Tax Law Commons^™

State And Local Taxation, Paul J. Hartman

Vanderbilt Law Review

That the field of state and local taxation is bedoming much more important, as well as increasingly active, is shown by a number of recent significant major developments that are of interest and concern to taxpayers and their counsel everywhere. Ten state tax cases are already on the United States Supreme Court docket for consideration during the Term commencing October 5, 1959.' During the past term at least a half dozen important state tax cases were decided by the Supreme Court, including the epochal Northwestern-Stockham decision, which threw much of the legal profession, as well as many taxpayers, into a …

Restitution--1959 Tennessee Survey, William Wicker

Vanderbilt Law Review

A defrauded party to a contract may ask for the alternative right of cancellation of the contract and restitution of the consideration, rather than a right to damages for being led into the fraudulent transaction. This restitutionary remedy is the right of the defrauded party to be restored to the situation which he occupied prior to the fraudulent transaction.

In Bluff City Company v. Davis, seller falsely represented that an automobile was new, and buyer relied on that representation. Within a reasonable time after buyer learned that he had bought a used automobile, he offered to return it. It was …

Recent Cases, Law Review Staff

Vanderbilt Law Review

CONFLICT OF LAWS--JURISDICTION--RESIDENCE AS A JURISDICTIONAL BASIS FOR DIVORCE

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CORPORATIONS-SECURITIES ACTS--DISTINCTION BETWEEN "CLASS" AND "SERIES" UNDER SECTION 16(b) OF SECURITIES EXCHANGE ACT

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CORPORATIONS-STOCK DIVIDENDS-INCONSISTENCY BETWEEN TRADITIONAL AND MODERN CONCEPTS OF STOCK DIVIDENDS

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CRIMINAL PROCEDURE-EVIDENCE-STATUTORY LIMITATION OF JENCKS DECISION

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EVIDENCE--SEARCHES AND SEIZURES--INADMISSIBILITY IN FEDERAL COURT OF EVIDENCE OBTAINED THROUGH AN UNREASONABLE SEARCH BY STATE OFFICERS

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EVIDENCE--WITNESSES-ABILITY OF ONE SPOUSE TO TESTIFY AGAINST THE OTHER IN FEDERAL CRIMINAL PROCEEDINGS

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HABEAS CORPUS--FEDERAL COURT REMAND OF PETITIONER TO STATE COURT FOR NEW TRIAL

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MUNICIPAL CORPORATIONS--TORT LIABILITY--DUTY TOPROVIDE POLICE PROTECTION TO INFORMERS

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TAXATION--ESTATE TREASURY REGULATIONS ON GOVERNMENT …

Recent Cases, Law Review Staff

Vanderbilt Law Review

Constitutional Law--Due Process of Law--Constitutionality of the Federal Youth Corrections Act in Its Application to Youthful Criminal Offenders

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Constitutional Law--Legislative Power--Infringement of Constitutional Guaranties by Demands of Legislative Investigating Committees for the Production of Membership Lists

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Courts--Process--Immunity of Nonresident Defendants in Federal Criminal Actions from Service of State Civil Process

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Damages--Installment Verdict in Tort Action

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Domestic Relations--Separation--Suit by Mentally Incompetent Wife

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Interstate Commerce--Hobbs Act--"Robbery" Provision Construed as Requiring Proof of Common Law Elements of Offense

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Taxation--Income--Determination of "Useful Life" of a Business Asset for Purposes of Depreciation

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Taxation--Income--Full Payment of Tax Deficiency as …

State And Local Taxation -- 1956 Tennessee Survey, Paul J. Hartman

Vanderbilt Law Review

As indicative of the growing importance to the bench and bar of state and local taxation, the Tennessee Supreme Court was called upon to decide three significant tax cases during the period covered by this survey article. During this period, objecting taxpayers spear-headed vigorous assaults against various privilege taxes on commerce and due process clause grounds.

Consideration Of Tax Aspects In Awarding Damages For Personal Injuries, Doris B. Gorman

Vanderbilt Law Review

The recent decision of the House of Lords, in British Transport Commission v. Gourley has completely changed the English position on the question of whether income taxes should be considered in determining personal injury damages based on actual or prospective loss of earnings. The House of Lords held that the lower court should have taken the tax aspects into account and that the damage award must be reduced accordingly. By this holding, the House of Lords overruled Jordan v. The Limmer And Trinidad Lake Asphalt Co. and Billingham v. Hughes, which until then represented the ruling law in England on …

The Literature Of Sales Taxation, Denzel C. Cline

Vanderbilt Law Review

This paper is limited to literature on general sales taxes and will not include taxes imposed upon the sale of particular commodities, such as gasoline or tobacco. It is also limited to publications by American authors in the last-quarter century. Even so, it is impossible in an article of this size to mention all of the contributions to the literature."

References for legal articles on sales and use taxes and related topics, such as interstate commerce, which are published in the law journals are found in the Index of Legal Periodicals. Another excellent bibliographical source is the Tax Institute Bookshelf, …

Administration And Collection Problems, Dixwell L. Pierce

Vanderbilt Law Review

"In the field of revenue administration, there is no longer such a thing as a simple tax law. Complex problems require complex laws, and complex laws are made to protect all taxpayers alike."

When a state or local government provides for a general sales and use tax, it is assuming a heavy administrative responsibility. Such tax laws are deceptively simple. They are not easy to administer. Failure to recognize these facts has resulted all too often in disappointing revenue yields and widespread dissatisfaction among retailers and their customers.

No one really enjoys paying taxes. What may be merely mild distaste …

The Use Tax: Its Relationship To The Sales Tax, Eugene Greener Jr.

Vanderbilt Law Review

The use tax was conceived as a necessary supplement to the successful administration of the sales tax. With a use tax, in addition to a sales tax, legislators felt they had developed a taxing method that was symmetrical and complete.

Thus, if for some reason a sale at retail of tangible personal property escaped tax, "the use, the consumption, the distribution, and the storage [of the property would be taxed] after it has come to rest in this state and has become a part of the mass of property in this state."'

But as the poet Robert Burns intimated about …

What Is A Sale For Sales Tax Purposes?, Clyde L. Ball

Vanderbilt Law Review

Each of the states which has adopted some form of sales tax' has also adopted its own individual definition of the term "sale" or retail sale." So long as a tax upon a business transaction does not offend some constitutional principle, a legislature is free to include such transaction within its statutory definition of a sale for purposes of an excise tax levy. The statutory definitions, then, are conditioned not by the normal denotation or connotation of the word "sale," but rather by the taxing policies of the several legislative bodies. Synthesis of these varying statutes into an acceptable general …

Sales And Use Taxes As Affected By Federal Governmental Immunity, Milton P. Rice, R. Wayne Estes

Vanderbilt Law Review

Sales and use taxes, since their advent in the early 1930's as significant state revenue producing measures have, like all other state levies, found, themselves subject to certain restrictions imposed by the Constitution of the United States. While the constitutional inhibition of greatest significance for most persons subject to these taxes has probably been the one posed by the commerce clause, or its first cousin the due process clause, an obstacle of no mean proportion to the states has been one not expressly mentioned or even alluded to in the Federal Constitution,' yet this barrier is as much a part …

Analysis Of Sales And Use Tax Exemptions -- With Comment As To More Uniform Applications, George D. Brabson

Vanderbilt Law Review

There are, generally speaking, three broad areas of exemption understatutes imposing sales and use taxes in the United States. These are:

(a) Exemptions arising out of the immunities of governmental agencies and instrumentalities, or out of the exercise of governmental functions (b) Exemptions arising under the commerce clause of the federal constitution (c) Specific exemptions created out of governmental taxing policies or social economic considerations

Each of these areas of exemption has grown up somewhat haphazardly over a substantial period of time, and very largely as the result of shifting judicial opinion, rather than as a matter of consistent legislative …

The Measure Of Sales Taxes, Arthur H. Northrup

Vanderbilt Law Review

The measure of the tax is as significant a problem in sales taxation as is assessment in ad valorem property taxation or the determination of net income for income taxation. It is the base for taxation.

Sales taxes are creations of state statutes. The appendix presents a general summary of these statutes to show their provisions. Separate state excise taxes on cigarettes or spirits are not included within the scope of this paper, nor are taxes on selling, storing or distributing motor fuels or oils. These excises present special problems, as do separate taxes on extraction, oil drilling and mining. …

Sales Taxation Collection Problems, Paul J. Hartman, E. William Henry, George L. Foster

Vanderbilt Law Review

This treatment is designed to gather together a number of legal problems concerning collection of taxes in the field of sales taxation, which may confront attorneys who represent either the taxing authority or the taxpayer. Some of the problems taken up are not related to each other. They are, nevertheless, troublesome and ofttimes recurring problems. For convenience of discussion, they are grouped under the two main categories of procedural problems that arise in sales taxation collections, and the problems of the substantive liability of various parties for the tax.

Municipal Power To Tax -- Its Constitutional Limitations, Chester J. Antieau

Vanderbilt Law Review

Throughout the United States a great many municipalities have found that in recent years their revenue from taxes has not kept up with their expenses. While inflation spiralled municipal costs, while demands for municipal services increased terrifically during the last few" decades, and while financial burdens, such as the three-platoon fire department, were readily imposed upon the municipal corporations by the state legislatures, the tax bases available to municipalities were too often insufficient to meet the expanding local requirements. Older taxes, such as the tax upon real property, have proved more and more inadequate as residents moved beyond city limits, …

Book Note, Law Review Staff

Vanderbilt Law Review

Book Note

Tax Planning for Estates (1955 Revision)

By William J. Bowe

Nashville: Vanderbilt University Press, 1955. Pp. 98. $3.00

Suggestions For The Improvement Of Municipal Annexation Law, Wallace Mendelson

Vanderbilt Law Review

World War II aggravated one of our most troublesome municipal problems--the growth of urban fringe areas around the outskirts of towns and cities. Many municipalities are finding their natural development either frustrated or completely strangled by choker necklaces of satellite settlements. Parent cities are surrounded by slum areas which they cannot control and wealthy suburban sections which they cannot tax. For it is common that the poorest and the most prosperous tend to live in the outskirts--the former to avoid the sanitation and anti-nuisance standards of urban life, the latter to escape their share of the cost of government in …

Federal Income Taxes And The Civil Fraud Penalty, Raymond Whiteaker

Vanderbilt Law Review

The drive against tax evaders is now in full swing after a complete reorganization of the Internal Revenue Service, and the new Commissioner has promised an efficient enforcement of all revenue laws. Although the effective administration of the federal income tax rests primarily upon the willingness of the taxpayer voluntarily to disclose his correct income, Congress has provided certain civil and criminal penalties to punish those who have not fulfilled their obligations to the United States Treasury. This article will deal only with the administration and operation of the civil fraud penalty.

The most severe civil penalty that may be …

The Non-General Power Of Appointment -- A Creature Of The Powers Of Appointment Act Of 1951, Allan Mccoid

Vanderbilt Law Review

In the course of the past fifty years, during which estate planning has become a specialty rather than one of many jobs handled by the general practitioner, the power of appointment has become an increasingly popular form of gift. The two great advantages which have been claimed for the power are the introduction of great flexibility into the estate plan and the reduction of the tax burden on the property as it passes from one generation to another. It was presumably with both of these objectives in mind that Professor William J. Bowe made a suggestion last year as to …

Constitutional Law, Paul H. Sanders

Vanderbilt Law Review

The Supreme Court of Tennessee has been faced with few major Constitutional Law problems during the period under consideration. Statistically, the action of the Court in invalidating one law out of almost a score that were attacked before it on the basis of constitutional defect suggests an attitude of judicial restraint toward the product of a coordinate branch of government. The relatively small number of constitutional questions raised-- and many of them were obviously make-weight rather than points of principal reliance-- suggests a general awareness of the Court's stability and the unlikelihood of its departing from established precedent. Similarly, regard …

Congress Or The Courts As Final Arbiter In Tax Disputes?, William J. Bowe

Vanderbilt Law Review

During the last two years the Supreme Court of the United States has handed down only five income tax opinions. The box score stands four for the Government, one for the taxpayer. None of the cases involved modifications in fundamental concepts of tax law or resulted in major policy changes in the administration of the fiscal system. The record for the taxpayer is far more impressive in the Congress than it is in the courts. As will be pointed out later Congress rather than the Supreme Court is tending to become the final arbiter in tax disputes. Problems that were …

Tax Planning For Nontaxable Estates, William J. Bowe

Vanderbilt Law Review

Owners of modest estates are always greatly relieved to learn of the liberal federal estate tax exemption of $60,000. Freed from the burden of federal estate tax planning they frequently turn their attention to methods of transferring property which will avoid the heavy cost and delay incident to probate administration. Joint ownership, gifts of remainder interests, donee-beneficiary contracts, revocable trusts are among the more common devices available. Use of any one of these plans may accomplish a shift in possession and enjoyment of property upon the death of the planner with no delay and minimum expense.

But the income tax …

Recent Cases, Law Review Staff

Vanderbilt Law Review

Recent Cases

Adverse Possession--Statutes--May One Acquire an Indefeasible Life Estate under Tennessee Code Section 8582

Constitutional Law--Freedom of the Press--Effect of City Ordinance Prohibiting Solicitation of Magazine Subscriptions without Prior Consent of Person Solicited

Constitutional Law--Statutes--Requirement of Loyalty Oath as Valid Exercise of Police Power

Contracts--Procurement of Government Contracts on Contingent Fee Basis--Effect of Executive Order

Criminal Law--Mens Rea--Requirement in Action for Converting Government Property--Necessity for Criminal Intent

Damages--Injury to Child--Expenses of Parent in Attending Child

Divorce--Determination of Place Where Abandonment Occurs--Effect of Residence Requirement for Bringing Action

Domestic Relations--Legitimation Statute--Interpretation and Effect

Evidence--Unreasonable Searches and Seizures--Admissibility of Evidence Obtained …

Recent Cases, Law Review Staff

Vanderbilt Law Review

CONSTITUTIONAL LAW--RACIAL RESTRICTIVE COVENANTS--ALLOWANCE OF DAMAGES FOR BREACH

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CORPORATIONS--PARENT AND SUBSIDIARY--SUBSIDIARY AS INSTRUMENTALITY OF PARENT WHEN USED TO CARRY ON UNFAIR TRADE PRACTICES

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EVIDENCE--ADMISSIBILITY OF CONFESSION--SCOPE OF REVIEW OF COURT-MARTIAL BY COURT OF MILITARY APPEALS

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EVIDENCE--CONFLICT OF LAWS--APPLICATION OF DOCTRINE OF RES IPSA LOQUITUR

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EVIDENCE--DUE PROCESS--USE IN STATE PROSECUTION OF EVIDENCE FORCIBLY OBTAINED BY STOMACH PUMP

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EVIDENCE--ENTRIES IN THE REGULAR COURSE OF BUSINESS--TEST FOR EXTENT OF ADMISSIBILITY UNDER FEDERAL JUDICIAL CODE

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EVIDENCE--HEARSAY--ADOPTION OF LIBERAL ADMISSION RULES OF ADMINISTRATIVE TRIBUNALS IN ANTITRUST COURT ACTION

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EVIDENCE--IMPEACHMENT OF ONE'S OWN WITNESS--USE OF PRIOR INCONSISTENT STATEMENTS

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Tax Problems Presented By The Tennessee Constitution, Eugene L. Parker Jr.

Vanderbilt Law Review

Although the North Carolina Constitution of 1776 had no specific tax provision, the draftsmen of Tennessee's Constitution of 1796 initiated a standard which reflected the creed of the frontier. These pioneers thought that every free man should contribute something to the support of the government and those with more ability should contribute more. The ability of the citizen was measured by the quantity of land and the number of slaves, which provided roughly a fair differentiation. Everyone had a similar log cabin; one lot in a settlement was worth about the same as another; one cleared acre was the equal …

Books Received, Law Review Staff

Vanderbilt Law Review

BOOKS RECEIVED

BUSINESS ORGANIZATION By Alfred F. Conard Brooklyn: The Foundation Press, Inc., 1950. Pp. vii, 661. $7.00.

CASES ON FEDERAL COURTS By Charles T. McCormick and James H. Chadburn Brooklyn: The Foundation Press, Inc., 1950. Pp. 921. $8.00.

CASES AND MATERIALS ON WORLD LAW By Louis B. Sohn Brooklyn: The Foundation Press, Inc., 1950. Pp. 1363. $8.00.

FEDERAL ESTATE AND GIFT TAXATION: CASES AND MATERIALS By William C. Warren and Stanley S. Surrey Brooklyn: The Foundation Press, Inc.,1950. Pp. vii, 518. $7.00.

HATCH ACT DECISIONS By James W. Irwin Washington. United States Government Printing Office, 1949. Pp. v, 304. …

The Effect Of Renunciations And Compromises On Death And Gift Taxes, Walter E. Black Jr.

Vanderbilt Law Review

When a man dies, it must be decided how his property shall be distributed. Ordinarily, the distribution will follow his express intention as evidenced in a will or the presumed intention of the state laws of intestacy. In these ordinary situations, the state death tax is applied to the various legacies and devises and to the property passing by descent in the manner provided by the state tax statutes. Thus, the majority of testamentary distributions are carried out without any state death tax problems.

However, in some cases, events occur after the death of the decedent which change the testator's …

Book Notes And Books Received, Law Review Staff

Vanderbilt Law Review

Book Notes

Labor Relations and Federal Law

By Donald H. Wollett

Seattle: University of Washington Press, 1949. Pp. xxv, 148, 30. $3.00

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Tennessee Personal Injury Fact Digest

Compiled by Eugene McSweeney

Nashville: The Fact Digest Co., 1949. Pp. 124. $5.50

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BOOKS RECEIVED

Cases on Federal Taxation

By Roswell Magill

Brooklyn: The Foundation Press, Inc., 1950. Pp. i, 546. $7.00

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Cases on Trusts

By George Gleason Bogert

Brooklyn: The Foundation Press, Inc., 1950. Pp. i, 1041. $7.50

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Differences in Income for Accounting and Federal Income Tax

By Clarence F. Reimer

Chicago: Commerce Clearing House, 1949. Pp. iii,184. …

Cash And Accrual Methods Of Income Tax Accounting, William J. Bowe

Vanderbilt Law Review

It is the purpose of this article to introduce the two methods of income'tax accounting to the general practitioner who is not a specialist in the field and to the student who is attempting to learn the subject of income taxation. The article simply seeks to express in a clear and orderly fashion the developed law on the topic.

Life Insurance, The Forbidden Fruit, William J. Rowe

Vanderbilt Law Review

Until recently life insurance has represented the most impenetrable stronghold of the professional tax avoider and his advisors. As a vehicle for the transmission of wealth to future generations with minimum tax levies, it stood unrivaled. During a policyholder's life the value of his policy for gift tax purposes was and is measured by replacement cost.' Under applicable regulations during the thirties, when insurance was transferred by way of inter vivos gift the tremendous increase in value of the policy that came with death escaped gift tax, income tax, and estate tax. But since 1941 the situation has been reversed …