A practical example: Suppose X owns a house and lot which the assessors value at $5,000. The county board of equalization finds that the city where X lives must raise $100,000 in taxes; $90,000 is required for the city government; $9,000 is the sum the city is required to contribute to the expenses of the county, and $1,000 is the share the city has to pay toward the government of the State. The value of taxable property in the city is $5,000,000. Every dollar of assessed property in the city must therefore pay two cents in taxes, and X’s taxes will be $100, of which $90 will go to the city, $9 to the county, and $1 to the State. A mortgage on the property does not decrease the amount to be paid.
Collecting Taxes:[3] If a person fails to pay his real-estate taxes the county treasurer is authorized to sell his property for the unpaid taxes. The property may be redeemed by the former owner on payment of back taxes with interest due and the cost and expenses of the tax sale.
Public buildings, religious and charitable institutions, are usually free from taxation; they are for the benefit of the entire community.
State Taxes: The ordinary expenses of the State government are met by revenues derived from special indirect State taxes, so that for years there was no direct State tax. State revenues are provided through taxes on stock transfers, mortgage taxes, inheritance taxes, excise, franchise, and corporation taxes. One-half the amount derived from the excise tax goes to the State and one-half to the community from which it comes.
Every stock company incorporated under any law of the State must pay a tax upon the amount of its capital stock and upon any subsequent increase. The earnings of corporations doing business in the State are also taxed.
An Inheritance Tax is a tax imposed on the transfer of property at death by will, or by operation of law in case of intestacy. The rate of this tax varies according to the value of the property or share of the recipient and his kinship to decedent. A higher rate is levied on a large bequest or share than on a small one, and a larger percentage is levied when the bequest or share goes to distant kin or to a stranger than when it goes to a close relative.
The direct property tax is now used to pay off the interest and gradually the principal of the State debt.
The estimated resources and revenues, not including the direct tax, for the State for 1918 are:
| Cash balance, July 1st | $11,084,423 |
| Stenographers’ tax | 431,607 |
| Excise tax | 5,750,000 |
| Corporation tax | 20,000,000 |
| Incorporation tax | 1,400,000 |
| Inheritance tax | 14,000,000 |
| Stock transfer tax | 6,100,000 |
| Investment tax | 2,500,000 |
| Mortgage tax | 1,180,000 |
| Motor Vehicle tax | 2,375,000 |
| Canal maintenance receipts | 150,000 |
| Other revenues | 4,554,150 |
| Total | $69,525,180 |
The Board of Equalization meets in Albany once a year to examine the reports from the different counties of the value of their taxable property, and to equalize the amount of their taxation. The State tax commissioners, who must personally visit the counties and examine the local rolls, and the land office commissioners form this board.