The Tax Law.

Laws 1896, Chap. 908.- An act in relation to taxation, constituting chapter twenty-four of the general laws.

Approved by the Governor, May 27, 1896. Passed, three-fifths being present.

The People of the State of New York, represented in Senate and Assembly, do enact as follows:

CHAPTER XXIV OF THE GENERAL LAWS.

The Tax Law.

Article 1. Taxable property and place of taxation. (§§ 1-4.) 2. Mode of assessment. (§§ 20-41.)

3. Equalization of assessment and levy of tax. (§§ 5059.)

4. Collection of taxes. (§§ 70-94.)

5. Collection of nonresident taxes. (§§ 100-109.)

6. Sales by comptroller for unpaid taxes and redemption of lands. (§§ 120-143.)

7. Sales by county treasurers for unpaid taxes and redemption of lands. (§§ 150-158.)

8. State board of tax commissioners, State board of equalization. (§§ 170-177.)

9. Corporation tax. (§§ 180-203.)

10. Taxable transfers. (§§ 220-242.)

11. Procedure. (§§ 250-264.)

12. Laws repealed; when to take effect. (§§ 280-281.)

ARTICLE I.

Taxable Property and Place of Taxation.

Section 1. Short title.

2. Definitions.

3. Property liable to taxation.

Section 4. Exemption from taxation.

5. Taxation of lands leased or sold by the state.

6. No deduction allowed for indebtedness fraudulently

contracted.

7. When property of nonresidents is taxable.

8. Place of taxation of property of residents.

9. Place of taxation of real property.

10. Taxation of real property divided by line of tax

district.

11. Place of taxation of property of corporations.

12. Taxation of corporate stock.

13. Stockholders of bank taxable on shares.

14. Place of taxation of individual bank capital.

Section 1. Short title. This chapter shall be known as the tax law.

The revisers' note, preceding this chapter, gives a history of the revision of the tax laws. The system of taxation in the State of New York is mainly that provided by the Revised Statutes of 1827, and the revisers have, for the most part, followed the same arrangement as that of the Revised Statutes, adding as separate articles, the subsequent laws relating to sales for unpaid taxes by the comptroller and county treasurers, creating a State board of assessors, State corporation taxes, State transfer taxes, and procedure for the review of erroneous assessments, as provided by the act of 1880.

The Tax Law is to be construed as a continuation or amendment of the laws repealed, and not as a new enactment, and references in other laws to laws repealed hereby are to be deemed references to the corresponding portions of this chapter in which the provisions of the laws repealed are substantially re-enacted. See Statutory Construction Law, section 32, and notes. Accrued or accruing rights, pending proceedings and penalties and forfeitures incurred, are saved by section 31 of the Statutory Construction Law. During the pendency of the bill in the legislature, the question was raised whether a saving clause was not necessary in the Tax Law itself, and it was suggested that the section of the Statutory Construction Law referred to was without force, as being an attempt to bind the power of future legislatures, and that if so, taxes assessed or becoming due before the passage of the Tax Law, but not collected, could not be collected after the repeal of the acts under which they were assessed or became due. This position is believed to be untenable. No doubt the legislature might adopt a different saving clause or different definitions from those contained in the Statutory Construction Law, but so long as it does not do so

it is deemed to legislate with reference to them; and such is the holding of the courts in a large number of States having statutory construction laws similar to our own. For numerous authorities on the subject, see note to section 31 of the Statutory Construction Law, ante.

Power of State.

The power of the State for purposes of taxation over persons, property and business within its jurisdiction is practically unlimited, except by the restrictions of the Federal and State Constitutions.

There is nothing in the Constitution of New York which requires that taxation shall be general, so as to embrace all taxable persons in the State, or within any district or territorial district of the State, or that it shall be equal, or that it shall be in proportion to the value of the property of the person taxed, or that it shall not be apportioned according to the benefit which each taxpayer is supposed to receive from the object on which the tax is expended. People ex rel. Griffin v. Mayor, etc., of Brooklyn, 4 N. Y. 419 (1851).

There is no constitutional limitation upon the legislative power to tax the persons and property of individuals within the State. The power may be exercised to pay debts contracted before the property holder comes within the jurisdiction. Pumpelly v. Village of Owego, 45 How. Pr. 219, Ct. of App. (1863).

The power of the State, even in its power of taxation, in respect to property, is limited to such as is within its jurisdiction. Railroad Co. v. Pennsylvania, 153 U. S. 628.

The United States Constitution does not profess in all cases to protect property from unjust and oppressive taxation by the States. This is left to the State Constitution and laws. Railroad Co. v. New Orleans, 143 U. S. 192.

The determination of taxing districts and the manner of apportionment are all within the legislative power. Walstown v. Nevin, 128 U. S. 578.

The power of taxation and of apportionment is vested in the legislature, and includes the right of determining what portion of a public burden shall be borne by any individual or class of individuals. People ex rel. Crowell v. Lawrence, 41 N. Y. 137 (1869).

It is within the power of the legislature to impose a tax upon a locality for any purpose, and its power in this respect is not restricted by the Constitution. Litchfield v. Vernon, 41 N. Y. 123 (1869).

The power of apportionment is included in the power to impose taxes, and is vested in the legislature; and in the absence of any constitutional restriction, the exercise of it cannot be reviewed by the courts. Gordon v. Cornes, 47 N. Y. 608 (1872).

Where a tax is imposed upon a particular locality to aid in a public purpose (in this case a normal school), which the legislature may reason

ably regard as a benefit to that locality, as well as to the State at large, inequality in the apportionment of the expenses of the undertaking, with reference to the benefits resulting respectively to the State and to the locality, cannot be alleged for the purpose of impugning the validity of the act. Id.

In Weisner v. Village of Douglas, 64 N. Y. 91 (1876); affirming 4 Hun, 201, Folger, J., in delivering the opinion of the court, referring to the expression in Town of Guilford v. Supervisors of Chenango, 13 N. Y. 143, decided in 1855, to the effect that, in the absence of express constitutional restriction, the power of taxation vested in the legislature is unlimited, says: “The legislature is not sole, supreme and unrestrainable therein, and the courts are not debarred; but may, as a co-ordinate branch of the government, scrutinize and measure the legislative act; always keeping in mind that the legislature is the primary authority which is to inquire what is a proper purpose for the application of money to be raised by taxation, and the necessity of taxation to subserve it, and it must be quite clear that it has erred before the courts can arrest the consequences of its action."

The mode, time and persons by whom property shall be appraised for taxation, what certificate of official action shall be furnished, and when parties shall be heard for the correction of errors are matters in the discretion of the legislature. Williams v. Albany County Bank, 122 U. S. 154.

It seems that it would have been competent for the legislature, while authorizing the imposition of taxes, to have omitted altogether the provisions requiring notice and a meeting by the assessors to review assessments, and to have provided only for a hearing before the supervisors in the first instance. Having full authority over the subject, it could lawfully provide for the way and manner of hearing the taxpayer, and in default of a hearing as provided, it could declare the consequences of such default, and provided for a hearing in some equivalent mode. So long as the taxpayer is given equivalent, therefore, the legislature has done all that is required of it under any view of a taxpayer's constitutional right. People v. Turner, 117 N. Y. 227; S. C., 27 N. Y. St. Repr. 158 (1889). Except as restrained by the Federal Constitution, the legislature has unlimited power to impose taxes and assessments for public purposes. "But, in all cases, there must be apportionment of the burdens, either among all the property owners of the State, or of the local division of the State, or the property owners specially benefited by the improvement." "A tax or assessment upon property arbitrarily imposed, without reference to some system of just apportionment, could not be upheld." Stuart v. Palmer, 74 N. Y. 183 (1878).

Unless restrained by provisions of the Federal Constitution, the power of the State as to the mode, form and extent of taxation is unlimited where the subjects to which it applies are within her jurisdiction. Kirtland v. Hotchkiss, 100 U. S. 491 (1879); affirming 42 Ct. 426,

The legislature can constitutionally impose the same poll-tax on every citizen without reference to his ability to pay. It can impose a tax on all watches, pianos, carriages, dogs, spirituous liquors or other chattels without reference to their value. It can impose an arbitrary tax upon any avocation or business without estimating its volume or value. People v. Equitable Trust Co. of New London, 96 N. Y. 387 (1884).

The power of the legislature to levy taxes for public purposes is limited only by the specific restrictions of the Constitution. In order to invalidate a statute imposing a tax, it is not enough to show that it is oppressive and unfair in its effect, provided it violates no express constitutional provision. People v. Supervisors of Ulster County, 36 Hun, 491 (1885).

On the nature of the power of taxation, see 11 Alb. L. J. 284. Concerning the limitations of the powers of local taxation, see 12 Alb. L. J. 8, 41.

Statutes relating to taxation are to be strictly construed. People ex rel. Young v. Willis, 35 N. Y. St. Repr. 176; S. C., 12 N. Y. Supp. 385.

The legislature may release property which has been assessed for taxation. Its power over the subject is unlimited and can be exercised in any way and at any time during the proceedings for taxation. People ex rel. A. B. Society v. Commissioners of Taxes, 142 N. Y. 348; S. C., 59 N. Y. St. Repr. 22; affirming 76 Hun, 491; S. C., 59 N. Y. St. Repr. 352; 27 N. Y. Supp. 1058 (1894).

The legislature has the power to exempt from taxation the property of a railroad corporation above a certain amount, notwithstanding it works injustice to others. So held, as to the act of 1853 (chap. 462), passed as the result of an agreement between the city of Troy and a railroad constructed therein. People ex rel. Railroad Co. v. Carter, 52 Hun, 458; S. C., 24 N. Y. St. Repr. 104; 5 N. Y. Supp. 507; 117 N. Y. 625.

Where legislature could have originally exempted property from taxation, and it has been omitted from the assessment-roll, a statute ratifying and confirming the assessment as made, is valid. Van Deventer v. Long Island City, 139 N. Y. 133; S. C., 54 N. Y. St. Repr. 510 (1893).

§ 2. Definitions. 1. "Tax district" as used in this chapter, means a political subdivision of the state having a board of assessors authorized to assess property therein for state and county taxes.

A tax district is not defined by the Revised Statutes, but reference is always made to the town or ward. In many cities, the ward division for purposes of assessment is no longer observed, a single board of assessors and a single collecting officer acting for the entire city. The city, in such case, is a "tax district" within this definition.