File No. 811.5124/5.]
The Danish Legation to the Department of State .
According to the statutes of the State of Iowa, an inheritance tax of 10–20% is imposed on inheritance of property left in that State when the heirs are non-resident aliens, in addition to the tax of 5% imposed on heirs either United States citizens or resident aliens of the same degree of kinship to the decedent.
In the estate of the late Ane Margrethe Andersen, born Hansen, of which C. L. Hansen is an administrator, and which estate, with will, is now before the District Court of Iowa in and for Mitchell County, the State Treasurer of Iowa claims the right to impose upon the portion of the estate to be distributed amongst heirs residents of Denmark, a collateral inheritance tax of 15%+5%, or 20%.
The attention of the State Treasurer has been called to the terms of Article 7 of the Convention of Commerce and Navigation concluded between Denmark and the United States on April 26, 1826, which reads as follows:
The United States and His Danish Majesty mutually agree that no higher or other duties, charges or taxes of any kind shall be levied in the territories or dominions of either party, upon any personal property, money or effects of their respective citizens or subjects, on the removal of the same from their territories or dominions reciprocally, either upon the inheritance of such property, money or effects or otherwise, than are or shall be payable in each State upon the same, when removed by a citizen or subject of such State, respectively.
Against the application of this article, to the effect of placing the said Danish heirs on equality of right with citizens or subjects of the United States, and therefore also citizens or subjects of the State of Iowa, the State Treasurer of that State makes the claim that in comparatively recent cases construing collateral inheritance tax statutes and treaties, such as the one referred to, it has been held that the treaty does not apply to the estate of a citizen or subject of the United States dying at home and leaving property here to subjects of the foreign country.
The State Treasurer further states that article 7 of the Danish-American convention relates to property belonging to citizens of Denmark that may be located in the United States and passes as an [Page 324] inheritance to subjects of Denmark; but that it does not apply where the owner of the property is a subject of the United States, owning property here that passes to subjects of Denmark.
Against this decision the Danish Minister hereby has the honor to enter a protest.
This protest is based,
- 1.
- upon the wording of said Article 7, which does not consider the status of the testator, but merely that of the legatee. It is the freedom of removal of property that is mutually assured, for the benefit of the person in whose favor the transfer of “personal property, money or effects,” “upon inheritance or otherwise” takes place, on terms of equality with citizens or subjects of the State from which such removal is made;
- 2.
- upon the fact that this same article has, in several previous cases, been respected in the sense as mentioned under 1; not only in other States (Washington for instance) but even previously in the State of Iowa, in consequence of consular representations.
The Danish Minister, being of the opinion that the question under contention is one over which the State courts have no exclusive authority, ventures to submit the case to the consideration of the Department of State, with the respectful request that such action as can properly be taken by the Federal authorities be taken for information as to the position of the United States of America as one party to the convention above referred to in regard to the question involved.
Washington , January 27, 1912 .