is domiciled elsewhere, and the property is not actually situated within the state, it cannot be taxed.176 It is not necessary, however, to invoke any peculiar doctrine of this nature to support the case of Putnam v. Middleborough.177 In that case a Massachusetts decedent had left personal property both in Massachusetts and in California, and named as executor a resident of California, who was appointed both in Massachusetts and in California. He was held not taxable in Massachusetts on the California property. This conclusion must have been reached in any state, since the California property was held by the executor not by reason of any action of the Massachusetts court, but because of his ancillary appointment in California.

171 Swarts v. Hammer, 194 U. S. 441 (1904).

172 Baldwin v. Shine, 84 Ky. 502, 2 S. W. 164 (1886); Boske v. Security T. & S. V. Co. 22 Ky. L. Rep. 181, 56 S. W. 524 (1900); Tafel v. Lewis, 75 Ohio St. 182, 78 N. E. 1003 (1906).

173 In re Miller, 116 Ia. 446, 90 N. W. 89 (1902); Commonwealth v. Peebles, 134 Ky. 121, 119 S. W. 774 (1909); Bonaparte v. State, 63 Md. 465 (1885); People v. Commissioners of Taxes, 38 Hun (N. Y.) 536 (1886); Tafel v. Lewis, 75 Ohio St. 182, 78 N. E. 1003 (1906).

174 Dorris v. Miller, 105 Ia. 564, 75 N. W. 482 (1898); Baldwin v. Shine, 84 Ky. 502, 2 S. W. 164 (1886); In re Thourot's Estate, 172 Pac. 697 (Utah) (1918).

175 Gallup v. Schmidt, 154 Ind. 196, 56 N. E. 443 (1900); Bonaparte v. State, 63 Md. 465 (1885).

176 Dallinger v. Rapello, 14 Fed. 32 (1882).

177 209 Mass. 456, 95 N. E. 749 (1911).

Suppose an administrator carries the property away from the state of his appointment into another state, may the property be taxed there? It has been held not; 178 and this decision seems correct, even in the case of tangible property. The administrator is answerable to his court for the disposition of the property, and for this reason it is submitted that the property would acquire no more than a temporary place in the state into which it is taken.

The case of the guardian is usually regarded as the same as that of the executor or administrator; property held by him is taxable in the state of his appointment, although he lives in another state and so does the ward.179 In accordance with this principle it has been held that property of a resident ward in the hands of a foreignappointed guardian is not taxable.180 In Kentucky, however, it has been held that such property is taxable at the domicile of the ward, the beneficial owner.181

For the reasons already given in the case of the executor or administrator, property in the hands of a receiver is taxable in the court where the receiver holds it; the fact that it is in the control of the court protecting it from taxation no more in the one case than in the other, even though the court be a federal court, and the tax assessed by the state.182 Thus where property formerly held by an ancillary receiver is transmitted to the principal receiver it is taxable in the state which appointed him, though there are many foreign distributees, 183

Where there are joint owners of property, each is taxable for his interest; and the same thing is true of joint trustees.184 If, however, there are joint trustees, some of them nonresidents, and the nonresidents have possession of the trust res outside the state, the resident trustee is not taxable on any part of the estate,

178 Weaver v. State, 110 Ia. 328, 81 N. W. 603 (1900).

179 Baldwin v. Washington County, 85 Md. 145, 36 Atl. 764 (1897); Baldwin v. State, 89 Md. 587, 43 Atl. 857 (1899).

180 Kinehart v. Howard, 90 Md. 1, 44 Atl. 1040 (1899).

181 Boske v. Security T. & S. V. Co., 22 Ky. L. Rep. 181, 56 S. W. 524 (1900). 182 Stevens v. New York & O. M. R. R., 13 Blatch. (U. S.) 104 (1875); Ex parte Chamberlain, 55 Fed. 704 (1893); Walters v. Western & A. R. R., 68 Fed. 1002 (1895); Hamilton v. David C. Beggs Co., 171 Fed. 157 (1909); Midland G. & T. Co. v. Douglas County, 217 Fed. 358 (1914); Coy v. Title G. & T. Co., 220 Fed. 90 (1915).

183 Schmidt v. Failey, 148 Ind. 150, 47 N. E. 326 (1897).

184 People v. Feitner, 168 N. Y. 360, 61 N. E. 1132 (1901).

at least in New York, where a domiciled owner is not taxable on absent property.

185

An estate held by joint executors is taxable at the domicile of the deceased, though some of them are nonresidents.186

VII. EXCISE TAX

Not only persons and property may be taxed, but also the privilege of acting within the state, or of taking any benefit from the law of the state. In short, whatever the state may refuse or forbid, it may grant or allow only upon the payment of a fee to the state in return for the privilege: a license fee, or excise tax.187

In People v. Reardon 188 the state had laid a transfer tax upon the transfer within the state of shares in a foreign corporation belonging to a nonresident. The power of the state to tax was questioned, on the ground that neither the person nor the property was taxable by the state; the court, however, held the tax valid as a privilege tax. Judge Vann said:

"The tax, however, is not on property, but on the sale of property, or on a particular kind of contract when made within this state. The certificate, itself, is not liable for the tax, but the person selling it is. The tax is not a lien on certificates, nor on shares, which may be owned to any extent throughout the state, free from any claim under the statute in question. It is the sale alone that gives rise to the tax, which is imposed through the command of the law to the seller to pay the tax when the contract to sell is made, and it is enforced not by levy and sale, but by civil and penal remedies against the person of the seller. While this tax, the same as all other taxes, must ultimately come out of the property of the seller, it cannot be enforced against the certificate sold as distinguished from his other property. . . .

...

"Jurisdiction over the persons who make the contract does not depend on their residence, but on their presence within the state when the contract is made. . . . Both they and their contract are subject to its laws, and they are not only entitled to the protection thereof, but are

...

185 People v. Coleman, 119 N. Y. 137, 23 N. E. 488 (1890); People v. Barker, 135 N. Y. 656, 32 N. E. 252 (1892); People v. Tax Commissioners, 17 N. Y. Supp. 923 (1891).

186 People v. Commissioners of Taxes, 38 Hun (N. Y.) 536 (1886); Hawk v. Bonn, 6 Ohio Circ. Ct. 452, 3 Ohio Circ. 535, December (1892).

187 Nathan v. Louisiana, 8 How. (U. S.), 73 (1850); Wiggins Ferry Co. v. East St. Louis, 107 U. S. 365 (1882); Williams v. Fears, 179 U. S. 270 (1900).

188 184 N. Y. 436, 449, 77 N. E. 970 (1906).