The opinion of the court was delivered by: BRUCHHAUSEN
The plaintiff herein moves for summary judgment in its favor in the sum of $ 10,032.15, alleged to have been erroneously levied and collected by the defendant for Documentary Stamp Taxes.
The question herein is whether transfers by the defendant corporation from its surplus account to its capital account, unaccompanied by the issue of new or additional shares to its stockholders, are subject to the stamp taxes imposed by 26 U.S.C.A. §§ 1800, 1802.
The essential facts, not disputed, in substance are:
1. The plaintiff, a New York Corporation, issued 21,185 shares of no par value common stock, valued at $ 100 per share, or a total of $ 2,118,500.
2. Thereafter and on May 5, 1950, the plaintiff, through action by its directors, increased the stated value per share from $ 100 to $ 200 and effectuated the increase by transferring the sum of $ 2,118,500 from its earned surplus to its common stock capital account, resulting in a new stated capital for such shares of $ 4,237,000.
3. In each of the years 1951, 1952 and 1953 similar action was taken by the plaintiff, whereby additional transfers totalling $ 6,355,500 were effected.
4. No new certificates or shares of stock were issued in connection with any of the said transfers to the capital stock account. The plaintiff did not affix any Federal Documentary Stamps to its stock books or other records.
The Government's position, as stated in its brief is that a dedication of amounts from a coporation's surplus account to its capital stock account constitutes an issue of shares and/or of profits and/or of interest in property or accumulations under Section 1802(a), regardless of whether or not such a dedication is accompanied by an increase in the number of shares outstanding, or by a physical delivery to the stockholders of new or different certificates.
The plaintiff contends, in substance, that the provisions of the statute do not require the payment of stamp taxes where as in this case no stock was issued, in connection with or accompanying the transfer of funds to the capital stock account.
The pertinent parts of the said statute are as follows:
' § 1800. Imposition of tax.
'There shall be levied, collected, and paid, for and in respect of the several bonds, debentures, or certificates of stock and of indebtedness, and other documents, instruments, matters, and things mentioned and described in sections 1801 to 1807, inclusive, or for or in respect of the vellum, parchment, or paper upon which such instruments, matters, or things, or any of them, are written or printed, the several taxes specified in such sections. * * *'
' § 1802. Capital stock (and similar interests)
'(a) Original issue. On each original issue, whether on organization or reorganization, of shares or certificates of stock, or of profits, or of interest in property or accumulations, by any corporation, or by any investment trust or similar organization * * * (whether or not such investment trust * * * constitutes a corporation within the meaning of this title), on each $ 100 of par or face value * * * of the certificates issued by such corporation or by such investment trust or similar organization (or of the shares where no certificates were issued), 11 cents: Provided, That where such shares or certificates are issued without par or face value, the tax shall be 11 cents per share (corporate share, or investment trust or other organization share, as the case may be), unless the actual value is in excess of $ 100 per share; in which case the tax shall be 11 cents on each $ 100 of actual value * * * of such certificates (or of the shares where no certificates were issued), or unless the actual value is less than $ 100 per share, in which case the tax shall be 3 cents on each $ 20 of ...