The business taxes levied during this period were the customary specific occupation taxes, the income tax as described above, and the special tax upon the receipts of railroad, telegraph and insurance companies. The occupation tax embraced a widening range of vocations as time went on, and especially after the discontinuance of the income tax in 1870. It is interesting to note that in 1866 an ad valorem tax on money loaned and on merchandise higher than the general ad valorem tax was levied under the guise of an occupation tax. This feature, which was observable in ante-bellum taxation and represented a spirit of hostility to money lenders and merchants, does not reappear in subsequent acts. The occupation taxes were frequently changed, and those upon the retail liquor business particularly showed violent fluctuations. There were defects in the laws levying them and laxity of administration, especially in the matter of light penalties for non-payment and of the absence of checks upon collections.2

This period is important in the history of corporation taxation by the state for the attempt to make use of special corporation taxes. Until 1870 the method of taxing corporations was by the property tax and the income tax. In 1870 there was levied, in addition to the general property tax, an annual tax of two per cent upon the gross receipts of railroad, insurance, and telegraph companies.3 In 1871 this was changed, and railroad and telegraph companies became subject to a tax of one per cent upon net receipts, life insurance companies to an annual occupation tax of $500, fire and marine insurance companies to one of $250.1 A few days later a tax of one per cent upon gross receipts was substituted for the one per cent tax upon net receipts. This combined use of the property and the receipts tax was thought to operate unfairly upon railroads as compared with telegraph companies because of the greater amount of tangible property owned by the railroads, and an increase in the tax upon telegraph companies to five per cent of their gross receipts was suggested.2 The legislature, however, passed a bill which relieved railroads of taxation by the property tax, but it was vetoed by the governor on the ground that since the counties were not allowed to tax the receipts of railroads, fairness required that the ad valorem tax should not be remitted.3 The result of this difference of opinion between the governor and legislature was the repeal of the receipts tax, leaving only the ad valorem property tax applicable.4 Corporations got off with comparatively light taxation, and for the first time in the state's tax history there appeared complaints of the working of the property tax as applied to corporations.5

1 Report of the Comptroller, 1868-9. Income tax assessed in 1867, $38,892; salary tax assessed in 1867, $1,186; ad valorem and poll taxes assessed in 1867, $354,418; income tax assessed in 1868, $14,600; salary tax assessed in 1868, $1,086; ad valorem and poll taxes assessed in 1868, $310,626; per cent of income and salary taxes to total assessed taxes in 1867, 10; in 1868, 4.8.

2 Report of the Comptroller, 1874, p. 56.

3 Laws of 1870, Called Sess., pp. 199, 216.