Opinion Number. 1463


State Stamp Duty validity of state stamp duty on salary of officers and employees of the Commonwealth: validity of state super (income) tax on salary of officers and employees of the Commonwealth

Key Legislation

Stamps (Unemployment Relief) Act 1930 (Vic): UnemployMENT Relief Act 1930 (Vic): Income Tax Act 1928 (Vic

The Secretary, Department of Works and Railways

The Secretary, Department of Works and Railways asks for advice on the questions set out in the following memorandum:

The following communication which has been received from the Works Director, Victoria, relative to the above Act, is referred for consideration and favor of early advice, in view of the early date, viz., 1st July, 1930, upon which this Act comes into force:

I desire to bring under your notice that the Victorian Government has passed the above Act, which will come into operation on the 1st July, 1930.

The stamp duty is chargeable on–

  1. The amount paid in respect of each payment of salary or wages of not less than £1 and not more than £6 earned in any week, and whether paid daily, weekly, fortnightly, monthly or otherwise.
  2. The full amount of salary or wages received by the employee during the currency of the said Act (notwithstanding that the rate thereof exceeds £312 per annum), if the said employee’s income for the year ending the 30th June, 1930, consisted solely of salary or wages and amounts to £312 or less.

The employer, subject to the approval of the Comptroller of Stamps, may deduct from salary or wages sheet and pay direct to the Comptroller of Stamps.

All salaries and wages exceeding £312 will be subjected to a Super Tax, which will be collected by the Commissioner of Taxes.

The question of the liability of Commonwealth employees coming under the State Act was verbally submitted to the Deputy Crown Solicitor’s office, who advised that, as a question of Commonwealth policy may be involved, the matter be referred to you for necessary action as far as this Department is concerned. It is pointed out that all Commonwealth Officers in the State of Victoria are involved.

As to the Stamps (Unemployment Relief) Act 1930, I have advised the Secretary to the Treasury that, so far as it purports to apply to officers and employees of the Commonwealth, the act is ultra vires. A copy of my advising of even date is forwarded herewith.(1)

As to the super-tax, this is imposed by the Unemployment Relief Act 1930 which is an Act to provide moneys for the relief of unemployment and is to be read and construed with the Income Tax Act 1928.

The Unemployment Relief Act 1930 is in the nature of an Income Tax Act imposing a super tax and stands on the same constitutional basis as any ordinary State Income Tax Act. In the absence of any law of the Commonwealth inconsistent with it, it is, in my opinion, valid.

[Vol. 24, p. 613]

(1) Opinion No. 1464.