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EUGENE M. TRAVIS, Comptroller

Deputy Comptroller

Deputy Comptroller WILLIAM BOARDMAN,

Deputy Comptroller, N. Y. City Office

Deputy Comptroller
CHARLES H. DORN, Secretary


New York state has adopted the plan of taxing individuals on their incomes. The bill establishing the system became a law on May 14, 1919. It is now operative and affects residents and nonresidents of the state.

It is realized that individuals differed in their opinions respecting the merits or demerits of this new plan of taxation, but now that the law is a fact personal views should be submerged in an honest endeavor to comply with legal requirements.

The duty of administering the act is imposed on the comptroller. I shall strive to execute the powers conferred according to the purposes and the intent of the act and in a manner fair alike to the state and to the individuals affected thereby. In that effort I am hopeful of having the earnest and hearty co-operation of all citizens.

This act is of such importance that immediate and accurate information respecting its provisions should be made available for the great body of taxpayers affected thereby. It is for that reason that this bulletin is being published. Later, when rules and regulations have been formulated and adopted, a second bulletin will be published. It is thought that the information contained in this pamphlet is accurate but closer study of the law and rules and regulations when established, may require the amplification or the modification of some of the answers herein given. If that be the case, all such changes will be noted in future bulletins.

Gigau Mefpavia

1. or. DEC 5 1913

HJll N74


1. What is the income tax law?

It is article 16 of the tax law, added by chapter 627, laws of 1919.

2. What is its purpose and intent?

The obvious purpose and intent of the law is that, com: mencing with 1919, all gains, profits and income of residents, from all sources, and of nonresidents, from sources within the state, shall be charged and assessed, unless expressly exempted, with an income tax at progressive rates, and that such tax shall be paid by the owner of such income or by the proper representative thereof having the receipt, custody, control or disposal of the same.


3. What are the rates of tax?

The tax is imposed at graduated rates: 1 per cent on the first $10,000 of taxable income, 2 per cent on the next $40,000, and 3 per cent on taxable income in excess of $50,000.

4. Are any surtaxes imposed?


5. Does the state income tax law resemble titles I and II of

the federal revenue act of 1918? Yes; in respect of individuals, it conforms closely to them. Many provisions of the state act are identical with those contained in the federal statute.


6. Is one's entire income taxed?

No. Put simply, the law provides that to arrive at the amount of taxable income"

(a) need not include income of certain characters (see answers 39 and 41) in computing gross income ”; (b) may subtract from **


income » certain deductions (see answers 42 and 44) to arrive at net income

(c) is allowed, if a resident, personal exemption according to status (see answer 49), as a deduction from “net income", in calculating “ taxable income ” (an exception to this rule is stated in answer 49);

(d) is allowed, under certain conditions, if a nonresident, credit for a ratable portion of income taxes paid to the state or country of his residence (see answer 51).



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7. When is the first tax payable?

On or before March 15, 1920, in respect of income of 1919. 8. Where and to whom is it to be paid?

To the state comptroller, at his offices in Albany and New York city, unless the state is districted and branch offices established. (This question will be more fully answered in a bulletin to be published later when plans are fully worked

out.) 9. Can remittances be made through the mail?

Yes; that plan is preferable. (The instructions which will

accompany return blanks will cover this point.) 10. Should the remittance accompany the return?

Yes. (Section 377) 11. Is it legal to contract to pay another's income tax?

No. It is unlawful for any person to agree or contract, directly or indirectly, to pay or assume or bear the burden of any tax payable by a taxpayer under this law. Any such contract is null and void and incapable of enforcement by any court. (Section 385). This does not apply to the withholding of the tax in whole or in part, by a withholding agent, in

the case of a nonresident. (Section 366) 12. Is the income tax a substitute for some other tax?

Yes; to a limited extent. It is provided that after July 31, 1919, no personal property assessment shall be made on any assessment-roll of a city, town, village, school or other special tax district on account of the following, if the income therefrom be subject to the tax imposed by the income tax law:

(a) Money on hand, on deposit or at interest
(b) Bonds, notes and choses in action, and

(c) Shares of stock in corporations other than banks

and banking associations if such be owned by any individual or constitute a part of a trust or estate subject to the income tax. Otherwise, the income tax is in addition to all other taxes imposed by law. (Section 352)

The proper construction of this section seems to be that individuals may and should be assessed on account of intangibles, of the characters mentioned above as personal property, in all tax districts where the assessments are required by law to be made prior to July 31, 1919, but that thereafter no

personal property assessments can be based thereon. 13. May a valid tax be levied on such an assessment on or after

August 1, 1919? Yes. The proper construction of section 352 of the tax law and of section 3 of article 16 thereof seems to be that if a

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