Anglim

Plaintiff seeks recovery of $22,082.08, the documentary stamp tax levied, pursuant to section 1802(a) of the Internal Revenue Code, Title 26 U.S.C., upon an issue of its stock. The facts have been stipulated. The sole question of law is whether or not the stock issue upon which the tax was levied was an “original issue” subject to the tax imposed by section 1802(a).

The term “original issue” is not statutorily defined. Section' 1802(a) states simply that a tax shall be levied on “each original issue, whether on organization or reorganization, of shares or certificates of stock,” by any corporation. The Bureau of Internal Revenue originally interpreted this language to mean' that a tax should be levied on each new class of stock issued by a corporation. Pursuant to this interpretation, the tax was imposed upon shares issued to effect a stock split-up, or an exchange of one type of stock for another even though corporate capital was not augmented by the issue. The courts rejected this interpretation' as contrary to the congressional intent to tax only “original” issues of corporate stock. It has been held that new classes of stock representing previously dedicated capital do not…