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Legal tender notes issued by the United States are not subject to State taxation. Bank v. Supervisors, 7 Wall. 26 (1868), reversing People ex rel. Bank of New York v. Supervisors, 37 N. Y. 21.

Certificates of indebtedness issued by the United States are beyond the taxing power of the States. Banks v. Mayor, 7 Wall. 16 (1868); reversing People ex rel. National Broadway Bank v. Hoffman, 37 N. Y. 9. People ex rel. Phenix Fire Ins. Co. v. Gardiner, 48 Barb. 608, had also maintained the right to tax such certificates.

An assessment of the whole capital stock of a bank without deducting the amount of United States bonds held by it, though erroneous, is not void. Genesee National Bank v. Supervisors of Livingston, 53 Barb. 223 (1869). See, also, People ex rel. Babbitt v. Commra. of Taxes, 41 How. Pr. 459 (1871).

A part of the indebtedness of a person examined by the assessors was a note payable on demand, the proceeds of which were used to buy United States bonds. Held, that the assessors erred in rejecting the note as an item of the indebtedness, although the transaction might have been a device to escape taxation. People ex rel. Thurman v. Ryan, 88 N. Y. 142 (1882).

A person has the right to buy government bonds to avoid taxation, or borrow money upon them for like purpose; but money borrowed on governments is liable to taxation. People ex rel. Bowne v. Assessors of Flushing, 3 N. Y. St. Repr. 148 (1886), G. T.

The decision of the Court of Appeals of the State of New York, that under Laws of New York, 1880 (chap. 542), and Laws 1881 (chap. 361), the amount of capital invested in United States bonds is not to be deducted in computing the tax imposed by these acts, affirmed by a divided court. Home Ins. Co. v. New York, 119 U. S. 129 (1886). See 92 N. Y.


The bonds or obligations of the United States for the payment of money cannot be the subject of taxation by a State. This inhibition upon the States cannot be invaded by any change in the mode or form of the taxation, provided the same result is effected. Home Ins. Co. v. New York, 134 U. S. 594; Palmer v. McMahon, 133 id. 660.

§ 5. Taxation of lands sold or leased by the state. All lands which have been sold by the state, although not conveyed, shall be assessed in the same manner as if such purchaser were the actual owner. Where land is leased by the state such leasehold interest shall be assessed to the lessee or occupant in the tax district where the land is situated.

[Revisers' Note.-R. S., pt. I, chap. 13, tit. I, § 6; 8th ed., 1084, The last sentence taxing leasehold interests is new.]

§ 6. No deduction allowed for indebtedness fraudulently contracted.- No deduction shall be allowed in the assessment of personal property by reason of the indebtedness of the owner contracted or incurred in the purchase of nontaxable property or securities owned by him or held for his benefit, nor for or on account of any indirect liability as surety, guarantor, indorser or otherwise, nor for or on account of any debt or liability contracted or incurred for the purpose of evading taxation.

[Revisers' Note.-R. S., pt. 1, chap. 13, tit. 2, § 9, subd. as amended by L. 1892, chap. 202,

without change.]

The provisions of this section were added by the amendment of 1892.

§ 7. When property of nonresidents is taxable.- Nonresidents of the state doing business in the state, either as principals or partners, shall be taxed on the capital invested in such business, as personal property, at the place where such business is carried on, to the same extent as if they were residents of the state.

[Revisers' Note.-L. 1855, chap. 37; R. S., 8th ed., 1086,

without change of substance.]

The act of 1855 was held constitutional in Duer v. Small, 17 How. Pr. 201 (1859); 4 Blatchf. 263 (1859); Brown v. Houston, 114 U. S. 633 (1885). Laws 1855, chap. 37,— held not to be in violation of the provisions of the Federal Constitution guaranteeing equal privileges and immunities to the citizens of each State in the several States; nor of those forbidding the imposition of duties on imported goods, by a State. Duer v. Small, 4 Blatchf. 269; 17 How. Pr. 201 (1859).

This statute was intended to reach the capital of nonresidents employed within this State in continuous trade, and not property sent here only to market for sale. So where a foreign corporation engaged in manufacturing in another State transmitted to its agent here its manufactured product for sale, the proceeds being remitted at once, with the securities received for sales on credit, to the home office of the corporation - held that it was not doing business in this State within the meaning of the statute. People ex rel. The Parker Mills v. Commrs. of Taxes, 23 N. Y. 242 (1861).

A foreign corporation is liable to be taxed upon bonds of a municipality within this State, deposited with the State comptroller under statutory requirements. Such bonds are personal property, and are to be regarded as invested in the business carried on, within the terms of the statute. The place of assessment for purposes of taxation of a foreign corporation doing business in this State, is where the principal business of the

corporation is carried on, not at the residence of the comptroller of the State, even as to the securities deposited with him. British Commercial Life Ins. Co. v. Commrs. of Taxes, 31 N. Y. 32 (1865); 28 How. Pr. 41.

That bonds and mortgages deposited by a foreign insurance company with the superintendent of insurance may be reached by taxation, see Smyth v. International Life Assurance Co., 35 How. Pr. 126 (1868); S. C 4 Abb. Pr. (N. S.) (1868).

The fact that a foreign insurance corporation has ceased to issue new policies within the State, and confines its business to receiving yearly premiums and paying losses on outstanding policies only, does not exempt it from taxation. Smyth v. International Life Assurance Co., 35 How. Pr. 126 (1868).

Where, at the time of making the assessment-roll, the agent of a nonresident has moneys of his principal in bank, it is liable to taxation, though before the time for correcting the roll it has been withdrawn and used. People ex rel. Westbrook v. Village of Ogdensburg, 48 N. Y. 390 (1872).

Where a foreign banking company had an agency permanently established in the city of New York, to which it transmitted funds to be employed in temporary loans, subject at all times to its control and drafts held, that it was not liable to taxation here for the funds so employed, and the exemption from taxation of foreign capital sent to agents here for investment, etc., under Laws of 1851, chap. 176, § 2, was not removed by the act of 1855, chap. 37, which subjects nonresidents doing business in this State to taxation on the moneys employed in such business. People ex rel. Bank of Montreal v. Commrs. of Taxes, 59 N. Y. 40 (1874); revg. 1 T. & C. 630.

Under Laws of 1855, chap. 37, a foreign corporation doing business in this State, and having a principal office here, is taxable for moneys invested in such business, as the personal estate of a domestic corporation is taxed, in the town or ward of such office, and the assessment at such place must be exclusive, and embrace all its personal property liable to taxation within this State. Assessment of personal property of a foreign corporation in the possession of an agent in a town, other than that of such office, by the assessors of that town,- held void. People ex rel. Bay State, etc., Co. v. McLean, 80 N. Y. 254 (1880); affg. 17 Hun, 204; 5 Abb. N. C. 137.

Moneys in the hands of a resident partner, belonging to a firm whose principal place of business was in a foreign country, but which transacted business here - held, subject to taxation, though the business here consisted of purchasing products for sale abroad, and the moneys were here only for that purpose. Matter of McMahon, 66 How. Pr. 190 (1883).

To render a nonresident subject to taxation upon his personal property in this State under Laws 1855, chap. 37, it is essential that he shall in fact have money invested in a business carried on by him in this State

either as a principal or a partner. The fact that he transacts business here is only as the agent of a foreign corporation is not sufficient. McLean v. Jephson, 132 N. Y. 142; S. C., 33 N. Y. St. Repr. 490. An assessment of the personal property of such nonresident made without personal notice to him was not rendered conclusive by reason of his failure to appear and object thereto, as such nonresident, not being subject to taxation, is not charged with the duty of examining the assessment-roll, and the determination by the assessors of the facts upon which their jurisdiction depends not being conclusive to establish it. Id. (1890).

Securities which were part of a trust fund were deposited in New Jersey, two of the three trustees were nonresidents, and only two of them could control or have access to the securities. Held, that they were not subject to taxation in New York, notwithstanding the trustees met in this State, and the securities represented investments in this State. People v. Tax Commrs., 42 N. Y. St. Repr. 449; S. C., 17 N. Y. Supp. 923 (1891).

Under Laws 1855, chap. 37, taxing the capital of nonresident persons and associations invested in business in this State, no deduction of tax from the sum so invested is permitted. People ex rel. T. W. Co. v. Barker, 141 N. Y. 118; S. C., 56 N. Y. St. Repr. 586; affg. 72 Hun, 638; S. C., 55 N. Y. St. Repr. 207; 25 N. Y. Supp. 394 (1894). The property of foreign corporations invested in this State is taxable under the act. Id.

A nonresident special partner taxed on his contribution to the firm ander Laws 1855, chap. 37, § 1, not being personally liable for the firm debts, is not entitled to a deduction of the firm obligations although incurred for the purchase of nontaxable property, where the firm is solvent and the special capital unimpaired. People ex rel. Bird v. Barker, 145 N. Y. 239; S. C., 64 N. Y. St. Repr. 719 (1895).

In determining the sums invested in business in this State by a foreign corporation for the purpose of taxation under Laws 1855, chap. 37, where It has purchased property here which it has not paid for in full, the amount remaining unpaid should be deducted from the value of such property. People ex rel. Milling Co. v. Barker, 147 N. Y. 31; S. C., 69 N. Y. St. Repr. 337; revg. 86 Hun, 148; S. C., 66 N. Y. St. Repr. 849; 33 N. Y. Supp. 321 (1895). But stock issued by the corporation in payment for property is not a debt which may be so deducted. Id.

§ 8. Place of taxation of property of residents - Every person shall be taxed in the tax district where he resides when the assessment for taxation is made, for all personal property owned by him, or under his control as agent, trustee, guardian, executor or administrator. Where taxable personal property is in the possession or under the control of two or more agents, trustees, guardians, executors or administrators residing in different tax

districts, each shall be taxed for an equal portion of the value of such property so held by them. Rents reserved in any lease in fee or for one or more lives or for a term more than twenty-one years and chargeable upon real property within the state, shall be taxable to the person entitled to receive the same, as personal property in the tax district where such real property is situated, and for the purpose of the taxation thereof such person is to be deemed a resident of such tax district. When a person shall have acquired a residence in a tax district, and shall have been taxed therein, such residence shall be presumed to continue for the purpose of taxation until he shall have acquired another residence in this state or shall have removed from this state. The residence of a person on July first shall be deemed his residence for the purpose of assessment and taxation during that year. If he shall have actually and in good faith changed his residence after July first, and before August first in any year, from one tax district to another, and shall make proof to the assessors at or before their last meeting for the correction of the assessment-roll of such change of residence and that he is assessed in the tax district to which he has removed, his name and the assessment of his personal property shall be stricken from the assessment-roll of the tax district where he resided on July first. In case of any controversy as to the proper place of taxation within the state of any person, his residence for purposes of taxation may be determined by the state board of tax commissioners, subject to review by the court.

[Revisers' Note.-R. S., pt. I, chap. 13, tit. II, §§ 1, 5; 8th ed., 1094,

L. 1846, chap. 327, §§ 1, 2; R. S., 8th ed., 1106,

L. 1858, chap. 357; R. S., 8th ed., 1108.

L. 1883, chap. 392, § 2; R. S., 8th ed., 1096.

The latter part of the section fixing the residence of July first as the residence of the year for taxing purposes is new, as an express statutory provision.]


See § 21 and notes, for manner of assessment.

Where plaintiff's place of business was in New York city and he resided there during the winter months- held, that he was properly taxed there under Laws 1850, ch. 92, though he resided elsewhere during the summer months. Bartlett v. Mayor, etc., of New York, 5 Sandf. 44 (1851).

The plaintiff resided in a hired house in New York during the winter and spring, and in his own house in Flushing during the summer and autumn of each year, and being assessed in the winter of 1850 in New

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