COMMONWEALTH IMMUNITY FROM STATE LAWS WHETHER RECEIPTS GIVEN IN CONNECTION WITH WAR LOAN TRANSACTIONS ARE SUBJECT TO STATE STAMP DUTY
STAMP ACT AMENDMENT ACT 1918 (QLD), s. 38
The following letter from the Secretary of the Brisbane Stock Exchange has been submitted to me with the request for advice as to whether stamp duty is payable under the above Act on receipts given in connection with sales of War Loan stock:
As you are no doubt aware an amended Stamp Duties Act has recently been passed by the State legislature. By this Act it is necessary to give a receipt for every payment of cash made and this imposes stamp duty on three receipts for every stock or share transaction, i.e. from the client for whom a broker sells stock, from that broker to the broker who purchases, and from that broker to the client for whom he buys the stock.
It is understood that in New South Wales, where Contract Note duty is charged, transactions in War Loan stocks have been exempted; and as the prospectuses of the various War Loans distinctly state that 'Bonds and Transfers of Stock will be free of Commonwealth and State Stamp Duty', my Committee believe that transactions in War Loan securities should also be exempt from the Queensland receipt stamp duty; and they will be glad if you will place the matter before the bank authorities in Sydney, with the view of having this officially recognised.
In my opinion the imposition of State stamp duty on the receipts in question would have the effect of hampering the flotation of Commonwealth War Loans, and would, therefore, be an interference with a Commonwealth instrumentality within the rule laid down in D'Emden v. Pedder 1 C.L.R. 91 and consequently invalid.(1)
[Vol. 16, p. 82]
(1)This opinion was reiterated by Mr Knowles [Vol.16, p. 83; 18 January 1919] when he was asked to consider the question ‘whether receipts for interest paid when War Loan coupons are cashed are liable to State stamp duty’.