THE LAW OF

TAXABLE TRANSFERS.

THE TAX LAW.

CHAP. 906, Laws 1896, as AmenDED TO JUNE 1, 1901.

ARTICLE X.

TAXABLE TRANSFERS.

SEC. 220. Taxable Transfers.

221. Exceptions and Limitations.

222. Lien of Taxes and Payment Thereof.

223. Discount, Interest and Penalty.

224. Collection of Tax by Executors, Administrators and Trustees. 225. Refund of Tax Erroneously Paid.

226. Deferred Payment.

227. Taxes Upon Devises and Bequests in Lieu of Commissions.

228. Liability of Certain Corporations to Tax.

229. Jurisdiction of the Surrogate.

230. Appointment of Appraisers, Stenographers, etc.

2308. Composition of Transfer Tax Upon Certain Estates.

231. Proceedings by Appraiser.

232. Determination of Surrogate.

233. Surrogate's Assistants in New York County.

234. Surrogate's Assistants in Kings and Certain Other Counties. 235. Proceedings for the Collection of Taxes.

236. Receipt from the County Treasurer and Comptroller.

237. Fees of County Treasurer.

238. Books and Forms to be Furnished by the State Comptroller.

239. Reports of Surrogate and County Clerk.

240. Reports of County Treasurer.

240a. Report of State Comptroller; Payment of Taxes.

241. Application of Taxes.

242. Definitions.

243, Exemptions in Article One, Not Applicable.

LAWS REPEALED.

Act Amending Takes Effect April 1, 1901.

§ 220. Taxable transfers.— - A tax shall be and is hereby imposed upon the transfer of any property, real or personal, of the value of five hundred dollars or over, or of any interest therein or income therefrom, in trust or otherwise, to persons or corporations not exempt by law from taxation on real or personal property, in the following cases:

1. When the transfer is by will or by the intestate laws of this state from any person dying seized or possessed of the property while a resident of the

state.

2. When the transfer is by will or intestate law, of property within the state, and the decedent was a nonresident of the state at the time of his death.

3. When the transfer is of property made by a resident or by a nonresident when such nonresident's property is within this state, by deed, grant, bargain, sale or gift made in contemplation of the death of

the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death.

4. (Such tax shall be imposed) When any such person or corporation becomes beneficially entitled, in possession or expectancy, to any property or the income thereof by any such transfer, whether made before or after the passage of this act.

5. Whenever any person or corporation shall exercise a power of appointment derived from any disposition of property made either before or after the passage of this act, such appointment when made shall be deemed a transfer taxable under the provisions of this act in the same manner as though the property to which such appointment relates belonged absolutely to the donee of such power, and had been bequeathed or devised by such donee by will; and whenever any person or corporation possessing such a power of appointment so derived shall omit or fail to exercise the same within the time provided therefor in whole or in part, a transfer taxable under the provisions of this act shall be deemed to take place to the extent of such omissions or failure, in the same manner as though the persons or corporations thereby becoming entitled to the possession or enjoyment of the property to which such power related

had succeeded thereto by a will of the donee of the power failing to exercise such power, taking effect at the time of such omission or failure.

6. The tax imposed thereby shall be at the rate of five per centum upon the clear market value of such property, except as otherwise prescribed in the next section.

(2 Heydecker's Gen'l Laws, 1930; as amended by Chapter 284, Laws of 1897.)

The transfer tax should be imposed upon the property in the form in which it stood when the testator died. (Matter of Opperman, 25 App. Div. 95; Matter of Sutton, 3 App. Div. 208; Matter of Livingston, 1 App. Div. 568.) And in case of a resident decedent, upon the personal property wherever situated. (Matter of Swift, 137 N. Y. 77.)

Meaning of "transfer."

It is certainly within the constitutional power of the legislature to tax all property transferred by will, whether the motive of the testator be to make a gift or pay a debt, and the language, absolutely unambiguous and free from saving clauses, which the legislature employed to accomplish that result, affords the best indication that the word "transfer" in the statute is used advisedly and according to its ordinary legal signification, which is that the owner of a thing delivers it to another person with the intent of passing the rights which he has in it to the latter. Whatever the motive of the testator, if the devise or bequest be accepted by the beneficiary, the transfer is made by

will, and the state by the statute in question makes a tax to impinge upon that performance. (Matter of Gould, 156 N. Y. 423; modifying s. c. 19 App. Div. 352.) Since there cannot be a transfer of interest to that which is non-existent, a tax cannot be assessed upon a legacy to a corporation which testator desired should be created after his death, upon certain contingencies. (Matter of Chesebrough, 34 Misc. 365.) Remainders are not subject to transfer tax until it can be determined unto whom they will ultimately be transferred. (Matter of Howell, 34 Misc. 432.)

Tax upon the transfer and not upon the property.

The tax is upon the right of succession. (Matter of Swift, 137 N. Y. 77). Therefore, a transfer of United States bonds after March 21, 1898, is taxable, although the bonds were issued under an act providing that they should be exempt from taxation by the United States and from taxation in any form by or under state, municipal, or local authority. (Matter of Plummer, 30 Misc. 19, affirmed 47 App. Div. 625; 161 N. Y. 631; Matter of Sherman, 153 N. Y. 1.)

The Supreme Court of the United States affirming this decision, has recently held that the right to take property by will or descent is derived from and regulated by state law, and that the tax imposed by the Transfer Act is upon this right or privilege; and that the state may lawfully fix the amount of the tax by referring to the value of the property passing, and the fact that such property is government bonds does not vitiate the Act, because such bonds are simply appraised in determining the value of the inheritance