A trust formed in a state for the purpose of purchasing, improving, holding and sell ing lands, which does not have perpetual succession, but ends with lives in being and twenty years thereafter, is not within the provisions of the corporation tax law; Eliot v. Freeman, 220 U. S. 178, 31 Sup. Ct. 360, 55 L. Ed. 424. See TRUST ESTATES AS BUSI NESS COMPANIES.
The subject matter of a succession tax is the devolution of the estate, or the right to become beneficially entitled to the same; Scholey v. Rew, 23 Wall. (U. S.) 349, 23 L.
Ed. 99; Northern T. Co. v. Rayner, 263 Ill. 222, 104 N. E. 1114; It is not a property tax: id. The taxes upon legacies and distril utive shares of personal property which were im posed by the war revenue act of June, 1898, were imposed on the transmission or receipt of such inheritances and legacies, and not upon the right of the state to regulate the devolution of property upon death : Knowl ton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969, where this tax was held to be a duty or excise, as distinguished from a direct tax.
It was imposed on the particular legacies or distributive shares, and not on the whole personal estate. The rate of the tax was de termined by the classifications of legatees and was progressively increased according to the amount of the legacies or shares; id. The opinion contains a historical review of the subject.
The cases upholding the constitutionality of such taxes are said to be based upon two principles: 1. An inheritance tax is not one on property, but one on the succession. 2. The right to take property by devise or de scent is a creature of the law and not a nat ural right-a privilege; and therefore the authority which confers it may impose con ditions upon it. From these principles it is deduced that the states may tax the priv ilege, discriminate between relatives, and be tween them and strangers, and grant exemp tions, and are not precluded from this pow er by the provisions of state constitutions re quiring uniformity and equality of taxation: Knowlton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969; Strode v. Com., 52 Pa. 181; Schoolfield's Ex'r v. Lynchburg, 78 Va. 366; State v. Dalrymple, 70 Md. 294, 17 Atl. 82, 3 L. R. A. 372; State v. Hamlin, 86 Me.
495, 30 Atl. 76, 25 L. R. A. 632, 41 Am. St. Rep. 569 ; State v. Alston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178 ; In re Wil merding's Estate, 117 Cal. 281, 49 Pac. 181; Minot v. Winthrop, 162 Mass. 113, 38 N. E. 512, 26 L. R. A. 259; Gelsthorpe v. Purnell, 20 Mont. 299, 51 Pac. 267, 39 L. R. A. 170.
Such acts may discriminate between col lateral and lineal relatives ; Billings v. Illi nois, 188 U. S. 97, 23 Sup. Ct. 272, 47 L. Ed. 400; and may tax undistributed estates of persons who died before the enactment; Ca hen v. Brewster, 203 U. S. 543, 27 Sup. Ct. 174, 51 L. Ed. 310, 8 Ann. Cas. 215; and a sliding scale is valid; Knowlton v. Moore, 178 U. S. 109, 20 Sup. Ct. 747, 44 L. Ed. 969. But an act taxing only estates over $20, 000 was held unequal and void; State v. Ferris, 53 Ohio St. 314, 41 N. E. 579, 30 L. R. A. 218. See an article in 34 Amer. L. Reg. (N. S.) 179, by Luther E. Hewitt.
A state may impose a graduated tax on transfers of personal property by an instru ment taking effect on the grantor's death, without violating the equal protection clause; Keeney v. New York, 222 U. S. 525, 32 Sup.
Ct. 105, 56 L. Ed. 299, 38 L. R. A. (N. S.) 1139; an Illinois testator's deposit in a New York bank and his credits there may be sub jected by New York to an inheritance tax; Blackstone v. Miller, 188 U. S. 189, 23 Sup. Ct. 277, 47 L. Ed. 439. Inheritance taxes ou tangible chattels, both at the domicil of the owner and at their 6:us, are constitutional; Callahan v. Woodbridge, 171 Mass. 595.
A New Hampshire testator bequeathed stock in a. corporation incorporated in Massa chusetts and other states; it was held that the of this stock, for the purpose of a succession tax to be paid in Massachusetts, is limited to the value of the franchise and property in Massachusetts which it specifical ly represents; Kingsbury v. Chapin, 196 Mass. 533, 82 N. E. 700, 13 Ann. Cas. 738.
The New York inheritance tax act, impos ing a transfer tax upon property within the state belonging to non-residents at the time of death, is valid as to promissory notes, the makers of which are non-residents of the state ; Wheeler v. New York, 233 U. S. 434, 34 Sup. Ct. 607, 58 L. Ed.