Recent Cases: Taxation — Intangible Property Tax on Corporate Stock — Status of Corporations Domesticated in Nebraska

An intangible property tax was assessed upon shares of stock held by plaintiff, executor, in four domesticated corporations. Plaintiff, in an action to enjoin the county treasurer from collecting the tax, contended that section 77-706 of the Nebraska Statutes, providing that intangible property taxes should be assessed against the corporation rather than its stockholders, applies to domesticated as well as domestic corporations, and, therefore, the shares should not be taxed to the stockholders. Held: by a divided court, the stock of a domesticated corporation is to be valued for taxation purposes as stock of a foreign corporation under the provisions of section 77-722, therefore the tax is assessed against the individual stockholders. Subsequent to this decision, the Nebraska Legislature amended section 77-706 to provide that the intangible tax on shares of stock in domesticated corporations, as well as that in domestic corporations, should be assessed against the corporation rather than its stockholders.

Therefore the future effect of the instant decision is overruled. However, under a Nebraska statute, these stockholders will be liable for the amount of taxes which they should, under the instant ruling, have paid during the last three years.