28 
TAXATION AND REVENUE SYSTEMS—CALIFORNIA. 
organized as an insurance company not having a capital stock and 
not strictly for charitable purposes pays a tax of $100. All insur 
ance companies having an outstanding capital stock of less than 
$500,000 pay an annual tax of $100; having a capital of $500,000 or 
more, $200. Corporations which have no capital stock employed 
in the state or which have a capital stock of less than $13,333 pay 
an annual tax of $10. 
Every fire, tornado, or marine insurance company shall, after 
deducting return premiums and authorized reinsurance, pay a tax 
of 1| per cent on gross receipts. Every life, health, and accident 
insurance company, and every bond and surety company, pays a 
tax of 1£ per cent on its gross receipts. Said tax is in lieu of all 
other taxes. 
Tax rates for state purposes.—General fund, 2\ mills; state capi- 
tol tax, three-eighths mill. Sinking fund tax is discontinued. 
If the assessments for road improvement districts are not paid at 
the time for the payment of county taxes, a penalty of 25 per cent 
attaches for such delinquency. 
Registration fee for each motor vehicle, $10 per annum. 
Professional nurse.—Registration fee, $5. 
Drainage taxes shall be collected on or before the 10th day of 
April of each year. The penalty for delinquency is 10 per cent. 
The inheritance tax was revised and practically rewritten as 
follows: 
(1) All property transferred in good faith to any person, corpora 
tion, or association of persons in trust for or to be devoted to any 
charitable, educational, or public purpose is exempt. 
(2) Property of the clear value of $3,000 transferred to a widow or 
a minor child of the decedent, and of $1,000 transferred to father, 
mother, husband, wife, child, brother, sister, wife or widow of a 
son or husband of a daughter, or any adopted child or children. 
(3) Property of the clear value of $500, transferred to any person 
or corporation other than the persons described in section 2. 
Upon a transfer of an amount in excess of the exemptions, and not 
in excess of $tj,000, to any father, mother, husband, wife, child, 
brother, sister, wife or widow of a son, or the husband of a daughter, 
or any adopted child or children, or any child to whom the decedent 
for not less than 10 years prior to such transfer stood in loco parentis, 
the tax is at the rate of 1 per cent of the clear value of such interest 
in such property. 
In 1910 the state of California entered upon a 
radical departure in the methods of raising its revenue. 
In that year a constitutional amendment was adopted 
providing for the separation of state from local taxation 
and providing for the taxation of public service corpo 
rations, banks, and insurance companies for the benefit 
of the state. The amendment further exempts the 
operative property of these companies from local 
taxation by counties, cities, towns, and districts, 
except for the payment of principal and interest on 
indebtedness existing before November 8, 1910. The 
state also derives revenue from an inheritance tax, a 
few licenses, and from a poll tax which is used for 
school purposes. A general ad valorem tax may, 
however, be levied if the revenues derived from the 
sources mentioned fail to meet the requirements of 
the state. The only general property tax now being 
1 This compilation is derived mainly from the following sources: 
Kerr’s Pocket Codes of California, 1909. 
Statutes and amendments to the Code, 1909-1913. 
Revenue Laws of the State of California in force January 1, 1912, 
prepared by T. M. Eby, secretary of the state board of equalization. 
Upon a transfer of an amount in excess of the exemptions, and 
not in excess of $5,000 to any person or corporation other than 
those enumerated above, the rate is 3 per cent of the clear value of 
such property. The rates given above are termed primary rates. 
When the market value of property exceeds $5,000, the rate of 
tax upon such excess is as follows: 
Upon amounts in excess of $5,000 and up to $10,000, two times 
the primary rates; $10,000 to $30,000, three times the primary rates; 
$30,000 to $50,000, four times the primary rates; $50,000 to $100,000, 
five times the primary rates; $100,000 to $500,000, six times the 
primary rates; $500,000 to $1,000,000, seven times the primary 
rates; in excess of $1,000,000, eight times the primary rates. If 
inheritance taxes are not paid until six months after the death of 
decedent, 6 per cent interest is collected; if not paid within 12 
months, a penalty of 10 per cent per annum in addition to the interest 
shall be collected. The proceeds from inheritance taxes are paid 
into the treasury of the state to the credit of the general fund thereof. 
A state banking department was created and a state banking 
commissioner provided for. All banks pay annual fees of one-fifth 
of 1 per cent on authorized capital stock and at the same rate on all 
increases. For each amendment or supplement to the articles of 
agreement, except increases to the capital stock, $10; annual fee for 
examination, $15, and 50 cents additional on each $1,000 of capital 
stock. 
A “Blue Sky” law, governing and regulating investment com 
panies was enacted. A filing fee of $5 is required from such com 
panies, in addition to the fees required from all corporations. 
Cities of the first class were authorized to license transient mer 
chants. The powers of assessment of public utility corporations 
by the state tax commission were increased. The right of eminent 
domain was extended to municipal corporations and counties for 
the purpose of establishing parks, boulevards, and public build 
ings, and for the organization of improvement districts to aid in 
acquiring such parks and boulevards. Students and persons unable 
to perform labor owing to physical disability were exempted from 
work on the roads. 
The department of state lands, highways, and improvements was 
organized. This department collects registration fees on motor 
vehicles, which are raised from $5 to $10 per annum. This department 
was also authorized to levy taxes on real estate for improvements. 
RNIA. 1 
levied is one authorized by a legislative act of 1910 
which provided that $1,250,000 should be raised by 
this method of taxation in each of the years 1911, 
1912, 1913, and 1914, in aid of the Panama Exposition. 
Counties and municipalities depend upon general 
property taxes and license taxes. 
CONSTITUTIONAL PROVISIONS. 
ARTICLE XIII. 
Sec. 1. All property in the state except as otherwise in this 
constitution provided, not exempt under the laws of the United 
States, shall be taxed in proportion to its value, to be ascertained 
as provided by law, or as hereinafter provided. The word “prop 
erty, ” as used in this article and section, is hereby declared to 
include moneys, credits, bonds, stocks, dues, franchises, and 
all other matters and tilings, real, personal, and mixed, capable of 
private ownership: Provided, That a mortgage, deed of trust, con 
tract, or other obligation by which a debt is secured when land is 
pledged as security for the payment thereof, together with the 
money represented by such debt, shall not be considered property 
subject to taxation; and further provided, That property used for 
free public libraries and free museums, growing crops, property 
used exclusively for public schools, and such as may belong to the