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during the first year of carrying on its business in this state. The amount of capital upon which such taxes shall be paid shall be fixed by the comptroller, who shall have the same authority to examine the books and records in this state of such foreign corporations, and the employees thereof, and the same power to issue his warrant for the collection of such taxes, as he now has with regard to domestic corporations. Every such foreign corporation hereafter authorized to do business in this state shall, before receiving the certificate of authority provided by law, pay to the state treasurer, for the use of the state, the tax herein before provided for. No action shall be maintained or recovery had in any of the courts of this state by such foreign corporation doing business in this state, without obtaining the certificate of authority prescribed by law, and a receipt for the license fee hereby imposed.

§ 182. Franchise tax on corporations. Every corporation, joint stock company or association incorporated, organized or formed under, by or pursuant to law in this state, shall pay to the state treasurer annually, an annual tax to be computed upon the basis of the amount of its capital stock employed within this state and upon each dollar of such amount, at the rate of onequarter of a mill for each one per centum of dividends made and declared upon its capital stock during each year ending with the thirty-first day of October, if the dividends amount to six or more than six per centum upon the par value of such capital stock. If such dividend or dividends amount to less than six per centum on the par value of the capital stock, the tax shall be at the rate of one and one-half mills upon such portion of the capital stock at par as the amount of capital employed within this state bears to the entire capital of the corporation. If no dividend is made or declared, the tax shall be at the rate of one and one-half mills upon each dollar of the appraised capital employed within the state. If such corporation, joint stock company or association shall have more than one kind of capital stock, and upon one of such kinds of stock a dividend or dividends amounting to six, or more than six per centum, upon the par value thereof, has been made or declared, and upon the other no dividend has been made or

declared, or the dividend or dividends made or declared thereon, amount to less than six per centum upon the par value thereof, then the tax shall be at the rate of one-quarter of a mill for each one per centum of dividends made or declared upon the capital stock upon the par value of which the dividend or dividends made or declared amount to six or more than six per centum, and in addition thereto a tax shall be charged at the rate of one and one-half mills upon every dollar of the valuation made in accordance with the provisions of this act of the capital stock upon which no dividend was made or declared, or upon the par value of which the dividend or dividends made or declared did not amount to six per centum. Every corporation, joint stock company or association organized, incorporated or formed under the laws of any other state or country, shall pay a like tax for the privilege of exercising its corporate franchises or carrying on its business in such corporate or organized capacity in this state, to be computed upon the basis of the capital employed by it within this state.

[Revisers' Note.-L. 1882, chap. 361, § 3; R. S., 8th ed., 1153, as am. by

L. 1890, chap. 522; R. S., 8th ed., supp., 3255,

L. 1882, chap. 361, § 11; R. S., 8th ed., 1155, as am. by

L. 1894, ch. 562.]

See Forms Nos. 26, 27.

The senate committee struck out an amendment of the law contained in section 182 as first reported. The section as it now stands changes the system of taxing corporations which declare a dividend of less than six per cent. Heretofore, such a corporation has been taxed in the same manner as a corporation declaring no dividend; that is, one and onehalf mills upon each dollar of the appraised capital employed within the state. Section 182 imposes a tax of one and one-half mills upon such portion of the capital stock at par as the amount of capital employed within the State bears to the entire capital of the corporation.

By the term "corporate franchise or business," in a statute taxing such franchise, is meant the right or privilege of being a corporation — that is, of doing business in a corporate capacity. Home Ins. Co. v. New York, 134 U. S. 594.

The taxation of a corporate franchise has no limitation but the discretion of the taxing power, and its value is not measured like that of property, but may be fixed at any sum that the legislature may choose. Such tax cannot be affected in any way by the character of the property in which its capital stock is invested. Id.

Where a State statute imposes a tax upon the "corporate franchise or business" of a company, and reference is only made to its capital

stock and dividends for the purpose of determining the amount of the tax to be exacted each year, this is not a tax on the capital stock or property of the company, but upon its corporate franchise, and is not, therefore, subject to the objection that it is a tax on United States securities, although a portion of its capital stock is invested in such securities. Id.

The property of shareholders in their shares, and that of the corporation in its capital stock, are distinct property interests, and may both be taxed, where such is the clear intent. New Orleans v. Houston, 119 U. S. 265.

The statute of New York does not require that the whole business of a foreign corporation shall be done within the State in order to subject it to the taxing power of the State. Horn Silver Min. Co. v. New York, 143 U. S. 305.

The provisions of Laws 1881, chap. 361, are not in contravention of the Constitution of the United States. People v. Gold and Stock Tel. Co., 98 N. Y. 67 (1885).

Laws 1880, chap 542, held constitutional. People v. New York Floating Dry Dock Co., 63 How. Pr. 451 (1882).

The provisions of Laws 1880, chap. 542, and of the acts amendatory thereof and supplemental thereto do not conflict with either the State or United States Constitutions, though an assessment thereunder may result in an unequal or double taxation. People ex rel. Postal Telegraph Co. v. Campbell, 70 Hun, 507; S. C., 52 N. Y. St. Repr. 790; 24 N. Y. Supp. 208 (1893).

The provisions of Laws 1880, chap. 542, and Laws 1889, chap. 353, relative to the State tax on corporations are not in conflict with either the State or United States Constitutions. Matter of Tiffany, 80 Hun, 486; S. C., 30 N. Y. Supp. 494 (1894).

The taxes imposed upon corporations by Laws 1880, chap. 542, are for the exclusive benefit of the State, and the statute does not interfere with the power of the local authorities to tax for municipal and county purposes. People ex rel. Eastern Trans. Co. v. Commissioners of Taxes, 26 Hun, 446 (1882).

The tax contemplated by Laws 1881, chap. 361, amending Laws 1880, chap. 542, is imposed upon the corporate franchises of a domestic corporation and upon the business of a foreign corporation, and not upon property. People ex rel. Penn. R. R. Co. v. Wemple, 138 N. Y. 1; S. C., 51 N. Y. St. Repr. 702; affg. 65 Hun, 252; S. C., 20 N. Y. Supp. 287 (1893). It seems, that property employed in interestate commerce is subject to tax the same as other property. Id.

The words "doing business in this State," in Laws 1880, chap. 542, § 3, imposing a tax upon the franchise and business of corporations, refer only to foreign corporations. A domestic corporation is subject to taxation under the act irrespective of its doing business here. People ex rel. Am. Contracting Co. v. Wemple, 129 N. Y. 558; S. C., 42 N. Y. St. Repr. 400

(1892). In cases where the capital stock is partially employed in this State, the proper basis for the tax is the amount employed here. Id.

The words " capital stock" as used in Laws 1880, chap. 542, and the acts amendatory thereof, refer to the property of the corporations contributed by the stockholders or otherwise obtained by it and not the share of stock. People ex rel. Axe & Tool Co. v. Roberts, 82 Hun, 313; S. C., 63 N. Y. St. Repr. 574; 31 N. Y. Supp. 245.

There must be some property or business done within the State to justify a tax by the State comptroller upon a domestic corporation, and some evidence to show how much capital is employed. Where it has removed its business without the State, it is error to tax it upon its entire capital stock, part of which is employed elsewhere, and if it has no property or business within the State there is no basis on which to compute the tax. People ex rel. Davis-Colby Co. v. Campbell, 66 Hun, 146; S. C., 48 N. Y. St. Repr. 817; 21 N. Y. Supp. 7 (1892). Where the evidence disclosed no business done within the State, and the only property was money deposited in bank here, held, that this money afforded a proper basis for taxation. Id.

It seems that the capital of a surety company deposited as securities in other States for those doing business with it in those States is not employed without the State so as to exempt it from taxation here. People ex rel. Am. Surety Co. v. Campbell, 64 Hun, 417; S. C., 46 N. Y. St. Repr. 228; 19 N. Y. Supp. 652 (1892).

Bonds of other corporation in New York or other States, received in payment of royalties, are taxable as part of the property of the corporation. People ex rel. Edison Electric Light Co. v. Campbell, 88 Hun, 530; S. C., 63 N. Y. St. Repr. 747; 34 N. Y. Supp. 713; affd. in 138 N. Y. 543 (1893).

Where entire capital of a domestic corporation was invested in patent rights, for the use of which it had received bonds of foreign corporations, and stock of corporations organized in this State and in other States, held, that the stock in corporations in this State was to be estimated as capital employed here; that in corporations in other States was to be deducted as employed elsewhere; the bonds of foreign corporations were taxable under Laws 1880, chap. 542, as amended by Laws 1881, chap. 361; Laws 1885, chap. 501, since they were presumably held at the domicile of the owner, and that the rights for use in places not granted were within the statutes employed within this State. People ex rel. Edison Electric Light Co. v. Campbell, 138 N. Y. 543; S. C., 53 N. Y. St. Repr. 184 (1893).

Stocks of local corporations organized and situated without this State, acquired by a domestic corporation in return for licenses to use patents in which its capital is invested, should not be included in the computation of the domestic corporation's annual tax under the provisions of law (chap. 542, Laws of 1880, as amended by chap. 151, Laws of 1882, and chap. 501, Laws of 1885) for the taxation of "capital stock employed

within this State." People ex rel. Edison Electric Light Co. v. Wemple, 148 N. Y. 690 (1896); revg. S. C., 63 Hun, 444 (1892).

No deduction should be made from the tax upon a corporation, because a part of its capital stock is invested in patent rights granted by the United States. People ex rel. Illuminating Co. v. Wemple, 39 N. Y. St. Repr. 605; S. C., 15 N. Y. Supp. 711 (1891).

Capital of a domestic corporation invested in real estate in another State, and in United States bonds deposited under a deed of trust, in another State, and with a finance minister in a foreign country, to enable the corporation to carry on its business, in such States and country,— held, not to be capital employed within this State, although the income of the bonds was received and used in New York and all the property was subject to the claims of all creditors. People ex rel. Am. Surety Co. v. Campbell, 74 Hun, 101; S. C., 55 N. Y. St. Repr. 881; 26 N. Y. Supp. 462 (1893).

The question as to whether a foreign corporation does business in this State so as to render it taxable under Laws 1880, chap. 542, as amended, must be determined from the actual character of the business carried on and not from the existence of any unexercised powers reserved to it by its contracts; for the material question is whether it has, in fact, done business within the State, and if so, what was its nature, character and extent, and not whether it possesses the natural or contractual right to carry on such business. People v. Bell Telephone Co., 117 N. Y. 241; S. C., 27 N. Y. St. Repr. 459; revg. 50 Hun, 114; S. C., 19 N. Y. St. Repr. 748; 3 N. Y. Supp. 733.

The provisions of Laws 1880, chap. 542 (amended by Laws 1881, chap. 361), as far as it relates to foreign corporations, imposes a tax upon business done within this State only. Such a tax the legislature has authority to levy and the mode of its exercise prescribed by the statute is not unconstitutional. People v. Equitable Trust Co. of New London, 96 N. Y. 387 (1884).

It seems that a foreign corporation cannot be taxed by this State on account of its property situated, or business done, without its limits, nor for its corporate franchises. Id.

A foreign corporation whose business is conducted in another State is not taxable in this State, merely because it maintains an office here in charge of a salaried agent, none of its corporate business being actually transacted here. People ex rel. Harlan, etc., Co. v. Campbell, 139 N. Y. 68; S. C., 54 N. Y. St. Repr. 451 (1893).

A statute imposing a tax upon a foreign manufacturing corporation for the privilege of doing business within limits of the State, which requires a tax, is valid. People ex rel. Cotton Oil Co. v. Wemple, 131 N. Y. 64; S. C., 42 N. Y. St. Repr. 632; revg. 61 Hun, 83 (1892).

The basis of taxation of a foreign corporation is the portion of its capital employed within this State, and such as is represented by the actual value of the property here, whether in money, goods, or other

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