98 BULLETIN 110 6, U. S. DEPARTMENT OF AGRICULTURE 
required by the State constitution and adding to the exemptions 
allowed thereunder. 20 ISTo other cooperative statute contains a taxa- 
tion provision like that in the Bingham Act. 
In a later Kentucky case, which involved the right of a city in 
Kentucky to impose taxes on toba-cco stored therein by the Dark 
Tobacco Growers' Association, received by it under a purchase-and- 
sale contract, it was held that the city was not entitled to levy taxes 
on the tobacco because the constitution of the State authorized its 
general assembly " to determine what class or classes of property shall 
be subject to local taxation," and an act of the assembly declared that 
" agricultural products in the hands of the producer or in the hands 
of any agent or agency of the producer to which said products had 
been conveyed or assigned for the purpose of sale by the producer " 
were exempt from liability for local taxes. Although the marketing 
contract under which the tobacco was received was a purchase-and- 
sale contract, the court was of the opinion that inasmuch as the 
"central purpose in the contract was to create an agency with the 
absolute power in the designated agent to handle and market the 
tobacco of the grower," that the exemption statute covered a situation 
of this kind. 21 
LICENSE AND STAMP TAXES 
In a Kansas case the court held that a cooperative association en- 
gaged in the handling of wheat was not liable for taxes on account 
of wheat held by it, under a tax statute relative to merchants, which 
in effect defined the term " merchant " as one who had " possession of 
personal property either purchased by it for sale at an advanced price 
or profit, or consigned to it to be sold in that manner — that is, at 
an advanced price or profit," because the association did not come 
within the statutory definition of a merchant. Moreover, the court 
regarded the association as " a mere instrument through which the 
members undertake by concerted action to market their own crops," 
and placed emphasis upon the fact that the members do not bargain 
with the association over prices 22 but receive all " it receives, less 
present and future expenses." 
Many of the cooperative statutes contain a provision reading sub- 
stantially as follows: "Each association organized hereunder shall 
pay to the State tax commission an annual fee of $10, in lieu of all 
franchise, or license, or corporation taxes." 23 
The Federal revenue acts of 1921 and 1924 contain a stamp-tax 
provision 24 reading : " Capital stock, issued : On each original issue, 
whether on organization or reorganization, of certificates of stock, 
or of profits, or of interest in property or accumulations, by any 
corporation, on each $100 of face value or fraction thereof, 5 cents." 
The Kansas Cooperative Wheat Marketing Association, a nonstock 
organization, paid, under protest, a stamp tax of 5 cents on each 
of its certificates of membership under the foregoing provision. The 
association then sucessfully brought suit for the recovery of the 
20 Burley Tobacco Growers' Co-op. Ass'n v. City of Carrollton, 208 Kv. 270, 270 S. W. 
749. 
21 City of Owensboro v. Dark Tobacco Growers' Ass'n, 222 Ky. 164. 300 S. W. 350. 
23 Kansas Wheat Growers' Ass'n v. Board of Commissioners of Sedgwick County et al., 
119 Kan. 877, 241 P. 466. 
23 New York Laws 1926, ch. 231, sec. 130. 
"Comp. Stat., sec. 6318p. 
