Railroad Company v. Collector
100 U.S. 595

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U.S. Supreme Court

Railroad Company v. Collector, 100 U.S. 595 (1879)

Railroad Company v. Collector

100 U.S. 595


1. The tax on interest paid by corporations under sec. 122 of the internal revenue law, as amended by the Act of July 13, 1888, 14 Stat. 138, is an excise tax on their business, to be paid by them out of their earnings, income, and profits.

2. In order that its payment might be secured, this tax was laid on the subjects to which these earnings were applied in the usual course of business of such corporations -- namely, dividends, interest on funded debt, construction, or some reserve fund held by the company.

3. Such a tax is not invalidated by the provision that the amount of it may be withheld from the dividend or the interest due or payable to the stockholder or the bondholder, who is a citizen or a subject of a foreign government, with no residence in this country.

This is a suit by the Michigan Central Railroad Company against Charles W. Slack, collector of internal revenue for the third collection district of Massachusetts, to recover a tax or duty of $860.33, paid to him, under protest, on the twenty-eighth day of February, 1870, which tax was assessed on or about the 19th of that month on sterling bond interest paid by said company in London in gold, in the previous month of January, by cashing certain coupons which then fell due.

The coupons were attached to certain sterling bonds issued by said company, to the amount of

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