ND. STATES STUDY TAX poration, leaving only a portion of its net earnings to be distributed as dividends or to be held as re- ON COOPERATIVES serve." "In contrast," says the report, "the cooperative, under what ap- New D pears to be similar circumstances, Continued From Page 1 would pay no Federal taxes and Legislature to Get Measure would have 100 per cent of these Having drafted specific recom- ing Act of Kansas for the conduct net earnings out of which to hold mendations for changes in the of such business, it is recommended a substantial reserve while return- State Income Tax Law, construing SUNDAY, DECE] ing as much as 50 per cent to their that the exemption clause of the patronage dividends and transfers member-patrons." to reserve accounts as taxable in- income tax law be amended "to come to cooperatives, these recom- limit such exemption to coopera- Opinions expressed herein by Mr. mendations were presented on Dec. STATES STUDY TAX tives, all of whose members shall Nelson, who is an authority on 4 to the full body of the Maryland be natural persons, and at least 90 taxation, are his own and not nec- Legislative Council and adopted per cent of whom shall be pro- essarily those of THE NEW YORK by it. ducers." Transactions of coopera- TIMES. Accordingly a bill will be intro- ON COOPERATIVES duced on the first day of the 1947 tive corporations would be con- REMEMBER THE NEEDIEST! Session of the Legislature, as the fined to members only. recommendation of the Maryland With reference to the tax advan- egislative Council, by the terms tage enjoyed by cooperatives, the which "income" will be defined Official Bodies in Maryland committee observes that "Regard- STOCK EXCHANG n the Maryland Income Tax Law and Kansas Recommend less of the rulings under present including all earnings of all statutes, your committee does not Closing quotations for issues not businesses, cooperative or private, Changes in Laws feel that any members of coopera- in on the Stock Exchange yesterday is taxable income, before any dis- tives will feel constrained to take STOCKS ribution has been made thereof. the position that the corporation Bid.Asked. Bid The State of Kansas also is con- which is serving them should not Abr & Straus 100 105 Cent Ill Lt pf 111 sidering a report which recom- Adams-Millis 52 56 Cen N Y Pow pf. 89 METHODS ADVISED DIFFER make its fair contribution towards Adressog-Mult 32 33 Cent R R 9 nends that the Cooperative Mar- the expense of government which Ala & Vicks 105 112 Cent Violeta Sug. 31 Aldens Inc pf 921/4 931/2 Champ Pap & 24 reting Act and the Cooperative makes such corporate enterprise Alleghany pr pf 561/8 581/ ChampPap&F pf.108 Societies Act be amended so as to Alleg & West 981/2 10216 Ches Corp Va possible." Allen Industries 19 1914 Chi Grt West clarify the definition of coopera- Former Looks to Broadening Allied Kid 1914 20 Chi Pneu T $3 pf 46 ives and the conduct of business Comparison of Burdens Allied St pf 1001/8 103 Chi Pn T $21/2 pf 57 Amal Leather pf. 49 54 Chi Yell Cab 14 lone on a cooperative basis. The of Revenue Law; Latter, to The report recognizes that "the Amerada Pet 74 7516 Chile Cop 40 report is that of a special commit- Am Bank Note 31 3116 Cin G & E pf 107 income tax burden upon the ordi- Am Bank N pf 75 77 City Invest pf 90 ee, of which Linn T. Woods is Terms of Incorporation nary corporation has been very Am Bosch 131/2 13% Clark Equip 50 chairman, to which committee was Am Br Shoe pf 128% 132 Cley CC & SL 160 much heavier than that upon co- Am Ch & Cbl pf.1071/2 108 Clev CC&SL pf 95 referred Proposal No. 8, under operatives," and that the ability of Am Chicle 142 148 Clev El Illum pf.110 House Concurrent Resolution No. Am Colortype 20% 21 1/4 Clev Graph Br 62 cooperatives to build up reserves Am Crystal Sug. 22 231/2 Clev Graph B pf.106 6, relating to a study of coopera- By GODFREY N. NELSON Am Crystal S pf 96 % NS Clev & Pitt 100 has been much greater than that 56 lives in Kansas. The committee It seems to be generally agreed Am Distill 45 46 Clev & Pitt spl of competing ordinary corpora- Am Encaus Tiling 5% 6 Clinton Ind 34 1as been engaged in a study of the that the Federal income tax law Am European 151/4 17 Cluett Peabdy pf.150 tions. Cooperatives may be au- Am&F P $6 pf 95 971/6 Coca-Cola A 621 rubject during the past eighteen and regulations, which permit of 107 111 Coca Cola Int 900 thorized by the by-laws, or by vote Am&FP $7 of months. Am Hi&L pf 49 51 7/8 Collins & Aik 413 tax exemption of cooperatives en- of stockholders, to retain from 50 Am Ice pf 106 111 Col & South 1 pf. 14 Am International. 11 Col & South 2 pf 13 Different Approach Made 11% gaged in a variety of activities, per cent to 100 per cent of patron- Am Invest Ill 12 12 1/2 Colum Br'cast B. 311 Consol Cigar The approach of the Kansas should be amended so as to remove age dividends allocated to patrons Am Locomot pf 111% 113 34 Am M&Fdy pf 97 101 Cons Coppermin committee is different from that the present inequalities of taxation each year. Such situations are re- Am M&Met 14 141/2 Cons Edison pf 106 garded by the committee as purely Am Met pf 136 139 Cons Laundries 14 in the case of Maryland in that the between cooperative corporations Am Molasses 13 131/2 Con Ret Strs 19 Kansas committee believes that and ordinary corporations. State matters "since the Federal Am News Co 391/2 41 Consum Pow .111 Government has no statutes defin- Am P&L $5 pf 11014 112 Container Corp 451 the proper place to remedy existing As a practical matter, the ques- Am Rad&St S .1731/ 1781/4 Cont Bak of tax inequalities is in the State tion before us is whether a large ing cooperatives and prescribing Am Roll Mill .104 105 Corn Exchange 54 Am Seating 20 203/4 Coty Internat statutes relating to the incorpora- segment of our national production their procedures." Am Smelt&R pf 165 1671/2 Crane Co pf 102 tion of cooperatives rather than in and distribution shall be allowed to Am Snuff pf 158 163 Crown Cork & S. 373 The committee believes that the Am Sugar Ref 423/4 433/4 Crown Zellerbach. 30 the State Income Tax Law or in escape State and Federal income only way in which the tax inequal- Am Sugar pf. 141 144 Crown Zeller pf 105 the Federal tax laws. "In our judg- taxes either wholly or partly. Am Tob pf 15614 158 Crown Zell 4 pf 117 ity can be remedied is to elimi- 1171/2 Crucible Stl pf 90 ment," says the report, "the diffi- Maryland is one of the leading Am Viscose pf 117 nate "the present cooperative Am W Wks pf 1021/2 107 Cuban-Am S pf 165 Am Wool 4 pf 90 91 % culties in the present situation States which is promoting a move- Cudahy Pack pf. 96 practice of deferring patronage Am Zinc pr pf 66 70 Cuneo Press 17 would be eliminated by returning ment to equalize the income tax dividends Comparing two Anacon W & C 521/2 54 Cunning Drug 54 AnchorHockG pf.109% 111 to what we believe was the original law as between cooperatives and Curtis Pub pr pf. 65 corporations, a cooperative and an Anderson Clayt 50 501/2 Cushman's 7% pf.129. legislative intent in the passage of general business corporations. On Andes Copper 15 15% Dana Corp 24 ordinary corporation, doing the these laws." Nov. 27 the Taxation Committee of P W Prod 43/ 5 Dana Corp pf 91 same amount of business, Federal Arch-Dan-M 381/ 39 Davega Stores 20 In order to return to the original the Maryland Legislative Council Armour pr pf 126 Dayton P & L pf.112 income taxes "have subtracted a unanimously approved a recom- Armour pf 152 160 Det Stl Corp 17 intent of the Cooperative Market- very large sum from 'net earnings Armst Cork pf 101 104 Det Hillsdale 64 mendation of the Tax Equality ATF Inc 14% 15% De Vilbiss 2 before taxes' of the ordinary cor- Associates Inv 461/2 47% Dist Corp-S pf 104 Continued on Page 3, Column S Committee, an incorporated body Atl G&W Indies. 281/4 283/4 Dow Chem pf 11 of which L. H. Fleming is the Atl G&W In pf. 65 74 Duplan Corp and doe president, which reads as follows: uer LOS "Define taxable business income to include all income of cooperative businesses as well as private. Make sure that the provisions of the Maryland Income Tax Law clearly UNDAY, DECEMBER include all earnings of all business, 15, 1946. cooperative or private, before any CASH CURE distribution thereof, as taxable in- PRICES come." OVED TILL