Question 257. - The stamp tax on bank notes, cheques or other documents, as set forth in 10-11 Geo. V. c. 71, s. 1, passed by the House of Commons at the end of June, 1920, in amendment to the Special War Revenue Act of 1915, has been the cause of many difficulties arising from misunderstandings on the part of the general public, according to the Department of Inland Revenue, which advises as follows:The value of the tax may be affixed to bills of exchange, notes or documents by means of an adhesive stamp or of a die stamp.

A stamp of the value of two cents must be affixed to or impressed upon a bill of exchange or promissory note not exceeding $100, transferred to a bank in such a way as to constitute the bank the holder, or delivered to a bank for collection, and a further tax of two cents is required for every additional $100 or fraction thereof. A bill of exchange payable on demand, sight, presentation, or three days after date or sight, for the purpose of the value of the tax, is to be deemed to be drawn for an amount not exceeding $100.

A stamp of two cents only is necessary for a promissory note delivered to the bank for an advance to be made by the bank, whatever the amount of money for which the note is made. The bank is required to make a quarterly statement of the maximum amount of advances made to the person transferring or delivering such notes, outstanding at the close of business on any day during the period of three months or portion of that period then ending, and must affix a stamp tax of the value of two cents for every 100 dollars or fraction thereof by which the maximum amount of the advances exceeds $100. Upon the bank rendering such statement to the person to whom the advances were made, the amount of the stamps affixed shall be payable by the person to the bank.