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 http://www.archive.org/details/cu31924030220895 
 
THE TAXATION OF 
 CORPORATIONS 
 
 IN NEW YORK 
 
 With Forms, and an Appendix containing the provision 
 
 of the Federal Income Tax Law 
 
 affecting corporations 
 
 BY 
 
 HENRY M. POWELL 
 
 ' Of the New York Bar 
 
 Second Edition 
 BY 
 
 MARTIN SAXE and HENRY M. POWELL 
 
 Of the New York Bar 
 
 NEW YORK 
 
 BAKER, VOORHIS & CO. 
 
 1914 
 
 S.V, 
 
A-^oivfSS" 
 
 Copyright, 1905 
 By HENRY M. POWELL 
 
 Copyright, 1914 
 By henry M. POWELL 
 
PEEFAOE TO THE SECOND EDITION 
 
 Since the publication of the first edition of this book in 1905 
 by Mr. Powell, there have been many additions to the case 
 law in connection with local taxation, and the statutory changes 
 affecting the taxation of corporations for state purposes have 
 been frequent and radical. The statute governing the annual 
 franchise tax (§§ 182 et seq. Tax Law) which was radically 
 amended in 1906 and 1907 has now been construed by the Courts 
 in most important particulars. The subject of the special fran- 
 chise tax, which at the time of the publication of the first edition 
 was still before the Federal Courts on the question of its consti- 
 tutional construction, has now been passed on by those courts as 
 constitutional, and has also been interpreted by the Court of Ap- 
 peals in this state in many of its features, particularly on the 
 important question of the method of arriving at the value of the 
 special franchise. It may, therefore, be said that the develop- 
 ment of this important branch of state taxation has now been 
 marked out on permanent lines. All of these things have in- 
 duced the authors to prepare and present a second edition of the 
 book, bringing the case and statute law, affecting corporations 
 in this state, down to date, and to make the book complete as a 
 work on corporate taxation, the new Federal Corporation Tax 
 Law (Income Tax Law) has been added. 
 
 The present edition has, in the main, followed the scheme 
 presented in the first edition, viz. : that of a commentary on the 
 statute and case law of taxation. The body of the book has 
 again been divided into four parts. I. Local Taxation, which 
 comprehends the assessments of corporations by local assessors 
 for local purposes. II. The Special Franchise Tax assessed by 
 state officers, and partly administered by local officers. III. 
 
 iii 
 
IV PEEFACE TO SECOND EDITION 
 
 State Taxation, which includes the assessments of corporations 
 by state officers for state purposes only. IV. Forms to be used 
 respectively in state and local taxation, and for the remedial 
 procedure in franchise tax litigation. Following the body of the 
 book is an Appendix, containing the recently enacted Federal 
 Corporation Tax, a comparative table, showing the difference 
 between the Federal Corporation Tax Law of 1909 and the 
 present Act, a Digest of cases arising under the Act of 1909, 
 and the Internal Revenue Eegulations with Forms to be used 
 by Corporations under the Act of 1913. 
 
 While the entire volume has received the attention of each 
 of the authors, Parts I and III of the book, devoted respectively 
 to local and state taxation, are the work of Mr. Powell, and 
 Part II, devoted to the special franchise tax, has been prepared 
 by Mr. Saxe. To distinguish the statute law from that part of 
 the book devoted to commentary, the former has been printed in 
 smaller type. The source of the statute is noted at the end of 
 each section of the Tax Law, reference being made to the origi- 
 nal Revised Statutes of 1827 or later law, as the case may be. 
 The provisions of the Charter of the City of ITew York affect- 
 ing the taxation of corporations, will, as a rule, be found under 
 separate chapter headings. 
 
 In conclusion, the authors wish to add that, having compiled 
 the book amidst the demands of a busy practice, they beg the 
 indulgence of their professional brethren. If the reader should 
 meet with errors and omissions, the authors will be pleased to 
 have their attention called to them, so that they may be cor- 
 rected or supplied in subsequent editions. 
 
 Maetin Saxe, 
 Henet M. Powell, 
 
 51 Chambers Street, 
 New York City. 
 
 Dated, January, 1914. 
 
CONTENTS 
 
 [A separate Index to each part of the book, except the Appendix, will be 
 found at the end of the volume. There will also be found here a Table of 
 Cases and an Index to Statutes. The Appendix has annexed thereto a 
 separate Index.] 
 
 PART I 
 LOCAL TAXATION 
 
 CHAPTEK PAGE 
 
 I. Development of Corporate Taxation for Local Purposes 1 
 
 II. Property of Corporations Exempt from Taxation 3 
 
 III. Property of Corporations Subject to Taxation 14 
 
 IV. Place of Taxation 22 
 
 V. Manner of Assessing Corporations. Capital Stock, and Sur- 
 plus. Deductions of Surplus and Real Estate 27 
 
 VI. Manner of Assessing Corporations; Deduction of Debts 35 
 
 VII. Manner of Assessing Foreign Corporations 42 
 
 VIII. Method or Form of Assessment; Time of Assessment; Prepa- 
 ration and Completion of Assessment Roll; Hearing of Com- 
 plaints ; Reports of Corporations 50 
 
 IX. Method or Form of Assessment in New Yorli City 64 
 
 X. Apportionment; Equalization; Levy of Tax, Completion of 
 
 Rolls 86 
 
 XI. Taxpayers' Remedies; the Review and Correction of Assess- 
 ments for Local Taxation; Common Law Writ and Statutory 
 
 Writ Distinguished 91 
 
 XII. The Practice in Certiorari Proceedings under the New York 
 
 Charter and the Tax Law 98 
 
 XIII. Remedies in Equity. Injunction and Mandamus 130 
 
 XIV. Collection of Taxes 133 
 
 XV. Collection by Judicial Proceedings 146 
 
 XVI. Proceedings under the New York Charter to Collect a Tax. . 150 
 
 PART II 
 
 THE SPECIAL FRANCHISE TAX 
 
 I. The Statute and Proceedings Regulating the Special Franchise 
 
 Tax 165 
 
 II. Assessing the Value of Special Franchises 199 
 
 PART III 
 STATE TAXATION 
 
 I. The System of Taxing Stock Corporations for State Purposes. . 215 
 
 II. The Organization Tax to be Paid by Domestic Corporations. . . . 220 
 
 III. License Tax; Foreign Corporations 223 
 
VI CONTENTS 
 
 CHAPTER PAGE 
 
 IV. Annual Franchise Tax; Domestic and Foreign Corporations.. 231 
 V. Principles Determining Taxation of Foreign Corporations under 
 
 Sections 181 and 182 of the Tax Law 252 
 
 VI. Exemption of Manufacturing and other Corporations from An- 
 nual Franchise Tax 258 
 
 VII. Annual Tax on Transportation, Transmission, Heat, Light, 
 
 Power and Water Companies Based on Gross Earnings 265 
 
 VIII. Annual Tax on Insurance Companies Based on Gross Premiums 270 
 IX. Annual Franchise Tax on Trust Companies, Savings Banks 
 
 and Foreign Bankers 274 
 
 X. Reports to be Filed with Comptroller; Statement of Tax and 
 
 Payment Thereof 277 
 
 XL Remedies ; Revision and Readjustment of Tax, Certiorari 284 
 
 XII. Collection of State Tax; Limitation, Exemption 299 
 
 PART IV 
 FORMS 
 
 Forms for Local Taxation 303 
 
 Forms for the Special Franchise Tax 329 
 
 Forms for State Taxation 339 
 
 APPENDIX 
 FEDERAL CORPORATION TAX 
 
 Text of the Act of 1913 364 
 
 Comparative Table of Acts of 1909 and 1913 384 
 
 Digest of Decisions under Act of 1909 397 
 
 Treasury Regulations under the Act of 1913 401 
 
 Index to Federal Income Tax Law 456 
 
 Index to Income Tax Regulations 461 
 
 Forms for Corporations under Federal Income Tax of 1913 490 
 
 Index to Forms under Incomfe Tax Law 540 
 
 INDICES (other than for appendix) 
 
 Table of Cases to Part I (Local Taxation) 542 
 
 Table of Cases to Part II (Special Franchise Tax) 552 
 
 Table of Cases to Part III (State Taxation) 555 
 
 Index to Statutes in Part I (Local Taxation) 561 
 
 Index to Statutes in Part II (Special Franchise Tax) 566 
 
 Index to Statutes in Part III (State Taxation) 567 
 
 Index to Part I (Local Taxation) 569 
 
 Index to Part II ( Special Franchise Tax) 580 
 
 Index to Part III (State Taxation) 584 
 
 Index to Part IV (Forms used in Local and State Taxation) 595 
 
PART I. 
 
 LOCAL TAXATION 
 
 CHAPTER I. 
 
 Development of Coepoeatb Taxation foe Local Pueposes. 
 
 Peioe to the year 1823 there was no regular system in ^ew 
 York for the taxation of corporations for either state or local 
 purposes. Corporations were few, principally banking, insurance 
 and manufacturing companies, and the corporate property was 
 assessed in the name of the individual owner of the stock with 
 the remainder of his personal property. (Eevised Statutes of 
 1813.) Beginning with the year 1823, "all incorporated com- 
 panies receiving a regular income from the employment of capi- 
 tal" were considered as persons and taxed in the same manner 
 as individuals. Cashiers of banks, secretaries of insurance com- 
 panies and of manufacturing companies were required to de- 
 liver to the assessors in the town or ward where the principal 
 oflSce of the company was located a list of the capital stock paid 
 in or secured to be paid in. Such tax was paid to the state treas- 
 urer, based upon the capital stock after making certain deduc- 
 tions, and apportioned among the several counties of the state in 
 proportion to the amount of stock held by the stockholders re- 
 siding in such counties. 
 
 It was not, however, until the year 1827 that we find the be- 
 ginning of the present system of taxing corporations for local 
 purposes. In 1853, and again in 1857, the laws affecting the 
 local taxation of corporations were amended, assuming in the 
 latter year substantially the form in which they appear in the 
 present Tax Law. 
 
2 TAXATION OF COEPOEATIONS 
 
 By Chapter 37 of the Laws of 1855, taxing the capital of non- 
 residents invested in business in the state, foreign corporations 
 were brought within the jurisdiction of the local assessors to the 
 extent of the capital invested here. 
 
 In 1896 the Tax Law of the state was again revised by the 
 Commissioners of Statutory Revision, and, as revised, was 
 adopted with minor changes, by the Legislature, 'becoming 
 Chapter 908 of the Laws of 1896. 
 
 In 1909, the Legislature adopted a revision and consolida- 
 tion of all the general laws of the state by the Board of Statutory 
 Consolidation, in which was included the Tax Law of 1896, 
 with some slight changes and amendments. That part of the 
 work of the Board, which included the Tax Law, became known 
 as Chapter 60 of the Consolidated Laws, the entire body of laws 
 being enacted in Chapter 62 of the Laws of 1909. 
 
 The, taxation of corporations for local purposes is, therefore, 
 neither in its historical development, nor in its present condi- 
 tion, a separate and distinct system, but is part of the general 
 system of local taxation, and with the exception of the basis of 
 the tax and some of the forms of the assessment, the general 
 provisions as to the assessment, the remedial procedure and the 
 collection of personal property taxes, in the case of individuals, 
 apply, with equal force, to corporations. 
 
CHAPTEE II. 
 Peopeett op Coepoeations Exempt peom Taxation. 
 
 What corporations exempt. — All corporations are liable to 
 taxation, except such as have been expressly exempted by statute. 
 Taxation is the rule, and exemption the exception. People ex 
 rel. Manhattan Fire Ins. Co. v. Com'rs, Y6 IST. Y. 64 (1879). 
 IS^or will the intent to exempt property be presumed. People 
 ex rel. 2Srd St. E. B. v. Com'rs, 95 K Y. 554 (1884). On the 
 other hand there is a presumption that all property within the 
 territorial limits of a state is subject to its taxing power. People 
 ex rel. Metropolitan St. By. Co. v. State Board of Tax Com'rs. 
 (Special Franchise Tax cases) 199 U. S. 1 (1905) ; afE'g 174 
 ]Sr. Y. 425. 
 
 Corporations are exempt from taxation on their property. 
 I. By virtue of the laws of the state of New York ; 
 II. By virtue of the federal laws or constitution; 
 
 III. Or there may be no express exemption from taxation, 
 but the property of the corporation may escape taxation, because 
 it does not come within the definition of either real or personal 
 property under the Tax Law. 
 
 I. PEOPEETY OF STOCK COEPOEATIONS EXEMPT 
 BY THE LAWS OF THE STATE OF NEW YOEK. 
 
 A— PROPERTY EXEMPT BECAUSE OF THE NATURE OF 
 THE PROPERTY 
 
 State and municipal bonds. — Bonds of this state to be hereafter 
 issued by the comptroller to carry out the provisions of Chapter 79 
 of the Laws of 1895, and bonds of a municipal corporation heretofore 
 issued for the purpose of paying up or retiring the bonded indebted- 
 ness of such corporation. (Subd. 6, sec. 4, Tax Law, same subd. and 
 sec. of ch. 908, L. 1896 [former Tax Law], as am'd by ch. 80, L. 1897. 
 
 3 
 
4 TAXATION OF COEPOEATIONS 
 
 Chapter 147 of the Laws of 1903, Chapter 469 of the Laws of 1906, 
 Chapter 718 of the Laws of 1907.) 
 
 Source: Ch. 685, L. 1892, sec. 7. 
 
 The exemptions of the bond issues under the Laws of 1903^ 
 1906 and 1907 were added by the Board of Statutory Con- 
 solidation. 
 
 Domestic vessels registered in the state.— AH vessels registered 
 at any port in this state and owned by an American citizen, or associa- 
 tion, or by any corporation, incorporated under the laws of the state 
 of New York, engaged in ocean commerce between any port in the 
 United States and any foreign port, are exempted from all taxation 
 in this state, for state and local purposes; and all such corporations, 
 all of whose vessels are employed between foreign ports and ports in 
 the United States, are exempted from all taxation in this state, for 
 state and local purposes, upon their capital stock, franchises and earn- 
 ings, until and including December 31, 1922. (Subd. 12, sec. 4, of 
 present and former Tax Law.) 
 
 Source: Ch. 433, L. 1881, as am'd. by L. 1892, ch. 661. 
 
 Prior to the passage of Chapter 433, L. 1881, vessels regis- 
 tered at a port in this state were taxable here. People ex rel. 
 Pacific Mail 8.8. Co. v. Com'rs, 58 K Y. 245 (1874). 
 
 Bonds, mortgages, notes, moneys and goods sent from without 
 or deposited within the state, and belonging to a non-resident. — 
 A bond, mortgage, note, contract, account or other demand, belonging 
 to any person not a resident of this state, sent to or deposited in this 
 state for collection; the products of another state, owned by a non- 
 resident of this state and consigned to his agent in this state for sale 
 on commission for the benefit of the owner; moneys of a non-resident 
 of this state, under the control or in the possession of his agent in this 
 state, when transmitted to such agent for the purpose of investment 
 or otherwise. (Subd. 13, see. 4, of present and former Tax Law.) 
 
 Source: L. 1851, ch. 176, sec. 2, amending 1 E. S., ch. XIII, title 
 II, sec. 5. 
 
 Neither bonds nor mortgages, sent by a non-resident for col- 
 lection, are taxable, nor are the proceeds in the hands of a non- 
 resident agent for re-investment, taxable. Williams v. Super- 
 visors of Wayne, 78 IST. Y. 561 (1879), rev'g 14 Hun, 343, 
 
PBOPEETY OF COKPOEATIONS EXEMPT FEOM TAXATION 5 
 
 A foreign banldng corporation, engaged in the business of 
 buying and selling drafts and bills of exchange on its branches, 
 and having a branch in New York City, where such drafts were 
 drawn and paid, cannot be said, in doing this, to come within 
 the exemption of subdivision 13, § 4 Tax Law, because the drafts 
 and bills are not sent here to an agent for collection, but are held 
 by the, corporation itself and belong to it in its business con- 
 ducted in this state. People ex rel. Iniernaiional Banhing Co. 
 V. Raymond, llY App. Div. 62 (1907) ; distinguishing People 
 ex rel. Bank of Montreal v. Com'rs, 59 N". Y. 40. 
 
 Deposits in savings banks; accumulations in domestic insurance 
 companies and co-operative loan associations; premium reserve. — 
 The deposits in any bank for savings which are due depositors, the 
 accumulations in any domestic life insurance corporation, held for the 
 exclusive benefit of the insured, other than real estate and stocks, now 
 liable to taxation; the accumulations of any incorporated co-operative 
 loan association upon the shares of such, association held by any per- 
 son; and personal property of any corporation, person, company or as- 
 sociation transacting the business of fire, casualty or surety insurance 
 in this state equal in value to the unearned premiums required by the 
 laws of this state, or the regulations of its insurance department, to be 
 charged as a liability. {Subd. 14, sec. 4, Tax Law; same subd. and sec. 
 of former Tax Law, as am'd by chap. 618, L. 1901.) 
 
 Source: Ch. 456, L. 1857, sec. 4, and eh. 689, L. 1892, sec. 187, as 
 am'd by ch. 705, L. 1894. 
 
 Premium reserve. — The efFect of the amendment of 1901 
 exempting the "premium reserve" or fund required to be kept 
 by insurance companies under the Insurance Law as a liability 
 for the payment of unearned premiums, was to nullify the de- 
 cision in People ex rel. National Surety Co. v. Feitner, 166 
 jST. Y. 130 (1901) and other cases cited infra. (Chapter VL) 
 
 Deposits. — Since the enactment of Laws of 1857, chapter 
 456, section 4, a savings bank cannot be taxed on the deposits 
 due from it. People ex rel. Ithaca Savings BanTc v. Beers, 67 
 How. Pr. 219 (1883). ISTor can deposits due depositors in 
 
D TAXATION OF COEPOEATIONS 
 
 banks for savings be assessed to the depositors. People ex rel. 
 Heermance v. Dederich, 158 JST. Y. 414 (1899). 
 
 Surplus. — It has been held that the surplus of a savings bank 
 is exempt from local taxation, since under the Banking Law the 
 interest in the property held by a savings bank is vested in the 
 depositors. People ex rel. Newhurgh Savings Bank v. Peck, 
 157 K Y. 51 {1898). The surplus is, however, liable to state 
 taxation under section 189 of the Tax Law. 
 
 Collections by co-operative life and casualty insurance com- 
 panies. — Moneys collected in the course of the business of any corpora- 
 tion, association or society doing a life or casualty insurance business, 
 or both, upon the co-operative or assessment plan, and which are to be 
 used for the payment of assessments, or for death losses or for benefits 
 to disabled members. {Suid. 15, sec. 4, of present and former Tans 
 Law.) 
 
 Source: L- 1884, ch. 353, sec. 1. 
 
 Stock in corporations not liable to taxation. — The owner or holder 
 of stock in an incorporated company liable to taxation on its capital, 
 shall not be taxed as an individual for such stock. (Bubd. 16^ sec. 4, 
 of present and former Tax Law.) 
 
 Source: 1 E,- S., ch. XIII, title I, see. 7. 
 
 Shares of stock of corporations create^d under the laws of this 
 state are not taxable in the hands of stockholders. Nor are 
 shares of stock of corporations created by other states taxable, 
 for the presumption is that they are taxed upon their capital in 
 the home states. Negotiable bonds being evidence of a fixed 
 indebtedness are taxable at their actual value. People ex rel. 
 Trowbridge v. Commissioners of Taxes, 4 Hun, 595 (1875) ; 
 affirmed 62 N. Y. 630. 
 
 Part Personal Property of a domestic mutual life insurance 
 
 company. The personal property in excess of $100,000 of a mutual 
 
 life insurance corporation, incorporated in this state before April 10, 
 1849. (Subd. 17,, sec. 4, of present and former Tax Law.) 
 
 Source: Ch. 469, L. 1853; ch. 83, L. 1855. 
 
PEOPEETT OF COEPOEATIOITS EXEMPT PEOM TAXATION 7 
 
 B— PROPERTY EXEMPT BECAUSE SUCH PROPERTY HAS 
 
 PAID A TAX 
 
 Mortgages paying recording tax exempt under mortgage 
 tax law from local taxation.— AH mortgages on real property in 
 New York state recorded on or after July 1, 1906, and paying 
 the tax required by the Mortgage Tax Act shall be exempt from 
 all local taxation except mortgages held by banks and included 
 in the valuation of the bank stock. Mortgages on real prop- 
 erty in the state recorded before that day may obtain this ex- 
 emption by complying with the provisions of the Act. 
 
 {See Mortgage Tax Law, Ch. 729, L. 1905, as amended iy Gh. 532, 
 L. 1906, Ch. 340, L. 1907.) 
 
 "Secured Debts" paying the stamp tax required by Art. 
 15 exempt.— Under Article 15 of the Tax Law as added by 
 Chapter 802 of the Laws of 1911, "secured debts" shall be ex- 
 empt from taxation, provided the stamp tax of one-half per- 
 centum on the face value thereof is paid to the office of the state 
 comptroller, as prescribed by section 330 of the Tax Law (Ar- 
 ticle 15). 
 
 THE STATUTE: 
 
 Definitions. — The words "secured debts," as used in this article, 
 shall include: 
 
 ( 1 ) Any bond, note or debt secured by mortgage of real property re- 
 corded in any state or country other than New York and not recorded 
 in the state of New York; 
 
 (2) Any and all bonds, notes or written or printed obligations, 
 forming part of a series of similar bonds, notes or obligations, the 
 payment of which is secured by a mortgage or deed of trust of real or 
 personal property, or both, which mortgage or deed of trust is recorded 
 in some place outside of the state of New York and not recorded in the 
 state of New York; 
 
 (3) Any and all bonds, notes or written or printed obligations, 
 forming part of a series of similar bonds, notes or obligations, which 
 are secured by the deposit of any valuable securities, as collateral se- 
 curity for the payment of such bonds, notes or obligations, under a deed 
 of trust or collateral agreement held by a trustee; 
 
8 TAXATIOlir OF COEPOEATIOWS 
 
 (4) Any bonds, debentures or notes, forming part of a series of simi- 
 lar bonds, debentures or notes, which by their terms are not payable 
 within one year from their date of issue and which are not issued for 
 an amount exceeding one thousand dollars for each such bond, de- 
 benture or note, and the payment of which is not secured by the deposit 
 or pledge of any collateral security. The term "secured debts" as used 
 in this article shall not include securities held as collateral to secure 
 the payment of bonds taxable under this article or under article eleven 
 of this chapter. (Sec. 330 Tax Law, added ly L. 1911, oh. 802.) 
 
 No deduction of debts against taxable secured debt. — The owner 
 of any secured debt, on which the tax provided for in this article has 
 not been paid, shall be assessed upon such secured debt in the taxing 
 district in which he resides, upon the fair market value of such secured 
 debt and no deduction for the just debts owing by him shall be allowed 
 against the assessed value of such secured debt, as provided in section 
 twenty-one of this chapter or elsewhere in this chapter or in any other 
 law of this state. (Sec. 336 Tax Law, added by L. 1911, cfe. 802.) 
 
 Motor vehicles paying the registration fee are exempt from 
 taxation. 
 
 Motor vehicles paying the registration tax.— "Fees in lieu of taxes. 
 The registration fees imposed by this article upon motor vehicles, 
 other than those of manufacturers and dealers and those used solely 
 for commercial purposes, shall be in lieu of all taxes, general or local, 
 to which motor vehiclesmay be subject. (Added Jiy L. 1910, cTi. 374.)" 
 
 Personal property of Trust Companies. — The personal prop- 
 erty of trust companies taxable for state purposes under section 
 188 Tax Law is exempt from taxation for all other purposes 
 under section 205 of the Tax Law. Infra, Part III. 
 
 Plank road or turnpike company. — A plank road or turn- 
 pike company is exempt from taxation, until its surplus annual 
 receipts from tolls shall exceed seven per cent, of the first cost 
 of the road. Jamaica B. R. R. Co. v. City of Brooklyn, 123 
 ]Sr. Y. 375 (1890). 
 
 (For provisions of the exemption, see section 141 of Trans- 
 portation Corporation Law.) 
 
PEOPEKTY OF COBPOEATIONS EXEMPT FBOM TAXATION 9 
 
 II. PEOPEKTY OF STOCK COEPORATIONS EX- 
 EMPT EEOM TAXATION, BY VIETUE OF THE 
 FEDEEAL LAWS OE CONSTITUTION: 
 
 Property of the United States. — Property of the United 
 States cannot be taxed under subdivision 1, section 4, Tax Law. 
 Nor can federal securities under the general limitation con- 
 tained in article I, section 8, United States Constitution. Wes- 
 ton V. Charleston^ 2 Peters, 456; Home Ins. Co. v. New Yorh, 
 119 U. S. 129 (1886). That the state may not tax the agencies 
 or instruments of the federal government V7as firmly established 
 by the case of McCullough v. Maryland, 4 Wheat. 316 (1819). 
 
 Under this heading United States legal tender notes or treas- 
 ury notes (greenbacks) v?ere formerly not taxable. Banh v. 
 Supervisors, 7 Wallace 26, rev'g Bank v. Supervisors, 37 N. Y. 
 21 (1876), and gold or silver certificates and national bank 
 notes came under the same limitation ; but by an act of Congress 
 passed in 1894 (28 U. S. Statutes at Large, 278) these exemp- 
 tions are repealed and the states may now tax this class of prop- 
 erty. 
 
 Patent rights. — The amount invested in patent rights is 
 not taxable as personal property. People ex rel. N. J. Tel Co. 
 V. Neff et al., 15 App. Div. 8 (1897), nor are patent rights as 
 distinguished from the property produced by application of the 
 invention within the taxing power of the state. People ex rel. 
 Edison Elect. Ilium. Co. v. Neff, 156 N. Y. 417 (1898). 
 
 Imports. — A tax imposed on exports or imports is invalid. 
 Brown v. Maryland, 12 Wheat. 419 (1827). The taxing power 
 of the state may begin when the original package in which the 
 goods are imported is broken. May v. New Orleans, 178 U. S. 
 496. It is thus important to determine what is an "original 
 package." In the last meiitioned case, in which four judges dis- 
 sented, it was held to be the box or case in which the goods were 
 shipped. 
 
10 TAXATION or COEPOEATIOWS 
 
 Interstate commerce.— To Congress is given exclusive 
 power by article I, section 8, United States Constitution, to 
 regulate commerce, and interstate commerce cannot, therefore, 
 be taxed by the state. State Freight Tax case, 15 Wall. 232 
 (1872). In New York state, a tax imposed on the property of 
 a telegraph company is not in violation of the interstate com- 
 merce clause. People ex rel. Western Union Tel. Co. v. Asses- 
 sors, 57 Hun, 357 (1890). The taxing of goods prepared for 
 shipment and deposited in a place or port of shipment within 
 the state is not a regulation of commerce. Coe v. Errol, 116 
 U. S. 517 (1886). If the tax discriminates against non-resi- 
 dents it has been held an interference with commerce. Ward v. 
 Maryland, 12 Wall. 419. 
 
 14th amendment. — Under this clause of the United States 
 Constitution "no state shall make or enforce any law which shall 
 "abridge the privileges or immunities of citizens of the United 
 "States ; nor shall any state deprive any person of life, liberty 
 "or property without due process of law ; nor deny to any per- 
 "son within its jurisdiction the equal protection of the laws." 
 
 A limitation on the state's power of taxation is imposed by the 
 term "equal protection of the laws,^' and it has been held that 
 corporations are "persons" within the meaning of the Four- 
 teenth Amendment. Santa Clara Co. v. Southern Pacific By. 
 Co., 118 U. S. 394 (1886) ; San Bernardino Co. v. same, 118 
 U. S. 417 (1886) ; San Mateo Co. v. same, 13 Fed. Rep. 722; 
 Pembina Mining Co. v. Pa, 125 U. S. 181 ; Oulf Colorado & 
 8. F. R. R. V. Ellis, 165 U. S. 154; Waters Pierce Oil Co. v. 
 Texas, 177 U. S. 28. 
 
 The United States Supreme Court does not, however, define 
 what is "the equal protection of the laws." In Connolly v. Union 
 Sewer Pipe Co., 184 U. S. 558, it says that "no person or class 
 of persons shall be denied the same protection of the laws which 
 is enjoyed by other persons or other classes in the same place 
 and in like circumstances." 
 
PBOPEETY OF COBPOEATIONS EXEMPT FEOM TAXATION 11 
 
 In the New York State Constitution there is (article 1, sec- 
 tion 6) a provision similar to that contained in the last para- 
 graph of the 14th amendment above quoted, and, in addition, 
 section 37, article 1 of the General Construction Law of New 
 York includes within the term "person" a corporation and a 
 joint stock association. In conformity with this deiinition, the 
 New York courts have protected corporations in their property 
 rights under this limitation. Fire Dept. of N. Y. v. Btanton, 
 28 App. Div. 334 (1898) ; Rochester & C. T. R. Co. v. Joel 41 
 App. Div. 43 (1899). 
 
 The state is not limited by the Fourteenth Amendment from 
 properly and reasonably adjusting its system of taxation. It 
 may exempt certain property, such as that of religious, educa- 
 tional and charitable corporations; it may tax different trades 
 and professions. Real and personal property may be assessed 
 differently. Bells Gap B. R. v. Pa., 134 U. S. 233. 
 
 "Due process of law" within the intent of the Fourteenth 
 Amendment should provide for a hearing to the owner and op- 
 portunity to be heard. Santa Clara County v. So. Pacific R. R., 
 supra. A hearing is required where valuation is to be fixed by 
 assessors, who are gwasi-judicial officers. Palmer v. McMahon, 
 133 U. S. 660. But the right of re-hearing or appeal is not es- 
 sential. Pittsburgh R. R. Co. v. BacTcus, 154 U. S. 426 (1894). 
 
 The New York courts have held that due process of law re- 
 quires an orderly proceeding adapted to the nature of the case, 
 in which the citizen has an opportunity to be heard and to de- 
 fend, enforce and protect his rights. A hearing or opportunity 
 to be heard is absolutely essential. Stuart v. Palmer, 74 N. Y. 
 183 (1878) ; People ex rel. Witherhee v. Supervisors, 70 N. Y. 
 228 (1877). 
 
 The equal protection of the laws does not mean equality or 
 uniformity in taxation. While some states have provisions in 
 their constitutions for equality and uniformity in taxation. New 
 York State is not limited in this respect, viz. The owner of per- 
 
12 TAXATION OF COEPOEATIOITS 
 
 sonal property is permitted hj statute in this state to deduct a 
 mortgage debt, but the owner of real estate cannot do so, even 
 though it results in double taxation. Paddell v. City of New 
 York, 50 Misc. 422 (1906) ; affirmed 114 App. Div. 911; af- 
 firmed 187 ]Sr. Y. 552. 
 
 III. PROPERTY OF STOCK CORPORATIONS EX- 
 EMPT FROM LOCAL TAXATION, BECAUSE NOT 
 INCLUDED WITHIN THE DEFINITION OF REAL 
 OR PERSONAL PROPERTY UNDER THE TAX 
 LAW. 
 
 Corporate franchises. — Prior to the Special Franchise Tax 
 Law (Ch. 712, L. 1899) corporate franchises were not assess- 
 able as personalty or realty. People ex rel. Coney Is. & Brook-, 
 lyn R. R. v. Neff, 15 App. Div. 585 (1897) ; People ex rel. 
 Union Trust Co. v. Gom'rs, 146 N. Y. 304 (1895) ; People ex 
 rel. Consol. Tel. &c. Co. v. Barker, 7 App. Div. 27 (1896) ; 
 People ex rel. Brooklyn City R. R. v. Nejf, 19 App Div. 590; 
 aff'd 154 N. Y. 763 (1897) ; Same ex rel. Edison Co. v. same, 
 19 App. Div. 599 (1897) ; People ex rel. Consol. Oas Co. v. 
 Feitner, 78 App. Div. 313 (1903). 
 
 But since the passage of that law the franchises of public 
 service corporations are now included in the definition of real 
 property. {See chapter on Special Franchise Tax Law, Part 
 II, infra.) 
 
 Good will. — Good will is not included in the definition of 
 personal property under the Tax Law, and is therefore not tax- 
 able as such for local purposes. People ex rel. Cornell Steam- 
 boat Co. V. Dederick, 161 N. Y. 195 (1900) ; People ex rel. 
 Patterson, Gottfried & Hunter v. Wells, New York Law Jour- 
 nal, Dee. 5, 1903 ; People ex rel. Brokaw Bros. v. Feitner, 44 
 App. Div. 278 (1899). 
 
, PEOPEETT OF COEPOEATIONS EXEMPT FEOM TAXATION 13 
 
 Joint stock association not taxable as a corporation. — Joint 
 stock associations are not liable to taxation under 1 R. S. title 
 4, ch. XIII, pt. 1, subjecting "all moneyed or stock corpora- 
 tions deriving an income or profit from tbeir capital or other- 
 wise" to such tax. A joint stock association is a partnership 
 with some of the powers of a corporation. People ex rel. Win- 
 chester, as Treasurer, etc. v. Coleman,, 133 N. Y. 279 (1892) ; 
 (see, also, Bell v. Streeter, 1 IST. Y. Transcript IST. S. Jan. 26, 
 1872, p. 63, to same effect) ; per contra Sanford v. Board of 
 Supervisors of N. Y., 15 How. Pr. 172 (1858). (The last named 
 decision was at Special Term and does not appear to have been 
 followed in any adjudicated case.) 
 
 Joint stock associations are liable for state tax. — See People 
 ex rel. Piatt v. Wemple, 117 IST. Y. 136 (1889), under head of 
 State Taxation. 
 
 There are various exemptions applicable to the> individual 
 taxpayer, or to the State, a municipality thereof, or to the Fed- 
 eral Government, which are not considered here, because not 
 within the limits of a work on corporate taxation. 
 
CHAPTEE III. 
 
 Peopeett of Coepoeations Subject to Taxatioit. 
 
 The consideration of corporate property subject to taxation 
 and of the constitutional limitations and statutory exemptions 
 that apply to corporate property necessarily involves to some 
 extent the consideration of the statutory provisions and consti- 
 tutional limitations controlling the taxation of property in 
 general. 
 
 Statute as to property liable to taxation.— All real property within 
 this state, and all personal property situated or owned within this 
 state, is taxable, unless exempt from taxation by law. (Art. 1, sec. 3, 
 of present and former Tax Law.) 
 
 Source: 1 R. S., ch. XIII, title 1, sec. 1, without change of substance. 
 
 This applies to all property, whether individual or corporate. 
 McMahon v. Palmer, 102 K Y. 176 (1886). 
 
 STATUTORY DEFINITIONS AS TO REAL AND PERSONAL 
 
 PROPERTY 
 
 Real property defined. — The terms "land," "real estate," and "real 
 property," include the land itself above and under water, all buildings 
 and other articles and structures, substructures and superstructures, 
 erected upon, under or above, or affixed to the same; all wharves and 
 piers, including the value of the right to collect wharfage, cranage or 
 dockage thereon; all bridges, all telegraph lines, wires, poles and ap- 
 purtenances; all supports and inclosures for electrical conductors and 
 other appurtenances upon, above and under ground; all surface, under 
 ground or elevated railroads, including the value of all franchises, 
 rights or permission to construct, maintain or operate the same in, un- 
 der, above, on or through, streets, highways, or public places; all rail- 
 road structures, substructures and superstructures, tracks and the iron 
 thereon; branches, switches and other fixtures permitted or authorized 
 to be made, laid or placed in, upon, above or under any public or 
 private road, street or ground; all mains, pipes and tanks laid or 
 placed in, upon, above or under any public or private street or place 
 
 14 
 
PEOPEETY OF COEPOEATIONS SUBJECT TO TAXATION 15 
 
 for conducting steam, heat, water, oil, electricity or any property, 
 substance or product capable of transportation or conveyance therein 
 or that is protected thereby, including the value of all franchises, 
 rights, authority or permission to construct, maintain or operate, in, 
 under, above, upon, or through, any streets, highways, or public places, 
 any mains, pipes, tanks, conduits, or wires, with their appurtenances, 
 for conducting water, steam, heat, light, power, gas, oil, or other sub- 
 stance, or electricity for telegraphic, telephonic or other purposes ; all 
 trees and underwood growing upon land, and all mines, minerals, 
 quarries and fossils in and under the same, except mines belonging to 
 the state. A franchise, right, authority or permission specified in this 
 subdivision shall for the purpose of taxation be known as a "special 
 franchise." A special franchise shall be deemed to include the value 
 of the tangible property of a person, copartnership, association or cor- 
 poration situated in, upon, under or above any street, highway, public 
 place or public waters in connection with the special franchise. The 
 tangible property so included shall be taxed as a part of the special 
 franchise. No property of a municipal corporation shall be subject 
 to a special franchise tax. {Sec. 2, suM. .3, Tax Law, as amended 
 iy Special Franchise Tax Law, L. 1899, ch. 712.) 
 
 Source: 1 R. S., ch. XIII, title 1; sec. 2, as amended by L. 1881, 
 ch. 293. 
 
 The above definitions of "land," "real estate" and "real 
 property" must be limited in their application to the purpose 
 of taxation. 
 
 Machinery taxed as real estate in certain cases. — Machinery 
 used in the' manufacture of gas and electricity and connected 
 with mains and wires carrying gas and electricity may be 
 taxed as real estate under Subd. 3, Sec. 2, of the Tax Law,^ 
 although not annexed to the freehold. Herhimer Co. Light & 
 Power Co. V. Johnson, 37 App. Div. 257 (1899). But this 
 does not apply to feed wires, conduits and connections of a 
 company supplying electricity to its customers where the light- 
 ing company had no interest in the property through which 
 the switches and cables are laid, the latter being situated on 
 private property within the house line, and the corporation 
 having no right to use the property except in connection with 
 a contract to supply electricity. People ex rel. Edison Co. v. 
 Feitner, 99 App. Div. 274 (1904) ; aff'g 45 Misc. Eep. 12. 
 
16 TAXATION^ OF COEPOEATIONS 
 
 Where a corporation is the owner of real estate used for manu- 
 facturing purposes, and annexes thereto machinery used for the 
 same purpose, even though the latter can be removed without 
 material injury to the buildings, it should be assessed as realty 
 and not as personalty. People ex rel. Nat. Starch Co. v. Wald- 
 ron, 26 App. Div. 531 (1898). 
 
 Intention of parties sometimes governs. — When a railroad 
 company operating a subway in the City of New York is exempt 
 from taxation under Section 35 of the so-called Kapid Transit 
 Act (Chapter 4, Laws of 1891, am'd by Chapter 729, Laws of 
 1896), on its machinery, equipment and appurtenances, the 
 exemption not applying, however, to its real property used in 
 connection with the road, it was held, that, notwithstanding 
 the heavy machinery used in connection with the subway road 
 was affixed to the real estate, it might, for the purpose of tax- 
 ation be considered as personal property, if that was the inten- 
 tion of the parties. People ex rel. I. B. T. Co. v. O'Donnell, 
 202 ISr. Y. 313 (1911). 
 
 Personal property defined. — The terms "personal estate" and "per- 
 sonal property" include chattels, money, things in action, debts due 
 from solvent debtors, whether on account, contract, note, bond or 
 mortgage; debts and obligations for the payment of money due or 
 owing to persons residing within this state, however secured or 
 wherever such securities shall be held; debts due by inhabitants of this 
 state to persons not residing within the United States for the purchase 
 of any real estate; public stocks, stocks in moneyed corporations, and 
 such portion of the capital of incorporated companies, liable to taxa- 
 tion on their capital, as shall not be invested in real estate. (Art. I, 
 sec. 2, suld. 5, Tax Law, formerly numbered suhd. 4, in Tax Law 
 of 1896.) 
 
 Source: 1 E. S.,'ch. XIII, title 1, see. 3; ch. 371, L. 1851, sec. 1; 
 ch. 392, L. 1883. 
 
 STATUTORY DEFINITIONS OF REAL PROPERTY AND 
 PERSONAL PROPERTY LIMITED 
 
 The words "real property" and "personal property" in the 
 Tax Law have a statutory meaning separate and distinct from 
 
PEOPEETY OF COEPOEATIONS SUBJECT TO TAXATION 17 
 
 the ordinary or even generally accepted legal definition of the 
 terms, for example : By a fiction of the law, a mortgage though 
 ordinarily known as personal property may for the purposes of 
 Article XIV of the Tax Law be known as "real estate." "Spe- 
 cial franchises" though partaking of the character of personal 
 property are under subd. 3, sec. 2 of the Tax Law known as 
 ''real estate." Unless property sought to be taxed comes under 
 the provision of subd's. 2 or 3, sec. 2 of the Tax Law it is not 
 subject to taxation. People ex rel. Lemmon v. Feitner, 56 
 App. Div. 280; 167 N. Y. 1. 
 
 Corporate franchises.— Prior to the Special Franchise Tax 
 Law (ch. 712, L. 1899) corporate franchises were not assessable 
 as personalty or realty. People ex rel. Coney Is. & Brooklyn 
 E. R. V. Neff, 15 App. Div. 585 (1897) ; People ex rel. Man. 
 By. Co. V. Com'rs, 146 K Y. 304 (1895) ; People ex rel. 
 Consol. Tel. etc. Co. v. Barker, 7 App. Div. 27 (1896) ; People 
 ex rel. Brooklyn City B. B. v. Neff, 19 App. Div. 590; aff'd 
 154 K Y. 763 (1897) ; Same ex rel. Edison Co. v. same, 19 
 App. Div. 599 (1897) ; People ex rel. Consol. Oas Co. v. Feit- 
 ner, 78 App. Div. 313 (1903). 
 
 But since the passage of that law the franchises of public 
 service corporations are now included in the definition of real 
 property. (See chapter on Special Franchise Tax Law, Part 
 2, infra.) 
 
 Good will. — Good Will is not included in the definition of 
 personal property under the Tax Law, and is therefore not tax- 
 able as such for local purposes. People ex rel. Cornell Steam- 
 boat Co. V. Dederick, 161 K Y. 195 (1900) ; People ex rel. 
 Patterson, Gottfried & Hunter v. Wells, ITew York Law Jour- 
 nal, Dec. 5th, 1903 ; People ex rel. Brokaw Bros. v. Feitner, 
 44 App. Div. 278 (1899). 
 
18 TAXATION OF COEPOEATIONS 
 
 "PERSONAL PROPERY SITUATED OR OWNED WITHIN 
 
 THIS STATE" 
 
 Section 3 of the present Tax Law requires that personal 
 property must be "situated or owned within this State" in order 
 that it may be taxable. The words in the original statute were 
 "personal estate within this state." The words "or owned" 
 were added to the Tax Law of 1896 and in interpreting this sec- 
 tion resort should be had to subd. 5, sec. 2 of the Tax Law in 
 which the definition of personal property is held tO' include 
 debts and obligations due to residents no matter how secured or 
 where such security should be held. 
 
 The earlier cases under the Eevised Statutes are not entirely 
 harmonious or clear as to the taxation of personal property out- 
 side the state. 
 
 • In the case of People ex rel. Hoyt v. Com'rs of Taxes, 23 
 'S. Y. 224 (1861), the rule of exemption of personal property 
 situated in another state owned by a resident of this state, was 
 applied to tangible property, but the Court intimated that per- 
 sonal property, whether tangible or intangible, had no situs 
 except the domicile of the owner, and that this being dependent 
 upon a fiction of law yielded whenever the legislative intent 
 was plain that the legal fiction should not operate. Notwith- 
 standing this decision, the same court in People ex rel. Pacific 
 Mail S.S. Co. V. Com'rs, 58 IST. Y. 245 (1874) decided that 
 ships at sea and outside of the state, but registered in the state 
 and belonging to a domestic corporation had its legal situs and 
 were taxable here. In a later case between the same parties it 
 was held that to entitle one to an exemption for property out- 
 side of the state, the change of location or residence must be 
 permanent and positive. People ex rel. Pacific Mail 8.8. Co. 
 V. Com'rs, 64 IST. Y. 541 (1876). 
 
 The Hoyt case was cited with approval in People ex rel. 
 Jefferson v. 8mith, 88 IST. Y. 577 (1882) and the rule extend- 
 ed to intangible property, the court there held that property of 
 
PEOPEKTY OF COKPOEATIOWS SUBJECT TO TAXATION 19 
 
 a resident in the form of mortgage securities in the hands of 
 an agent in another state, and permanently invested without 
 the state, was not taxable in this state. An amendment to the 
 statute followed the decision in the Jefferson case and Chapter 
 392 of Laws of 1883 made taxable all debts and choses in action 
 due to residents, wherever situated. This change was retained 
 in the present Tax Law. 
 
 Decision under the Tax Law. — iN'otwithstanding the 
 change in the present Tax Law and in the Tax Law of 1896 
 from the language of the Revised Statutes, there has been no 
 advance in attempting to tax property outside of the state, even 
 though in some cases, the property was only temporarily outside 
 of the state on taxing day. While the earlier cases that arose 
 since the Tax Law of 1896 would seem to hold this class of 
 property liable to taxation, the more recent cases and majority 
 opinions in the later cases have been inclined to hold to a strict 
 construction of the law and to the taxation only of such tangible 
 property as may be within the state on taxing day. Intangible 
 property, wherever situated, belonging to domestic corporations 
 is held to be taxable within the state. Bank accounts may or 
 may not be taxable within the state dependent on the perma- 
 nency of the deposit. 
 
 In one of the earliest of these cases arising under the Tax 
 Law People ex rel. Kursheedt Mfg. Co. v. Feitner, 32 Misc. 
 84 (1900), the Court at Special Term held that personal prop- 
 erty temporarily outside the state on the second Monday of 
 January was taxable if it could be proved that it had once been 
 within the state. This case does not seem to have been ap- 
 pealed. It would appear to be in conflict with the Pacific Mail 
 Steamship case supra. This property would apparently escape 
 taxation at the place where it was situated, as well as in the 
 jurisdiction where it belongs. 
 
 In the case of People ex rel. United Verde Copper Co. v. 
 
20 TAXATION OF COEPOEATIOISrS 
 
 Feitner, 54 App. Div. 217 (1900), aff'd 165 K Y. 645, the 
 Court of Appeals points out the change in the statute since the 
 Hoyt and Jefferson cases. In the Verde ease, a New York 
 company engaged in mining business outside the state, was, 
 under subd. 5, sec. 2, Tax Law, liable to taxation on bills and 
 accounts receivable from non-residents and on deposits in bank 
 outside of the state. The court calls attention to Chapter 392, 
 Laws of 1883, passed after the decision in the Hoyt and Jef- 
 ferson cases and evidently intended to overthrow the rule there 
 laid dovsTi. 
 
 More recently it was held that tangible property having an 
 actual situs in another state cannot be said to be "owned" in 
 this state. The words "or owned" added in the Tax Law may 
 refer to a kind of property which can have no actual sitiis such 
 as choses in action. People ex rel. Orinoka Mills v. Barker, 
 84 App. Div. 469 (1903). Justice Hatch in the dissenting 
 opinion (concurred in by Patterson, J.) assumes that the legis- 
 lature may give a domestic situs to personal property, although 
 without the state, and that such an intent is clearly manifested 
 in the present Tax Law ; that the decision in the United Verde 
 Copper Company case is in line with this view, and that it 
 should not be limited to intangible but applies equally to tangi- 
 ble property. 
 
 In People ex rel. Hyde & Sons v. O'Donnell, 116 App. Div. 
 161 (1906) ; (aff'd without opinion, 188 K Y. 551 (1907) 
 Haight and Chase, J.J. dissenting, Vann, J., not voting), it was 
 held on the authority of People ex rel. Orinoka Mills v. Barker, 
 supra, that personal property out of the state on the second 
 Monday of January is not taxable. In this case the personal 
 property was in the form of unbleached, cotton cloth purchased 
 out of the state and sent from the place of purchase for bleach- 
 ing purposes to mills also outside of the state and it did not 
 reach ISTew York until after the second Monday of January. 
 The dissenting opinion of Justices Clark and Scott at Appellate 
 
PEOPEETT OF COEPOEATIONS StTBJEOT TO TAXATIOIT 21 
 
 Division held that the goods were only temporarily out of the 
 state and should have been taxed under the authority of People 
 ex rel. Pacific Mail 8.8. Co. v. Commr's, supra. 
 
 Rents reserved in lease for term of more than twenty-one years 
 taxable as personalty. — 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 pur- 
 ipose of the taxation thereof such person is to be deemed a resident 
 of such tax district. (Extract from sec. 8, Tax Law.) 
 
 Source: Ch. 327, L. 1846. 
 
 The above • provision of section 8 does not contravene the 
 Constitution as to equality of taxation, nor does it involve 
 double taxation. While the courts will as a general rule so 
 construe a law as to avoid a double taxation, the legislature 
 may impose a double tax. Woodruff v. Oswego Starch Com- 
 pany, 177 N. T. 23 (1903). 
 
CHAPTER IV. 
 
 Place op Taxation. 
 
 The residence of a corporation for purposes of taxation shall 
 be, 
 
 1. In the case of a domestic corporation where its principal 
 office is located, as set forth in its certificate of incorporation. 
 
 2. In the case of a foreign corporation, at the place desig- 
 nated in its certificate filed tinder section 16 of the General 
 Corporation Law. 
 
 Law governing place of taxing corporations. — The real estate of 
 all incorporated companies liable to taxation shall be assessed in tlie 
 tax district in which the same shall lie, in the same manner as the real 
 estate of individuals. All the personal estate of every incorporated 
 company liable to taxation on its capital shall be assessed in the tax 
 district where the principal office or place for transacting the financial 
 concerns of the company shall be, or if such company have no principal 
 office, or place for transacting its financial concerns, then in the tax 
 district where the operations of such company shall be carried on. 
 In the case of a toll bridge, the company owning such bridge shall be 
 assessed in the tax district in which the tolls are collected; and where 
 the tolls of any bridge, turnpike or canal company are collected in 
 several tax districts, the company shall be assessed in the tax district 
 in which the treasurer or other officer authorized to pay the last pre- 
 ceding dividend resides. {Sec. 11 of present and former Tax Laic.) 
 
 Source: R. S. pt. I, ch. 13, title II, sec. 6.) 
 
 The reference in the statute to the taxation of toll bridge 
 companies applies to assessments on personal estate only. The 
 real estate is to be assessed where it is situated. Hudson River 
 Bridge Co. v. Patterson, 74 N. Y. 365 (1878) ; aff'd 11 Hun, 
 527. 
 
 Section 2 of Article 2 of the Business Corporations Law 
 provides that the certificate of incorporation of a stock corpora- 
 tion shall contain among other things: "The city, village or 
 town in v/hich its principal business office is to be located. If 
 
 22 
 
PLACE OF TAXATION 23 
 
 it is to be located in the City of New York, the borough therein 
 in which it is to be located." The term "ofiSce of a corporation" 
 means its principal office within the state or principal place of 
 business within the state, if it has no principal office therein. 
 (Sec. 2 of the General Corporation Law.) The terms "prin- 
 cipal office" and "principal place of business" within the state 
 have been held to be synonymous. People ex rel. Knickerbocker 
 Press V. Barker, 87 Hun, 341 (1895) ; afE'd 147 JST. Y. 715. 
 
 Certificate of incorporation conclusive. — The certificate of 
 incorporation is conclusive to fix the taxable status of a corpo- 
 ration. People ex rel. Knickerbocker Press v. Barker, supra; 
 People ex rel. India Rubber &c. Co. v. Barker, 16 Misc. 252 
 (1896). And this is so, notwithstanding the greatest amount of 
 business was transacted, and its officers resided, at a place other 
 than that designated and even though it was intimated that such 
 designation was made in order to avoid taxation. Western 
 Transportation Co. v. Scheu, 19 IST. Y. 408 (1859). 
 
 What designations in certificate sufficient. — "The principal 
 office for managing the affairs of such company" has been held 
 a sufficient designation in the certificate. Union Steamboat 
 Co. V. Buffalo, 82 N. Y. 351 (1880). So, too, the location for 
 the purposes of taxation of a manufacturing corporation or- 
 ganized under the general act of 1848 is the place designated 
 in the certificate as that where the operations of the company 
 are to be carried on. Oswego Starch Factory v. Dollaway, 21 
 K Y. 449 (1860); Chesebrough Mfg. Co. v. Coleman, 44 
 Hun, 545 (1887). 
 
 Corporations doing business at different places. — The loca- 
 tion of the principal office of a corporation doing business in 
 different places, indicated in its certificate, determines the place 
 where it should be taxed. Peter Cooper's Glue Factory v. Mc- 
 MaJion, 15 Abb. K C. 314 (1885). 
 
24: TAXATION OF COEPOEATIOITS 
 
 Where the certificate of incorporation mentions the city of 
 New York "or at such other place as the stockholders of the 
 company might determine," the certificate is conclusive and the 
 additional clause has no force as to residence for purpose of 
 taxation. People ex rel. Edison El. Co. v. Barker, 91 Hun, 
 594 (1895). 
 
 Where statute does not require principal office. — But 
 
 where the statute under which a domestic corporation is or- 
 ganized does not fix its residence, such a statement in the ar- 
 ticles of incorporation is not binding on the corporation or the 
 taxing ofiicers, and the residence is deemed to be where its prin- 
 cipal place of business is actually situated. Austen v. Hudson 
 Biv. Tel. Co., Y3 Hun, 96 (1893). 
 
 Corporation created under special act. — Where a special act 
 of the legislature under which a corporatiop is formed desig- 
 nates Schenectady as its principal office, such designation is 
 conclusive for the purpose of taxation. People ex rel. General 
 El. Co. V. BarTcer, 91 Hun, 590 (1895) ; affd 149 JST. Y. 589. 
 
 Where a corporation is estopped by its return to the asses- 
 sors. — Where a domestic corporation, in its return to the com- 
 missioners of taxes, names the city of New York as its principal 
 office, whereas, the place designated in its certificate of incorpo- 
 ration is , and where it is assessed by the 
 
 commissioners of taxes in New York City on the basis of this 
 return, the company is afterwards estopped, in a collateral ac- 
 tion brought by the receiver of taxes to collect the tax, from 
 denying the jurisdiction of the assessors and setting up as its 
 principal office the place designated in its certificate. McLean, 
 Beceiver of Taxes v. Wyandance Brich & Terra Cotta Co., 138 
 N. Y. 158 (1893) ; afE'g 66 Hun, 122. 
 
 When objection to assessment of corporation in wrong ward 
 to be disregarded.— An objection that a domestic corporation 
 
PLACE OF TAXATION 25 
 
 was assessed in the wrong ward, if not made in due time before 
 the assessors, should properly be disregarded at special term on 
 certiorari. People ex rel. Citizens El. III. Co. v. Neffj 26 App. 
 Div. 542 (1898). But, under the ISTew York Charter, an as- 
 sessment made by default in the wrong borough is invalid. 
 People ex rel. Moller v. O'Donnell, 183 IST. Y. 9 (1905). 
 
 AS TO CHANGE OF PRINCIPAL PLACE OF BUSINESS 
 Where residence is not fixed by statute. — When the statute 
 under which a telephone company was incorporated does not 
 fix its residence, and where it removed its office from New 
 York City prior to the second Monday of January and ceased 
 to transact any business there, it was not a resident of that 
 city and consequently not taxable therein, but might change 
 its office to any place within the state where it was actually 
 engaged in business. Austen v. Hudson Riv. Tel. Co., 73 Hun, 
 96 (1893). 
 
 Where residence is fixed by certificate. — Where a company 
 was incorporated under the manufacturing act of 1848, which 
 required its principal office to be stated in the certificate, such 
 designation in the certificate was conclusive for the purpose of 
 taxation, and it cannot change its principal office by resolution 
 of its board of directors. People ex rel. India Rubber Co. v. 
 Barker, K Y. Law Journal, Apl. 28, 1894. 
 
 Where there is a disputed question of fact as to the location 
 of the principal office of a domestic corporation, the court in a 
 collateral proceeding by the receiver of taxes, to collect the tax 
 may discredit the statement of the president of the company 
 that the certificate of incorporation named Tarrytown, West- 
 chester County, as the company's principal office. McLean, 
 Receiver of Taxes v. Couper Milling Co., 14 E". Y. Supp. 509 ; 
 affd 60 Hun, 578, 133 IST. Y. 603 (1892). 
 
 Proceedings to change principal office. — ^Proceedings may be 
 taken for changing the principal office of a corporation under 
 section 13 of the Stock Corporation Law. 
 
26 TAXATION OF COEPOEATIONS 
 
 Place of taxation of foreign corporation engaged in business 
 within the state. — Chapter 37 of the Laws of 1855 taxed non- 
 residents on all sums invested in business "the same as if they 
 were residents of this state." It was held that under this Act 
 the place of assessment for purposes of taxation of a foreign 
 insurance corporation doing business in this state is where the 
 principal business of the corporation is carried on, and not at 
 the residence of the comptroller of the state, even as to securi- 
 ties deposited with him. British Commercial Life Ins. Co. v. 
 Com'rs of Texas, 31 IT. Y. 32 (1865). 
 
 A foreign corporation doing business in this state and having 
 a principal office here is taxable for moneys invested in the state 
 in the town or ward where such office is located, and the assess- 
 ment at such place must be exclusive, and embrace all its per- 
 sonal property liable to taxation within this state. The assess- 
 ment of personal property of a foreign corporation in the pos- 
 session of an agent in a town, other than where such office is 
 located, is void. People ex rel. Bay State Co. v. McLean, 80 
 K T. 254 (1880) ; aff'g 17 Hun, 204; 5 Abb. K C. 137. 
 
 The personal property, within the state, of a corporation, 
 whether domestic or foreign, is taxed at the place where its 
 principal office, within the state, is located without regard to 
 the particular situs of the property. The People ex rel. Key- 
 stone Oas Co. V. Assessors of Clean, 15 N. T. State Kep. 461 
 (1888). 
 
 Where a foreign corporation has established two places for 
 the sale of its goods within the state, it is taxable on its capital 
 employed anywhere in the state at the place designated by it in 
 its certificate filed under section 16, General Corporation Law, 
 as its principal office within the state. People ex rel. Arm- 
 strong Cork Co. V. Barker, 157 K Y. 159 (1898). 
 
CHAPTER V. 
 
 Manner of Assessing Coepoeations : Capital Stock and 
 SuEPLTjs^ HOW Assessed: Deductions of 
 
 SUEPLTTS and EeAL EsTATE. 
 
 Method of assessing corporations before 1853. — Prior to 
 1853 moneyed corporations were assessed on their capital stock 
 at the nominal or par value. The Eevised Statutes of 1828 
 (I. K. S. 414) provided that all moneyed or stock corporations 
 deriving an income from their profit or capital or otherwise, 
 should be liable to taxation on their capital. The amount of the 
 tax was to be computed upon the capital stock actually paid in 
 or secured to be paid in, excepting the actual cost of the real 
 estate of the company and the amount of the capital stock held 
 by the state and incorporated literary or charitable institutions. 
 The regulations as to the method of assessing incorporated com- 
 panies were also prescribed, and required that the proper offi- 
 cer of the company furnish the assessors of the town or ward 
 where it was liable to be taxed upon its capital, with a state- 
 ment of the amount of its capital paid in or secured, the amount 
 invested in real estate, with the actual cost thereof, and the 
 amount of the capital stock held by the state, or others, which 
 was exempt from taxation. The principal object appeared to be 
 to ascertain the amount of the capital stock to be taxed as the 
 personal estate of the corporation, and it also provided that the 
 amount of the capital stock so ascertained be inserted in the 
 assessment roll in the column of personal estate, after deduct- 
 ing therefrom the cost of the real estate, and the stock exempt 
 from taxation. It would seem to be evident from these differ- 
 ent provisions, that the legislature intended to tax corporations 
 upon the nominal amount of the stock itself and not upon its 
 actual value to the stockholders. (This did not apply to manu- 
 
 27 
 
28 TAXiTIOW OF COEPOEATIOIirS 
 
 facturing, turnpike and marine insurance companies where a 
 different principle applied.) Banh of Utica v. City of Utica, 
 4 Paige Chancery, 399 (1834). 
 
 In the year 1853 and again in 1857, the statute was amended, 
 and the present system of taxing capital stock at actual value 
 introduced. People ex rel. C agger v. Dolan, 86 N. Y. 59 
 (1867). 
 
 The statute. — The capital stock of every company liable to taxation, 
 except such part of it as shall have been excepted in the assessment 
 roll or shall be exempt by law, together with its surplus profits or 
 reserve funds exceeding ten per centum of its capital, after deducting 
 the assessed value of its real estate, and all shares of stock in other 
 corporations actually owned by such company which are taxable upon 
 their capital stock under the laws of this statd", shall be assessed at 
 its actual value. (jSfec. 12 of present and former Tax Law.) 
 
 Source: L. 1857, ch. 456, sec. 3, without change of substance. 
 
 The words "and taxed in the same manner as the other per- 
 sonal and real estate of the county" contained in section 3, 
 Chapter 456, Laws of 1857, are omitted in the Tax Law. It 
 was argued in People ex rel. Cornell Steamboat Co. v. Dederich, 
 161 IsT. Y. 195, that the omission of these words indicated a 
 legislative intent that corporations should not deduct their 
 debts, but the court held otherwise. The words were perhaps 
 omitted, because the intent was clear without them, and their 
 retention might create ambiguity. 
 
 "Capital stock" defined.— The words "capital stock" in Laws 
 of 1857, Chapter 456 section 3 (section 12, Tax Law), refer to 
 the capital of the company and not the shares of the stock- 
 holders. People ex rel. Union Trust Co. v. Coleman, 126 
 E". Y. 433 (1891). It denotes the property owned by the cor- 
 poration, and not the par or actual value of the shares of the 
 stockholders. People ex rel. Second Ave. B. B. v. Barker, 72 
 Hun, 126 (1893). 
 
MANNER OP ASSESSING COEPOEITIONS^ ETC. 29 
 
 Capital stock shall be assessed at actual value. — The capi- 
 tal stock of a corporation is to be assessed at its actual value, 
 irrespective of its par or nominal value. Oswego Starch Fac- 
 tory V. Dolloway, 21 N. Y. 449 (1860) ; People ex rel. Panama 
 B. R. V. Com'rs, 64 How. Pr. 405 (1883). 
 
 Where indebtedness exceeds assets capital stock should not 
 be assessed. — In assessing the capital stock of a corporation 
 the actual value of the stock is the basis, and where it is of no 
 value, because of its indebtedness, it should not be assessed. 
 People ex rel. West Side & Yonkers R'y Co. v. Com'rs of Taxes, 
 31 Hun, 32 (1st Dept.), 1883. 
 
 Market value and cost sometimes considered. — Where the 
 value of the assets of a corporation cannot be definitely ascer- 
 tained the market value may be considered. People ex rel. 
 Malcolm Brewing Co. v. Neff, 19 App. Div. 596 (1897) ; aff'd 
 154 N. Y. 437. Cost may sometimes be considered. People 
 ex rel. Beinhardt v. Feitner, IST. Y. Law Journal, 'Nov. 12, 
 1900. 
 
 "Book value" may also be considered, though not the usual 
 or best test. — In fact, assessors may resort to any and all tests 
 which will be most likely to give them the actual value of the 
 stock, i. e., either book value or market value. The latter is 
 usually though not always the best test of the value of the stock 
 of a going concern. People ex rel. Knickerbocker Fire Ins. Co, 
 V. Coleman, 107 K Y. 541 (1887) ; aff'g 44 Hun, 410. 
 
 The cost or book value may be taken as the basis, in the ab- 
 sence of satisfactory proof as to the market or actual value. 
 People ex rel. John Turl's Sons v. O'Donnell, N. Y. Law Jour- 
 nal, June 27, 1905. 
 
 On the subject of "book value" see case of People ex rel. J. 
 B. Co. V. Roberts, 37 App. Div. 1. 
 
30 TAXATION OF COEPOEATIONS 
 
 When both "book value" and actual value are given in a cor- 
 poration's return to the tax department, the latter v?ill be taken, 
 for the purpose of taxation, even though smaller than the book 
 value, where nothing else appears in the verified statement to 
 cast a doubt on the corporation's figures. A. 0. Hyde & Sons 
 V. Wells, Sup. Ct. Sp. Term, li. Y. Law Journal, April 5, 
 1904; aff'd 116 App. Div. 161 (1906). 
 
 Erroneous to assess capital stock on share value. — Since 
 the subject of valuation is not the share stock, but the capital 
 stock and surplus, which must be assessed at actual value, it is 
 an erroneous and illegal method to fix the assessment of the 
 corporation's capital stock at its market price. People ex rel. 
 Equitable Gas Ught Co. v. Barker, 66 Hun, 21 (1892). 
 
 It is the value of the corporate assets, constituting its capital, 
 and not the value of its shares in the hands of individual own- 
 ers, which is the subject of taxation. People ex rel. Bleecher 
 St. By. Co. V. Barker, 85 Hun, 210 (1895). 
 
 To the same effect it was held that the actual value of the 
 capital stock and not the market value of the share stock is to be 
 considered. U. S. Trust Co. v. Mayor, 71 Hun, 182 ; People ex 
 rel. Manhattan B'y Co. v. Barker, 146 K Y. 304 (1895). 
 
 Earnings and dividends are to be considered in assessing 
 capital stock in the absence of other proof. — When it ap- 
 peared from the statement of a corporation to the commis- 
 sioners of taxes that the earnings of the corporation enabled it 
 to pay its interest on its indebtedness, to declare a dividend on 
 its stock and still have a surplus, it was proper to assume that 
 the capital stock remained unimpaired, and that there were 
 surplus assets sufficient to pay outstanding indebtedness. Peo- 
 ple ex rel. Manhattan B'y v. Barker, 146 IST. Y. 304 (1895). 
 In another case between the same parties, it was held that while 
 assessors may assume that the capital is unimpaired when it 
 
MANNER OF ASSESSING COEPOBATIONSj ETC. 31 
 
 pays six per cent, dividends, evidence may be introduced to 
 rebut this presumption. People ex rel. Manhattan B'y Co. v. 
 Barher, 165 N. Y. 305 (1901). 
 
 Surplus profits or reserve funds exceeding ten per cent — 
 
 A deduction of ten per cent, of the capital stock of a corpora- 
 tion depends on whether a surplus equal to that sum has been 
 returned for taxation. If the surplus is represented by the 
 franchise, which is exempt from taxation, it may have arisen 
 from enhancement of the value of that franchise and not from 
 accumulations or savings. People ex rel. Citizens' Elec. Ilium. 
 Co. V. Neff, 26 App. Div. 542 (1898); aff'd 165 K Y. 
 340. 
 
 The issuing of interest-bearing certificates to stockholders for 
 their pro rata share in the surplus does not affect the status of 
 the accumulation as surplus profits. People ex rel. Williams- 
 burgh Gas Light Co. v. Assessors, 16 Hun, 196 (1878) ; aff'd 
 76 ]Sr. Y. 202 (1879). And where a corporation by resolution 
 of board of directors voluntarily distributes a part of its capital 
 and surplus, it is not taxable on its entire capital as it existed 
 prior to said resolution. People ex rel. Genesee Banh v. Olm- 
 stead et al.. Assessors, 45 Barb. 644 (1866). 
 
 The value of the surplus should not be assessed in addition 
 to the value of the capital stock, for the valution placed upon 
 the latter should include the former. People ex rel. 23rd St. 
 By. Co. V. Com'rs, 95 K Y. 554 (1884). 
 
 Assessed value of real estate deducted. — The assessed value 
 only of the real estate of a corporation should be deducted from 
 its capital, but not necessarily the cost of it. People ex rel. 
 Van Nest v. Com'rs, 80 IST. Y. 573 (1880). It seems that to 
 arrive at the assessed value of real estate of a corporation not 
 situated in the same town or ward, with its principal office, 
 though within the state, reference may be had to the proper 
 assessment rolls. If it is without the state, the price paid, in 
 
32 TAXATION OF COEPOEATIONS 
 
 the absence of other evidence, may be taken as the assessed 
 value. People ex rel. 23rd 8t. B. B. Co. v. Com'rs, 95 If. Y. 
 554 (1884). But the actual value of real estate without the 
 state cannot be arrived at in the case of a resident corporation 
 operating a railroad without the state by capitalizing the net 
 income for three years and then deducting the value of the per- 
 sonal estate from this result, since the income is derived from 
 the use of the franchise of the railroad as well as from its real 
 and personal property. People ex rel. Panama B. B. Go. v. 
 Com'rs, 104 K Y. 240 (1887). 
 
 When a corporation liable to taxation owns real estate situ- 
 ated and assessed in another state, its assessed valuation, if 
 shown, is usually sufficient evidence of actual value, and that 
 amount is to be deducted. People ex rel. Fairfield Chemical 
 Co. V. Com'rs, 115 K Y. 178 (1889) ; distinguishing People 
 ex rel. 23rd St. By. Co. v. Com'rs, supra, and People ex rel. 
 Panama B. B. Co. v. Com'rs, supra. In the 23rd Street Kail- 
 way Co. case, the real property was in another county of the 
 state, and the court laid down the dictum that in the case of 
 real estate outside of the state, in the absence of any other 
 standard, the price paid therefor might be taken as the assessed 
 value. In the Panama B. B. case the real estate was situated 
 in New Grenada, and the company paid a gross sum in lieu of 
 taxes on real estate and personal property. In such case there 
 could be no assessed value. But where the real estate is situated 
 in the same taxing district, the assessed value, and not the ac- 
 tual value of the real estate, is to be deducted. People ex rel. 
 Equitable Qas L. Co. v. Barker, 66 Hun, 21 (1892) ; affd 137 
 N. Y. 544. 
 
 Assessed value of building on leased ground. — Where a 
 company owns a building on leased ground, it may deduct the 
 assessed value of the building, but not the assessed value of the 
 whole property. People ex rel. Van Nest' v. Tax Commis- 
 
MANNEE OF ASSESSIITG COEPOEATIONS, ETC. 33 
 
 sioners, 80 E". Y. 573 (1880) ; see, also, People ex rel. Eden 
 Musee Co. .v. Feitner, 60 App. Div. 282. 
 
 A corporation owning buildings placed upon leased ground, 
 is not entitled to a deduction for the value of the land, but only 
 for the value of the buildings and the ten per cent, of the sur- 
 plus exempt by statute. However, the assessors, having ac- 
 cepted the corporation's statement, as to its capital stock and 
 surplus, which consisted of real estate and buildings, should 
 have given it credit for the assessed value of the land as well 
 as the buildings. Otherwise, this would result in double taxa- 
 tion of the land. People ex rel. N. Y. Real Estate Assn. v. 
 Barker, 29 App. Div. 325 (1898). If a corporation returns to 
 the assessors in the valuation of its capital stock only its equity 
 in real estate, on which there is a mortgage for which it is not 
 liable, it should not be permitted to deduct the assessed value of 
 the entire property, but only that portion of it represented by 
 the equity. The statute permits the deduction by a corporation 
 of "the assessed value of Us real estate." Not having credited 
 itself with the entire piece of real estate, but only with the 
 equity, it should only be permitted to deduct the assessed value 
 of the equity. People ex rel. Weher Co. v. Wells, 180 IST. Y. 
 62; rev'g 95 App. Div. 574; Werner, O'Brien and Bartlett, 
 JJ., dissenting. 
 
 The rule that may be deduced from these cases is that where 
 a corporation owns real estate in which there are several es- 
 tates, such as a leasehold, or the equity in mortgaged premises, 
 if it credits itself only with the ownership of a part of the 
 estate, such as the value of the building in leasehold, or equity 
 in mortgaged premises, it can only have deducted therefrom the 
 assessed value of such part. 
 
 If it should appear, however, in the case of a divided owner- 
 ship in real estate, as for instance, where a safe deposit corpo- 
 ration owns vaults annexed to and part of a leased building, 
 that the assessment of the building did not include the assess- 
 
34 TAXATIOET OF COEPOEATIONS 
 
 ment of the vaults, it seems that the safe deposit company 
 would not be entitled to a deduction of the cost value of the 
 vaults from the valuation of its capital stock. The apparent 
 purpose of the provision of section 12 of the Tax Law requiring 
 the deduction of the assessed value of the real estate was to 
 avoid double taxation, and if there was no assessment of the real 
 estate no claim for deduction can arise. People ex rel. Knicker- 
 hocker 8. D. Co. v. Wells, 99 App. Div. 455 ; aff'd 181 K Y. 
 245 (1905). 
 
 Assessed value of real estate to be deducted from aggregate 
 value of capital stock, whether it be invested in real or per- 
 sonal property. — In assessing the capital of a corporation for 
 purposes of taxation, it is immaterial in what description of 
 property that capital may be invested. Both its real and per- 
 sonal property is to be considered and valued and from the ag- 
 gregate value is to be deducted the assessed value of the real es- 
 tate. People ex rel. Clearing House Bldg. Co. v. Barker, 31 
 App. Div. 315 (1898) ; aff'd 158 K Y. 709 ; aff'd 179 U. S. 
 279. 
 
 If there be indebtedness, the value of the capital stock is as- 
 certained by adding together the real estate and personal prop- 
 erty and deducting therefrom the sum of the indebtedness and 
 the assessed value of the real estate. People ex rel. Cord Meyer 
 Co. V. Feitner, 39 Misc. 467 (1902). 
 
CHAPTER VI 
 
 Manner of Assessing Coepoeations ; Deduction of Debts. 
 
 ' ; 
 
 In the Tax Law of 1896 there was no specific provision 
 which permitted the deduction of the debts of a corporation in 
 the assessment of its capital stock. Section 21 of the Tax Law 
 of 1896 providing for the manner in making up the assessment- 
 roll required that there should be placed "in the fourth column 
 the full value of all the taxable personal property owned by 
 each person respectively, after deducting the just debts owing 
 by him." In construing this section of the law, it was held 
 that since under section 5 of the Statutory Construction Law 
 the term "person" included a corporation and a joint stock 
 association, a corporation may, therefore, deduct its debts from 
 the value of the property. People ex rel. Cornell Steamboat 
 Co. V. Dederick, 161 K Y. 196 (1900) ; see alsb People ex rel. 
 Second Ave. R. R. Co. v. Barker, 141 IST. Y. 196 (1894). 
 
 Section 21 of the Tax Law as amended by Chapter 315 of 
 the Laws of 1911 provides for the preparation of an assessment- 
 roll, and the arrangement of columns therein, and as far as it 
 relates to the method of assessing corporations it is as follows : 
 
 "1. In the first column, the names of all persons and corporations in 
 the tax district, taxable on personal property. 
 
 "2. In the second column, the full value of all the taxable personal 
 property owned by each person respectively after deducting the just 
 debts owing by him. 
 
 * * # » * 
 
 "4. In the fourth column, the full value of the capital stock of each 
 corporation assessed pursuant to the provisions of section twelve of 
 this chapter. 
 
 "5. In the fifth column, the full value of all the taxable personal 
 property owned by each person respectively after deducting the just 
 debts owing by him when such person resides in an incorporated village 
 
 35 
 
36 TAXATION OF COErOEATIONS 
 
 and the name of the village, and the full value of the capital stock 
 of each corporation, assessed pursuant to the provisions of section 
 twelve of this chapter, when such corporation has its principal office 
 in an incorporated village and the name of the village. 
 
 "6. In the sixth column, there shall be entered by the proper official 
 the amount of the tax levied against such person or corporation 
 named. 
 
 "7. In the seventh column, there shall be entered by the proper 
 official the date of the payment of such tax." 
 
 Erroneous arrangement of columns and abbreviation of 
 names not fatal. — Where the columns were not arranged in the 
 roll just as directed by statute, but all the matters required to 
 make a good assessment were inserted therein, with sufficient 
 certainty, and where the relator's name was abbreviated as 
 "Mohawk and Malone E. E. Co.," the assessment was held 
 valid in form and sufficiently indicated relator as the person to 
 be assessed. People ex rel. Mohawh B. R. Co. v. Oarmon, 34 
 Misc. 350, aff'd 63 App. Div. 530 ; see, also, In re Hartshorne, 
 11 N. Y. Supp. 567, as to misnomer. 
 
 "Full value" or "actual value" comprehends allowance for 
 just debts. — The deduction of debts is not an absolute right, 
 but within the grant of the legislature. People ex rel. Bijur v. 
 Barker, 155 K T. 330 (1898). 
 
 Section 12 of the Tax Law requiring capital stock to be 
 assessed at its "actual value" comprehends an allowance for 
 just debts, and the omission of the words from the present Gen- 
 eral Tax Law, "taxed in the same manner as other personal 
 and real estate of the county" in no way changes the construc- 
 tion of that section. The courts have interpreted this section 
 of the Tax Law and the original statute, Chapter 456, Laws of 
 1857, to which it conforms in substance, as permitting the de- 
 duction of the debts of a corporation in valuing the capital 
 stock and surplus. People ex rel. Rochester Ry. Co. v. Pond, 
 
 37 App. Div. 330 (1899). 
 
MANNEE or ASSESSING COEPOEATIONS, ETC. 37 
 
 Debts must be clearly shown. — To be entitled to the privi- 
 lege, the indebtedness must be clearly and distinctly shown. 
 That some confusion exists in the decisions as to the deduction 
 of indebtedness, is largely due to the assessors, in some cases, 
 vakiing the capital stock of the corporation apart from its prop- 
 erty and not as in the case of individuals making the assessment 
 upon the taxable property alone. Under this construction, 
 while indebtedness was considered, if the assessors had already 
 valued the capital stock and taken into account the question of 
 debts in their valuation, no further deduction was permitted. 
 People ex rel. Broadway R. B. v. Com'rs, 1 Thomp. & C, 635 
 (1873) ; People ex rel. Butchers Co. v. Asten, 100 N. Y. 597 
 (1885). 
 
 Indebtedness not deducted where statement shows in- 
 solvency and item of surplus unexpended. — Where by a state- 
 ment to the commissioners of taxes, it appeared that a corpora- 
 tion was insolvent, but was paying out large sums as dividends, 
 in the absence of any explanation of this discrepancy, and on 
 the basis of statements filed with them for previous years, show- 
 ing a surplus, the commissioners were justified in assuming 
 that the corporation's capital was unimpaired. People ex rel. 
 Equitable Gas Light Co. v. Barker, 144 K Y. 94 (1894). 
 
 The indebtedness must, however, be deducted, where the 
 statement is uncontradicted. — Although the capital stock of a 
 domestic corporation is unimpaired, and an item of "surplus" 
 is stated, the indebtedness cannot be ignored, if there is nothing 
 in the statement to show that there are undisclosed assets sufii- 
 cient to pay the indebtedness. People ex rel. Seidenherg, 8. & 
 Co. V. Feitner, 41 App. Div. 571 (Equitable Gas Light Co. 
 case, supra, distinguished). Where the statement of a corpora- 
 tion as to the value of its capital stock and surplus is uncontra- 
 dicted, no other value can be substituted for it, notwithstand- 
 
38 TAXATION OF COBPOEATIONS 
 
 ing the market price of its stock or a statement by one of its offi- 
 cers before the assessors that he considers the stock worth par. 
 The good will, while part of the capital stock, is not taxable as 
 personal property. People ex rel. Brohaw Bros. v. Feitner, 44 
 App. Div. 278 ; see, also, People ex rel. German Looking Olass 
 Co. V. Barker, 75 Hun, 6 (1894). And even where it appears 
 that a corporation paid a dividend out of earnings in bank but 
 not "surplus earnings," it was erroneous on the part of the com- 
 missioners to disregard the indebtedness and assume that the 
 company's capital was unimpaired. People ex rel. Sicilian As- 
 phalt Co. V. Feitner, 30 Misc. 665 (1900) ; see also, Edison 
 Gen. Elec. Co. v. Barker, 141 N. Y. 255 (1894) ; Edison Elec. 
 Ilium. Co. V. same, 139 N. Y. 61 (1893). 
 
 Indebtedness must be fixed and not contingent. — The only 
 indebtedness which, under section 21, Tax Law, may be de- 
 ducted, is a present fixed liability, in no way contingent. The 
 amount due by a customer to a broker in speculative stock sales 
 on margin is not to be measured by the value of stocks pur- 
 chased but is merely contingent. People ex rel. Sands v. Feit- 
 ner, N. Y. Law Journal, July 17, 1902 ; aff'd 76 App. Div. 
 620 ; aff'd 173 N. Y. 647. 
 
 Contingent liability.— The statute (ch. 618, L. 1901, amend- 
 ing sec. 4, stibd. 14, Tax Law) now specifically exempts from 
 taxation the "premium reserve" or fund required to be kept as 
 a reserve by the Insurance Law, but prior to its passage, the 
 rule had been laid down in a number of cases that the premium 
 reserve, being a contingent liability, could not be deducted. 
 People ex rel. American Fire Ins. Co. v. Commissioners, 28 
 Hun, 261 (1882); aff'd 91 N. Y. 670; People ex rel. West- 
 chester Fire Ins. Co. v. Davenport, 91 N. Y. 574 (1883) ; Peo- 
 ple ex rel. National Surety Company v. Feitner, 166 N. Y. 130 
 (1901); aff'g 54 App. Div. 633; per contra People ex rel. 
 
MANNER OF ASSESSING COKPOKATIONS, ETC. 39 
 
 Glens Falls Fire Ins. Co. v. Ferguson, 38 N. Y. 89 (1868). 
 The amendment of 1901 has now removed this mooted point, 
 but the cases are valuable on the question of deducting con- 
 tingent liabilities. 
 
 On the authority of the cases above cited, it has been held 
 that a contingent liability to repurchase paper patterns sold un- 
 der a contract by a pattern company to its customers, by which 
 it agreed to repurchase the unsold patterns at a certain price, 
 "was not a proper deduction under Section 12 of the Tax Law. 
 People ex rel. Butterich Publishing Co. v. Purdy, 153 App. 
 Div. 665, Ingraham and Scott, J J., dissenting; modified on 
 another point in 207 IST. Y. 771. 
 
 Unearned rentals of telephpne company not deductible- 
 Unearned rentals, i. e., advance payments for telephone service, 
 "which must be repaid by the company, on certain contingencies, 
 are not to be deducted. People ex rel. N. Y. & N. J. Tel. Co. 
 V. Neff, 15 App. Div. 8 (1897). 
 
 Unearned subscriptions of magazine company deductible. — 
 
 In the recent case of People ex rel. Butterich Publishing Co. v. 
 Purdy, supra, the dissenting opinion of Justice Scott distin- 
 guishes the xmearned rentals of a telephone company referred 
 to in the Ne-ff case, supra, from that of a publishing company, 
 which was entitled to deduct unearned subscriptions for maga- 
 zines not yet printed or published, the difference being that the 
 debt in the former case was contingent and to be paid in money 
 and in the latter case was absolute and to be paid in goods, viz., 
 magazines. Upon the dissenting opinion in the Appellate Di- 
 vision, this case was modified in 207 IST. Y. 771 (1913). 
 
 Dividends declared before, but payable after second Mon- 
 day of January, deductible.— Dividends declared by a corpora- 
 tion before, but payable after the second Monday of January, 
 
40 TAXATION OF COEPOEATIONS 
 
 tecome at once the property of the stockholder and are there- 
 fore not part of the capital stock and surplus on that date. 
 People ex rel. U. S. Trust Co. v. Gom'rs, 86 Hun, 131. 
 
 A different question presents itself when dividends have heen 
 declared several years back and left in the business. In that 
 case they become taxable. People ex rel. Hawley Box & Lum- 
 ler Co. V. Barker, 23 App. Div. 532 (1898). 
 
 Debts incurred in the purchase of non-taxable property not to 
 be deducted. — No deduction shall be allowed in the assessment of 
 personal property by reason of the indebtedness of the owner con- 
 tracted or incurred in the purchase of non-taxable property or securi- 
 ties owned by him or held for his benefit, nor for or on account of any 
 indirect liability as surety, guarantor, endorser or otherwise, nor for 
 or on account of any debt or liability contracted or incurred for the 
 purpose of evading taxation. {Sec. 6, Tax Law.) 
 
 Source: In substance the same as R. S. eh. XIII, title 2, sec. 9, 
 Bubd. 4, as am'd by ch. 202, L. 1892. 
 
 In assessing personal property for taxation, the provision 
 that no deduction shall be made or allowed for or on account 
 of any debt or liability contracted or incurred in the purchase 
 of non-taxable property applies to debts incurred in the pur- 
 chase of imported goods not taxable by the state. People ex rel. 
 Bijur V. Barker, 155 N. Y. 330. 
 
 Debts incurred in the purchase of good will are not deductible 
 under section 6, General Tax Law, which prohibits deductions 
 of indebtedness incurred in the purchase of non-taxable prop- 
 erty. People ex rel. Cornell Steamboat Co. v. Dederick, as As- 
 sessor, 161 K T. 195 (1900). 
 
 And prior to the Special Franchise Tax Law debts of a street 
 railroad incurred in the purchase of franchise could not be de- 
 ducted. People ex rel. Manhattan B'y Co. v. Barker, 165 N. Y. 
 305 (1901). 
 
 A seat on the New York Stock Exchange may be said to be 
 non-taxable property under section 6, Tax Law, and a debt in- 
 curred directly or indirectly in the purchase of this seat cannot 
 
MANNER OF ASSESSING COEPOEATIONS^ ETC. 41 
 
 be deducted, because the debt was incurred in the purchase of 
 property which was itself non-taxable. People ex rel. Blade v. 
 Oomm'rs, IS. Y. L. J., Feb. 13, 1907, Leventritt, J., Sp. 
 Term, I. 
 
 Debts due by reason of purchase of stock in another taxable 
 resident corporation. — The provision of the statute that debts 
 contracted in the purchase of non-taxable property or securities 
 are not to be deducted, does not apply to notes given for the 
 purchase of stock in another domestic corporation, but refers 
 to property entirely exempt from taxation, and not to capital 
 and surplus taxable under the statute. People ex rel. Keppler 
 & Swarzman Go. v. Barker, 22 App. Div. 120 (1897) ; aff'd 
 on opinion below, 155 IST. Y. 661. 
 
 Value of leased franchise must be deducted from value of 
 lease. — Where a railroad company leases the property and fran- 
 chises of another, the assessors in fixing the value of the lease 
 for the purpose of assessing the capital stock and surplus should 
 deduct therefrom the value of the leased franchise. People ex 
 rel. D. & H. Go. v. Feitner, 61 App. Div. 129 (1901) ; aff'd 
 171 K Y. 641. 
 
 Deductions can only be made where the debt is a direct 
 legal one. — Bonds of a railroad sold, and guaranteed as to pay- 
 ment by another, and secured by a mortgage on the property 
 of the former railroad, is not an original obligation and not 
 deductible. D. & H. Gase, supra. 
 
 Exemptions and limitations. — For that portion of the capi- 
 tal stock not liable to taxation by reason of exemption or consti- 
 tutional limitation see Chapter II, supra. 
 
CHAPTEE VII. 
 
 Mannee of Assessing Foeeign Coepoeation-s. 
 
 Foreign corporations taxable on capital invested within 
 state. — There is no provision of the statute taxing foreign cor- 
 porations as such, but under the first paragraph of section 7 
 of the Tax Law: 
 
 "Non-residents 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." 
 {Reviser's note, ch. 37, L. 1855, without change of substance.) 
 
 And Chapter 37, Laws of 1865, provided : 
 
 Sec. 1. All persons and associations doing business in the state of 
 New York, as merchants, bankers, or otherwise, either as principals or 
 partners, whether special or otherwise, and not residents of this state, 
 shall be assessed and taxed on all sums invested in any manner in 
 said business, the same as if they were residents of this state; and 
 said taxes shall be collected from the property of the firms, persons 
 or associations to which they severally belong. 
 
 Foreign corporations are included within the terms of the 
 act of 1855. Life Ins. Co. v. Com'rs, 1 Keyes, 303 (1864) ; 
 People ex rel. Bay State Shoe Co. v. McLean^ 80 iN". Y. 254 
 (1880). 
 
 Until 1906, no property of a non-resident could be taxed in 
 this state, unless it was capital invested in business, and unless 
 such non-resident was at the same time engaged in business 
 here, either as principal, or partner, in person or by agent. 
 Thus, much of the property of non-residents permanently sit- 
 uated here, but not invested in business, escaped taxation. In 
 1906, the Tax Law of 1896 was amended by adding a new 
 paragraph to Section 7, which reads as follows : 
 
 42 
 
MANNER OF ASSESSING FOREIGN COEPOEATIONS 43 
 
 "Sec. 2. The personal property of non-residents of the state having 
 an actual situs in the state, and not forming a part of capital invested 
 in business in the state, shall be assessed in the name of the owner 
 thereof for the purpose of identification and taxed in the tax district 
 where such property is situated, unless exempt by law. This sub- 
 division shall not apply to money, or negotiable collateral securities 
 deposited by, or debts owing to, such non-residents, nor shall it be 
 construed as in any manner modifying or changing the law, imposing 
 a tax on real estate mortgage securities." (Par. 2, sec. 7, present and 
 former Taoo Law, as am'd iy ch. 248, L. 1906.) 
 
 Facts necessary to tax non-residents engaged in business. — 
 
 The enforcement of the first paragraph of section Y (or Chap- 
 ter 37, Laws of 1855, to which it conforms in substance), has 
 been productive of much litigation, and the interpretation of 
 the courts on this point has not always been clear. The courts, 
 in recent cases, have pointed out the facts which the assessors 
 must establish as jurisdictional, and the evidence necessary to 
 bear out these facts. 
 
 The non-resident must (1) be engaged in continuous busi- 
 ness within the state, and (2) have capital invested in said busi- 
 ness. While one is to a certain extent dependent upon the other 
 both facts must appear. 
 
 "No single fact can be laid down as controlling in determining 
 these jurisdictional points, but the following points are impor- 
 tant in arriving at the question of intent : 
 
 1. Has the corporation filed a certificate under section 16 of 
 the Corporation Law ? 
 
 2. Are the proceeds of sale immediately remitted to the home 
 office? 
 
 3. Is any part of the capital invested or reinvested here ? 
 
 4. Are contracts or sales made from the 'New York office; 
 Is a bank account carried here ? 
 
 5. Has it a factory, salesroom, or office, and does it make 
 sales from a stock that is replenished from time to time ? 
 
 While the bare fact that the proceeds of goods sent here for 
 sale are immediately remitted to the home office may be suffi- 
 
44 TAXATION OF COEPOEATIONS 
 
 cient to exempt a corporation as in the Parker Mills case under 
 the old tax law, and the Sherwin-Williams case (5 App. Div.), 
 Tinder the present statute, and while the courts have held in the 
 Armstrong Cork and Crane cases, infra, that the filing of a cer- 
 tificate under section 16 of the Corporation Law is controlling 
 as to the intention of the corporation to conduct a continuous 
 business in the state, these facts may be rebutted by others more 
 conclusive, and the question of the assessors' jurisdiction must 
 in each case be determined from its own peculiar facts and cir- 
 cumstances. 
 
 When foreign corporations are not taxable. — This statute 
 was intended to reach the capital of non-residents employed 
 within this state in continuous trade, and not property sent here 
 for the purpose of sale. So where a foreign corporation, en- 
 gaged in manufacturing in another state transmitted to its agent 
 here its manufactured product for sale, the proceeds being re- 
 mitted at once, to the home office of the corporation, it was not 
 doing business in this state within the meaning of the statute. 
 People ex rel. The Parker Mills v. Com'rs of Taxes, 23 I^. Y. 
 242 (1861). 
 
 Where a foreign corporation having its principal office and 
 factory in Cleveland, Ohio, sends its manufactured goods to its 
 salesroom in the city of New York for sale, the proceeds of 
 which, except a small amount reserved to pay its office expenses 
 in New York, are remitted to Cleveland, the goods kept on hand 
 in New York City for sale, which average about $15,000 
 throughout the year, are not taxable. People ex rel. Sherwin- 
 Williams Co. V. Barker, 5 App. Div. 246, aff'd 149 N. Y. 623 
 (1900) ; see, also. People ex rel. Tower Co. v. Wells, 98 App. 
 Div. 82 (1904), aff'd 182 K Y. 553 (1905) on opinion below. 
 The last mentioned cases follow the Parker Mills case and over- 
 rule the decision in People ex rel. Martin Bros. Co. v. Barker, 
 14 Misc. 382 (1895), Special Term, where it was held that the 
 
MAliTNEE OF ASSESSING FOEEIGN COEPOKATIONS 45 
 
 goods of a foreign corporation kept in a 'New York office for 
 sale, are capital invested, notwithstanding that the proceeds 
 are remitted to the home office. 
 
 When foreign corporations taxable and what is "doing busi- 
 ness" in state. — The fact that a foreign corporation has been 
 authorized to do business in the state and has an office here for 
 the purpose of holding directors' meetings and paying divi- 
 dends, keeping a sufficient bank account here to pay such divi- 
 dends, does not make it "doing business" in the state, under sec- 
 tion 7. People ex rel. Dives Pelican Co. v. Feitner, 77 App^ 
 Div. 190 (1902). 
 
 Where a foreign banking company had an agency perma- 
 nently established in the city of New York to which it trans- 
 mitted funds to be employed in temporary loans, subject at all 
 times to its control and draft, 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 (Chapter 176, Section 2), was not removed by 
 the act of 1855 (Chapter 37), which subjects non-residents 
 doing business in this state to taxation on the moneys employed 
 in such business. People ex rel. BanTc of Montreal v. Com'rs 
 of Taxes, 59 N. Y. 40 (1874) ; rev'g 1 Thomp. & C. 630. But 
 where a foreign banking corporation having an agency in New 
 York City is engaged in the business of selling its own drafts 
 01^ its foreign branches, and of paying or collecting the drafts 
 drawn on it by its foreign agencies, such corporation is engaged 
 in business here, even though it has filed no certificate under 
 the Corporation Law. Nor are the drafts sent here for collec- 
 tion exempt under Subd. 13, Section 4, Tax Law, when they 
 are not in the hands of an agent for collection, but held by the 
 corporation itself, doing business in the state. People ex rel. 
 International Banking Co. v. Raymond, 111 App. Div. 62 
 (1907) distinguishing People ex rel. BanTc of Montreal v. 
 Com'rs, supra. 
 
46 TAXATION OF COEPOEATIONS 
 
 A foreign corporation maintaining a leased sales office in 
 ISTew York for the sale of goods made in France, keeping a bank 
 account here, and remitting proceeds less the New York ex- 
 penses to France, is taxable upon the value of the goods on 
 hand for sale. People ex rel. Farcy & Oppenheim Co. v. Wells, 
 183 K Y. 264 (1905), reversing 104 App. Div. 629. 
 
 The last named case approves People ex rel. Durand Buel 
 Co. V. Wells, 180 K Y. 506 (1903), the facts in both cases 
 being similar, and at the same time, distinguished People ex 
 rel. Tower Co. v. Wells, supra, where the New York office was 
 a mere conduit or agency for the shipment of goods from the 
 home office and thence re-shipped to other states. Where a 
 foreign corporation has an office in New York maintained 
 partly at its own expense and partly by a local agent paid on 
 commission, using the office for soliciting orders and the de- 
 livery of goods, after they are approved at the home office in 
 Massachusetts, it was held, that notwithstanding the filing of the 
 certificate under section 16, its business here was merely tran- 
 sient, and not taxable under section 7. People ex rel. Goetz 
 Mfg.'Co. V. Wells, 42 Misc. 86; aff'd 93 App. Div. 613, with- 
 out opinion (1904). 
 
 When open accounts and bills receivable taxable.— The 
 
 taxable character of open accounts and bills receivable depends 
 upon whether the goods which they represent would have been 
 taxable if still unsold. People ex rel. National Sewing Machine 
 Co. V. Feitner, New York Law Journal, March 15, 1899. 
 
 When foreign insurance companies liable to taxation. — 
 
 Securities other than United States stock deposited by foreign 
 insurance company with the comptroller as security for policy 
 holders under Laws of 1853, Chapter 463, to enable it to do 
 business in the state, are subject to taxation. International Life 
 Assurance Soc'y v. Com'rs of Taxes, 28 Barb. 318 (1858). So 
 it has been held as to bonds and mortgages deposited by a for- 
 
MANITEE OF ASSESSING FOREIGN COEPOKATIONS 47 
 
 eign insurance company with the superintendent of insurance. 
 Smyth V. International Life Ins. Co., 35 How. Pr. 126 (1868). 
 The fact that a foreign insurance company has ceased to issue 
 new policies within the state, and confines its business to receiv- 
 ing yearly premiums and paying losses on outstanding policies 
 does not exempt it from taxation. Ibid. 
 
 Facts establishing a continuous business. — Where the busi- 
 ness of a foreign corporation in this state is continuous and 
 permanent, manufacturing as well as selling its goods, the value 
 of merchandise at the place designated by it as its principal 
 place of business in this state is properly taxable under section 
 7 of Tax Law, even though a portion of the goods was manufac- 
 tured without the state. People ex rel. Armstrong Cork Co. v. 
 Barker, 157 'N. Y. 159, dist'g People ex rel. Parker Mills v. 
 Com'rs, 23 K Y. 242. 
 
 A foreign corporation filing a certificate under section 16 
 of the General Corporation Law, having warerooms for goods 
 manufactured without the state, salesrooms, a general manager 
 and office force, traveling salesmen, selling its goods on credit 
 in the state, the bills being paid at its l^ew York office, was held 
 to have established a continuous business and was taxable on its 
 capital invested in business in this state. People ex rel. Crane 
 Co. V. Feitner, 49 App. Div. 108, citing People ex rel. Arm- 
 strong Cork Co. V. Barker, 157 IST. Y. 159 ; see, also, People ex 
 rel. Sherwin-Williams Co. & Feitner (Tax of 1900), 60 App. 
 Div. 628 ; aff'd 167 K Y. 622. 
 
 Nor is it a controlling factor that the moneys were imme- 
 diately remitted to the home office and the goods were not manu- 
 factured here, if all the other evidential facts point to a con- 
 tinuous business. People ex rel. Reversible Collar Co. v. Feit- 
 ner, 31 Misc. 556 (1900). 
 
 Where a foreign corporation files a certificate under section 
 16 of the General Corporation Law, and maintains an office, 
 
48 TAXATIOlir OF COEPOEATIOlirS 
 
 salesroom, storage room, keeps goods here for the purpose of 
 sale and sells them within the state, these are all facts to be 
 taken into account in determining whether the corporation is 
 engaged in a continuous business and taxable in this state. 
 People ex rel. Carey Mfg. Co. v. Com'rs, 39 Misc. 282, Sp. 
 Term (1902). 
 
 Foreign corporation taxable on bills receivable. — A foreign 
 corporation is taxable for local purposes on credits and bills 
 receivable, due it for merchandise sold by it in the course of the 
 transaction of its business in New York state. People ex rel. 
 Yellow Pine Co. v. BarJcer, 23 App. Div. 524 (1897) ; afE'd 
 on opinion below, 155 'N. Y. 665 ; see, also. People ex rel. 
 Henry McShane Mfg. Co. v. Barher, 23 App. Div. 530 
 (1897), afE'd 155 E". Y. 665, no opinion. 
 
 Deductions of foreign corporations; debts not to be de- 
 ducted generally. — Section 7 of the Tax Law does not contem- 
 plate a deduction by non-residents of their general indebtedness 
 from the sums invested in this state. The debts of a non-resi- 
 dent, it is to be assumed, will be deducted at its domicile. Peo- 
 ple ex rel. Thurher-Wyland Co. v. Barker, 141 'N. Y. 118 
 (1894). 
 
 Debts growing out of investment deductible. (Thurber- 
 Whyland case distinguished). — While a foreign corporation 
 engaged in business in this state may not deduct all its debts, 
 wherever and upon whatever cause incurred, the indebtedness 
 it has incurred in the transaction from which the purchase of 
 the property is the result is no part of the sum it has invested 
 in such purchase, and no assessment can be made which in- 
 cludes the amount of that indebtedness. People ex rel. Hecher- 
 Jones-Jewell Milling Co. v. Barker, 147 N. Y. 31; rev'g 86 
 Hun, 148 (1895). 
 
MANNEE OP ASSESSING FOKEiaJSr COEPOEATIONS 49 
 
 The deduction of indebtedness in the case of foreign corpora- 
 tions, therefore, proceeds on the theory of ascertaining the spe- 
 cific investment, which can only he determined by deducting 
 the indebtedness arising. out of the investment in the state. It 
 has been stated (supra), that the term "actual value" when 
 tised in reference to the manner of assessing the capital 
 stock of domestic corporations comprehended an allowance for 
 just debts. People ex rel. Rochester By. Co. v. Pond, 37 App. 
 Div. 330 (1898). And, as under the statute, non-residents are 
 to be assessed "to the same extent" as residents, it is not un- 
 reasonable to assume that the actual value of the capital in- 
 vested of a foreign corporation is the gross sum in business in 
 the state lessened by the particular indebtedness arising out of 
 that business. In the taxation of corporations for state pur- 
 poses, an analogous, but not quite parallel, basis of arriving at 
 the capital employed in the state is used. In that case, also, 
 the general indebtedness cannot be deducted, but only that por- 
 tion of the indebtedness which the amount of assets within the 
 state bears to the entire assets of the company. People ex rel. 
 Hyde & Sons v. Miller, 90 App. Div. 599 (1904). 
 
 Jurisdiction of assessors under section 7 depends on facts 
 stated in statute. — The question as to whether persons or prop- 
 erty are assessable under the statutes is a jurisdictional one, 
 and is always open to inquiry when the authority to make an 
 assessment is assailed. Under the act of 1855, Chapter 37, 
 taxing non-residents doing business in this state, the jurisdic- 
 tion of the assessors depends on the existence of the facts stated 
 in the statute. They cannot acquire jurisdiction by determin- 
 ing that they have it. McLean v. Jephson, 123 IST. Y. 142. 
 
 Exemptions and limitations. — For that portion of a non- 
 resident's capital invested in business not liable to taxation by 
 reason of exemption or constitutional limitation see Chapter II, 
 supra. 
 
CHAPTEK VIII. 
 
 Method ob Form of Assessmeitt ; Time of Assessment; 
 
 Peepakation and Completion of Assessment Koll; 
 
 Hearing of Complaints ; Kepoets of Coepoeations. 
 
 The administrative work of assessment for the purpose of 
 local taxation divides itself into three principal parts, the first 
 of which concerns itself with the ascertainment of the names 
 and property subject to taxation and the filing of reports of 
 corporations, the second of which has to do with the filing of 
 statements and the hearing of complaints of those dissatisfied 
 with the preliminary or tentative assessments, and the third 
 concerns itself with the preparation and completion of the final 
 assessment roll. 
 
 Assessors to ascertain persons and property taxable. — The 
 
 assessors in each tax district shall, annually, between May 1st and 
 July 1st, ascertain by diligent inquiry, all the property and the names 
 of all the persons taxable therein, except that in towns containing an 
 incorporated village having a population of more than ten thousand 
 inhabitants, according to the last state census, the assessors may have 
 from April 15th until July 1st to ascertain the taxable property and 
 names of persons taxable in such town, and except that in towns con- 
 taining an incorporated city having a population of more than ten 
 thousand inhabitants, according to the last state census, where said 
 city so situated shall have its own separate board of assessors, the town 
 assessors may have from May 1st to July 1st to ascertain the taxable 
 property and names of persons taxable in such towns, and provided 
 that the town board in any town may, by resolution, determine that a 
 longer time is required by the assessors of the town than is herein- 
 above provided for, and may, in such resolution, determine that the as- 
 sessors of such town shall begin their work at a time after the first 
 day of January in any year to be fixed in such resolution. The comp- 
 troller shall on or about May fifteenth in each year transmit to the 
 assessors of each tax district a statement of all lands owned by the 
 state in such district and such statement shall be used by the assessors 
 in making up their assessment-rolls and shall be considered by them 
 as their authority to assess to the state such of the lands described 
 
 50 
 
PKEPABATION AND COMPLETIOIT OF ASSESSMENTS 51 
 
 thereon as are legally subject to taxation. (Sec. 20, of present Tax 
 Law, as amended by chs. 116 and 805, L. 1911, eh. 270, L. 1912.) 
 
 Source: The first paragraph down to the first exception is in sub- 
 stance the same as sees. 7 and 8, 2 E. S., pt. 1, eh. XIII, title 2, and 
 was incorporated in the Tax Law of 1896; the remainder was added by 
 amendment; L. 1900, ch. 512, L. 1902, ch. 324, L. 1905, ch. 61, L. 1911, 
 chs. 116, 905, and L. 1912, ch. 270. 
 
 What is a tax district?— "Tax district" as that term is used 
 in the present and former Tax Law, means a political sub- 
 division of the state having a board of assessors authorized to 
 assess property for state and county taxes. (Sec. 2, Tax Lav?.) 
 Under this definition, the city of New York, made up of five 
 boroughs, but having a single board of assessors, is one tax dis- 
 trict, as far as corporations are concerned. People ex rel. Mai- 
 ler V. O'Donnell, 106 App. Div. 526 (1905). Eeversed on an- 
 other point applicable to executors residing in different bor- 
 oughs, 183 K Y. 9 (1905). 
 
 Previous to the adoption of the Tax Law, the territorial unit 
 of assessment referred to in the revised statutes was the town 
 or ward, but as in many cities having a single board of assessors 
 the ward divisions were no longer recognized, the Tax Law 
 substituted "tax district" and defined its application. 
 
 An incorporated village having its own Board of Assessors is 
 not a "tax district" ; because they are not authorized to assess 
 property for state and county purposes. People ex rel. Cham- 
 plin V. Gray, 185 K Y. 196 (1906). 
 
 Who may assess property. — One assessor cannot make an 
 assessment ; it is the joint act of all, or at least of a majority of 
 the assessors. People ex rel. Mygatt v. Supervisors, 11 If. Y. 
 563 (1854). Where an assessment was made by one assessor 
 only, and neither of the other assessors took part in it, it was 
 held void, and afforded no grounds for proceedings for con- 
 tempt in refusing to pay the tax. Metcalf v. Messenger, 46 
 Barb. 325 (1864). Two assessors, however, can make an assess- 
 
52 TAXATION OF COEPOEATIOETS 
 
 ment, when they constitute a majority. People ex rel. Dela- 
 ware, &c. Canal Co. v. Barker, 45 Hun, 432 (1887). 
 
 Time of assessment. — The assessment should be considered 
 as made at the expiration of the time limited for making the 
 inquiry, namely, on the first day of July. A person who re- 
 moved before the end of the assessing period was not liable. 
 Mygatt v. Washburn, 15 K Y. 316 (1857). Thus a change of 
 residence of the owner, or in the ownership of the property after 
 the first day of July, does not affect the assessment roll. Any 
 changes which the assessors are authorized to make after that 
 date, are simply to correct mistakes. Boyd v. Gray, 34 How. 
 Pr. 323 (1867). And, if the assessors, for any reason, delay in 
 making the assessment until after that date, it will not be con- 
 sidered as a reason for reducing or increasing an assessment. 
 People ex rel. Seelye v. Keefe, 119 App. Div. 714 (1907), af- 
 firmed on opinion below 190 K Y. 555 (1908). 
 
 While no new names or property afterwards acquired can be 
 added to the rolls after July 1st, the assessors have until August 
 1st to correct or reduce the assessment. People ex rel. Chamber- 
 lain V. Forrest, 96 ]N". Y. 544, and the Legislature may exempt 
 property until the latter date. 
 
 Tn the Matter of Pullman, 52 Misc. 1 (1906), the court de- 
 cided at Special Term that a mortgage subject to personal tax 
 on July 1st, but renewed after that date by a mortgage paying 
 the recording tax, was exempt from taxation, because the tax 
 was paid before the assessment was completed. This case would 
 seem to hold the contrary view on the question of the taxable 
 status being fixed as of July 1st. The case was never appealed 
 and is in direct conflict vsdth the cases above mentioned, as well 
 as with the later case of People ex rel. Seelye v. Keefe, supra. 
 There the mortgage tax was paid prior to the completion of the 
 assessment roll, and it was held that a delayed assessment 
 is deemed to have been made vsdthin the statutory time and that 
 the assessors are without power to tax mortgages upon which 
 
PEEPAEATIOW AND COMPLETION OF ASSESSMENTS 53 
 
 tHe tax has been paid under the statute, even though the statute 
 was repealed prior to the time they actually completed the roll. 
 This case was affirmed on the opinion below in 190 E". Y. 555 
 (1908). 
 
 Reports of corporations. — The president or otlier proper officer of 
 every moneyed or stock corporation deriving an income or profit from 
 its capital or otherwise, shall on or before June 15th, deliver to one of 
 the assessors of the tax district in which the company is liable to be 
 taxed, and if such tax district is in a county embracing a portion of 
 the forest preserve, to the comptroller of the state, a written statement 
 specifying: 
 
 1. The real property, if any, owned by such company, the tax district 
 in which the same is situated, and, unless a, railroad corporation, the 
 sums actually paid therefor. 
 
 2. The capital stock actually paid in and secured to be paid in ex- 
 cepting therefrom the sums paid for real property and the amount 
 of such capital stock held by the state and by any incorporated literary 
 or charitable institution, and 
 
 3. The tax district in which the principal office of the company is 
 situated or in case it has no principal office, the tax district in which 
 its operations are carried on. 
 
 Such statement shall be verified by the officer making the same to 
 the effect that it is in all respects just and true. If such statement 
 is not made within twenty days after the fifteenth day of June, or is 
 insufficient, evasive or defective, the assessors may compel the corpo- 
 ration to make a proper statement by mandamus. {Sec. 27, Tax Law.) 
 
 Source: R. S., pt. 1, ch. XIII, title 4, sees. 1-3. The date of making 
 the report is changed from July 1 to June 15. 
 
 What are corporations deriving an income or profit from 
 their capital. — Section 27 of the Tax Law requires a report to 
 be made by "every moneyed or stock corporation deriving an 
 income or profit from its capital or otherwise." The law will 
 infer (in the absence of proof to the contrary) that capital in- 
 vested in business yields an income, and that a domestic corpo- 
 ration is a "stock" corporation, so that the denial of these in- 
 ferential allegations creates no triable issue. McLean, Receiver 
 of Taxes v. Julien Electric Co., 28 Abb. IST. C. 349 (1892) ; see, 
 also, opinion of Attorney-General Hancock, filed January 9, 
 
54 TATATTO-NT OF COEPOEATIOlSrS 
 
 1897, holding that the term "corporation deriving an income 
 or profit" applies to every moneyed or stock corporation organ- 
 ized for the purposes of acquiring income or profit, and does 
 not apply to financial condition. 
 
 Corporation may be assessed in default of statement; such 
 statement not controlling. — Corporations may be assessed 
 though no statement is made by them to the assessors as required 
 by law. Such a statement when made is not conclusive upon 
 the assessors. It is the judgment of the assessors that the law 
 requires. People ex rel. Manhattan Fire Ins. Co. v. Com'rs, 76 
 N. Y. 64 (1879). Assessors may be justified in assessing a cor- 
 poration on its personal property instead of on its capital stock 
 under sections 12 and 13, Tax Law, if it fail to deliver the writ- 
 ten statement required by section 27, Tax Law (In re Adler 
 Bros. Co., 76 App. Div. 571 (1902) ; aff'd 174 N. Y. 287), or 
 they may in the absence of sworn testimony ascertain the value 
 of the capital stock of a corporation from other sources, as they 
 do in valuing real estate. People ex rel. Pacific Mail 8. 8. Co. 
 V. Com'rs, 49 How. Pr. 315 ; 1 Thomp. & C. 611. 
 
 Valuation of secretary controlling in certain cases. — The 
 
 valuation of the capital stock made by the secretary of the com- 
 pany in the statement to the assessors, may be sufficient evidence 
 of value upon which to base the assessment in the absence of 
 other definite information. People ex rel. Buffalo Mutual Oas 
 Light Co. V. Steele, 1 Buff. Supr. Ct. 345 (1873). 
 
 But while assessors are botind by proof produced before them 
 as to value, they may exercise their judgment, notwithstanding 
 such proof. People ex rel. Ogdenshurg, etc. B. B. Co. v. Pond, 
 13 Abb. If. C. 1; afE'd92 K Y. 643. 
 
 Failure to file statement bars relief by certiorari for over- 
 valuation where corporation omits to apply for correction of 
 assessment. — The commissioners of assessment have jurisdic- 
 tion to assess a corporation that omits to make a statement of its 
 
PEEPAEATIOir AND COMPLETION OF ASSESSMENTS 55 
 
 financial condition. If such a corporation omits to appear and 
 demand a correction of the preliminary assessment, it can ob- 
 tain no relief from over-valuation by certiorari. People ex rel. 
 Mutual Union Tel. Go. v. Com'rs, 99 N. Y. 254 (1885). 
 
 It is the duty of a company to make the statement required 
 by section 27, Tax Law. Prior to the Tax Law of 1896, the 
 court had no power to impose any other punishment than that 
 prescribed by the statute, and a writ of certiorari would not 
 be quashed on the ground that the return showed that no such 
 statement had been made. People ex rel. West Shore B. B. Go. 
 V. Pitman, 9 JST. Y. State Eep. 469 (1887). Section 290, Tax 
 Law, now makes it necessary to show that due application was 
 made to the assessors to correct the assessment before a writ of 
 certiorari will be granted. 
 
 Attorney general may prosecute to recover penalty for omission 
 to make statement. — In caae of neglect to furnish such statements 
 within thirty days after the time above provided, the company so neg- 
 lecting shall forfeit to the people of this state for each statement so 
 omitted to be furnished, the sum of two hundred and fifty dollars, and 
 it shall be the duty of the attorney general to prosecute for such pen- 
 alty upon information which shall be furnished him by the comptroller. 
 
 Upon such statement being furnished and the costs of the suit being 
 paid, the comptroller, if he shall be satisfied that such omission was 
 not wilful, may, in his discretion, discontinue such suit. (Sec. 28 of 
 present and former Tax Law.) 
 
 Source: The above provision is in substance the same as sees. 4 and 5, 
 title rv, ch. XIII, E. S. pt. 1. 
 
 County Clerks to furnish data respecting corporations. — Between 
 the first and fifteenth days of June in each year, the county clerk in 
 each county of the state, excepting counties containing a city of the 
 second class and counties wholly situate within the corporate limits 
 of a city, shall prepare from the records in his office and mail to each 
 of the town clerks in his said county, a certified statement containing 
 the names of every stock corporation, whose certificate of incorpora- 
 tion has been filed with him since his last preceding annual statement 
 to said several town clerks, whose principal business office or chief 
 place of business is designated in its certificate of incorporation as 
 being in such town or in any village or hamlet therein, together with 
 
56 TAXATION OF COEPOEATIOITS 
 
 the fact of such designation and the names and addresses of the di- 
 rectors of each such corporation, so far as said county clerk can dis- 
 cover the same from the certificate of incorporation or from the latest 
 certificate of election of directors of such corporation filed in his 
 office. Each town clerk receiving such statement shall forthwith file 
 the same in his office and mail a notice of such filing to each of the 
 assessors of his town. {Sec. 29, formerly Bee. 28o, Tax Law, added by 
 eh. 425, L. 1906.) 
 
 Assessment of omitted property.— The assessors of any tax dis- 
 trict shall, upon their own motion, or upon the application of any tax- 
 payer therein, enter in the assessment roll of the current year any 
 property shown to have been omitted from the assessment roll of the 
 preceding year, at the valuation of that year, or if not then valued, at 
 such valuation as the assessor shall determine for the preceding year, 
 and such valuation shall be stated in a separate line from the valuation 
 of the current year. ( Sec. 34, Tam Law, formerly Sec. 33 of Tax Law of 
 1896.) 
 
 Source: The above is in substance the same as sec. 1, oh. 453, L. 
 1865, with the exception that the original law provided that the appli- 
 cation be made by three taxpayers. 
 
 Under this section the duty of the assessors is ministerial 
 merely, and they have no discretionary power. If the property 
 was valued the year it was omitted, they must enter it at such 
 valuation. If not, and it was upon the roll of the nest year pre- 
 ceding the year it was omitted, they must take it at the valua- 
 tion of the earlier year. If it was not valued in one of these 
 years, they have no power to enter it. The valuation required 
 is that upon the previous roll. The assessors cannot increase it. 
 People ex ret. Oswald v. Goff, 52 ¥. Y. 434 (1873). 
 
 The provisions of section 33 (now 34) do not authorize re-as- 
 sessment of omitted taxes without notice nor after the com- 
 pletion of the roll for the current year. Overing v. Foote, 65 
 K Y. 263 (1875). 
 
 This section also applies to a corporation liable to taxation 
 under Laws 1880, Chapter 542, and inadvertently omitted from 
 assessment for city and county purposes. People ex rel. Brook- 
 lyn City B. B. Co. V. Assessors of Brooklyn, 92 N. Y. 430 
 (1883). 
 
PEEPAEATION AKD COMPLETION OF ASSESSMENTS 57 
 
 The provisions of section 33 (now section 34), being a part 
 of the general system of taxation, are not subject to the consti- 
 tutional objection that they do not provide for a notice or hear- 
 ing, since the general notice of the completion of the assessment 
 roll covers them. Ibid. An assessment against the "estate of 
 
 ," being considered void, may be placed on the rolls for 
 
 the following year under this section. Matter of Chadwick, 59 
 App. Div. 334 (1901). The last named case applied to an as- 
 sessment of real estate only. 
 
 Notice of completion of assessment roll. — The assessors shall com- 
 plete the assessment roll on or before the first day of August, and make 
 out one copy thereof, to be left with one of their number, and forth- 
 with cause a notice to be conspicuously posted in three or more public 
 places in the tax district, stating that they have completed the assess- 
 ment roll, and that a copy thereof has been left with one of their num- 
 ber at a specified place, where it may be seen and examined by any per- 
 son until the third Tuesday of August next following, and that on that 
 day they will meet at a time and place specified in the notice, to review 
 their assessments. They shall also, between the first and fifth day of 
 August, mail a notice to each corporation and person non-resident of 
 their town, who has filed with the town clerk, on or before the fifteenth 
 day of July preceding, a written demand therefor. Such notice shall 
 specify each parcel of land assessed to said corporation or non-resident 
 and the assessed valuation thereof. Upon application by any such non- 
 resident owner of real estate or by a corporation having real estate in 
 more than one tax district, the assessor shall fix a time subsequent to 
 the third Tuesday in August, but not later than the thirty-first day of 
 August, for a hearing and to review their assessment. In any city the 
 notice shall conform to the requirements of the law regulating the time, 
 place and manner of revising assessments in such city. During the time 
 specified in the notice the assessor with whom the roll is left, shall 
 submit it to the inspection of every person applying for that purpose. 
 (Sec. 36 present Tax Law, formerly Sec. 35, Tax Law of 1896, as 
 amended by ch. 385, L. 1904, oh. 403, L. 1909.) 
 
 Source: R- S., pt. 1, ch. XIII, title 2, sees. 19, 20, as am'd by L. 
 1858, eh. 110, without change of substance, except the paragraph as to 
 non-resident owners of real estate, which is new. The paragraph as to 
 mailing a notice to corporations and non-residents was added by ch. 
 403, L. 1909. 
 
 Notice does not apply to bank stock. — The assessment of bank 
 
58 TAXATION OF COEPOEATIONS 
 
 stock under sections 23 and 24 of the Tax Law is not governed 
 by the provisions of section 35 of the Tax Law as to notice. 
 The Tax Law provides a complete and independent system with 
 respect to the amount, method and manner of assessment of 
 bank stock, and hence, local charter provisions as to notice do 
 not apply to this class of property. People ex rel. Bridgeport 
 Sav. Bank v. Feitner, 191 N. Y. 88 (1908). 
 
 Notice, jurisdictional. — Omission by the assessor to give no- 
 tice of the completion of the assessment roll is a jurisdictional 
 defect. Where notices are not posted for a sufficient time, the 
 assessment is void. Wheeler v. Mills, 40 Barb. 644 (1863). 
 But the posting of the notice by some person other than the as- 
 sessor answers the requirement of the statute (1890), Super- 
 visor V. Belts, 25 K Y. State Eep. 660 (1890). If notice of the 
 completion of the roll is not given, it excuses a delay in bring- 
 ing certiorari. People ex rel. R. W. & 0. B. B. v. Haupt, 104 
 K Y. 377 (1887) ; People ex rel W. S. R. R. Co. v. Adams, 
 125 K Y. 471 (1891). 
 
 Assessors cannot, ex parte, change names of persons or valu- 
 ations. — After the completion of the assessment roll and formal 
 notice thereof, the assessors are without jurisdiction to change 
 either the persons or property assessed, or the adjudged valua- 
 tion of the latter, except upon complaint of the party aggrieved. 
 Nor could the assessment be increased except on twenty days' 
 notice. People ex rel. Chamberlain v. Forrest, 96 !N". Y. 544 
 (1884). , 
 
 Hearing of complaints.— The assessors shall meet at the time 
 and place specified in such notice, and hear and determine all com- 
 plaints in relation to such assessments brought before them, and for 
 that purpose they may adjourn from time to time. Such complainants 
 shall file with the assessors a statement, under oath, specifying the re- 
 spect in which the assessment complained of is incorrect, which veri- 
 fication must be made by the person assessed, or whose property is as- 
 sessed, or by some person authorized to make such statement, and who 
 has knowledge of the facts stated therein. The assessors may ad- 
 minister oaths, take testimony and hear proofs in regard to any such 
 
PEEPAEATION AND COMPLETION OP ASSESSMENTS 59 
 
 complaint and the assessment to which it relates. If not satisfied that 
 such assessment is erroneous, they may require the person assessed 
 or his agent, or representative, or any other person, to appear before 
 them and be examined concerning such complaint, and to produce any 
 papers relating to such assessment with respect to his property or 
 his residence for the purpose of taxation. If any such person or his 
 agent or representative, shall wilfully neglect or refuse to attend and 
 be so examined, or to answer any material question put to him, such 
 person shall not be entitled to any reduction of his assessments. 
 Minutes of the examination of every person examined by the assessors 
 upon the hearing of any such complaint, shall be taken and filed in the 
 ' ofiBoe of the town or city clerk. The assessors shall, after said exam- 
 ination, fix the value of the property of the complainant and for that 
 purpose may increase or diminish the assessment thereof. (Sec. 37, 
 formerly Sec. 36, Tax Law.) 
 
 Source: The above is in substance the same as R. S., pt. 1, ch. 13, 
 
 title 2, sec. 20, as am'd by ch. 536, L. 1857. The provision that the 
 complaint shall be in writing and filed with the assessors is new. 
 
 Agent competent to verify.— The tax agent of a railroad may 
 be presumed to have sufficient .knowledge of its assets and prop- 
 erty to verify the statement. Assessors who accept and receive 
 such a statement waive objections as to form or want of definite- 
 ness. People ex rel. Erie R. R. Co. v. Webster, 49 App. Div. 
 556 (1900). A statement made to the assessors by an agent, on 
 information and belief and specifying the grounds of his in- 
 formation and belief, if accepted without objection, is sufficient. 
 Personal knowledge is not necessary in such case. People ex 
 rel. W. S. R. R. Co. et al. v. Johnson, 29 App. Div. 75 (1898). 
 The statutory requirements as to the affidavits to reduce assess- 
 ments must be strictly complied with. People v. Supervisors of 
 Westchester, 15 Barb. 60 (1853) ; Adriance v. Supervisors of 
 N. Y., 12 How. Pr. 224 (1854) ; People v. Ross, 15 How. Pr. 
 23 (1857). 
 
 The examination. — Assessors may administer oaths. People 
 ex rel. Buffalo R. R. v. Frederick, 48 Barb. 176 (1866). If the 
 applicant states that he cannot remember to whom the debts he 
 seeks to have deducted from his assessment, are due, nor the sev- 
 
60 TAXATION OF COEPOEATIOlirS 
 
 eral amounts thereof, the assessor should disregard his evidence. 
 Vose V. Willard, 47 Barb. 320 (1866). If a foreign corporation 
 doing most of its business in this state refuses to answer in- 
 quiries relevant and material to ascertain Mrhat is invested here, 
 the tax commissioners may take into consideration the refusal 
 to answer the questions, and decline to accept the corporation's 
 statement in its entirety. People ex rel. H. B. Claflin Co. v. 
 Feitner, 58 App. Div. 468. 
 
 Failure to appear on "grievance day" bars relief on subse- 
 quent applications for reduction. — Where no application is 
 made by a corporation for a reduction before the assessors on 
 "grievance day" it is guilty of such laches that will warrant a 
 refusal to grant it any relief in a subsequent application to re- 
 duce the assessment. People ex rel. Western Union Tel. Co. v. 
 'Dolan, 126 K Y. 166 ; People ex rel. Western Union Tel. Co. 
 V. Tierney, 126 N. Y. 166. 
 
 Completion and verification of assessment roll. — When the 
 assessors, or a majority of them, shall have completed their roll, they 
 shall severally appear before any olBcer of their county, authorized by 
 law to administer oaths, and shall severally make and subscribe before 
 such oifieer an oath in the following form: 
 
 "We, the undersigned, do severally depose and swear that we have 
 set down in the foregoing assessment roll all the real estate situated in 
 the tax district in which we are assessors, according to our best in- 
 formation; and that, with the exception of those cases in which the 
 value of the said real estate has been changed by reason of proof pro- 
 duced before us, and with the exception of those cases in which the 
 value of any special franchise has been fixed by the state board of 
 tax commissioners, we have estimated the value of the said real es- 
 tate at the sums which a majority of the assessors have decided to be 
 the full value thereof; and also that the said assessment roll con- 
 tains a true statement of the aggregate amount of the taxable personal 
 estate of each and every person named in such roll over and above 
 the amount of debts due from such persons respectively, and excluding 
 such stocks as are otherwise taxable, and such other property as is 
 exempt by law from taxation, at the full value thereof, according to 
 our best judgment and belief," which oath shall be written or printed 
 on said roll, signed by the assessors and certified by the officer. (Sec. 
 
PEEPAEATIOW AND COMPLETION OF ASSESSMENTS 61 
 
 38, 'present Tax Law, former Sec. 37 Tax Law of 1896, as am'd by ch. 
 712, L. 1899.) 
 
 Source: The above is in substance the same as L. 1851, ch. 176, 
 sec. 8, as amended by ch. 201, L. 1885, omitting, however, the last sen- 
 tence, as to false oath, now covered by Penal Code. 
 
 Presumption in favor of legality. — Every assessment roll is 
 presumed to be legal and valid until the contrary appears. Tifft 
 V. City of Buffalo, 8 E". Y. State Eep. 325 (1887). Proof of a 
 valid assessment roll, as finally corrected and delivered to the 
 receiver of taxes, may be considered prima facie evidence of the 
 validity of the tax. City of New York v. Streeter, 91 App. Div. 
 206 (1904) ; aff'd 101 K Y. 508. 
 
 In the city of New York, the tax commissioners being sv^orn 
 officers, are presumed to do their duty. People ex rel. Manhat- 
 tan Ry. Co. V. Commissioners, 146 N. Y. 304; People ex rel. 
 Manhattan Ry. Co. v. Commissioners, 165 N. Y. 305 (1901). 
 
 Form of assessment; curable defects. — An omission of a dol- 
 lar mark in the statement of a tax roll and vs^arrant is not a juris- 
 dictional defect, and where the certificate attached to the roll 
 was signed and not the roll, the defect is not fatal. Ensign v. 
 Burse, 107 IST. Y. 329 (1887). 
 
 The oath — verification. — The oath need not be at the end of 
 
 the assessment roll, and additional words may be considered as 
 surplusage. Ward v. City of Brooklyn, 32 App. Div. 430 ; aff'd 
 164 ]Sr. Y. 591 ; see, also, Coleman v. Shattuck (infra) ; Cham- 
 berlain V. Taylor, 36 Hun, 24. 
 
 Omission of venue is not material — nor the fact that the oath 
 is not placed under both the resident and non-resident lists. 
 Coleman v. Shattuck, 62 K Y. 348 (1875). 
 
 The provision of the charter of the city of Brooklyn, section 
 9, title 10, Chapter 863, Laws of 1873, which declares that the 
 assessment roll shall be duly sworn to by at least two of the as- 
 sessors, to the effect that they have together personally examined 
 within the past year each and every lot or parcel of land, &c., 
 
62 TAXATION OF COEPOEATIONS 
 
 does not require that all the verifying assessors should depose 
 that they together examined the property; it is sufficient if at 
 least two of them swear that they did so examine. Kane v. City 
 of Brooklyn, 114 K Y. 586. 
 
 A substantial compliance with the statute in the form of the 
 assessor's affidavit is sufficient; the use of the words "full and 
 true value" instead of "true value" does not invalidate the roll. 
 R. W. & 0. B. B. V. Smith, 39 Hun, 332 ; Buffalo & State Line 
 B. B. V. Supervisors, 48 IST. Y. 93 (1871). 
 
 Filing of roll and notice thereof. — In cities, the assessment roll 
 when thus completed and verified shall be filed on or before September 
 first in the office of the city clerk, there to remain for fifteen days for 
 public inspection. The assessors shall forthwith cause a notice to be 
 posted conspicuously in at least three public places in the tax district 
 and to be published in one or more newspapers, if any, published in 
 the city, that such assessment roll has been finally completed and 
 stating that it has been so filed and will be open to public inspection. 
 At the expiration of such fifteen days, the city clerk shall deliver such 
 roll to a supervisor of the tax district embraced therein. In towns, 
 when the assessment roll shall have been thus completed and verified, 
 the assessors shall make two copies thereof, one of which shall be 
 retained by them for the use of themselves and their successors in 
 ofBce, and the other of which, duly certified by the said assessors, to be 
 a copy of said assessment roll, shall on or before the fifteenth day of 
 September, be filed in the office of the town clerk, and shall thereupon 
 become a public record. The assessors shall forthwith cause a notice 
 to be posted conspicuously in at least three public places in the tax 
 district, and to be published in one or more newspapers, if any, pub- 
 lished in the town, that such assessment roll has been finally com- 
 pleted, and stating that such certified copy has been so filed. The 
 said original assessment roll shall, on or before the first day of Oc- 
 tober, be delivered to a supervisor of the tax district embraced therein. 
 Notwithstanding the provisions of this section, the board of super- 
 visors of any county may determine the number of copies of the town 
 assessment rolls of the towns of such county to be made, by whom such 
 copies shall be made, the date when the certified copy of the town as- 
 sessment roll shall be filed in the office of the town clerk, and the date 
 when the original assessment roll shall be delivered to the supervisor 
 of the town. (Sec. 39 Tax Lam^ former Sec. 38 of the Tax Law of 
 1896, as am'd by ch. 358, L. 1901; ch. 279, L. 1904.) 
 
 Source: In substance the same as sec. 27, R. S., pt. 1, ch. XIII, title 
 2, except last paragraph, which is new. 
 
PEEPAEATION AND COMPLETION OF ASSESSMENTS 63 
 
 When assessment roll may be verified. — For the purpose of 
 verification and delivery to the supervisor, the assessment roll 
 cannot be completed until the expiration of the time fixed for 
 its final review and correction. An affidavit of the assessors 
 thereto made before that time is a nullity, and when the defect 
 appears on the face of the papers by the date of the jurat, it 
 confers no power on the supervisor to impose the tax. Westfall 
 V. Preston, 49 N. Y. 349 (1872). The statutory direction when 
 the roll shall be verified and left with the supervisor is directory 
 and not mandatory. People ex rel. Rome, W. &c. R. R. v. Jones, 
 43 Hun, 131 (1887) ; aff'd 106 K Y. 330; Kane v. City of 
 Brooklyn, 15 St. Rep. 872 (1888) ; see City v. Streeter, 91 
 App. Div. 206 (1904). 
 
 Roll in parts valid. — An assessment roll, which, on review 
 day, was in several parts, but afterwards engrossed, put together 
 and verified, is in compliance with the statute. People ex rel. 
 D. L. & W. R. R. V. Clapp, 64 Hun, 547 (1892). 
 
 Neglect or omission of duty by assessors. — The assessors in the 
 execution of their duties, shall use the forms and follow the instruc- 
 tions transmitted to them from time to time, by the commissioners of 
 taxes. If any assessor shall neglect or omit to perform any duty, the 
 other assessors shall perform such duty and shall certify upon the 
 assessment roll the name of the delinquent assessor, stating therein 
 the cause of such omission, and the assessment roll, when otherwise 
 made and completed in accordance with the requirements of this ar- 
 ticle, shall be deemed to be the assessment roll of all the assessors. 
 If the assessors shall neglect to meet for the purpose of hearing griev- 
 ances any person aggrieved by the assessment may appeal to the board 
 of supervisors at its next meeting, which shall have the same power 
 to review and correct such assessment as the assessors have under this 
 article. If any assessor shall refuse or neglect to perform any duty or 
 do any act required of him by this article {Art. II, sees. 20-41, Tax 
 Law), he shall forfeit to the county the sum of fifty dollars, to be 
 recovered by the district attorney. (Sec. 41, Taw Law, former Sec. 40 
 of Tax Law of 1896.) 
 
 Source: In substance the same as sees. 28-30, ch. XIII, title 2, pt. 1, 
 R. S. 
 
CHAPTER IX. 
 
 Method oe Foem of Assessment in New Yoek City. 
 
 Department of taxes and assessments; powers and duties; one 
 of the departments of the city. — The department of taxes and as- 
 sessments shall be one of the departments in said city. (Beo. 884, 
 Charter. ) * 
 
 Source: Prior to the enactment of the Charter, this section was in- 
 cluded under sec. 34, ch. 410, L. 1882 (Consol. Act), L. 1873, ch. 335, 
 sec. 26. 
 
 In proving the validity of a tax it is not necessary as part of 
 plaintiff's prima facie ease to prove the department of taxes was 
 legally and properly constituted. That will be inferred if the 
 assessment roll is proved. City of New York v. Streeter, 91 
 App. Div. 206 (1904) ; aff'd 180 IST. T. 508. 
 
 Department, how composed; terms and salaries. — The head of 
 the department of taxes and assessments shall be called the board of 
 taxes and assessments. Said board shall consist of a president, who 
 shall be designated in his appointment, and six other persons, one of 
 whom at least shall be a person learned in the law, who shall be called 
 commissioners of taxes and assessments. The salary of the president 
 shall be eight thousand dollars a year, and the salary of each of the 
 other commissioners seven thousand dollars a year. 
 
 Not more than five of the said commissioners, including the said 
 president, shall belong to the same political party and have the same 
 political opinions on state and national issues. 
 
 The said president shall be a resident of the borough of Manhattan, 
 and not more than one of said commissioners, belonging to the same 
 political party and having the same political opinions on state and na- 
 tional issues, may be residents of the same borough, except of the 
 borough of Manhattan. (Sec. 885, Charter as amended hy ch, 757, L. 
 1904.) 
 
 Source: The above in substance is the same as sec. 43, ch. 410, Laws 
 1882 (Consol. Act) L. 1873, ch. 335, sec. 87. 
 
 ♦The reterencea to the sections of the Charter are to the Revised Charter of 1901. 
 
 64 
 
METHOD OP ASSESSMENT IN" NEW YORK CITY 65 
 
 Composition of Board. — The number of commissioners was 
 changed from three to five in the charter, and from five to seven 
 by the amendment of 1904, as was also the provision that one of 
 the number shall be a lawyer. The increase in salary first ap- 
 pears in the charter of 1897. By the amendment of 1904, the 
 provision as to the political and territorial division of the board, 
 was added. The term of office fixed at six years in the Consoli- 
 dation Act, is omitted here, and is presumably governed by 
 section 95 of the Charter, viz. : Subject to the discretion of the 
 mayor. 
 
 Devolution of power. — All of the rights, powers and duties here- 
 tofore devolved by law upon the board of taxes and assessments in the 
 city of New York, upon the department of assessments of the city of 
 Brooklyn, and upon like departments, boards or officers of taxes and 
 assessments other than for street improvements in the other municipal 
 and public corporations or parts of municipal and public corporations 
 consolidated by this act with the municipal corporation known as the 
 mayor, aldermen and commonalty of the city of New York are hereby 
 devolved, unless otherwise herein expressly provided, upon and vested 
 in the board of taxes and assessments in the city of New York. The 
 said board of taxes and assessments in the city of New York is hereby 
 authorized to adopt a common seal. Copies of all books and papers 
 duly filed in the office of the department of taxes and assessments, 
 and transcripts thereof, and of the records of the proceedings of the 
 board of taxes and assessments, certified to by one of the commissioners 
 of taxes and assessments, or by one of the deputy commissioners of 
 taxes and assessments, or by the secretary of the board of taxes and 
 assessments, and under the common seal of the board of taxes and 
 assessments, shall be admissible in evidence in all courts and places in 
 same manner and for the same purposes as books, papers or documents 
 similarly authenticated by the clerk of a county. [Sec. 886, Charter, 
 as amended by L. 1904, ch. 375.) 
 
 Source: The provisions of sec. 886 are new. The provision as to the 
 department's seal, and the admission in evidence of transcripts or 
 copies of records from the department, was added by amendment in 
 1904, after the decision in City v. Vanderveer, 91 App. Div. 303 
 (1904). 
 
 Deputy tax commissioners; how appointed; their duties.^ The 
 board of taxes and assessments shall appoint persons to be known as 
 deputy tax commissioners, not exceeding forty in number, who shall 
 
66 TAXATION OF COEPOEATIONS 
 
 perform, under the direction and supervision of the board of taxes 
 and assessments, such duties as the said board shall prescribe. The 
 said board shall give such directions to the deputy tax commissioners 
 as it shall think expedient to secure in all the boroughs and parts of 
 the city equality of valuations of property for the purposes of taxa- 
 tion. The number of deputy tax commissioners above prescribed may 
 from time to time be increased by the appointment of the board of 
 taxes and assessments, provided such increase is authorized by the 
 board of estimate and apportionment. (Sec. 887, Charter.) 
 
 Source: In substance the same as sec. 813, ch. 410, L. 1882 (Con- 
 sol. Act [L. 1859, ch. 302, sec. 3], with the exception of the number 
 of deputies.) 
 
 Deputies are ministerial, not judicial officers. — Whileunder 
 section 813 of the Consolidation Act (section 887, Charter), 
 the deputy tax commissioners are required to perform "such 
 duties as the commissioners shall prescribe," it is not to be as- 
 sumed that this authorizes the tax commissioners to delegate 
 their judicial function to the deputies. People ex rel. Conway v. 
 Barker, 14 Misc. 360 (367). 
 
 The statute evidently gives the Board the right to impose 
 upon the deputy tax commissioners any duty of whatever na- 
 ture, which are reasonably or necessarily incidental to the oper- 
 ation of the department, whether prescribed by law or not. 
 
 Appointment of deputy tax commissioners among the boroughs. 
 
 — In making appointments of the deputy tax commissioners the head 
 of the department of taxes and assessments shall apportion such ap- 
 pointments as nearly as may be, among persons residing in the several 
 boroughs created by this act, according to the population of the sev- 
 eral boroughs; and after the first day of January, nineteen hundred 
 and two, no person shall be appointed to the office of deputy tax com- 
 missioner unless he shall be at the time he is appointed and shall have 
 been at least one year prior thereto an elector in the borough from 
 which he is appointed. No deputy tax commissioner shall be as- 
 signed to assess property in any other borough than that from which 
 he is appointed, except by the vote of the board of taxes and assess- 
 ments, and in that case the reasons for such an assignment shall be 
 stated in the minutes of the board. (Sec. 888, Charter, as amended 
 by chapter 330, Laws 1905.) 
 
 The provisions of this section are new. 
 
METHOD OF ASSESSMENT IN NEW YORK CITY 67 
 
 Deputy tax commissioners; duties of in assessing taxable prop- 
 erty.— It shall be the duty of the deputy tax commissioners, under the 
 direction of the board of taxes and assessments, to assess all the tax- 
 able property in the several districts that may be assigned to them 
 for that purpose by said board, and they shall furnish to the said 
 board, under oath, a detailed statement of all such property, showing 
 that said deputies have personally examined each and every house, 
 building, lot, pier, or other assessable property, giving the street, lot, 
 ward, town and map number of such real estate embraced within said 
 districts, together with the name of the owner or occupant, if known, 
 also the sum for which, in their judgment, each separately assessed 
 parcel of real estate under ordinary circumstances would sell, if it were 
 wholly unimproved; and separately stated, the sum for which under 
 ordinary circumstances, the same parcel of real estate would sell, with 
 the improvements, if any, thereon; with such other information in 
 detail relative to personal property or otherwise, as the said board 
 may, from time to time, require. Such deputies shall commence to 
 assess real and personal estate on the first day in April in each and 
 every year not a Sunday or a legal holiday. {Sec. 889, N. Y. Charter, 
 as amended in 1903, and by ch. 455, L. 1911.) 
 
 Source: Sec. 814, ch. 410, L. 1882 (Consol. Act) [L. 1859, ch. 302, 
 sec. 7], with the exception of the separate assessment of the land and 
 improvements, which was added by ch. 454, L. 1903, and the date of 
 the commencement of assessment amended in 1911. 
 
 The deputy tax commissioners are not independent officers, 
 and as the assessment of property referred to under this section 
 of the charter is "under the direction of the hoard of taxes and 
 assessments," it may be assumed to be the act of the board. 
 People ex rel. Thompson v. Feitner, 168 N. Y. 441 (453). 
 
 "Detailed statement" refers to real and not to personal. — 
 
 The provisions of this section requiring the deputy tax com- 
 missioners "to personally examine 'each and every house, build- 
 ing, lot, pier, or other assessable property' and to furnish under 
 oath to the commissioners of taxes a detailed statement of such 
 property," refer to real property and not to personal. In re Mc- 
 Mahon v. Palmer, 102 N. Y. 176 (1886). It seemed that the 
 detailed statement here referred to is not part of the "Annual 
 
68 TAXATION OF COBPOBATIONS 
 
 Kecord," but constitutes a record of the Department. People ex 
 rel. Zollihoffer v. Feitner, 34 Misc. 299, affd 63 App. Div. 615 ; 
 aff'd 168 N. Y. 674. 
 
 Under sec. 889 of the Charter, it is the duty of the assessors to 
 assess real property at its actual value. People ex rel. Manhat- 
 tan By. Co. V. Barker, 146 K Y. 304. 
 
 Oath of assessor. — The testimony of an assessor is not ad- 
 missible to impeach his oath. Brooklyn El. R. B. v. City of 
 Brooklyn, 11 App. Div. 132-133. 
 
 The only oath to be taken by an officer connected V7ith the 
 making of assessments under the charter, is the oath required to 
 be made by the deputy commissioner under section 889 of the 
 charter, annexed to the "Annual Kecord of Assessed Valuations 
 of Eeal and Personal Estate." People ex rel. ZoUikoffer v. 
 Feitner, supra. This oath is not prematurely made, even if 
 taken before the time the books of annual record are directed 
 by statute to be open for examination, provided the record itself 
 is complete at that time. McMaJion v. Palmer, supra. 
 
 Offices of the department in the boroughs. — There shall be an 
 office of the department of taxes and assessments in the Borough of 
 Brooklyn, a like office of the department in the Borough of Queens, a 
 like office of the department in the Borough of Richmond, and a like 
 office in the department of the Borough of the Bronx; at which the 
 duties of the department of taxes and assessments pertaining to the 
 assessment of property in the said several boroughs shall, under the 
 direction of the board of taxes and assessments, be performed by such 
 number of the deputy tax commissioners or other employees of the 
 department of taxes and assessments as the said department may de- 
 cide to be necessary and assign to such duties. Such offices shall in 
 law be a part of the main office, and the main office of the department 
 of taxes and assessments shall be maintained in the Borough of Man- 
 hattan. The books, maps, assessment rolls, files and records pertain- 
 ing to the department of taxes and assessments of the municipality 
 heretofore designated as the mayor, aldermen and commonalty of the 
 City of New York, of the department of assessment of the City of 
 Brooklyn and of each and every of the like offices in any of the mu- 
 
METHOD OF ASSESSMENT IN NEW TOEK CITY 69 
 
 nieipal and public corporations, or parts of municipal and public cor- 
 porations consolidated by this act with the municipal corporation of 
 the mayor, aldermen and commonalty of the City of New York, shall 
 be delivered into and thereafter be in the custody and control of the 
 department of taxes and assessments hereby constituted, to be kept in 
 such of the offices of the said department as may be most convenient 
 to the taxpayers and suitable to the proper discharge of the business 
 of such department, and shall be public records, and at all reasonable 
 times open to public inspection. (Sec. 890, Charter.) 
 
 Source: Principally new, but partly covered by sec. 812, ch. 410, L. 
 1882 (Consol. Act) ; L. 1859, ch. 302, sec. 6. 
 
 This section of the charter evidently gives the Board of Taxes 
 power to impose duties upon its clerical force or "employees," 
 other than those of a clerical nature. Section 887 of the Char- 
 ter also gives the Board the right to confer upon deputy tax 
 coramissioners any duties of whatever nature incidental to the 
 operation of the Department. 
 
 Annual record of assessed valuation; what to contain and when 
 to be open for examination and correction. — There shall be kept in 
 the several of&ces established by the department of taxes and assess- 
 ments books to be called "the annual record of the assessed valuation 
 
 of real and personal estate of the Borough of ," in which 
 
 shall be entered in detail the assessed valuation of such property 
 within the limits of the several boroughs of the city of New York as 
 established by this act. In such books the assessed value of real estate 
 shall be set down in two columns; in the first column shall be given, 
 opposite each separately assessed parcel of real estate, the sum for 
 which such parcel under ordinary circumstances, would sell if wholly 
 unimproved; and in the second column shall be set down the sum 
 for which the said parcel under ordinary circumstances would sell, 
 with the improvements, if any, thereon. The annual record of the 
 assessed valuation of real property shall be open for public inspection, 
 examination and correction from the first day in October not a Sunday 
 or a legal holiday until the sixteenth day of November in each year, 
 and the annual record of the assessed valuation of personal estate 
 shall be open for public inspection, examination and correction from 
 the first day in October not a Sunday or a legal holiday until the first 
 day of December in each year; but on the said respective days, the 
 same shall be closed to enable the board of taxes and assessments to 
 prepare assessment rolls of the several boroughs for delivery to the 
 
VO TAXATION OF COEPOEATIONS 
 
 board of aldermen. The said board previous to and during the time the 
 said books are open as aforesaid for inspection shall advertise the fact 
 in the City Record and in such other newspaper or newspapers pub- 
 lished in the several boroughs created by this act as may be au- 
 thorized by the board of city record. The taxable status of all per- 
 sons and property assessable for taxation in the city of New York 
 shall be fixed for each year on the day of October in the preceding 
 year, provided by law for the opening of the books of annual record of 
 the assessed valuation of real and personal estate of that year. (Sec. 
 892, Charter, as amended by L. 1903; ch. 454, and ch. 455, L. 1911.) 
 
 Source: In substance the same as sec. 817, ch. 410, L. 1882 (Consol. 
 Act.) [L. 1873, ch. 758]. The revised charter of 1901 shortened the 
 time when the books of annual record were to be open for examination 
 and correction, until April 1st, and by ch. 454, L. 1903, provision was 
 made for the entry of the separate assessment of the real estate and 
 improvements. In 1911 by ch. 455, L. 1911, the period of assessment 
 was changed to the fall of the year, and the time for public inspection 
 again shortened. The amendment of 1911 also fixes the taxable status 
 of persons and property as the first day in October not a Sunday or 
 legal holiday. 
 
 Section 892 of the charter gives taxpayer right to inspect 
 assessments that affect him.— Section 1545 of the charter pro- 
 viding that the books of any department shall be open to the in- 
 spection of any taxpayer, subject to reasonable rules and regu- 
 lations, and section 892, charter, providing that the books of an- 
 nual record shall be open during a certain period, do not confer 
 on a taxpayer a general and unlimited power to inspect the tax 
 rolls, but he may be restricted to certain hours of the day and to 
 an examination of such assessments as affect him individually 
 and those represented by him as attorney, executor or trustee. 
 In re Lord, 59 App. Div. 591 (1901) ; aff'd 167 K Y. 398. 
 
 In the city of New York the assessment is deemed to be 
 completed on the first day in October (formerly the second 
 Monday of January). — The tax lists are required to be placed in 
 the hands of the commissioners of taxes on the first day in Oc- 
 tober (formerly the second Monday of January) and there to 
 
METHOD OF ASSESSMENT IN NEW YOEK CITY 71 
 
 remain open until the 1st day of December for personalty and 
 until November 16tli for realty for examination and correction. 
 So far as it may be affected by a change of ownership of property 
 taxed, or by the condition of the owner, the assessment is to be 
 deemed complete on the first day of October. Executors are 
 liable for a personal tax assessed against a testator who 
 died after the assessment was made. McMahon v. Beehman, 65 
 How. Pr. 427 (1883). The statute (ch. 455, L. 1911) now 
 fixes the date when the taxable status of persons and property be- 
 comes fixed in the city of New York as the first day in October 
 not a Sunday or a legal holiday. The decisions have reference 
 to the two following classes of cases : 
 
 1. The time when a personal liability attaches, after which 
 no new names of persons or property can be added to the list : 
 — This is the first day of October (formerly the second Monday 
 of January), and affects such cases as the liability for a per- 
 sonal tax assessment of a corporation which became insolvent 
 after that day, or the case of an executor or administrator of a 
 person assessed, who dies after that day. Matter of Babcoch, 115 
 N". Y. 450; Association of Colored Orphans v. Mayor, 104 S". 
 Y. 581 ; Sisters of St. Francis v. Mayor, 112 K Y. 677 ; 51 
 Hun, 355 ; In re Welsbach Incandescent Gas Light Co., 59 N. 
 Y. Supp. 1006. 
 
 2. The time within which the property and names which were 
 on the list when the tax books are opened may be exempted : — 
 The legislature may exempt property from taxation at any time 
 before the closing of the record on May 1st (now November 16th 
 for real property and December 1st for personal property). 
 People ex rel. American Bible Society v. Commissioners, 142 
 N. Y. 348 ; distinguishing the Colored Orphan Asylum case. 
 (Supra.) But a legislative act taking effect after the closing of 
 the record, will not exempt the property assessed until the fol- 
 lowing year. The character of real estate as to its being subject 
 to a tax becomes fixed May 1st (now November 16th). In re 
 
72 TAXATIOK OF COEPOEATIONS 
 
 'American Fine Arts Society^ 6 App. Div. 496 (1896) ; aff'd 
 151 K Y. 621. 
 
 Examining these cases and construing them in the light of the 
 present statute, it appears that the date of liability may be fixed 
 as the first of October, but that liability may be lessened, or the 
 taxpayer exempted by act of legislature up to November 16th 
 in the case of real estate and until December 1st in the case of 
 personalty (formerly May 1st). 
 
 "Closing of books" is a limitation of time. — The closing of 
 the books contemplated by this section is not a physical act, but 
 is a simple limitation of the time during which those interested 
 can apply to have mistakes in the assessments of property for 
 taxes corrected. Clarke v. Mayor, 23 J. & Sp. 259 (1888) ; 
 aff'd 111 K Y. 621. 
 
 The opening of the books for a certain period does not in- 
 clude the last day. — The provision requiring the commissioners 
 of taxes to keep books containing the annual record of assessed 
 value of real and personal estate "open for examination and cor- 
 rection," from a certain day until a certain day in each and 
 every year, does not include the day last mentioned. Ibid. 
 
 Annual record of assessed valuation of real and personal estate 
 of corporations to be kept in main office. — The department of taxes 
 and assessments shall cause to be prepared and kept in the main 
 oflBoe of the department of taxes and assessments, books to be called 
 "The Annual Record of the Assessed Valuations of Real and Per- 
 sonal Estate of Corporations," and it shall be the duty of the deputy 
 tax commissioners in the several districts in the several boroughs 
 which may be assigned to them for that purpose by the board of taxes 
 and assessments, to furnish to the department of taxes and assess- 
 ments, under oath at their main oflBce, at the time that such state- 
 ment is filed in any office of the department of taxes and assessments 
 in any borough other than in the main office in the Borough of Man- 
 hattan, a duplicate detailed statement of the assessable property of 
 corporations, both real and personal, which said statements of said 
 
METHOD OP ASSESSMENT IN NEW TOEK CITY 73 
 
 deputy tax commissioners shall be entered upon the books, to be kept 
 in the 'main office of the department of taxes and assessments to be 
 known as the "Annual Eecord of the Assessed Valuation of Real and 
 Personal Estate of Corporations." (Sec. 893, Charter.) 
 
 Source: The provisions of the section are new, and were first con- 
 tained in the Charter of 1897. 
 
 Assessment of real estate of corporations valid although it is 
 not entered in "annual record of assessed valuations of real and 
 personal estate of corporations." — The "record of the assessed 
 valuations of real and personal estate of corporations" provided 
 by section 893 to be kept in the main office of the board of taxes 
 and assessments is made up of duplicate records from the various 
 boroughs. This record is not required by the charter to be kept 
 open for public inspection, nor must notice thereof be pub- 
 lished as section 892 requires, of the more general and compre- 
 hensive records required to be kept by virtue of section 892. 
 People ex rel. Manhattan Life v. Wells, 82 W. Y. Supp. 876 
 (1903) ; aff'd 91 App. Div. 44 (1904). The omission to enter 
 the assessment of real estate of corporations as provided in sec- 
 tion 893, merely limits the city to the enforcement of the lien on 
 the land, and prevents it from enforcing the collection out of the 
 personal property of the company. (Ibid.) 
 
 Assessed valuation of personal property; how to be entered. — 
 
 The assessed valuation of all personal property shall be entered by 
 said depuity tax commissioners, or by such other persons as may be 
 assigned to that duty by the department of taxes and assessments in 
 the several offices, in books or rolls, in alphabetical order, of the 
 names of persons and corporations subject to taxation. No tax or 
 assessment shall be void by reason of the name of the rightful owner 
 or owners, whether individuals or corporations, of real estate in any 
 of the said boroughs not being inscribed in the assessment rolls or 
 lists; but in such case no tax shall be collected except from the real 
 estate so assessed. The assessed valuation of all real and personal 
 property of corporations shall be entered in duplicate in the office 
 in the borough where the same is assessed and in the main office of the 
 department of taxes and assessments in the Borough of Manhattan. 
 
74 TAXATION OF COEPOEATIONS 
 
 If, at any time prior to the first day of January in any year, it shall 
 appear to the tax commissioners that a person assessed for taxation on 
 personal estate on the books or rolls of one borough should have been 
 assessed therefor on the books or rolls of another borough, they shall 
 forthwith cause the assessment to be cancelled and a new assessment 
 to be made on the proper books or rolls, and within five days there- 
 after shall cause written notice of the new assessment to be mailed 
 to such person at his last known residence or business address within 
 the city of New York, and an aSidavit of the mailing of such notice 
 to be filed in the main oifice. The person so notified may apply for 
 correction of such assessment on or before the twentieth day of Jan- 
 uary, with the same force and efi'ect as if such application were made 
 on or before the thirtieth day of November in any year. {Sec. 894, 
 Charter, as am'd by ch. 455, L. 1911.) 
 
 Source: The above is in substance the same as sec. 818, ch. 410, L. 
 1882 (Consol. Act), L. 1867, ch. 410, sec. 5, with the exception of the 
 last portion thereof, relating to the assessment of personal estate in 
 the wrong borough, which is new and applicable since 1897, and also 
 the change of dates brought about by the amendment of 1911. 
 
 The purpose of assessing every person (or corporation) in the 
 borough where he (or it) resides is that notice may be given of 
 the assessment, and an assessment in the wrong borough, if not 
 corrected, on written notice, is invalid. People ex rel. Wood v. 
 O'Donnell, IST. Y. Law Journal, April 4, 1905; aff'd 105 App. 
 Div. 643 (1905) on opinion of court below. 
 
 Misnomer in entry of a personal assessment does not invali- 
 date it.— Where a tax was assessed against Harry D. Van 
 Voorhis, while the real name of the person intended was Wil- 
 liam H., being familiarly known as Henry, it was held that the 
 designation was sufficient. Van Voorhis v. Budd, 39 Barb. 479 
 (1863). Where the person assessed was the only one bearing 
 the name in the county, and was confessedly the owner of the 
 property, the addition of the letters "est" to his name on the 
 roll was held not to invalidate the assessment. In re Hartshorn, 
 44 K T. State Eep. 16 (1892). And a description slightly 
 elliptical, but sufficiently definite to identify the person intended 
 
METHOD OF ASSESSMENT IN NEW TOEK CITY 75 
 
 to be assessed, does not invalidate the assessment. In re McLean 
 V. Walburger Horn, 17 N. Y. Supp. 119. 
 
 Power of department to add property and names to assessment 
 rolls. — So long as the books of annual record of the assessed valua- 
 tion of real and personal estate of the several boroughs remain open 
 for public inspection, examination and correction, the board of taxes 
 and assessments, after giving at least ten days' prior personal notice 
 to the party in interest, may add to the rolls of assessment of such 
 annual record any real estate, or the name of the owner of any per- 
 sonal estate, and also the assessed valuation of any such real or per- 
 sonal estate that may have been omitted from such rolls on the day 
 of the opening of such books. {Sec. 894a, Charter, added by L. 1906, 
 eh. 207.) 
 
 Executor's name may be substituted for deceased owner. — 
 
 It has been held that where the tax commissioners placed the 
 name of a deceased person on the Tax Roll before the second 
 Monday of January, under section 894a of the charter, on dis- 
 covering the error, and while the books were open for examina- 
 tion and correction, they might correct the same, by substituting 
 the name of the executor, on giving the ten days' notice re- 
 quired by the above section. An executor is an "owner" of the 
 property within the meaning of the Tax Law. People ex rel. 
 Stebbins v. Purdy, 144 App. Div. 361 (1911). 
 
 The omission of name of owner of realty deprives city of 
 personal remedy. — ^In New York city it is not essential to the 
 validity of a tax upon land that the name of the owner should 
 be inserted in the assessment list, and the only effect of omitting 
 it, or of inserting the name of one who is not the owner, is to 
 deprive the city of the right to collect the tax from the owner 
 personally or by distress of goods and chattels, &c., and to con- 
 fine its remedy to the enforcement of its lien. Haight v. Mayor, 
 99 ]Sr. Y. 280 (1885), aff'g 32 Hun, 153 (1884) ; Man. Life 
 Ins. Co. V. Wells, supra. 
 
 Assessment against non-residents. — While the assessment is 
 in form against non-residents personally it is in effect an as- 
 
76 TAXATION OF COEPOBATIOlSrS 
 
 sessment against their property (City of New York v. McLean, 
 170 N. Y. 384), and it has been held that the insertion of the 
 names in their case in the annual record and roll helped to in- 
 dicate and describe the property assessed. People ex rel. Du- 
 four V. Wells, 85 App. Div. 440 ; aff'd 177 E". Y. 586. It would 
 seem that under section 7, Tax Law, the capital of a non-resi- 
 dent, and not the specific property, is sought to be taxed. This 
 appears to be the more likely when it is remembered that under 
 the earlier statute (section 37, Laws 1855) the tax against non- 
 residents was "on all sums invested in any manner." 
 
 Applications for correction of assessment. — During the time that 
 books shall be open to public inspection as aforesaid application may 
 be made by any person or corporation claiming to be aggrieved by the 
 assessed valuation of real or personal estate to have the same cor- 
 rected. If such application be made in relation to the assessed valu- 
 ation of real estate, it must be made in writing, stating the ground 
 of objection thereto. The board of taxes and assessments shall ex- 
 amine into the complaint, as herein provided, and if in their judgment 
 the assessment is erroneous they shall cause the same to be corrected. 
 If such application be made in relation to the assessed valuation of 
 personal estate, the applicant shall be examined under oath by a com- 
 missioner of taxes and assessments or by an assistant commissioner 
 or assistant to a commissioner, or by a deputy tax commissioner, as 
 herein provided, who are hereby authorized to administer such oath, 
 and if the assessment as hereinafter provided be determined by the 
 board of taxes and assessment to be erroneous, it shall cause the same 
 to be corrected and fix the amount of such assessment as the board of 
 taxes and assessments may believe to be just, and declare its decision 
 upon and application within the time and in the manner hereinafter 
 provided. But the commissioners of taxes and assessments may dur- 
 ing the last fifteen days of the month of November, and during 
 the months of December and January in any year, act upon ap- 
 plications, examine applicants under oath and take other testimony 
 thereon, for the reduction of assessments upon either real or personal 
 property filed in their offices on or before the fifteenth day of Novem- 
 ber preceding as to real estate, and on or before the thirtieth day of 
 November preceding as to personal estate, and cause the amount of 
 any assessment as corrected by the board of taxes and assessments to 
 be entered upon the assessment rolls for the year for which such 
 correction is made. {Sec. 895, Charter.) 
 
METHOD OF ASSESSMENT IN NEW TOBK CITT TY 
 
 Source: In substance the same as see. 820, eh. 410, L. 1882 (Consol. 
 Act) [L. 1859, ch. 302, sec. 10], with the exception of change of dates, 
 brought about by ch. 455, L. 1911, and that the examination may be 
 made by an assistant commissioner by ch. 324, L. 1913. 
 
 Failure to appear. — Failure to appear on "grievance day" 
 bars relief on a subsequent application for reduction. A person 
 so failing to appear is guilty of laches^ whicb will warrant a 
 refusal to grant him any relief in a subsequent application to re- 
 duce such assessment. People ex rel. Western Union Tel. Go. 
 V. Dolan; Same v. Tierney, 126 IST. Y. 166. 
 
 While failure to appear before assessors on grievance day was 
 not a bar to certiorari proceedings under Chapter 269, Laws 
 1880 {People ex rel. Buffalo^ B. & Pittsburgh R'y Co. v. Du- 
 guid et al., 68 Hun, 243), under section 250, Tax Law of 1896, 
 due application to the assessors for correction of the assessment 
 must be alleged in the petition for certiorari before a writ can 
 be obtained. When there was no jurisdiction to assess, no appli- 
 cation need be made for cancellation on review day. People ex 
 rel. Powder Co. v. Feitner, 41 App. Div. 544; People ex rel. 
 Edison Co. v. Feitner, 99 App. Div. 274 (1904). 
 
 When a company fails to mate the statement within the time 
 required by law the commissioners have the right to assess the 
 stock according to the best information they can procure. Peo- 
 ple ex rel. Mutual Union Tel. Co. v. Com'rs, 31 Hun, 568 ; aff'd 
 99 K Y. 254. 
 
 Corporations applying for a reduction must take the initia- 
 tive. — Under section 895, the commissioners are under no obli- 
 gation to reduce an assessment on a mere statement that it 
 is excessive, but must have a sworn statement or examination 
 under oath before them, on which they can take action. It is 
 the duty of the corporation applying for a reduction to take the 
 initiative. People ex rel. Rochester Lamp Co. v. Feitner, 65 
 App. Div. 224 (1901). 
 
78 TAXATIOIT or COEPOEATIONS 
 
 May appear by agent. — The tax agent of a railroad may 
 verify a statement before assessors. Assessors wlio accept it 
 waive objections as to form or definiteness. People ex rel. Erie 
 E. R. Co. V. Webster, 49 App. Div. 556; People ex rel. W. S. 
 B. B. & N. Y. C. R. B. V. Johnson, 29 App. Div. 75. 
 
 Refusal to answer questions. — An erroneous assessment is 
 not justified by the refusal to answer questions by the president 
 of the corporation under this section when it is not shown by 
 the record what questions he refused to answer. People ex rel. 
 Claflin Co. v. Feitner, 58 App. Div. 468. 
 
 Date when assessment becomes final.- Under section 895 of 
 the charter (1897) the action of the board of assessment of !N^ew 
 York city became final on May 1st, where no application was 
 made for reduction. (November 16th and December 1st under 
 present charter as amended.) When such application is made 
 the action of the board becomes final on the first day of June 
 (now February 1st). People ex rel. Mt. Vernon Consumers' 
 Brewing Co. v. Feitner, 41 App. Div. 496; see, also. People ex 
 rel. Bronx Gas & Elec. Co. v. Barker et al., 22 App. Div. 161; 
 People ex rel. Consol. Steel & Wire Co. v. Feitner, New York 
 Law Journal, Nov. 22, 1898 ; People ex rel. Standard Bock Co. 
 V. Feitner, L. J. June 3, 1902. 
 
 Uncontradicted testimony of value must stand. — Where 
 upon an application to correct an assessment there is no evidence 
 before the assessors on the subject of the value of the real estate 
 assessed, except the affidavits produced by the o^vner, these, if 
 uncontradicted, must be considered controlling and conclusive. 
 People ex rel. Amer. Linen Thread Co. v. Assessors of Me- 
 chanicville, 61 Barb. 273 (1871). 
 
 Where on examination before the tax commissioners, a com- 
 pany's statement showed an impaired capital and indebtedness 
 exceeding assets, and where there was no circumstance warrant- 
 
METHOD OF ASSESSMENT IN NEW YOBK CITY 79 
 
 ing a disbelief of the statements except that a dividend had 
 shortly previous to the time of making the statement been de- 
 clared, in the absence of a request by the tax commissioners for 
 further information, it was error on the part of the assessors to 
 disregard these statements. People ex rel. Edison Electric Co. 
 V. Barker, 141 N. Y. 251 (1894). But where a domestic corpo- 
 ration furnishes the tax department with a full statement of its 
 assets and liabilities, notwithstanding the fact that the capital is 
 shown to be unimpaired, the commissioners are bound to make 
 such statement the basis of assessment, in the absence of other 
 evidence. People ex rel. Seidenherg v. Feitner, 41 App. Div. 
 571 (1899) ; dist'g Equitable Gas case, 144 N. Y., and citing 
 Edison Gen. Elec. Co. case, supra, and Edison Elec. Ilium. Co. 
 case, infra. 
 
 Tax commissioners are bound by general statement if ac- 
 cepted. — Where the tax commissioners accept a general state- 
 ment of the value of the taxpayer's property furnished by it for 
 the purpose of assessment, they are bound thereby, if they fail 
 to ask for further information. People ex rel. Edison Elec. 
 Ilium. Co. V. Barker, 139 IST. Y. 55 (1893) ; rev'g 68 Hun, 513. 
 
 Prior statements and reports may be considered. — In mak- 
 ing assessments the commissioners may consider relator's admis- 
 sions on previous occasions, reports to railroad commissioners 
 and also that dividends have been paid after meeting all fixed 
 charges. People ex rel. Manhattan By. Co. v. Barker, 6 App. 
 Div. 356. 
 
 Assessors act judicially and the rolls cannot be collaterally 
 attacked. — Assessors act judicially and their action has all the 
 force and effect of a judgment, which, while open to review by 
 some direct proceeding prescribed by law, is secure against col- 
 lateral attack. Swift v. Poughkeepsie, 37 I^. Y. 511 ; Newman 
 V. Supervisors, 45 IST. Y. 685 ; City of New York v. Tucker, 91 
 App. Div. 217 (1904). Where the assessors have jurisdiction 
 
80 TAXATION OF COEPOEATION'S 
 
 to act, their action becomes final, and may not be attacked col- 
 laterally in any proceeding. Buffalo & State L. R. B. Co. v. 
 Supervisors of Erie Co., 48 N. Y. 93 ; Mayor v. Davenport, 92 
 N. T. 604. 
 
 No jurisdiction makes assessment void; waiver of jurisdic- 
 tion. — [f the assessors have jurisdiction of the person and prop- 
 erty of the individual assessed, their action is valid; if they 
 have no jurisdiction, their acts are void. National Bank of 
 Chemung v. FAmira, 53 jST. Y. 49 (1873). But a party to a 
 judicial proceeding may waive an objection founded on want of 
 jurisdiction of his person, and he does waive it by a general ap- 
 pearance and proceeding to a trial upon the merits. Proceed- 
 ings for the assessment of property are of a judicial character, 
 and assessors in making an assessment act judicially. Where, 
 therefore, a party who deems himself aggrieved by their pro- 
 posed action, appears before assessors, siibmits proof in support 
 of his claim, asks to have his assessment reduced and obtains a 
 reduction, without making other objections, he is precluded 
 from subsequently claiming that the assessors had no jurisdic- 
 tion to tax him at all. In re McLean v. Wyandance Co., 138 IN^. 
 Y. 158 (1893). 
 
 Where there is jurisdiction, error is only reviewable by direct 
 proceeding. — Where in the exercise of an actual jurisdiction 
 over person and subject matter, the taxing officers commit an 
 error, their actions, though reviewable in a proper proceeding, 
 are not void, and their assessment is protected against collateral 
 attack, as they themselves also would be. The exercise of their 
 judgment is subject to no review or condition except as pre- 
 scribed by law. United States Trust Co. v. Mayor, £-c., 144 
 N. Y. 488 (1895). ITor can assessors be heard in a collateral 
 action to impeach their own acts. Brooklyn El. B. R. v. Brook- . 
 lyn, 11 App. Div. 132. 
 
METHOD OF ASSESSMEITT IN NEW YOEK CITT 81 
 
 When assessed valuation may be increased or diminished. — The 
 board of taxes and assessments may increase at any time before the 
 sixteenth day of November as to real estate and before the first day 
 of December as to personal estate, in each year, or may diminish at any 
 time before the first day of December in each year, the assessed valu- 
 ation of any real or personal estate of any individual or corporation, 
 as in its judgment may be just or necessary for the equalization of 
 taxation; but it shall not increase such valuations of the property of 
 any individual or corporation after said books are opened for correc- 
 tion and review, except upon notice given to the individual or corpora- 
 tion affected by such increase at least ten days before the fifteenth day 
 of December in each year. {Sec. 896, Charter, as am'd iy ch. 455, L. 
 1911.) 
 
 Source: In substance the same as sec. 819, ch. 410, L. of 1882 (Con- 
 sol. Act) [L. 1859, eh. 302, see. 11], with the exception of change of 
 date. 
 
 Notice to be given of increase. — The commissioners may re- 
 duce an assessment at any time before the closing of the books 
 of annual record, but shall not increase the assessment except 
 on notice. People ex rel. Cent. Stamping Co. v. Barker, 86 
 Hun, 240 (1895). If an increase is made without notice it is 
 illegal and void. People ex rel. Littman v. Wells, 91 App. Div. 
 172 (1904). 
 
 The provision as to the increase of assessments under section 
 896 of the charter, after the books have been opened, is not un- 
 constitutional. While the books of annual record are closed gen- 
 erally, as far as making complaints are concerned, on the first 
 day of April (December), yet when the assessment has 
 been increased after the second Monday of January (now Oc- 
 tober 1st), the reasonable construction to be given to this sec- 
 tion, reading it in the light of sections 892 and 895 of the char- 
 ter, would be that the books are not closed in such cases until 
 April (December) fifteenth; otherwise the provision as to giv- 
 ing at least ten days' notice before April (December) fifteenth 
 would be meaningless. People ex rel. Simpson v. Wells, 181 ~N. 
 Y. 252 (1905) ; aff'g 99 App. Div. 364. 
 
 Where the assessment was changed or increased from $65,000 
 
82 TAXATION OF COEPOEATIONS 
 
 to $70,000 before the books were opened on the second Monday 
 of January, no notice need be given, and if a person receives a 
 written notice of the lower assessment instead of the increased 
 assessment under these circumstances, and relying on the 
 smaller assessment, does not appear before the tax board, he 
 has no remedy by certiorari, the assessment not being illegal or 
 void and he having failed to appear before the tax board. Peo- 
 ple ex rel. Bijur v. Feitner, O'Gorman, J. Sp. Term, III, L. J. 
 Feb. 14, 1907. 
 
 It appears that relator's only remedy in this case was by 
 equitable defence to any action under section 934, charter, to 
 collect the tax. The remedy suggested in the Bijur case would 
 seem to be in accord with a later decision in City v. Halsey, 132 
 App. Div. 192 (1909). In that case, the defendant was refused 
 an inspection of the tax record, and was informed by the com- 
 missioner that there was no assessment against him, on which 
 statement he relied. The Appellate Division held that under 
 these circumstances, an equitable defense under Sec. 934 of the 
 Charter, to an action brought to collect the tax was justified. 
 
 The Board of Taxes and Assessments may not, however, in- 
 crease the assessed valuations after the books of annual record 
 are open for examination and correction, except upon notice 
 to the taxpayer. Even if the taxpayer appears after the open- 
 ing of the books and objects to the assessment as made, this 
 shall not be construed as a consent on his part to have the as- 
 sessment increased, nor can the action of the Board in opposing 
 the application for a reduction be considered a notice that they 
 will order an increase. People ex rel. Kemp. B. E. Co. v. 
 O'Donnel, 198 K Y. 48 (1910). 
 
 Power of the board to remit or reduce a tax. — The board of taxes 
 and assessments is hereby Invested with power to remit or reduce 
 where lawful cause therefor is shown. It may remit or reduce if found 
 excessive or erroneous, a tax imposed upon real or personal property. 
 It shall require a majority of the commissioners of taxes and assess- 
 ments to remit or reduce the assessed valuation of personal property, 
 
METHOD OF ASSESSMENT IN NEW TOBK CITY 83 
 
 and no tax on personal property shall be remitted, cancelled or re- 
 duced except to correct clerical errors unless the person aggrieved 
 shall satisfy the board of taxes and assessments that illness or ab- 
 sence from the city had prevented the filing of the complaint or mak- 
 ing the application to the said board within the time allowed by law 
 for the correction of taxes. Any remission or reduction of taxes upon 
 the real estate of individuals or corporations must be made within 
 one year after the delivery of the books to the receiver of taxes for the 
 collection of such tax. {Sec. 897, Charter, as am'd hy ch. 192, L. 1902, 
 and ch. 64, L. 1908, and ch. 324, L. 1913.) 
 
 Source: In substance the same as sec. 822, ch. 410, L. 1882 (Consol. 
 Act) [L. 1870, ch. 882, sec. 8; L. 1873, ch. 335, sec. 87]. By ch. 324, 
 L. 1913, the opinion of the corporation counsel appears to be no longer 
 necessary. 
 
 Section 897 applies to corporations. — The absence of all offi- 
 cers or agents of a corporation from the state or their being pre- 
 vented by sickness from making the application for correction 
 within the time fixed by law entitles it to the benefit of the 
 above provision of the charter. People ex rel. N. Y. Hotel & 
 Rest. Co. V. Barker, 140 K Y. 437 (1893) ; reversing 69 Hun, 
 287. 
 
 But section 897 of the charter does not apply to a case where 
 a person was absent or ill during a portion of the time when 
 he might have appeared. To come within the law one must have 
 been prevented from appearing during the entire period. People 
 ex rel. Leroy v. Feitner, 35 App. Div. 490. 
 
 By Chapter 324, Laws 1913, section 897 of the charter was 
 
 amended by the omission of the words "in the opinion of the 
 
 corporation counsel" so that such opinion appears to be no 
 
 longer necessary to give the board power to remit or reduce a 
 
 tax. 
 
 Applications for revision and cancellation of assessment in the 
 several boroughs; when and how made.— The board of taxes and 
 assessments from the whole number of persons appointed as deputy 
 tax commissioners shall for each of the boroughs wherein one of the 
 offices of the department of taxes and assessment is established and 
 maintained designate one or more deputy tax commissioners, who 
 shall, between the first day of October in each year and the sixteenth 
 day of November following as to real estate, and the first day of De- 
 
84 TAXATION OF COEPOEATION'S 
 
 cember following as to personal estate, receive applications for the 
 revision and cancellation of any assessments entered in the books of 
 annual record of the assessed valuation of real and personal estate in 
 that borough, take testimony, on such applications and reduce the 
 same to writing, and when so reduced to writing, transmit such ap- 
 plications and testimony, with his recommendation, to the board of 
 taxes and assessments at its main office in the Borough of Manhattan, 
 or to any office of the department of taxes and assessments in any 
 borough as the board of taxes and assessments may prescribe. Such 
 deputy tax commissioners as may be designated for the purposes and as 
 prescribed in this section are hereby authorized between the first day 
 of October and the first day of December to administer oaths for the 
 purpose of taking testimony upon all applications for the revision or 
 cancellation of assessments, and they are hereby required and di- 
 rected to transmit the evidence so taken and reduced to writing, 
 within ten days after the evidence upon any application is taken, with 
 their recommendation as hereinbefore described. The board of taxes 
 and assessments shall hear at its main office all applications of cor- 
 porations for revision and cancellation of assessments; and as to all 
 other applications, the said board may prescribe the time and place of 
 hearing thereof in the several boroughs and give such public notice 
 thereof in the City Record and in at least one newspaper in each bor- 
 ough as they may designate, and the board may make such rules and 
 regulations as may be appropriate and expedient to the end that the 
 taxpayers of each borough other than corporations, may have a hear- 
 ing in the borough in which they reside or in which their property 
 assessed is situated. All testimony taken by the board of taxes and 
 assessments by any commissioner or by deputy tax commissioners as 
 herein prescribed, shall be reduced to writing and shall constitute part 
 of the record of the proceedings upon any assessment. The decision 
 of the board of taxes and assessments, upon any application for the 
 revision, reduction or cancellation of any assessment and upon the 
 evidence taken thereunder, shall, where the evidence is taken by the 
 board of taxes and assessments, be rendered within thirty days after 
 the hearing upon such application is closed, and in no case later than 
 the first day of February. And where the evidence upon any applica- 
 tion is taken by any commissioner or a deputy tax commissioner, the 
 determination of the board of taxes and assessments shall be rendered 
 within thirty days after the application and the testimony thereunder 
 shall have been filed with the board of taxes and assessments, at the 
 main office of the department in the Borough of Manhattan, and in 
 no case later than the first day of February. [Sec. 898, Charter, as 
 am'd ly ch. 455, L. 1911.) 
 Source: This section of the charter is new. 
 
METHOD OF ASSESSMEliTT IN NEW TOEK CITY 85 
 
 Applications of corporations for revision of assessments 
 made at main office in Manhattan. — The purpose of having the 
 "annual record of assessed valuations of real and personal estate 
 of corporations" kept complete at the main office under section 
 893, is apparent from a perusal of section 898, which requires 
 applications for revision and cancellation of assessments of cor- 
 porations to be made at the main office of the board, whereas 
 other applications of a similar character are addressed to the 
 deputy tax comrnissioners for the various boroughs; People ex 
 rel. Manhattan Life Ins. Co. v. Wells, 82 N. Y. Supp. 876, aff'd 
 91 App. Div. 44 (1904) ; see, also. People ex rel. L. I. R. B. v. 
 Feitner, 53 App. Div. 185 (1900). 
 
 Deputy tax commissioners to make up aggregate amount of 
 assessed valuation in the boroughs.— It is hereby declared to be the 
 duty of the deputy tax commissioners, or of such other persons as 
 may have been assigned to the charge and direction of any one of the 
 offices of the department of taxes and assessments in the several bor- 
 oughs, to compute from the annual record of the assessed valuations 
 of real and personal estate in each of the said several offices, the total 
 aggregate amount of the assessed valuation of real and personal prop- 
 erty appearing on said books for each of the said boroughs on the 
 first day in October in any year not a, Sunday or a legal holiday, and 
 to transmit a statement of such aggregate amounts of assessed valu- 
 ations of real and persoiial property in the said several boroughs to the 
 department of taxes and assessments at its main office in the Borough 
 of Manhattan, on or before the first day in October in each year not 
 a Sunday or a legal holiday. The board of taxes and assessments is 
 hereby invested with the power and charged with the duty before open- 
 ing the books for the public inspection as herein prescribed, to fix 
 such valuations of property for the purposes of taxation throughout 
 the city of New York at such sums as will, in its judgment, establish 
 a just and equal relation between the valuations of property in each 
 borough and throughout the entire city. To this end the board of 
 taxes and assessments is authorized to require the deputy tax com- 
 missioners to transmit a report to it of the assessed valuation of real 
 and personal property in the several boroughs at such time prior to 
 the first day in October in each year, not a Sunday or a legal holiday, 
 as the board of taxes and assessments may prescribe. {See. 899, Char- 
 ter, as am'd by ch. 455, L. 1911.) 
 
CHAPTEK X. 
 
 Appoetionment ; Equalization ; Levy of Tax ; Completion' 
 
 OF Rolls. 
 
 Equalization by board of supervisors and correction of er- 
 rors. — Section 50 of the Tax Law authorizes the board of super- 
 visors in each county to equalize the valuations of property on 
 the assessment rolls in the several tax districts in the county. 
 Its provisions manifestly apply to the equalization of the valua- 
 tion of real estate as also do sections 51, 52 and 53 of the Tax 
 Law relating to the same subject. Section 56 of the Tax Law 
 also refers to real estate and authorizes the board to correct cer- 
 tain clerical errors occurring in the transcribing from one roll 
 to another or in the omission of property and Section 57 to re- 
 assess property found to be illegally assessed by the judgment of 
 the court. People ex rel. Hermance v. Supervisors of Ulster, 
 10 Hun, 545 (1877). 
 
 Levy of tax by supervisors. — The board of supervisors of each 
 county shall, at its annual meeting, levy the taxes for the county, in- 
 cluding the state tax, upon the valuations as equalized by it and esti- 
 mate and set down in a separate column in the assessment roll of 
 each tax district therein, opposite to the sums set down as the valu- 
 ation of real and personal property or property of incorporated com- 
 panies or of the taxable rents reserved, the sum to be paid as a tax 
 thereon, including the state tax, as fixed by the comptroller. Such 
 assessment roll shall, when the warrant is annexed thereto, become 
 the tax roll of the tax district, and a copy thereof shall be delivered 
 to the proper supervisor, who shall deliver it to the clerk of the proper 
 city or town, to be kept by him for its use. (Sec. 58, Tax Law, former 
 Bee. 55, Tax Law of 1896.) 
 
 Source: R. S., pt. 1, ch. XIII, title 2, sees. 33-35, as amended. See, 
 also, sec. 12 and sees. 240 and 242 of County Law, and sec. 170, Town 
 Law, for county and town charges. 
 
APPOETIONMENT ; .EQUALIZATION ; LEVY OF TAX 87 
 
 Taxes not a lien until roll is completed and delivered to 
 supervisors. — A covenant in a conveyance made October 27 
 that certain premises were then free and clear from all encum- 
 brances whatsoever, is not to be deemed broken by the fact that 
 such premises have been assessed for taxation in June, and the 
 roll containing the assessment completed in August, since it was 
 not delivered to the board of supervisors until November. Bar- 
 low V. St. Nicholas Bank, 63 K Y. 399 (1875). 
 
 It has been held under the New York city practice prior to 
 the revised charter, that a tax was not due and payable and no 
 lien attached until the board of aldermen (qorresponding to the 
 board of supervisors) imposed the tax, and the same was ex- 
 tended on the rolls. This applied equally to personal taxes. 
 Lathers v. Keogh, 109 IST. Y. 588 (1888) ; Burr v. Palmer, 53 
 App. Div. 358 (1900). 
 
 Under Sec. 914 of the Charter as amended by Chapter 455, 
 Laws of 1911, the first half of all taxes on real estate in the 
 City of New York is due and payable, and shall become a lien 
 on May first, and the remaining half on November first. 
 
 When assessment-rolls to be made and delivered to the board 
 of aldermen. — Beginning with the first day in December in each year 
 not a Sunday or a legal holiday, the board of taxes and assessments 
 shall cause to be prepared from the books of annual record of assessed 
 valuations of real and personal estate in the several oflBces of the de- 
 partment of taxes and assessments in the several boroughs, assessment- 
 rolls for each of said several boroughs, and shall, as soon as such 
 rolls are completed, annex to eaeh of said rolls its certificate that the 
 same is correct in accordance with the entries in said several books of 
 record. The rolls so certified must, on the first day of March in each 
 year, be delivered by the board of taxes and assessments to the board 
 of aldermen, which shall meet at noon on that day at the city hall, 
 or usual place of meeting, in the Borough of Manhattan, for the pur- 
 pose of receiving the same and for the purpose of performing such 
 other duties in relation thereto as are prescribed by law; except that 
 whenever said first day of March shall fall on Saturday, Sunday or a 
 legal holiday, such rolls shall be delivered by said board of taxes and 
 assessments on the next succeeding day thereafter not a Saturday, 
 Sunday or a legal holiday to the board of aldermen, which shall meet 
 
88 TAXATION OF COEPOEATIOITR 
 
 at noon on such next succeeding day, at the place and in the manner 
 and for the purposes herein specified. In the event of the board of 
 aldermen failing to meet to receive said rolls, the same may be de- 
 livered to the city clerk, with the same effect as if delivered to the 
 board of aldermen. 
 
 The board of aldermen, however, shall meet not later than the third 
 day in March which is not a Saturday, Sunday or a legal holiday to 
 fix the annual tax rates. In determining such rates the board of 
 aldermen shall fix each rate in cents and hundredths of a cent upon 
 each dollar of assessed valuation. Within three weeks after the de- 
 livery of the assessment rolls to the board of aldermen, the board of 
 taxes and assessments shall furnish to the supervisor of the City 
 Record a copy of the annual record of the assessed valuation of real 
 estate, omitting from the said annual record two columns headed 
 respectively "size of house" and "houses on lot." {Sec. 907, Charter, 
 as am'd by ch. 454, L. 1903, ch. 455, L. 1911.) 
 
 Source: The above is, in substance, the same as sec. 828, Consol. 
 Act. (L. 1859, ch. 302, sees. 12, 13), with the exception of last para- 
 graph, which was added by ch. 454, L. 1903, and the change of dates 
 in the first and second paragraphs, created by the amendment of 1911. 
 
 The provision as to the time when the rolls are delivered for 
 inspection is only directory. The assessors have power to cor- 
 rect or supply defects in an affidavit verifying the rolls. People 
 ex rel. Borne, W. & 0. B. B. v. Jones, 43 Hun, 131 ; see, also, 
 City V. Ferris, 91 App. Div. 223 (1904) ; City v. Watt, 40 
 Misc. 595 (1903). 
 
 Meaning of the words "board of taxes and assessments" in this 
 chapter; majority clause. — Whenever any act is required or autho- 
 rized to be done, or any determination or decision made by the board 
 of taxes and assessments, or any other body or board, then, in the 
 absence of express provision to the contrary, any such act, if done, 
 or any such determination or decision, if made by a majority of the 
 body or board, shall, within the meaning of this act, be held to be the 
 act, determination or decision of the body or board. (Sec. 908, Char- 
 ter.) 
 
 Source: This section of the Charter is new. 
 
 Assessment rolls to remain in custody of board of aldermen. — 
 The tax or assessment rolls, when finally submitted to the board of 
 aldermen, shall remain in its custody, but the president of the board 
 
APPOKTIONMENT ; EQUALIZATIOIf ; LEVY OF TAX 89 
 
 may, by written permission, permit access to them, and he is hereby, 
 in the name of the board of aldermen, and as its act, authorized and 
 directed to cause to be properly estimated and computed the taxes an- 
 nually imposed, and cause the same to be properly set down or ex- 
 tended in the several assessment rolls or tax books, as required by the 
 next section. It shall also be the duty of said president to cause the 
 items of said taxes to be carefully added, and to set down the amount 
 of the same therein; and when completed to deliver the tax books re- 
 lating to real estate to the comptroller, in order that the unpaid water 
 rents and the expenses of meters, with their connections and setting, 
 water rates and other lawful charges for the supply of water measured 
 by meters of any preceding year may be entered therein. After such 
 completion of the assessment rolls or tax books, it shall be the duty of 
 the city clerk to procure the proper warrants authorizing and requir- 
 ing the receiver of taxes to collect the several sums therein mentioned, 
 according to law, and such warrants need be signed only by the presi- 
 dent of the board of aldermen and countersigned by the city clerk, and 
 immediately thereafter the president of the board of aldermen shall 
 deliver the said assessment rolls, with the warrants aforesaid an- 
 nexed thereto, to the receiver of taxes, at the same time notifying the 
 comptroller of the amount of taxes in each book, in order that he may 
 cause the proper sum to be charged to the receiver for collection. (Sec. 
 909, Charter, as am'd 'by oh. 455, L. 1911.) 
 
 Source: This section is, in substance, the same as sec. 831, Consol. 
 Act (L. 1871, eh. 573, sec. 3) ; the amendment of 1911 contains the 
 provision for adding meter charges and the expense of setting meters. 
 
 The actual issuing of the warrant formerly determined the 
 time when taxes became a lien. The process of assessment was 
 then complete. Ooudert v. Huerstel, 60 App. Div. 83 (1901). 
 The lien now attaches from the respective days mentioned in 
 Section 914 of the Charter, as amended in 1911. (See P. 152.) 
 
 Duties of board of aldermen. — At such annual meeting the board 
 of aldermen must make such alterations in the description of real 
 property belonging to non-residents as may be necessary to render such 
 descriptions conformable to the provisions of law; and if such altera- 
 tions cannot be made, they must expunge the descriptions of such real 
 property, and the assessment thereon from the assessment rolls. They 
 must also estimate and set down in a fifth column, to be prepared for 
 that purpose in the assessment rolls, opposite to the several sums set 
 down as the valuation of real and personal property, the respective 
 
90 TAXATION OF COEPOEATIOlfrS 
 
 sums, in dollars and cents, to be paid as a tax thereon, rejecting the 
 fractions of a cent. They must also add up and set down the aggre- 
 gate valuations of the real and personal property in the several bor- 
 oughs as corrected by them; and must transmit to the comptroller of 
 this state by mail a certificate of such aggregate valuations, showing 
 separately the aggregate amount of the real and personal property in 
 each borough, as corrected by the board of aldermen. {8ec. 910, Char- 
 ter.) 
 
 Source: This section is, in substance, the same as sec. 832, Consol. 
 Act (L. 1850, ch. 121, sees. 24-26; L. 1871, ch. 573, sec. 1). 
 
 Duty of board purely clerical. — When the assessment-rolls 
 are delivered to the supervisors the data upon which taxes are 
 to be computed is fixed by law, and the duty devolving upon the 
 supervisors is purely clerical in its nature, and consists in com- 
 puting the ratio of taxation and the sums chargeable to the re- 
 spective taxpayers. Matter of Bdbcoch^ 115 !N". Y. 450. 
 
CHAPTER XI. 
 
 Taxpayers' Remedies ; The Review aitd Coeeection of As- 
 sessments FOE Local Taxation; Common Law Weit 
 
 AND StATUTOEY WeIT DISTINGUISHED. 
 
 Remedies prior to the law of 1880. — Prior to the adoption of 
 Chapter 269, Laws of 1880, there was no procedure by which 
 an excessive or disproportionate assessment might be reviewed 
 and corrected. 
 
 Where assessors had acted without jurisdiction, illegally or 
 fraudulently, a common law writ of certiorari lay to review 
 their acts, but mere inequality or over-valuation was no ground 
 for review, and in such cases the judgment of the assessors was 
 deemed conclusive. Nor would common law certiorari lie after 
 the assessment rolls had left the hands of the assessors. People 
 ex rel. Raphe v. Beddy, 43 Barb. 539 (1865) ; People ex rel. 
 Marsh v. Delaney, 49 IST. Y. 655 (18*72) ; People ex rel. Law v. 
 Com'rs, 9 Hun, 609 (1877) ; People ex rel. Weehs v. Super- 
 visors of Queens, 82 K Y. 275 (1880). 
 
 The common law writ. — The common law writ of certiorari 
 issued on special cause shown and not as a matter of right to 
 review the determination of assessors, who, as gwasi-judicial 
 officers, acted as a special tribunal, and also to officers of mu- 
 nicipal corporations in certain cases. People ex rel. Church v. 
 Supervisors, 15 Wend. ,198 (1836). The writ reviewed the 
 record upon which the determination was founded and inquired 
 into the legality of the proceedings and the jurisdiction of the 
 assessing officers, to the end that if they acted illegally and with- 
 out jurisdiction a final order might be entered annulling or va- 
 cating their determination. People ex rel. Oriffin v. Mayor of 
 Brooklyn, 4 K Y. 419 (1851). While the Supreme Court still 
 
 91 
 
92 TAXATION OF COEPOEATIOITS 
 
 has inlierent power to issue a common law writ {People ex rel. 
 Powder Co. v. Feitner, 41 App. Div. 544, 1899), it is now well 
 established that the statutory writ has superseded this proceed- 
 ing. 
 
 The statutory writ. — The statutory writ applies where some 
 express statute authorizes the remedy. The statute providing 
 for the writ also specifies the cases when it may be granted, the 
 court to whom, and time within which, application must be 
 made, the relief to be granted, and frequently provides the pro- 
 cedure to be followed. A long line of cases settled the procedure, 
 practice and limitations of the common law writ, and these 
 where not expressly modified by statute, have, to a great extent, 
 been followed in the practice governing the statutory writ. 
 
 By Chapter 269, Laws of 1880, a remedy was provided not 
 only for illegal tax assessments, but also for inequality or over- 
 valuation, and the action of assessors might now be reviewed in 
 the Supreme Court. The provisions of Chapter 269, Laws of 
 1880, were incorporated in the General Tax Law without change 
 of substance, forming sections 250 et seq. of the act (now Sec. 
 290 et seq. of the Tax Law). 
 
 In the city of Ifew York, under the l^ew York Consolidation 
 Act, inequalities in the assessment of real estate were not re- 
 viewable by certiorari. This restriction of the grounds of re- 
 view was sustained as constitutional. People ex rel. Second Ave. 
 B. R. V. Coleman, 21 St. Eep. 178. 
 
 Distinction between the common-law writ, the statutory 
 writ under the Code and the special statutory writ. — [By the 
 "special statutory writ" is meant Chapter 269 of the Laws of 
 1880, now contained in the Tax Law (Section 290).] 
 
 The common-law writ limited the petitioner to questions of 
 the assessors' jurisdiction and review of the procedure pursued 
 by them; their decision upon values and appraisals was final. 
 The Code writ of Certiorari may be issued (Section 2120) where 
 
KEMEDIES; COMMON LAW AND STATUTORY WEITS 93 
 
 it might have been issued at common law by a court of general 
 jurisdiction, and where the right to the writ, or the power of 
 the court to issue it, is not expressly taken away by statute and 
 also (Section 2140) permits the following questions to be de- 
 termined: As to the assessors' jurisdiction of the subject-mat- 
 ter ; as to the exercise of the assessors' authority pursuant to law 
 in reaching the determination ; as to the violation of any rule of 
 law affecting the petitioner's rights to his prejudice; as to the 
 competency of proof of all the facts necessary to be established 
 in making the determination; as to the preponderance of such 
 proof, if any, against the existence of any of those facts, being 
 sufficient to warrant a court in setting aside a verdict of a jury 
 affirming the existence thereof as against the weight of evidence. 
 The granting of the common-law writ is discretionary; People 
 ex rel. Toms v. Supervisors, 199 IST. Y. 150 (1910). This is 
 also true of the Code writ ; Section 2127 of the Code makes the 
 granting of the writ discretionary. People ex rel. The Mayor v. 
 McCarthy, 102 IST. T. 631 (1886), but this is qualified by other 
 provisions making the granting of the writ a matter of right in 
 certain cases. The statutory writ under Chapter 269, Laws of 
 1880, under the Tax Law and the New York Charter is a mat- 
 ter of right. Matter of Corwin, 135 K Y. 245 (1892). 
 
 By Chapter 269 of the Laws of 1880 the powers of the courts 
 in certiorari proceedings to review tax assessments were ex- 
 tended so as to permit of a review of the assessors' determina- 
 tion upon the ground of over-valuation or inequality if the pe- 
 titioner showed injury thereby, and thus practically provided 
 a de novo hearing. This law was embodied in the Tax Law of 
 1896, Chapter 908 (Art. XI, Sec. 250) and now found in Art. 
 XIII of the Tax Law, Sec. 290 et seq. (Consolid. Laws, Chap- 
 ter 60). 
 
 In People ex rel. Manhattan R. Co. v. Barker, 152 IST. Y. 417 
 (430) the distinction between the various writs of certiorari is 
 indicated by Judge Vann. He says: 
 
94 TAXATION OP COEPOEATIONS 
 
 "Thus we have a -writ of certiora/ri with novel functions hitherto un- 
 known to such methods of review. The common-law writ brings up the 
 record for inquiry into jurisdiction and regularity and, in criminal or 
 quasi-criminal cases, the evidence also, 'to see whether as a matter of 
 law, there was any proof which could warrant a conviction of the 
 relator. {People em rel. C. 0. L. Co. v. Board of Assessors, 39 N. Y. 81; 
 People ex rel. Cook v. Board of Police, 39 N. Y. 506, 512, 518.) The 
 general statutory writ brings up both record and proceedings for ex- 
 amination, not only as to jurisdiction and method of procedure, but 
 also to see whether there was a violation of any rule of law, or any 
 competent proof of all the essential facts, or a preponderance of proof 
 against the existence of any of those facts. (Code Civ. Pro. Sees. 2120 
 to 2148; People ex rel. Coyle v. Martin, 142 N. Y. 352.) The special 
 statutory writ now before ua differs from its predecessors in one re- 
 markable respect, in that it permits a re-determination of all questions 
 of fact upon evidence, taken in part at least by the Special Term, or 
 under its direction. {People ex rel. TJ. & D. R. R. Co. v. Smith, 24 
 Hun, 66, 71; People ex rel. Qrace v. Gray, 45 Hun, 243, 245.)" 
 
 In Mercantile National Bank v. Mayor, etc. of New York, 
 172 ]^. Y. 35 (40), the distinction between the common-law 
 writ and the code writ was again pointed out. In that case, 
 Gray, J. says: 
 
 "I have grave doubt whether the common-law writ of certiorari 
 would afford to the plaintiff an adequate remedy for the particular 
 grievance assigned in its complaint, if the right to resort to it existed. 
 The issuance of the writ was largely discretionary and its function was 
 to bring up for review the record of the proceedings of tribunals, or 
 boards, possessing a special, or limited jurisdiction, for inquiry, by the 
 court into the questions whether the proceedings were with jurisdiction 
 of the subject-matter and with regularity; that is to say, with due 
 regard to individual rights in matters affecting their persons, or prop- 
 erty. Did they keep within the boundaries prescribed by the statute 
 law, or by well-settled principles of the common law, would be the 
 question presented. It was not until the passage of the general act 
 of 1880 (Chap. 269, Laws of 1880), that tax-payers were afforded an 
 effective remedy against illegal, or erroneous assessments by the writ 
 of certiorari. Prior thereto, as the assessors were deemed to act ju- 
 dicially, the review of the courts was confined to questions of jurisdic- 
 tion. {People ex rel. Citizens' O. L. Co. v. Board of Assessors, 39 N. 
 Y. 81. 88; People ex rel. Cook v. Board of Police, lb. 506; People ex 
 
remedies; common law and statutory weits 95 
 
 rel. Buffalo d 8. L. R. R. Co. v. Fredericks, 48 Barb. 173; aff'd. 48 
 N. Y. 70; People ex rel. Manh. Ry. Go. v. Barker, 152 lb. 417, 430.) 
 In People ex rel. Cook v. Board of Police (supra), Judge Woodruff, 
 in his opinion, elaborately reviews the authorities and concludes that 
 there were these three classes, into which certiorari proceedings di- 
 vided themselves: First, that of the common-law writ, brought to re- 
 view the summary conviction of a person charged with crime, or offense 
 in law; second, that of the common-law writ brought to review other 
 proceedings of inferior tribunals, magistrates, or bodies of oflScers, un- 
 der a special, or limited jurisdiction, and, third, the statutory certio- 
 rari. Speaking of the second class, he observed : 'The decisions of this 
 state seem to hold with much uniformity that none but jurisdictional 
 questions can be considered.' In that case, as in the later case of Peo- 
 ple ex rel. Clapp v. Board of Police (72 N. Y. 415), where Judge An- 
 drews wrote, the question related to the punishment of the relator 
 by the board of police for an offense and it was held that, in such 
 cases, the power to review extended to the consideration of the ques- 
 tion whether there was any proof supporting the conviction. . . . 
 
 "Thus, the common-law writ of certiorari, in bringing up for re- 
 view the proceedings of the commissioners of taxes and assessments, 
 which are, unquestionably, judicial in their nature {Barhyte v. Shep- 
 ard, 35 N. Y. 238; Buffalo & S. h. R. R. Co. v. Supervisors, 48 lb. 93; 
 Stanley v. Supervisors, 121 U. S. 535), would present questions relating 
 to jurisdiction and to regularity and not to the merits of this contro- 
 versy. But, in my opinion, the common-law writ would be no longer 
 available in such cases. With the enactment of Chapter 269, of the 
 Laws of 1880, there was created a new and complete system for re- 
 viewing upon certiorari, and for thereby correcting the errors of assess- 
 ing officers. {People ex rel. Wallkill Valley R. R. Co. v. Keator, 101 
 N. Y. 610.) It rendered inapplicable the provisions of the Code of 
 Civil Procedure, relating to the writ of certiorari (People ex rel. 
 Church of the Holy Communion v. Assessors, 106 N. Y. 671; Matter of 
 Corwin, 135 lb. 245), and resumed within itself the remedies available 
 to a taxpayer aggrieved by the action of the assessing officers. What 
 was discretionary at common-law now became a right. I think that 
 that act became the only authority for the review of errors in assess- 
 ments for purposes of taxation. It was entitled 'An act to provide for 
 the review and correction of illegal, erroneous, or unjust assessments.' 
 It authorized the issuance of a writ to review assessments for illegali- 
 ties, the grounds of which are specified in the petition, or which are 
 alleged to be erroneous, by reason of overvaluation, or to be unequal, 
 'in that the assessment has been made at a higher proportionate valu- 
 ation than other real or personal property on the same roll by the 
 same officers.' " 
 
96 TAXATION OF COEPOEATIONS 
 
 The special statutory writ of the Laws of 1880 (Chap. 269) 
 now in Art. XIII of the Tax Law (Sec. 290 et seq.) is only 
 applicable to assessments "upon any assessment roll" and of 
 course applies to special franchise assessments; furthermore, 
 by section 46 of the Tax Law it is specifically provided that 
 Art. XIII is made applicable to such assessments as far as 
 practicable. 
 
 The Greater New York Charter provides for a certiorari 
 (Sec. 906) to review the final determination of the board of 
 taxes and assessments of that city; the provision is similar to 
 the writ of Sec. 290 of the Tax Law. 
 
 The writ provided for by Sec. 199 of the Tax Law for review- 
 ing the determination of the state comptroller is the so-called 
 code writ as distinguished from the special statutory writ and is 
 not as broad in scope as the latter {People ex rel. Manhattan 
 B. Co. V. Barker, 152 N. Y. 417). The relator is concluded 
 by the return of this writ. 
 
 The special statutory writ permits a re-determination of all 
 questions of fact; the return thereto is not conclusive. The 
 relator may give further evidence upon the material issues. 
 People ex rel. Citizens' Lighting Co. v. Feitner, 81 App. Div. 
 118 ; People ex rel. Bihb Manufacturing Co. v. Wells, 84 App. 
 Div. 330; People ex rel. Knickerbocker Co. v. Wells, 99 App. 
 Div. 455 ; aff'd 181 N. Y. 245 ; People ex rel. Twenty-third St. 
 B. Co. V. Feitner, 92 App. Div. 518 ; People ex rel. Sands v. 
 Feitner, 173. K Y. 649. 
 
 In People ex rel. Citizens' Light Co. v. Feitner, 81 App. Div. 
 118, the court carefully expounds the distinction between these 
 various writs. For practical purposes, it is simplest to bear in 
 mind that the writ that should issue in all tax cases is the writ 
 prescribed by the Tax Law governed as to procedure by the Code 
 of Civil Procedure. (People ex rel. Bklyn H. B. B. Co. v. As- 
 sessors, 10 App. Div. 393.) Where, with respect to this writ, the 
 Tax Law and the Code of Civil Procedure are inconsistent, the 
 
97 
 
 provisions of the former prevail, and the latter are inapplicable 
 {People ex rel. The Church v. Assessors^ 106 E". Y. 671) ; where 
 the Tax Law does not make specific provision the Code gov- 
 erns. People ex rel. N. Y. C. B. B. Co. v. Cook, 62 Hun, 303 ; 
 People ex rel. Erie B. B. Co. v. Webster, 49 App. Div. 556, 
 565 ; People ex rel. N. Y. L. E. & W. B. B. Co. v. Low, 40 Hun, 
 176; People ex rel. Kendall v. Feitner, 51 App. Div. 196. 
 
 The power of the Supreme Court to issue a common-law writ 
 of certiorari to review an assessment for the purposes of taxa- 
 tion, void for want of jurisdiction, was not taken away by Sec. 
 290 of the Tax Law (formerly Sec. 250 Tax Law of 1896), or 
 by any other statute. People ex rel. Powder Co. v. Feitner, 41 
 App. Div. 544. But a common-law writ will not be issued to re- 
 view an assessment which is alleged to be erroneous, because of 
 over-valuation or of inequality. People ex rel. Kendall v. Feit- 
 ner, 51 App. Div. 196. 
 
 Stay, pending certiorari, not granted under section 906. — 
 
 A stay pending review by certiorari, where the writ was ob- 
 tained under the provisions of the charter (section 906), cannot 
 be granted. The writ thus provided for, issues as of right upon 
 the presentation of a specified case and there is no authority in 
 the statute for a stay. It is thus distinguished from the writ 
 treated of in Article 7 of Title 2 of Chapter 16 of the Code, 
 which authorizes a stay and is within the discretion of the court 
 to grant. Code, section 2127 ; In re Corwin, 135 IST. Y. 245 ; 
 People ex rel. Dale v. Feitner, N. Y. Law Journal, May 4, 
 1900 ; Special Term, Part I, Bischoff, J. Nor is there any au- 
 thority for a stay, where the vn-it is obtained under the pro- 
 visions of the Tax Law (Sec. 290 et seq.). 
 
CHAPTEK XII. 
 
 The Pbactice in Ceetioeaei Peoceedings undee the New 
 York Chaetee and the Tax Law. 
 
 The case and statute law applicable to certiorari under the 
 New York charter and the Tax Law are treated together and 
 as part of one and the same subject; for while the provisions 
 of the New York charter differ in some respects from the Tax 
 Law, and, in so far as they differ, the charter provisions pre- 
 vail in the city of New York, nevertheless those provisions of 
 the Tax Law not repugnant to the charter must be taken as sup- 
 plementary, and in addition, to the provisions of the local law. 
 
 Certiorari under the Greater New York Charter. — A certiorari 
 to review or correct on the merits any final determination of tlie board 
 of taxes and assessments shall be allowed by the Supreme Court or any 
 justice thereof, directed to the commissioners of taxes and assessments 
 on the verified petition of the party aggrieved, but only on the grounds, 
 which must be specified in such petition, that the assessment is illegal, 
 and giving the particulars of the alleged illegality, or that it is er- 
 roneous by reason of over-valuation, or in ease of real estate, that the 
 same is erroneous by reason of inequality, in that the assessment has 
 been made at a higher proportionate valuation than the assessment of 
 other real estate of like character in the same ward or section or other 
 real estate on the tax rolls of the city for the same year, specifying 
 the instances in which such inequality exists, and the extent thereof, 
 and stating that he is or will be injured thereby. Such certiorari and 
 all proceedings thereunder may be had and taken in the judicial dis- 
 trict where such real estate is situated, and may be begun at any time 
 before the first day of July following the time when the determination 
 Bought to be reviewed or corrected was made. {Sec. 906, Charter, as 
 amended by ch. 455, L. 1911.) 
 
 Certiorari under the Tax Law. — Any person assessed upon any as- 
 sessment roll, claiming to be aggrieved by any assessment for prop- 
 erty therein, may present to the Supreme Court a petition, duly veri- 
 fied, setting forth that the assessment is illegal, specifying the grounds 
 of the alleged illegality, or if erroneous by reason of over-valuation, 
 
 98 
 
99 
 
 stating the extent of such over-valuation, or if unequal in that the as- 
 sessment has been made at a higher proportionate valuation than the 
 assessment of other property on the same roll by the same ofiicers, 
 specifying the instances in which such inequality exists, and the extent 
 thereof, and stating that he is or will be injured thereby. Such petition 
 must show that application has been made in due time to the proper 
 ofiScers to correct such assessment. Two or more persons assessed 
 upon the same roll who are afifected in the same manner by the alleged 
 illegality, error or inequality, may unite in the same petition. {Sec. 
 290, present Tax Law, former sec. 250 Tax Lam of 1896.) 
 
 Source: This provision is the same in substance as sec. 1, chap. 269, 
 Laws of 1880, with the exception of the last paragraph but one, show- 
 ing that application in due time has been made for the correction of 
 the assessment. This provision is new. 
 
 The Petition; the person aggrieved. — There is a difference 
 between the language of the Tax Law and the 'New York char- 
 ter, the former providing that "any person assessed . . . claim- 
 ing to be aggrieved" and the latter, holding that the certiorari 
 shall be allowed on the verified petition of the "party ag- 
 grieved," but there has never been any serious question as to the 
 intent of the legislature limiting the remedy to the party ag- 
 grieved, irrespective of the form of the assessment, whether 
 such party be the ovsmer of the property assessed, or lessee, or 
 obligated in any way to pay the tax, or whether he be assessed as 
 trustee, committee or in a representative capacity. The lan- 
 guage of the New York charter more nearly expresses the legis- 
 lative intent, and is in accord with the present practice and 
 method of assessment (Section 21 Tax Law, as amended in 
 1911, and 1912). Property is often assessed to persons who 
 are not the ovmers thereof, and who are not even obligated to pay 
 the tax or interested in the property, so that the limitation of the 
 remedy to the "person assessed" would make the proceeding in- 
 effective and void, as far as many assessments are concerned. 
 That the right to have an assessment reviewed rests only with 
 the party aggrieved, has been well established. People v. Wall 
 St. Bank, 39 Hun, 525 (1886); People ex rel. Wright v. 
 Chapin, 104 N. Y. 369 (1887). The committee of a lunatic 
 
100 TAXATION OF COBPOBATIOM'S 
 
 may petition for a writ as the person aggrieved. People ex rel. 
 Canaday v. Williams, 90 Hun, 501. 
 
 An application by one stockholder of a bank on behalf of him- 
 self and of its other stockholders, for a writ of certiorari to 
 review an assessment of the bank stock, will be denied, where 
 the papers do not show any authority on the part of the peti- 
 tioner to make such application in behalf of the others and they 
 have not signed the petition. People ex rel. Kohler v. Feiiner, 
 Yl App. Div. 572. 
 
 A bank is a "person aggrieved" under the statute, when in 
 its representative capacity of agent, it seeks to maintain a pro- 
 ceeding in behalf of its stockholders, in relation to the assess- 
 ment and taxation of its shares of stock. In re First National 
 Bank of Ossining, 182 'E. Y. 460; People ex rel. American Ex- 
 change National Bank v. Purdy, 196 IST. Y. 270. The decisions 
 in the last two cases are contrary to those in Kohler v. Feitner 
 and in the Merchants National Bank case, supra, because, under 
 the law at the time of the former decisions, bank shares were as- 
 sessed against each holder and the tax paid by him. Laws of 
 1882, Chapter 409, Section 312, as amended. The bank is 
 now regarded as the agent of its shareholders under the Tax 
 Law, which makes it the duty of the bank to collect the tax 
 from the shareholders and pay the same. 
 
 When the assessment is void for want of jurisdiction, the 
 person so assessed is a "person aggrieved" and entitled under 
 the statute to review t\fe assessment by certiorari. People ex rel. 
 Kellogg v. Wells, 182 IST. Y. 314, reversing 101 App. Div. 600 ; 
 People ex rel. Strong v. O'Donnel, 47 Misc. 226. 
 
 Where an assessment is levied on trust property against a 
 resident and a non-resident trustee, such assessment is illegal 
 as to the non-resident, who may review the same by writ of 
 certiorari without awaiting proceedings for its enforcement and 
 is to be regarded as a person aggrieved. People ex rel. Kellogg 
 V. Wells, supra. 
 
STATTTTOEY CEETIOEAEI PEOCEEDINGS 101 
 
 In the following cases under the Code certiorari the rule is 
 equally well-settled, that the remedy is confined to the person or 
 party aggrieved: 
 
 Where the Common Council of the city of iN^ew Eochelle was 
 authorized by its charter to designate and accordingly did desig- 
 nate two newspapers representing the two principal political 
 parties in that city, in which should be published all public 
 notices, ordinances, etc., it was held in certiorari proceedings 
 that the publisher of another newspaper published in that city, 
 was not a "party aggrieved" under Section 2127 of the Code. 
 Indeed, there was nothing to show that there might not be other 
 newspapers published in that city, which might be said to fairly 
 represent the principles of the same political party, which the 
 relator claimed to represent. People ex rel. Sweet v. Raymond^ 
 131 App. Div. 160 (1909). 
 
 If it appears in certiorari proceedings instituted by a party 
 who claims to have been illegally removed by a municipal board, 
 that the relator was never entitled to the office, he cannot be said 
 to be a "person aggrieved" no matter how informal or irregular 
 the proceedings of the board may have been. Russell v. Com- 
 missioners, 76 Hun, 147 (1894) ; People ex rel. Healy v. Fire 
 Commrs., 27 App. Div. 530 (1898) ; People ex rel. Blakeslee v. 
 Commrs., 135 IsT. Y. 447 (1892). 
 
 Joinder of Relators. — Sec. 290 of the Tax Law provides: 
 
 "Two or more persons assessed upon the same roll who are affected 
 in the same manner by the alleged illegality, error or inequality, may 
 unite in the same petition." 
 
 The statute was not intended to permit all parties to unite 
 who are aggrieved because of their local assessments but only 
 applies to a situation wherein the adjudication upon the com- 
 plaint of one taxpayer necessarily determines the complaint of 
 the others. People ex rel. Wash. Bldg. Co. v. Feitner, 163 E". 
 Y. 384; aff'd 49 App. Div. 385; People ex rel. Zollikoffer v. 
 Feitner, 74 App. Div. 130; aff'd 172 K Y. 618. 
 
102 TAXATION OF COKPOBATIONS 
 
 The relators are improperly joined when their petition shows 
 that neither petitioner owns lots in any city block in which the 
 lots of either of the other relators are situated ; that no two of 
 the lots are of the same assessed valuation, and that the reduc- 
 tions in value asked are not uniform, either as to owners or lots. 
 People ex rel. Litchfield v. O'Donnel, 113 App. Div. 713 ; aff'd 
 187 N. Y. 536. 
 
 The petition; grounds for certiorari; "erroneous" and "il- 
 legal" assessments defined. — The grounds that may be set 
 forth in the petition for the granting of a writ of certiorari, are 
 error or illegality in the assessment. The assessment may be, 
 at the same time erroneous and illegal. An erroneous assess- 
 ment is one where the assessors have jurisdiction, but err in the 
 exercise of their power ; an illegal assessment is where they have 
 no power to act at all. Natl. Bank of Chemung v. Elmira, 53 
 K Y. 49, 58 (1873) ; U. S. Trust Co. v. Mayor, etc., 77 Hun, 
 182 (1894). An illegal assessment under section 290, Tax Law, 
 (formerly 250), extends to a void assessment, but an assess- 
 ment may be "illegal" without being "void," as for instance, 
 an erroneous assessment. 
 
 In assessments on real or personal property, a tax is deemed 
 erroneous where there has been an over-valuation, or in the case 
 of real estate, where a disproportionate assessment has been 
 made, but where an increase is made without notice, after the 
 books are open, the assessment is illegal and void as far as the 
 increase is concerned and application to the commissioners need 
 not be alleged. People ex rel. Littman v. Wells, 91 App. Div. 
 172 (1904). 
 
 Where the review of an assessment upon the ground of its 
 illegality is sought under the provisions of the act, only the con- 
 clusions of fact specifying the grounds of illegality need be 
 stated and not the evidence necessary to support them; the pe- 
 tition is in this respect in the nature of a pleading. People ex 
 
STATUTOEY CERTIOEAEI PEOCEEDINGS 103 
 
 rel. Commercial Mut. Ins. Go. v. Tax Gom'rs, 144 N. Y. 483 
 (1895); People ex rel. Wechsler v. Harkness, 84 Hun, 445; 
 Matter of Nisbet, 3 App. Div. 171 (1896) ; Matter of Ca- 
 thedral of Incarnation, 91 App. Div. 543. A relator, however, 
 has the right to waive some of the questions presented before 
 the tax commissioners. People ex rel. Commercial Mut. Ins. 
 Co. V. Comm'rSj supra. The petition should state such facts, as, 
 if admitted by the return would establish that the relator was 
 entitled to relief. If this is not done a motion to dismiss the 
 proceeding should be granted. People ex rel. Sweet v. Blake, 72 
 Misc. 646. In the petition for certiorari a party is precluded 
 from alleging for the first time an error in its verbal statement 
 seasonably made to the assessors upon application for reduc- 
 tion. People ex rel. German Looking Glass Co. v. Barker, 75 
 Hun, 6 (1894). 
 
 The petition; allegations as to description of property. — 
 
 An allegation of the petition that the assessment roll did not 
 contain a description of the relator's property, nor give the 
 quantity of land to be assessed, or the number of the lot, or any 
 description of it sufficient to comply with the Tax Law, and the 
 duties of the assessors, is to be regarded merely as an allegation 
 of law. Where it appears from the return that the property in 
 question was described on the assessment roll as "paper mill 
 now in operation, store house and office between the canal and 
 the river" such description will be regarded as sufficient. People 
 ex rel. Sweet v. Blake, 72 Misc. 646. 
 
 The petition; allegations as to over-valuation. — An allega- 
 tion that the relator's property was assessed in 1911 for $20,- 
 000, and that in former years the property had been assessed 
 for less than $20,000 is insufficient and not equivalent to an 
 allegation that the property was assessed for more than its fair 
 value. People ex rel. Sweet v. Blake, supra. 
 
 An allegation in a petition that property was assessed at 
 $210,000 more than its market value is equivalent to a state- 
 
lO'l TAXATION OF COEPOEATIONS 
 
 ment that the assessment is $210,000 in excess of the sum for ■ 
 which such property, under ordinary circumstances, would sell 
 and such petition is sufficient. People ex rel. Broadway Imp. 
 Co. V. Barker, 14 App. Div. 412. 
 
 An allegation of over-valuation in the language of the statute 
 is sufficient, provided the amount of over-valuation is specified 
 or can be determined. Matter of Nishet, 3 App. Div. 171 
 (1896). 
 
 Where a petition stated that the commissioners of taxes and 
 assessments of the city of New York "have illegally and er- 
 roneously included in their valuation of the personal property 
 of the said corporation on said roll for taxation the following: 
 The then market value of the capital stock of said corporation, 
 to wit, 112 per cent, upon the whole of said capital stock," the 
 court held that the petition did not specify as a ground of il- 
 legality merely an over-valuation of the capital stock to the ex- 
 tent of 12 per cent., but fairly apprised the commissioners of 
 the objection that their method of assessment was illegal and 
 erroneous. People ex rel. Equitable Oaslight Co. v. Barker, 66 
 Hun, 21. 
 
 Petition ; allegation as to inequality. — ^An allegation that the 
 assessment upon the petitioner's property is erroneous, unequal 
 and disproportionate because the property is not assessed at the 
 same proportionate valuation as other real property on the same 
 assessment roll, or an allegation that the property is assessed at 
 a higher proportionate valuation than other property on the 
 same roll is insufficient. The petitioner must present a state of 
 facts which, if unexplained, would show that the inequality of 
 which he complains will subject him to the payment of more 
 than his just proportion of , the taxes. People ex rel. Wechsler v. 
 Harhness, 84 Hun, 445. So, too, where only a single instance 
 of inequality is set forth, it is insufficient to raise the question 
 and a writ of certiorari issued thereon will be quashed upon mo- 
 tion. People ex rel. Witihaus v. O'Donnel, 46 Misc. 519 ; Pea- 
 
STATUTOEY CEETIOEAEI PEOCEEDINGS 105 
 
 pie ex rel. Wechsler v. Harhness, supra. In a petition under 
 the Charter of Greater New York for a writ of certiorari to 
 review a tax upon the ground of inequality the instances and 
 extent thereof must be stated. People ex rel. Sutphen v. Feit- 
 ner, 27 Misc. 384. 
 
 But it has been held that an allegation that the property in 
 question is assessed proportionately higher than any other prop- 
 erty in the tax district was sufficient in itself and would excuse 
 the setting up of a list of other properties therein. People ex 
 rel. Erie B. B. Co. v. Webster, 49 App. Div. 557. And where 
 a petition to review an assessment on the ground of over-valu- 
 ation and inequality, specified a number of pieces of property 
 located in the vicinity, which were alleged to have about the 
 same value as petitioner's property and were assessed at a great 
 deal less than petitioner's property it was held to be sufficient. 
 People ex rel. Marlborough Hotel Co. v. Feitner, 33 Misc. 293. 
 
 In another case, it was alleged in the petition that the assess- 
 ment of the relator's property in 1899 was increased 66% 
 per cent, over the assessment for the preceding year, while the 
 increase in the assessed value of all real estate in New York 
 City was 15 per cent, and the increase in the assessed value of 
 all the real estate in the Borough of Manhattan was 10%o 
 per cent. It was further alleged that the other real estate upon 
 the same tax roll was assessed at a lower proportionate valua- 
 tion than the petitioner's real estate, and that at the average 
 valuation of all the other real estate upon the same rolls, the pe- 
 titioner's real estate should not have been assessed at more than 
 $1,500,000, which was $1,000,000 less than the amount at 
 which it had been assessed. Annexed to the petition and made a 
 part thereof was a schedule showing many instances of alleged 
 inequality in the assessment. These statements the court held 
 were sufficient to establish a prima facie case, and the direction 
 of a reference was proper. People ex rel. Bway B. B. Co. v. 
 Feitner, 61 App. Div. 156. 
 
106 TAXATION OF COKPOEATIONS 
 
 The petition; application for correction must be shown as 
 prerequisite to writ. — Section 290 of the Tax Law provides that 
 "such petition must show that application has been made in 
 due time to the proper officers to correct such assessment." This 
 provision was not contained in Chapter 269 of the Laws of 
 1880, which has been incorporated into Section 290 of the Tax 
 Law, with the addition of the paragraph just quoted ; but it was 
 held under the Act of 1880, that where an assessment had been 
 properly made, unless application to the Tax Commissioners to 
 correct the same followed, no relief could be granted in cer- 
 tiorari proceedings. People ex rel. Mut. Union T. Co. v. Com- 
 m'rs., 99 K Y. 254 (1885), affirming 31 Hun, 568; Feo- 
 ple ex rel. Hoffman v. Osterhoudt, 24 Weekly Dig. 101 ; 
 In the Matter of Winegard, 78 Hun, 58. None of these 
 cases arising under the Act of 1880 has gone as far as 
 to hold that the omission to appear was a jurisdictional 
 fact that might not be excused in a proper case. People ex rel. 
 Buffalo R. B. V. Duguid, 68 Hun, 243 (1893). In that case, 
 the agent of the relator failed to appear on grievance day, and 
 one of the assessors had promised to present the matter to the 
 board on an adjourned day, but the assessors failed to meet on 
 any subsequent day. The application for correction of the as- 
 sessment need not be made on the first day set for the hearing of 
 grievances, if the board adjourned and met on a subsequent 
 day, when such application was presented. Matter of Cathedral 
 of Incarnation, 91 App. Div. 543 (1904). In connection with 
 an assessment in New York City, it was held, under the Act of 
 1880, that a person who had not applied to the commissioners 
 for a reduction of his assessment cannot have it reviewed upon 
 certiorari. People v. Wall St. Bank, 39 Hun, 525 (1886). The 
 rule that previous application for a correction is necessary does 
 not apply where there was no jurisdiction on the part of the 
 assessing officers. In that case the assessment is void, and there 
 is no necessity for its correction, though it may be cancelled. 
 
EEMEDIES; STATUTOET CEETIOKAEI PEOCEEDINGS 107 
 
 It has been held under the present Tax Law, that a void assess- 
 ment is an "illegal" assessment, and that a writ may issue in 
 such cases, without previous application to assessors. People 
 ex rel. Paddock v. Lewis, 55 Hun, 521 (1890) ; People ex rel. 
 American Thread Co. v. Feitner, 30 Misc. 64 (1900) ; People 
 ex rel. Strong v. O'Donnell, 47 Misc. 226 ; People ex rel. N. Y. 
 C. & H. B. B. Co. V. KenOj 61 Misc. 345. Where, however, the 
 assessment is not void, but merely erroneous, the rule under the 
 Tax Law that previous application must be made to the tax 
 commissioners has been upheld. People ex rel. Chambers v. 
 Wells, 110 App. Div. 336. 
 
 An appearance by an attorney or agent will satisfy the pro- 
 vision of the statute. Matter of Corwin, 135 'E. Y. 245. Un- 
 less the Board of Assessors request the personal appearance on 
 the part of the relator, when it should be made. People ex rel. 
 Kennelly v. O'Donnell, 133 App. Div. 237. If a corporation 
 has made application for the correction of an assessment and it 
 has not filed its statement under Section 27 of the Tax Law, 
 the omission to file the statement is no ground for quashing the 
 writ. People ex rel. W. 8. B. B. v. Pitman, 9 St. Eep. 469 
 (1887). 
 
 An allegation that application was made in due time for cor- 
 rection of the assessment, if denied, creates an issue of fact and 
 the Court may, under Sec. 293 of the Tax Law, send the mat- 
 ter to a referee to take evidence and report thereon. People ex 
 rel. Sweet v. Blake, 72 Misc. 646. 
 
 The petition; time limitation for making application for 
 writ. — Section 291 of the Tax Law provides: 
 
 "Such petition must be presented to a justice of the Supreme Court 
 in the judicial district in which the assessment complained of was 
 made, within fifteen days after the completion and filing of the assess- 
 ment roll and the first posting or publication of the notice thereof, as 
 required by this chapter." 
 
108 TAXATION OF COKPOEATIONS 
 
 The provisions of the Tax Law respecting the time when 
 a petition to review an erroneous and illegal assessment must be 
 presented, do not apply to the city of New York. People ex rel. 
 Bronx Oas & Electric Co. v. Baker, 22 App. Div. 161 ; People 
 ex rel. Thomson v. Feitner, 168 IST. Y. 441 ; People ex rel. Lang- 
 don V. Feitner, 30 Misc. 646. 
 
 In the City of ISTew York, it is sufficient if a proceeding be 
 begun within the time required by the New York Charter. 
 People ex rel. Taber-Prang Art Co. v. Wells, 39 Misc. 602. 
 
 Section 906 of the New York Charter, as amended by Chap- 
 ter 455 of the Laws of 1911, provides: 
 
 "Such certiorari . . . may be begun at any time before the first day 
 of July following the time when the determination sought to be re- 
 viewed or corrected was made." 
 
 The presentation and filing of the petition for the writ and 
 not the signing of the writ, or service thereof, has been held 
 to mark the beginning of the proceeding. People ex rel. Taber- 
 Prang Art Co. V. Wells, supra. 
 
 The failure of the assessors to give notice of the completion 
 and filing of the assessment-roll prevents the running of the time 
 during which the application may be made for a writ of certio- 
 rari to review an assessment, and leaves the writ to be sued out 
 at any time. People ex rel. Rome, Watertown & Ogdenshurgh 
 R. R. V. Hicks, 105 N. Y. 198 ; People ex rel. Rome, Watertown 
 & OgdenshurgJi B. B. v. Haupt, 104 N. Y. 377 (1887) ; Matter 
 of Corwin, 135 N. Y. 245 (1892) ; People ex rel West Shore 
 R. R. V. Adams, 125 N. Y. 471 ; People ex rel. D. & H. Canal 
 Co. V. Becker, 54 Hun, 1; People ex rel. Swartivout v. Port 
 Jervis, 23 Misc. 317. 
 
 Where a reassessment has been made as required by an order 
 of the Court of Appeals, it is to be regarded as having the same 
 force and effect as an original assessment and the commissioners 
 of taxes and assessments may be required to make a return of 
 their proceedings for the purpose of a review notwithstanding 
 
EEMEDIES; STATUTOBY CEETIOEAEI PEOCEBDINGS 109 
 
 the expiration of more than fifteen days after delivery of the 
 tax books to the board of aldermen. People ex rel. Manhattan 
 By. Co. V. Barker, 17 Misc. 497, aff'd 41 K Y. Supp. 236. 
 
 The petition; formal requisites; verification and subscrip- 
 tion. — Verification of the petition by a railroad superintendent 
 stating that the company has no director or general officer re- 
 siding in the county is sufficient. People ex rel. Sodus Bay R. 
 B. Co. V. Cheetham, 45 Hun, 6 (1887). It is not necesary that 
 all the persons in whose behalf the petition is presented should 
 subscribe to and verify it, verification by one of them being 
 sufficient (Ibid). The petitioners may act through attorneys, 
 whose authority will be presumed until the contrary is shown. 
 People ex rel. Adams v. Coleman, 41 Hun, 307 (1886) ; People 
 ex rel. Erie B. B. v. Webster, 49 App. Div. 557. 
 
 If the assessors receive and act on an unverified petition, they 
 waive the verification. People ex rel. Glen Head B. Co., 72 
 Misc. 414. 
 
 The petition; amendment thereof.— A petition for a writ of 
 certiorari may be amended under Section 2133 of the Code of 
 Civil Procedure. People ex rel. Badeziwon v. City of Buffalo, 
 62 Misc. 313. Where it is sought to review an assessment upon 
 the ground of disproportionate valuation and the petitioner has 
 failed to set forth the instances and extent of the same, the 
 court has power to permit a petitioner to amend his petition. 
 People ex rel. Brooklyn El. B. B. Co. v. Assessors, 10 App. 
 Div. 393. The petition may also be amended to conform to the 
 proof given upon the hearing. People ex rel. Congress Hall v. 
 Onderhirh, 120 App. Div. 650. But where the allegations in 
 the petition and writ are indefinite, the remedy of the defendant 
 is to move before filing the return to have the allegations made 
 more definite and certain. People ex rel. N. Y. C. & H. B. B. 
 V. Budlong, 25 App. Div. 373. Amendment of the petition will 
 be permitted after the return is made, provided the respondent 
 
110 TAXATION OF COEPOEATIONS 
 
 has not been prejudiced by the delay. Sections 723 and 2133 
 of the Code give the court power to authorize such an amend- 
 ment. People ex rel. N. Y. C. & E. B. B. Co. v. Feitner, 58 
 LA.pp. Div. 343 (1901). 
 
 Section 723 of the Code provides as follows : 
 
 "The court may, upon the trial, or at any other stage of the action, 
 before or after judgment, in furtherance of justice, and on such terms 
 as it deems just, amend any process, pleading or other proceeding, 
 by adding or striking out the name of a person aa a party, or by 
 correcting a mistake in the name of a party, or a mistake in any 
 other respect, or by inserting an allegation material to the case; or, 
 where the amendment does not change substantially the claim or 
 defense, by conforming the pleading or other proceedings to the facta 
 proved. And in every stage of the action, the court must disregard 
 an error or defect, in the pleadings or other proceedings, which does 
 not affect the substantial rights of the adverse party. . . . ," 
 
 Section 2133 of the Code provides as follows : 
 
 "After a writ of certiorari has been issued, the time to make a re- 
 turn thereto may be enlarged, or any other order may be made, or 
 proceeding taken, in the cause, in relation to any matter not pro- 
 vided for in this article, as a similar proceeding may be taken in an 
 action, brought in the same court, and triable in the county where 
 the writ is returnable." 
 
 The writ. — Section 291 of the Tax Law providing for the 
 allowance, issuance, service and return of the writ of certiorari 
 is as follows: 
 
 Allowance of writ of certiorari. — Such petition must be presented 
 to a justice of the Supreme Court or at a Special Term of the Supreme 
 Court in the judicial district in which the assessment complained of 
 was made, within fifteen days after the completion and filing of the 
 assessment-roll and the first posting or publication of the notice 
 thereof, as required by this chapter. Upon the presentation of such 
 petition, the justice or court may allow a writ of certiorari to the 
 officers making the assessment, to review such assessment, and shall 
 prescribe therein the time within which a return thereto must be 
 madle and served upon the relator's attorney, which shall not be leas 
 than ten days, and may be extended by the court or a justice thereof. 
 
EEMEDIES; STATUTOEY CEETIOEAEI PEOCEEDINGS 111 
 
 Such writ shall be returnable to a Special Term of the Supreme Court 
 of the judicial district in which the assessment complained of was 
 made. The allowance of the writ shall not stay the proceedings of the 
 assessors or other persons to whom it is directed or to whom the as- 
 sessment is delivered, to be acted upon according to law. (Sec. 291, 
 Tax Law, former sec. 253 Tate Law of 1896.) 
 
 Source: Laws of 1880, chap. 269, sees. 2 and 3, without change of 
 substance. 
 
 The right to the writ under Section 291 is not discretionary, 
 but absolute. People ex rel. Citizens Lighting Co. v. Feitner, 
 81 App. Div. 118. 
 
 Parties defendant. — Section 291 of the Tax Law provides 
 that upon the presentation of such petition, the Justice or Court 
 may allow a writ of certiorari to "the officers making the assess- 
 ment" and the analogous provision of the Charter, Section 906, 
 provides that a certiorari shall be allowed by the Supreme Court 
 or any justice thereof "directed to the Commissioners of Taxes 
 and Assessments." There is no doubt that under this practice, 
 the assessors are the only proper parties defendant to the pro- 
 ceeding, but under the earlier Code practice, it was customary 
 to make the custodians of the assessment rolls, when they had 
 passed out of the hands of the assessors, also parties defendant. 
 People ex rel. Utica &c. R. B. Co. v. Shields, 6 Hun, 556 
 (1876). Under Chapter 269 of the Laws of 1880, afterward 
 embodied in the Tax Law, this practice was not deemed neces- 
 sary. People ex rel. Ulster & Delaware B. B. Co. v. Smith, 24 
 Hun, 66 (1881). The court intimated in this case, that the 
 custodian of the papers might be a suitable party, even though 
 not absolutely necessary, and in a later case. People ex rel. Ul- 
 ster & Delaware B. B. Co. v. Burhans, 25 Hun, 186 (1881), 
 the court indicated that Section 2129 of the Code of Civil Pro- 
 cedure, which declared "that the writ must be directed to the 
 body or officer whose determination is to be reviewed or to any 
 other person having the custody of the record or other papers 
 
112 TAXATION OF COEPOEATIONS 
 
 to be certified, or to both, if necessary," permitted the town 
 clerk as the custodian of the roll in this case, to be made a party 
 defendant. The better practice appears to be that where the 
 assessors are the proper parties to make the return, the town 
 clerk is not a necessary party to the writ. People ex rel. W. 8. 
 B. B. Co. V. Pitman, 9 JST. Y. St. Eep. 469 (1887). In an- 
 other case, it was held that the assessors are proper parties to the 
 writ, although they had completed their assessment roll and 
 delivered it. to the comptroller. People ex rel. Warren v. Garter, 
 47 Hun, 446 (1888). 
 
 In the Matter of Winegard, 78 Hun, 58 (1894), the court 
 held that it was not necessary to make the town clerk in whose 
 custody the original papers were, a party to the proceeding, be- 
 cause the statute. Section 3, Chapter 269 of the Laws of 1880, 
 permitted a return of a copy of the original roll. It would, 
 therefore, seem from the cases under Chapter 269, Laws of 
 1880, as well as from the later provisions of the Tax Law and 
 the New York Charter, that Section 2129 of the Code, pro- 
 viding that "any other person having custody of the record or 
 other papers to be served" shall be made a party, do not apply, 
 and that the Tax Law and Charter provisions are exclusive in 
 this respect. 
 
 Writ matter of right. — Under the Common Law procedure, 
 as well as under the Code, the granting of the writ was dis- 
 cretionary ; but under the Tax Law in a case brought within its 
 provisions, it is a matter of absolute right. Matter of Gorwin, 
 135 N. Y. 245 ; People ex rel. Friendly v. Davenport, 119 App. 
 Div. 790 ; Merchants Nat'l. Bank v. Mayer, 172 IST. Y. 35, 41. 
 
 In the City of New York application for the writ is made 
 ex parte at Special Term, Part II. 
 
 Amendment of writ.— (See page 109, under head of "The 
 petition; amendment thereof.") The writ may be amended as 
 
113 
 
 to place of return, or in other particulars, provided the essential 
 allegations conferring jurisdiction are properly stated. People 
 ex rel. N. Y. G. & H. R. B. v. Cooh, 62 Hun, 303 ; People ex 
 rel. Herkimer & M. B. B. v. Assessors, 6 Civ. Pro. Rep. 297. 
 
 A writ of certiorari may be amended and upon an appeal by 
 the assessors from an order denying their motion to set aside and 
 vacate a writ of certiorari issued against them, the same should 
 be modified, so as to direct the return by them only of those 
 papers necessary to enable the court to review their decision on 
 the questions raised before them on grievance day. Matter of 
 Winegard, 78 Hun, 58. The court may amend a writ of certio- 
 rari by making it recite that it was issued upon the relation of 
 the person assessed, by prescribing the time within which the 
 return should be served upon the relator's attorney and by di- 
 recting the writ to be tested by the Justice who granted it. Peo- 
 ple ex rel. Erie B. B. Co. v. Webster, 49 App. Div. 556. 
 
 Preliminary motions ; motions to compel return, supersede or 
 quash writ. — The Tax Law does not set forth the complete pro- 
 cedure regulating the practice where the petition is irregular, 
 defective, where the court granted the writ without jurisdiction, 
 where the return is Insufficient, or the assessors delay in making 
 the return. The practice in this, as In so many other respects 
 where the Tax Law is silent, must be gathered from the pro- 
 cedure indicated by the Code of Civil Procedure, in so far as 
 its provisions are not repugnant to the Tax Law. 
 
 The Supreme Court has Inherent power to punish for con- 
 tempt a neglect or refusal to make a return to a writ of certio- 
 rari. People ex rel. L. I. B. B. Co. v. Feitner, Sp. Term, 
 Truax, J., Law Journal, May 1, 1900 ; aff'd 53 App. Div. 181. 
 The court may also compel a further return when the return is 
 insufficient. People ex rel. Fitzgerald v. Feitner, 37 App. Div. 
 362. 
 
 A motion to supersede the writ will be granted on the ground 
 
114 TAXATION OF COBPOEATIONS 
 
 of misjoinder of parties plaintiff. That motion is the proper 
 practice before a return is made. People ex rel. Washington 
 Bdg. Co, V. Feitner, 49 App. Div. 385 ; aff'd 163 K Y. 384. 
 But prior to the Tax Law it was held, that this objection should 
 be taken by motion to strike out the party improperly joined. 
 People ex rel. Sodus Bay B. B. v. Cheetham, 45 Hun, 6 (1887). 
 The motion to quash will be granted if it does not appear in 
 the petition that due application was made to the assessors to 
 correct the assessment. People ex rel. SutpJien v. Feitner, 45 
 App. Div. 542 (1899). Or where the writ was prematurely or 
 improvidently granted. People ex rel. Bronx Gas Co. v. Barker, 
 22 App. Div. 161 (1897). Or where the relator does not show 
 that he has been aggrieved. People ex rel. Kohler v. Feitner, 
 71 App. Div. 572 (1902) ; People ex rel. Manhattan Life Ins. 
 Co. V. Wells, 91 App. Div. 44 (1904). In the last named case, 
 the motion was made to quash or supersede before the return. 
 It has been held, however, that a motion made to quash a writ 
 after return filed will not be granted. People ex rel. Glen Head 
 Realty Go. v. Garland, 72 Misc. 413 (1911). There were ad- 
 ditional grounds for the court's action in the last case, which 
 does not appear to have been appealed, but the court evidently 
 viewed the motion to quash in the nature of a demurrer, as in 
 People ex rel. W. 8. B. Co. v. Pitman, 9 St. Kep. 469, where the 
 court said : "A motion to quash the writ is somewhat in the na- 
 ture of a demurrer. It is ordinarily based upon the papers 
 upon which the writ was issued. It may ordinarily be granted 
 when it appears that the Court has no jurisdiction, where the 
 papers are insufficient to authorize it, where improper parties 
 are joined, or proper parties omitted, etc." This is at variance 
 with the earlier cases holding that a motion to quash cannot be 
 granted until after the return. Clarh v. Lawrence, 1 Oow. 48 
 ,(1879) ; People ex rel. Nichols v. Cooper, 57 How. Pr. 463. 
 The weight of authority seems to be that a motion to quash 
 should be made after the return. Cyc. Vol. 6, page 813, but the 
 
115 
 
 practice in this state does not appear to differentiate the motion 
 whether made before or after the return. 
 
 The terms "quash" and "supersede" in certiorari proceedings 
 are very often used interchangeably, although there is a dis- 
 tinction. American & English Encyclopedia of Pr., page 234, 
 defines the distinction between quashing and superseding the 
 writ as follows : "The writ is quashed only after the return has 
 been made, while it is superseded before the return; but the 
 practice in this respect is somewhat loose. In Ferguson v. Jones, 
 12 Wend. 241, it was held, that when the prayer was that the 
 writ to be quashed or 'for such other order as to the court may 
 seem proper,' and the writ had not been returned, it was super- 
 seded. In Comstoch v. Porter, 5 Wend. 98, there was a motion 
 to quash and the writ was superseded. In Saratoga & Washing- 
 ion B. B. Co. V. McCoy, 5 How. Pr. 378 (1851), on a motion 
 in a common law certiorari proceeding to quash or supersede the 
 certiorari it was objected that the motion would not lie, because 
 the certiorari had not been returned, although it was returnable, 
 and the court held, citing Ferguson v. Jones, supra, "that the 
 same purpose will be accomplished by a writ of supersedeas as 
 by an order to quash." 
 
 In People ex rel. W. 8. B. Co. v. Pitman, 9 St. Eep. 469 
 (1887), it was held, that while at common law the return to a 
 writ of certiorari was conclusive as to the facts, such is not the 
 case of a return under the statutory writ provided for by Chap- 
 ter 269, Laws of 1880, which permitted a hearing and testimony 
 to be taken when necessary ; that it was not the practice to quash 
 a writ of certiorari upon a hearing based upon the return, and 
 that "upon such hearing, the court should make a final order in 
 the proceedings, either nullifying, confirming or modifying the 
 determination under review." 
 
 In People ex rel. Supervisors v. Hadley, 14 Hun, 183, the 
 court held that a motion to supersede or quash a writ of certio- 
 rari is proper when it has issued after the lapse of too long a 
 
116 TAXATION OF COEPOEATIONS 
 
 period of time, or in behalf of one who has no interest in the re- 
 lief sought, or irregularly, or without proper cause being shown 
 therefor, or when, for any reason, it appears that the writ was 
 improvidently issued. 
 
 Return to writ. — The officers making a return to such writ shall not 
 be required to return the original assessment-roll or other original 
 papers acted upon by them, but it shall be sufficient to return certified 
 or sworn copies of such roll or papers, or of such portions thereof as 
 may be called for by such writ. The return must concisely set forth 
 such other facts as may be pertinent and material to show the value of 
 the property assessed on the roll and the grounds for the valuation 
 made by the assessing officers and the return must be verified. {See. 
 292, Taw Law, former sec. 252, Tax Law of 1896.) 
 
 Source: Contained in substance in sec. 3, chap. 269, L. 1880. 
 
 Sworn or certified copies of the assessment roll are sufficient 
 on the return. In re Winegard v. Kromer et al.. Assessors, 5 
 Misc. 54 (1893) ; aff'd 78 Hun, 58. 
 
 By whom made. — See cases under heading of "Parties De- 
 fendant," supra. 
 
 When and where return to be made. — Section 291 of the 
 Tax Law requires a return to be made at a special term to be 
 held not less than ten days from the time of its allowance, but 
 it is not necessary that the writ should be served ten days before 
 the return. People ex rel. U. & D. R. R. v. Smith, 24 Hun, 66 
 (1881). The provisions of section 2132 of the Code requiring 
 a return to be made within twenty days after the service of the 
 writ, do not apply to a writ obtained under the Tax Law, or 
 under the Charter. Section 291 of the Tax Law regulates this 
 procedure (formerly Chapter 269, Laws of 1880) ; and it also 
 requires the return to be made at a Special Term of the Supreme 
 Court of the Judicial District in which the assessment com- 
 plained of was made. People ex rel. N. Y. Lake Erie & W. R. 
 R. V. Low, 40 Hun, 176 (1886). 
 
STATUTOEY CEKTIOEAEI PEOCEEDINGS 117 
 
 The writ should designate some particular special term at 
 which the return should be made and a requirement that the 
 return be made within twenty days after service at the office of 
 the county clerk is irregular. A voluntary appearance by both 
 parties at a subsequent special term and a stipulation for an 
 order of reference will amount to a waiver of the defect. People 
 ex rel. Paddock v. Lewis, 55 Hun, 521. 
 
 Statements and allegations in return. — The allegations con- 
 tained in the return to a writ of certiorari must for the purpose 
 of pleading in certiorari proceedings be taken as true; if they 
 are untrue, relator's remedy is by an action for a false return. 
 People ex rel. Rochester Lamp Co. v. Feitner, 65 App. Div. 224 
 (1901). 
 
 Facts which induced commissioners to determine a corpora- 
 tion's claim to a reduction under Section 820 of the Consolida- 
 tion Act on capital stock and surplus need not be set forth in the 
 return to a petition in certiorari proceedings, if found in the 
 corporation's sworn report to commissioners. If the commis- 
 sioners rely on facts not otherwise appearing in the proceedings, 
 they must state them in their return; if not, it is legal error. 
 People ex rel. Edison Gen. El. Co. v. Barker, 74 Hun, 418 
 (1893) ; aff'd 141 K Y. 251. 
 
 The assessors should not be required to specify the statute 
 or law under which they proceed. People ex rel. Fitzgerald v. 
 Feitner, 40 App. Div. 620 (1899). 
 
 A writ issued on the application of one assessed for real estate, 
 who claims to be unequally assessed, may require a return as to 
 assessments of both real and personal property. People ex rel. 
 Ulster & Del. B. E. v. Smith, 24 Hun, 66 (1881). This prac- 
 tice does not apply in the city of ISTew York under section 906, 
 of the Charter. 
 
 A form of return used by the Board of Taxes and Assess- 
 
118 TAXATIOIT OF COEPOEATIOITS 
 
 ments of the city of New York is shown in the forms used in 
 local taxation at the end of the book. 
 
 Proceedings upon return. — If it shall appear upon the return to 
 any such writ that the assessment complained of is illegal or erroneous 
 or unequal for any of the reasons alleged in the petition, the court 
 may order such assessment, if illegal, to be stricken from the roll, or 
 if erroneous or unequal, it may order a re-assessment of the property 
 of the petitioner, or the correction of his assessment upon the roll, in 
 whole or in part, in such manner as shall be in accordance with law, 
 or as shall make it conform to the valuations and assessments of other 
 property upon the same roll and secure equality of assessment. If 
 upon the hearing it shall appear to the court that testimony is neces- 
 sary for the proper disposition of the matter, it may take evidence or 
 may appoint a, referee to take such evidence as it may direct, and re- 
 port the same to the court, with his findings of fact and conclusions of 
 law, which shall constitute a part of the proceedings upon which the 
 determination of the court shall be made. Upon such hearing the 
 parties to the proceeding may mutually agree upon the number of pieces 
 of property to be valued and the number of witnesses to be sworn on 
 the subject of the value of such properties. But in case the parties 
 fail to so agree, then upon application of either party the court shall 
 determine the number of witnesses to be sworn and the number of the 
 pieces of property to be valued and shall limit the same to such num- 
 ber as the court shall deem reasonable. When the writ is obtained 
 to review a special franchise assessment made pursuant to the pro- 
 visions of section forty-six of this chapter, upon the filing of the return 
 to the writ the court may take such evidence as it may deem neces- 
 sary, or may appoint a, referee to take evidence and to hear, try and 
 determine all questions raised by the petition and the return thereto 
 and to make his findings and determinations therein, or, on motion of 
 either party, the court may direct the place of trial changed to the 
 county in which the special franchise under revfew is situated, and 
 on an order duly entered granting such motion, the place of trial shall 
 be deemed changed to the county designated and the papers and pro- 
 ceedings shall be certified to that county in the manner now provided 
 by law in the case of a change in the place of trial of an action and 
 all subsequent proceedings shall be had in the county so designated, 
 as if the special proceedings had been originally instituted in that 
 county, and the court may, upon the application of the attorney-gen- 
 eral, upon cause shown, vacate any reference heretofore made in any 
 proceeding instituted to review a special franchise assessment, made 
 pursuant to the provisions of section forty-six of this chapter. The 
 governor may, upon the application of the attorney-general, upon cause 
 
EBMEDIES; STATUTOEY CEETIOEAEI PEOCEEDIITGS 119 
 
 shown, appoint extraordinary terms of the Supreme Court to be held 
 in any judicial district and designate a justice to preside thereat, to 
 try such special franchise eases. Such extraordinary term shall have 
 jurisdiction over all special franchise cases arising in any tax district 
 within the judicial district for which the term is appointed, without re- 
 gard to the county in which the term is being held, and either party to 
 a proceeding to review a special franchise assessment may at any time 
 bring the proceeding on for a hearing or trial before said extraordi- 
 nary term by serving upon the other party sixteen days' notice thereof 
 by mail or fourteen days' notice personally. A new assessment or 
 correction of an assessment made by order of the court shall have the 
 same force and effect as if it had been so made by the proper ofBcers 
 within the time prescribed by law for making such assessment. {Sec. 
 293, Tax Law, as amended hy L. 1909, ch. 330, and L. 1911, ch. 302, 
 former sec. 253, Tax Law of 1896.) 
 
 Source: L. 1880, ch. 269, sec. 4, 5. The provisions relating to special 
 franchises were added by the amendment of 1909. The third and 
 fourth paragraphs permitting the parties to limit the testimony on 
 the hearing were added by the amendment of 1911. 
 
 The issue. — Where the return shows there is nothing to con- 
 tradict in the statement made by the corporation assessed, and 
 that there appeared to be no other basis for the assessors' action, 
 a mere denial that the assessment is illegal, erroneous or unequal 
 is a conclusion of law and creates no triable issue. People ex rel. 
 Bhumgara Co. v. Wells, 93 App. Div. 212 (1904). And, if in 
 return to the certiorari, there is no dispute as to facts no ref- 
 erence will be ordered. People ex rel. Equitable Gas L. Co. v. 
 Com'rs, 81 Hun, 22 (1894) ; reversed on other grounds, 144 
 N. Y. 94. It is the duty of the court to determine whether the 
 tax commissioners applied a correct method of assessment, and, 
 if they did not, to re-appraise and fix the amount subject to tax- 
 ation. People ex rel. Man. By. Co. v. Barker, 48 App. Div. 252 
 ^(1900).; reversed on other grounds, 165 IST. Y. 305. 
 
 The common law writ and Code writs only brought up the 
 record and proceedings. The writ under the Tax Law and its 
 predecessor, the Law of 1880, permits a re-determination. The 
 return is not conclusive but the facts may be inquired into de 
 
120 TAXATION OF COEPOEATIONS 
 
 novo. People ex rel. Manhattan By. Co. v. Barker, 152 N. Y. 
 417 (1897). The issues are determined not on the return as in 
 ordinary certiorari proceedings, but on the testimony presented 
 on the hearing referred to in Section 293 of the Tax Law. Peo- 
 ple ex rel. Congress Hall v. Onderhirh, 120 App. Div. 650 
 (1903). 
 
 If there is no allegation in the petition and no facts stated in 
 the return to show that the assessment was illegal, and the evi- 
 dence taken by the Court or Keferee on behalf of the relator does 
 not contradict the statement in the return, the court will not be 
 justified in vacating an assessment as illegal. People ex rel. 
 Lazarus v. Feitner, 65 App. Div. 318 (1901). If the return 
 contains a conclusion of law denying that the assessment is il- 
 legal or erroneous without setting forth any facts in support of 
 that conclusion, it creates no triable issue and the Special Term 
 may grant a reduction of the assessment without taking testi- 
 mony. People ex rel. Bhumgara Co. v. Wells, 93 App. Div. 213 
 (1904). 
 
 If a corporation claims a deduction for the value of certain 
 real estate, and if, on certiorari proceedings, it appears that 
 there is a question as to whether certain vaults annexed to and 
 part of a building leased by it were assessed as part of the real 
 estate, proof may be introduced on this point at the hearing at 
 special term. People ex rel. Knicherhocker 8. D. Co. v. Wells, 
 99 App. Div. 455. 
 
 Equality of taxation is the result to be sought, and where it 
 exists, no ground for interference is shown. People ex rel. 
 Hartford &. Conn. Western R. B. Co. v. Frost, 10 K Y. St. 
 Eep. 878 (1887). 
 
 The return to a writ is not conclusive, and the court may ap- 
 point a referee to take and report the evidence. People ex rel. 
 Ulster & Del. B. B. v. Smith, 24 Hun, 66 (1881). 
 
 The fundamental statement is the application for revision, 
 and if that is insufficient nothing will be brought up by the pe- 
 
121 
 
 tition for the writ, however full and complete it may he. Only 
 the errors complained of to the assessing officers will he hrought 
 up for review. People ex rel. Powell v. Supervisors, 54 Misc. 
 323 ; People ex rel. Citizen L. Co. v. Feitner, 81 App. Div. 
 118 ; People ex rel. Champlin v. Oray, 185 IST. Y. 196. The 
 application to the hoard of assessors for a revision of an assess- 
 ment should set forth the specific grounds of complaint; mere 
 general allegations of inequality, for example, are insufficient. 
 If this is not done, the relator has not put himself in a position 
 to require the court, upon a writ of certiorari, to enter upon 
 new and original inquiry. People ex rel. Zollikojfer v. Feitner, 
 34 Misc. 299 ; affd 63 App. Div. 615. The same rule obtains 
 with reference to a proceeding to review an assessment on real 
 property located in New York City. People ex rel. Oreenwood 
 V. Feitner, 17 App. Div. 428 ; People ex rel. Zollikojfer v. Feit- 
 ner, supra; People ex rel. Sutphen v. Feitner, 45 App. Div. 542. 
 An objection that an assessment is illegal in that it was not made 
 in accordance with the provisions of the statute regulating such 
 assessment, is insufficient to raise the question that the realty 
 assessed is so indefinitely described that the assessment does 
 not meet the requirements of the statute and is therefore void. 
 People ex rel. Buffalo, Rochester & Pittsburg By. Co. v. Car- 
 michael, 64 Misc. 271. 
 
 Practice for bringing the proceeding on for trial. — Section 
 291 of the Tax Law requires the return to be made at Special 
 Term. The Tax Law is silent as to the procedure for bringing 
 the proceeding on for trial, and we must look to the Code for 
 the practice in this respect. Section 2138 of the Code provides 
 that either party may notice the proceeding for a hearing at any 
 time after the return is complete. The method of compelling 
 a return, where none is made within a reasonable time, and of 
 serving a further return where the return made is insufficient, 
 is discussed on pages 109, 113, supra. 
 
122 TAXATION OF COEPOEATIOITS 
 
 Section 977 of the Code, providing for the trial of issues in 
 civil suits, applies to certiorari proceedings. The notice of trial 
 under this section must be served at least fourteen days before 
 the commencement of the term and the note of issue filed at 
 least twelve days before the commencement of the term. Section 
 295 of the Tax Law provides that "all issues and appeals in any 
 proceeding brought under this article (the Tax Law) shall have 
 preference over all other court actions and proceedings in all 
 courts." A claim for such preference should be incorporated in 
 the notice of trial, with the statutory authority therefor, or it 
 may be considered waived. 
 
 In the City of New York, Kule VIII of the Kules for the 
 Regulation of Special Terms of the Supreme Court, in the 
 First Judicial District, providing for the Calendar Practice in 
 these proceedings is as follows: 
 
 "There shall also be made up a Special Calendar, upon which shall 
 be placed all proceedings to review the assessment for the taxation of 
 real and personal property in the County of New York, which are 
 now pending, or which shall hereafter be brought for that purpose. 
 There shall also be made up a Special Calendar, upon which shall be 
 placed all proceedings to review the assessment for taxation of special 
 franchises, or to enforce the payment of taxes based thereon, or pro- 
 ceedings to review the assessment thereof, under Section 46 of the Tax 
 Law (Chapter 62 of the Laws of 1909). These Special Calendars shall 
 be called and disposed of in Part VI of the Special Term.'' 
 
 The hearing or trial.— Under Section 293 of the Tax Law, 
 
 "If upon the hearing it shall appear to the court, that testimony is 
 necessary for the proper disposition of the matter, it may take evi- 
 dence or may appoint a referee to take such evidence as it may di- 
 rect, and report the same to the court, with his findings of fact and 
 conclusions of law, which shall constitute a part of the proceedings 
 upon which the determination of the court shall be made." 
 
 Under this practice, the case is tried before the court at 
 Special Term without a jury, or in its discretion, it may refer. 
 In the City of New York, the present practice is to try the cer- 
 
STATUTORY OEKTIOKAEI PROCEEDINGS 123 
 
 tiorari proceedings before the Court at Special Term, Part VI 
 of the Supreme Court. If the issue is submitted to the court, 
 findings of fact and conclusions of law are submitted with the 
 final order. Under the former practice, these proceedings were 
 usually sent to a referee. When a referee is appointed, he is 
 not "to hear and determine" but only "to take such evidence 
 as it (the Court) may direct." Upon the referee's report, with 
 his findings of fact and conclusions of law, a motion may be 
 made to restore the case to the calendar and additional proof 
 may be offered before the court. 
 
 The petition may be regarded as the complaint and the return 
 as the answer, and the court may call witnesses in deciding the 
 issue. People ex rel. Manhattan By. Co. v. Barker, 152 iN". Y. 
 417. But the court will not take testimony unless an issue of 
 fact is raised by the petition and return. People ea> rel. Bhum- 
 gara Co. v. Wells, 93 App. Div. 212; aff'd 1T9 N. Y. 529 
 (1904). 
 
 Burden of proof on relator. — A party assailing the validity 
 of an assessment should make it conclusively appear that the 
 method by which the assessors arrived at the result complained 
 of was incorrect, and that the assessment does not represent the 
 fair value of the property assessed. People ex rel. Westchester 
 Fire Ins. Co. v. Davenport, 91 IST. Y. 574 (1883). But under 
 the Tax Law the burden is on the relator to show that he has 
 been injured, irrespective of the method adopted by the asses- 
 sors. People ex rel. Equitable G. L. Co. v. BarTcer, 66 Hun, 
 21, aff'd 137 ]Sr. Y. 544; People ex rel. Eden Musee v. Feitner, 
 60 App. Div. 282. 
 
 Final order. — The final determination of the court is in the 
 form of an order, which, under Section 293 of the Tax Law if 
 the assessment is illegal, may direct such assessment "to be 
 stricken from the roll, or if erroneous or unequal, it may order 
 
124 TAXATION OF COEPOEATIONS 
 
 a reassessment of the property of the petitioner, or the correc- 
 tion of his assessment upon the roll in whole or in part, in such 
 manner as shall be in accordance with law, or shall make it 
 conform to the valuations and assessments of other property 
 upon the same roll and secure equality of assessment." 
 
 'No formal judgment is necessary beyond the final order. 
 Under the practice before the statutory writ and the Code, an 
 elaborate judgment was entered. 
 
 The form of order usually entered does not direct the de- 
 fendants, as assessor or commissioners of taxes, to correct the 
 assessment roll, or to cancel the tax, but is directed to the cus- 
 todian of the rolls and is generally in the following form : 
 
 "Ordered and directed that the officer or officers having custody of 
 the assessment roll or the tax roll upon which the above mentioned 
 assessments, and any taxes levied thereon, have been entered, shall 
 forthwith correct the said entries in conformity to this order, and shall 
 note upon the margin of the said roll opposite the said entries, that 
 the same have been corrected by the authority of this order." 
 
 When the decision is in favor of the respondent, after a hear- 
 ing and trial, the usual determination is an order dismissing 
 or quashing the writ. The distinction is not entirely clear, but 
 it seems that a notice to quash will lie where the writ was im- 
 providently granted, where there was no one aggrieved, where 
 there was a misjoinder of parties defendant, or proper par- 
 ties omitted, and where the papers are insufficient. See cases 
 on page 113, supra. 
 
 If a tax based on the assessment in dispute has already been 
 paid, which is in excess of the amount of the tax based on the 
 assessment as determined by the order, provision is made in the 
 final order for the reimbursement of the excess tax to the re- 
 lator. 
 
 The statute directing the refund. Section 296 of the Tax 
 Law is as follows: 
 
 Refund of tax paid upon illegal, erroneous or unequal assess- 
 ment. — If in a final order in any such proceeding it has been or shall 
 
125 
 
 be ordered or adjudged or determined that the assessment complained 
 of was illegal, erroneous or unequal, and correcting or directing correc- 
 tion thereof, and such order shall not be made in time to enable the 
 assessors or other officers to make a new or corrected assessment for 
 the use of the board of supervisors or for the use of the town, village, 
 city or school officers levying any tax upon such property, the assess- 
 ment of which has been or shall be so ordered or adjudged or deter- 
 mined to be illegal, erroneous or unequal, then any tax collected or to 
 be collected upon such illegal, erroneous or unequal assessment shall be 
 refunded as follows: 
 
 1. When such tax upon such illegal, erroneous or unequal assessment 
 shall have been levied by the board of supervisors, then at an annual 
 session of the board of supervisors held after the order for such cor- 
 rection has been granted and entered there shall be audited and allowed 
 to the petitioner or other person who shall have paid such tax, and 
 included in the tax levy of the town, village or city in which the prop- 
 erty is situated, made next after the entry of such order, and paid to 
 the petitioner, or other person paying the tax, the amount paid by 
 him, in excess of what the tax would have been if the assessment had 
 been made as ordered, adjudged or determined by such order of the 
 court, together with the interest thereon from the date of payment. 
 In case the amount deducted from such assessment by such order ex- 
 ceeds ten thousand dollars, so much of the tax as shall be refunded by 
 reason of such corrected assessment, other than the proportion or per- 
 centage thereof collected for such town, village or city purposes, shall 
 be levied upon the county at large and paid with interest, to the pe- 
 titioner or other person paying the tax without further audit; and the 
 board of supervisors shall audit and levy upon such town, village or 
 city, the proportion or percentage of such excess of tax collected for 
 such town, village or city purposes, which shall be collected and paid 
 with interest to the petitioner, or other person paying the tax, without 
 other or further audit. 
 
 2. When such tax upon such illegal, erroneous or unequal assessment 
 shall have been levied by the proper officers of any city or village, 
 then the common council or other auditing officer or officers of such city 
 or village shall immediately after such correction audit and allow, to 
 the petitioner or other person who shall have paid such tax, and in- 
 clude in the tax levy of such city or village in which the property is 
 situated made next after the entry of such order and cause to be paid 
 to such petitioner or other person paying such tax, the amount paid 
 by him in excess of what the tax would have been if the assessment 
 had been as ordered, adjudged or determined by such order of the court 
 together with interest thereon from the date of the payment. 
 
126 TAXATIOir OF COEPOEATIOITS 
 
 3. When a tax shall have been levied and collected in any school 
 district of this state upon any property within such district on any 
 assessment value thereof which shall have been ascertained from a town 
 assessment-roll and which assessment upon such town roll shall have 
 been ordered, adjudged or determined by order of the court as afore- 
 said to have been illegal, erroneous or unequal and which assessment 
 though made by town assessors was adopted and was used in such dis- 
 trict for the purpose of taxation for school purposes, then and in such 
 case the trustees of such school district shall audit and allow and 
 cause to be paid to the petitioner, or other person who shall have paid 
 such tax, the amount paid by him in excess of what the school tax 
 would have been in such case if the assessment had been made as or- 
 dered, adjudged or determined by such order of the court, together 
 with interest thereon from the date of the payment. 
 
 Application to the proper officer for the audit and allowance of such 
 moneys must be made by the petitioner or other person paying such 
 tax as follows: Where the writ of certiorari was issued pursuant to 
 chapter two hundred and sixty-nine of the laws of eighteen hundred 
 and eighty, and such tax shall not have been heretofore refunded, such 
 application must be made within three years from the twenty-fourth 
 day of July, nineteen hundred and seven. When the writ of certiorari 
 was issued under the provisions of this section, then such- application 
 for audit and allowance must be made within three years after the 
 entry of the final order ordering or adjudging or determining such as- 
 sessment to have been illegal, erroneous or unequal; provided that the 
 time of the pendency of any appeal in any such proceeding or from 
 any such order shall not be deemed any part of such three years. 
 {Sec. 296 of the Tax Law, former sec. 256 of the Tax Law of 1896, 
 as am'd hy ch. 721, L. 1907.) 
 
 Section 296 of the Tax Law applies only where assessors 
 have jurisdiction. — Where assessors have jurisdiction, the 
 above section governs the proceedings to be taken in refunding 
 the excess of the tax over what it should have been. People ex 
 rel. Manhattan By. Co. v. Coleman, 48 Hun, 602 (1888). 
 Where there is no jurisdiction to assess, Section 296, Tax Law, 
 does not affect a plaintiff's right to recover the tax. Dale v. 
 City of New York, 71 App. Div. 22Y (1902). 
 
 Costs. — Costs shall not be allowed against the officers whose pro- 
 ceedings may be reviewed under any such writ unless it shall appear 
 to the court, that they acted with gross negligence or in bad faith or 
 ■with malice in making the assessment complained of. If the writ shall 
 
remedies; STATTJTOBT CEBTIOEAEI PEOCEEDINGS 127i 
 
 be quashed or the assessment confirmed or if the assessment com- 
 plained of shall be reduced by an amount less than half the reduction 
 claimed before the assessing officers, costs and disbursements shall be 
 awarded against the petitioner. If the assessment shall be reduced by 
 an amount greater than half the reduction claimed before the assessing 
 officers, costs and disbursements shall be awarded against the tax dis- 
 trict represented by the officers whose proceedings may be reviewed. 
 The costs and disbursements shall not exceed those taxable in an action 
 upon the trial of an issue of fact in the Supreme Court, except that if 
 evidence shall be taken there shall be included in the taxable costs and 
 disbursements the expense of furnishing to the court or to the referee 
 a copy of the stenographer's minutes of the evidence taken. (Sec. 
 294, Tace Law, former sec. 254, Tax Law of 1896, as amended hy chap. 
 281, L. 1905.) 
 
 Source: Sec. 6, chap. 269, L. 1880. The provision as to the payment 
 of costs and disbursements by the taxing authorities, covered by the 
 amendment of 1905, does not take eflFect until July 1, 1905, nor does 
 it apply to proceedings under writs granted before that time. 
 
 This section only relieves assessors from costs upon the hear- 
 ing at special term on the return of the certiorari. Costs on ap- 
 peal are to be given or withheld in the discretion of the court as 
 provided on an appeal from an order under Code of Procedure, 
 Section 3239. People ex rel. Smith v. Com'rs, 101 IST. T. 651 
 (1886). 
 
 Costs in certiorari proceedings under Chapter 269, Lavrs of 
 1880, are governed by that act, and not under the provisions of 
 the Code in reference to costs in special proceedings generally, 
 viz. : Costs on appeal are to be taxed as costs on appeal from 
 orders under Section 3239 of the Code. People ex rel. Oak Rill 
 Cemetery Ass'n v. Pratt, 66 Hun, 578, aff'd 138 K Y. 655 ; 
 see, also. People ex rel. Warren v. Carter, 46 Hun, 444 (1887). 
 
 Costs at special term are awarded against assessors only 
 where there is gross negligence. People ex rel. Echerson v. 
 Christie, 14 K Y. St. Kep. 525 (1888). The costs provided 
 for in the amendment of 1905, in cases where the assessment 
 is reduced more than one-half of the reduction claimed before 
 the assessing officers, are not to be awarded against the asses- 
 sors but against the tax district in which the assessment is made. 
 
128 TAXATIOH" OF COEPOEATIONS 
 
 Presumably, the final order in the certiorari proceedings should 
 recite the fact that the costs are to be paid by the tax district 
 in which the assessment is made. The costs to be awarded 
 against the petitioner, or against the tax district, under the 
 amendment of 1905, will be governed by Sections 3251, 3253, 
 ^255 and 3256 of the Code of Civil Procedure. 
 
 Appeals. — An appeal may be taken by either party from an order, 
 judgment or determination under this article as from an order, and it 
 shall be heard and determined in like manner as appeals in the Su- 
 preme Court from orders. All issues and appeals in any proceeding 
 under this article shall have preference over all other civil actions and 
 proceedings in all courts. (Sec. 295, Tax Law, formerly sec. 255, Tax 
 Law of 1896.) 
 
 Source: Same in substance as sec. 7, chap. 269, Laws of 1880. 
 
 An appeal to the Appellate Division must be taken within 
 thirty days. (Section 1351, Code Civil Procedure.) 
 
 For the purpose of an appeal a judgment in proceedings by 
 certiorari to review an assessment is to be considered as an 
 order, and an appeal to the Court of Appeals from a decision 
 of the general term affirming a reduction of an assessment is 
 limited to sixty days under the above section of the Tax Law. 
 People ex rel. Wallkill Valley R. R. Co. v. Keator, 101 N. T. 
 610 (1885) ; affirming 36 Hun, 592 (1885). 
 
 What may be reviewed on appeal. — On appeal to the Court 
 of Appeals in certiorari proceedings only questions of law may 
 be reviewed ; the determination of the court below on the ques- 
 tion of value is final and conclusive when that question was 
 fairly in dispute, unless proper elements were excluded, or 
 improper ones considered, or the conclusions arrived at by legal 
 error. People ex rel. Rome, W. & 0. R. R. v. Hicks et al., As- 
 sessors; same v. Eddy et al.. Assessors; same v. Bancroft et al.. 
 Assessors, 105 K Y. 198 (1887). 
 
 On appeal to the general term of the Supreme Court findings 
 of fact determining the inequality of the relators' assessment 
 may not be reviewed. The only inquiry is as to whether there 
 was legal evidence tending to the conclusion arrived at, and 
 
Bi^MEDIES; STATUTOBT CEETIOBAEI PKOCEEDINGS 129 
 
 whether any errors of law affected the decision. People ex rel. 
 EcJcerson v. Christie, 14 N. Y. St. Kep. 525 (1888). Ques- 
 tions of fact cannot be reviewed on an appeal from a unanimous 
 decision of the Appellate Division affirming a finding of fact 
 in certiorari proceedings under the Tax Law, where there was 
 a trial de novo at special term. People ex rel. Sands v. Feitner, 
 1Y3 ISr. Y. 647 (1903). 
 
 When the only question raised upon certiorari was error or 
 inequality of assessment and a re-assessment is ordered by 
 special term and affirmed by the Appellate Division, no question 
 of law is raised for review by the Court of Appeals. People ex 
 rel. Malcolm Brewing Co. v. Assessors, 154 E". Y. 437 (1897) ; 
 aff'g 19 App. Div. 596. 
 
 It seems that Article 6, Section 9, New York Constitution, 
 providing "that no unanimous decision of the Appellate Di- 
 vision that there is evidence supporting a finding of fact, shall 
 be reviewed by the Court of Appeals," applies to special pro- 
 ceedings, and therefore to an order of affirmance in a statutory 
 proceeding to review an assessment. People ex rel. Manhattan 
 By. Co. V. Barker, 152 K Y. 417 (1897) ; reversing 6 App. 
 Div. 356. 
 
 A finding of fact by the special term, when supported by evi- 
 dence, cannot be reviewed by the Court of Appeals on appeal. 
 Where the Appellate Division reverses a final order at special 
 term, involving the question of value of relator's assets, on ap- 
 peal to the Court of Appeals it may be assumed, under Section 
 1361 of the. Code, that the reversal was not on the facts, but 
 upon some error of law. People ex rel. Manhattan By. Co. v. 
 Barker, 165 K Y. 305 (1900) ; reversing 48 App. Div. 248. 
 Where there is some evidence to support the conclusion reached 
 by the commissioners of taxes, the Court of Appeals will not in- 
 terfere. It will not review or reverse on appeal a determina- 
 tion of assessors on a question of fact as to the true amount of a 
 corporation's assets. People ex rel. Hecker-Jones Co. v. Com'rs, 
 147 K Y. 31 (1895). 
 
CHAPTEK XIII 
 
 Eemedies in Equity; In junction and Mandamus. 
 
 Proceedings in equity; remedy by injunction; cases where 
 equitable relief may be had to prevent the collection of an il- 
 legal tax. — In the absence of fraud, equity will not ordinarily 
 entertain an action for relief against personal tax or assessment. 
 Mooers v. Smedley, 6 Johns. Ch. 28 (1822) ; Heywood v. City 
 of Buffalo, 14 ]Sr. Y. 534 (1856) ; Clarh v. Village of Dunhirh, 
 12 Hun, 181 (1877) ; aff'd in 75 K Y, 612 (1878). The 
 court can be invoked to exercise its equity powers only to pre- 
 vent a multiplicity of suits, irreparable injury to the freehold 
 or to remove a cloud on title. Quest v. City of Brooklyn, 69 N. 
 Y. 506 (1877), aff'g 8 Hun, 97 (1876) ; Heywood v. City of 
 Buffalo, 14 N. Y. 534 (1856). Where the assessment is merely 
 erroneous and not void, equity will not interfere to restrain the 
 collection of the tax. Livingston v. Hollenheck, 4 Barb. 9 
 (1847) ; Van Rensselaer v. Kidd, id. 17. Nor will an action 
 in equity lie to restrain the collection of a tax where there is a 
 legal remedy. A judgment in certiorari proceedings declaring 
 an assessment valid has been held to estop the plaintiff from 
 seeking an injunction to restrain the collection of the tax. Par 
 cific Mail 8. 8. Co. v. Mayor, 57 How. Prac. 511 (1879). 
 
 Where the assessment complained of might have been re- 
 viewed by certiorari, or have been stricken out by mandamus, 
 equity will not interfere. Mutual Benefit Life Ins. Co. v. Su- 
 pervisors, 2 Abb. Pr. N. S. 233 (1866). The policy of the law 
 is opposed to the granting of an injunction to prevent the col- 
 lection of taxes. Messeck v. Supervisors of Colunibia, 50 Barb. 
 190 (1867). So, also, in case of an assessment. Western R. R. 
 Co. V. Nolan, 48 K Y. 513 (1872) ; Stevens v. N. Y. & Oswego 
 R. R., 13 Blatchf. 104 (1875) ; Rome, Waiertown, &c. R. R. 
 V. Smith, 39 Hun, 332 (1886) ; aff'd in 101 K Y. 684 (1886). 
 To sustain a suit in equity to restrain the collection of a tax, 
 
 130 
 
EEMEDIES IN EQUITY J INJUNCTION AND MANDAMUS 131 
 
 plaintiff must show that the action will prevent a multiplicity 
 of suits, irreparable injury to the freehold, or that extrinsic 
 evidence is required to establish the invalidity of the lien of the 
 assessment. Pacific Mail 8. 8. Co. v. Mayor, 57 How. Pr. 511 
 (1879). No injunction will issue against the collection of an 
 illegal tax except on recognized grounds of equity jurisdiction. 
 Susquehanna Bank v. Supervisors of Broome, 25 N. Y. 312 
 (1862). 
 
 Where the present statutory remedy does not give adequate 
 relief, as for instance in the case of an illegal discrimination, 
 there is no doubt inherent power in the Supreme Court, in a 
 proper case, to enjoin the collection of the tax. Mercantile 
 Nat'l Bank v. Mayor, 172 IST. Y. 35 (1902). 
 
 The presumption being in favor of the regular and valid 
 execution of the laws concerning taxation, the court vnll not 
 on a motion for an injunction against the collection of a tax 
 review the action of the assessors. Gillman v. Gillman, 8 !tT. Y. 
 St. Kep. 836 (1887). If persons assume to act as assessors 
 without proper authority, or perform their duties in such man- 
 ner as to render their acts void, the party may proceed by quo 
 warranto or by action against the officials to recover damages 
 against them personally. A resort to equity is not proper. Del. 
 & Hudson Canal Co. v. Atkins, 48 Hun, 456 (1888). Public 
 policy does not sanction an interference with the process of col- 
 lection of taxes, where there is a legal remedy. D. & H. Canal 
 Co. V. Atkins, 121 IST. Y. 248 (1890). Equity will interfere to 
 prevent the collection of a double tax, where there are two as- 
 sessments against the same person and property on the same 
 roll and one has been paid. Jackson v. City, 62 App. Div. 46. 
 
 Mandamus. — Mandamus is rarely granted under the present 
 practice. After the expiration of the time when certiorari may 
 be granted, the aggrieved party is remitted to his remedy in 
 equity or law. Prior to the enactment of Chapter 269, Laws 
 of 1880, forming the basis of the present remedy by certiorari. 
 
132 TAXATION OF COKPOEATIOITS 
 
 mandamus was granted in cases of void assessments and where 
 there was no legal remedy. People ex rel. Moulton v. Mayor, 
 10 Wend. 395 (1833) ; Mygatt v. Supervisors of Chenango, 11 
 ]Sr. Y. 563 (1854). 
 
 It was also granted to compel a tax receiver to accept a pay- 
 ment of and discharge a tax. dementi v. Jackson, 92 N. Y. 
 591 (1883) ; People ex rel. Townshend v. Cady, 18 Jones & 
 Sp. 399 (1884); aff'd 99 K Y. 620 (1885). 
 
 Since the adoption of the statutory remedy by certiorari it 
 has been held that a writ of mandamus will not lie to correct an 
 error in assessment, even though the relator has lost its right to 
 review by certiorari, when there are other remedies within its 
 reach. N. Y. L. E. & W. R. R. Co. v. Asten, N. Y. Daily 
 Eegister (ISTovember 25, 1884). 
 
 Under the present Tax Law it has been held that where a re- 
 lator has lost his remedy of certiorari under the charter, man- 
 damus will not issue to compel the assessors to cancel a tax rest- 
 ing originally upon questions of fact. Indeed, where the asses- 
 sors by lapse of time have no longer power' to remit the tax, if 
 a mandamus were to issue it would be to direct the performance 
 of an illegal act, which is not the province of the writ. A 
 remedy may exist by defense to a suit brought to collect the tax 
 or possibly by equitable action. People ex rel. Corn v. Commis- 
 sioners, N. Y. Law Journal (July 8, 1899). While there are 
 exceptional cases where, in the sound discretion of the court, a 
 writ of mandamus will be issued, the general rule still holds 
 that it will not be allowed where the party has another adequate 
 remedy. People ex rel. N. Y. & Harlem R. R. v. Com'rs, 55 
 App. Div. 544 (1900). 
 
 After the expiration of the time within which the remedy by 
 certiorari may be invoked, the aggrieved party will not be 
 granted a peremptory writ of mandamus, directing the cancel- 
 lation of the assessment, but he will be left to whatever remedy 
 he may have in equity or law. People ex rel. Cochrane v. Feit- 
 ner, 44 App. Div. 239. 
 
CHAPTER XIV. 
 
 Collection op Taxes. 
 
 Methods of collection.— The collection of local taxes from 
 corporations in the state of New York is part of the general 
 scheme of local taxation and may be divided into four parts ac- 
 cording to chronological order and the method of collection. 
 (1) Voluntary payment. (2) Distress and sale by virtue of 
 the collector's warrant. (3) Collection by judicial proceedings. 
 (4) Sequestration proceedings by the Attorney-General in the 
 case of corporations only. 
 
 Voluntary payment, or payment on notice without levy. — 
 
 This is the usual mode of collection throughout the State, except 
 as modified by the Charter provisions of various cities. The 
 Charter regulations providing for voluntary payment in the 
 City of New York are given in Chapter XVI infra. The gen- 
 eral statute regulating this method of payment throughout the 
 state is as follows : 
 
 Tax-roll and collector's warrant. — On or before December fifteenth 
 in each year, or such date as may be designated by a resolution of the 
 board of supervisors of any county, not embracing a portion of the 
 forest preserve not later, however, than the fifteenth day of April in 
 each year, the board of supervisors shall annex to the tax-roll a war- 
 rant under the seal of the county, signed by the chairman and clerk 
 of the board, commanding the collector of each tax district to whom 
 the same is directed to collect from the several persons named in said 
 tax roll the several sums mentioned in the last column thereof, op- 
 posite their respective names, except taxes upon the shares of stock 
 of banks and banking associations, on or before the first day of the 
 following February, where the same is annexed on or before the fif- 
 teenth of December, in each year, as above provided. But where, how- 
 ever, the time of annexing the same and performing the several duties 
 herein imposed is deferred to a later date by resolution as aforesaid, 
 then on or before the first day of June, following the said later date, 
 
 133 
 
134 TAXATION OF COEPOEATIONS 
 
 and further commanding him to pay over on or before the said first 
 day of February or first day of June, as the ease may be, if he be a 
 collector of a city or a division thereof, all moneys so collected appear- 
 ing on said roll to the treasurer of the county, or if he be a collector 
 of a town : 
 
 1. To the commissioners of highways of the town, such sum as shall 
 have been raised for the support of highways and bridges therein. 
 
 2. To the overseers of the poor of the town, such sum as shall have 
 been levied, to be expended by such overseers for the support of the 
 poor therein. 
 
 3. To the supervisor of the town, all the moneys levied therein, to 
 defray any other town expenses or charges. 
 
 4. To the treasurer of the county, the residue of the money so to be 
 collected. 
 
 If the law shall direct the taxes levied for any locality for special 
 purpose in a city or town to be paid to any person or ofiioer other than 
 those named in this section, the warrant shall be varied so as to con- 
 form to such direction. The warrant shall authorize the collector to 
 levy such taxes by distress and sale, in ease of non-payment. The 
 corrected assessment-roll, or a fair copy thereof shall be delivered 
 by the board of supervisors to the collector of the tax district on or 
 before December fifteenth, in each year, unless another date is desig- 
 nated by the board of supervisors in the manner above specified, then 
 in that event, on or before such date so designated. {Sec. 59, Too; Law, 
 formerly sec. 56 as amended hy L. 1901, chap. 158, and L. 1901, ch. 
 550.) 
 
 Source: R.S., t. 1, ch. XIII, title 2, sees. 36-39. 
 
 Defects in warrant and roll in relation to collection of taxes. 
 
 — A delay in the delivery of the roll and warrant to the collector 
 does not invalidate the warrant. Bradley v. Ward, 58 IST. Y. 401 
 (1874) ; People ex rel. R., W. & 0. R. R. v. Haupt, 104 IST. Y. 
 377. See also {City v. Watt, 40 Misc. 595), where the pro- 
 vision as to the delivery of the roll is held to be merely directory 
 and not mandatory. 
 
 The omission of a seal from a warrant makes it illegal 
 and void. City of Rochester v. Bloss, 77 App. Div. 28. It was 
 intimated in an earlier case that an impression with a die 
 marked "Seal" on the warrant was insufficient. Bellinger v. 
 
COLLECTION OF TAXES 135 
 
 Oray, 51 K Y. 610 (1873). In a later case, Erase v. Miller, 
 195 I^. Y. 204 (1909), reversing 119 App. Div. 872, it was 
 held that the use of the Board of Supervisors' seal instead of 
 the County seal made the warrant invalid and void. The ab- 
 sence of the signatures of the mayor and receiver from the war- 
 rant has been held to make it void. Franklin v. Pearsall, 21 
 Jones &Sp. 271 (1886). But the omission to copy on the tax 
 roll the affidavit made by the assessors and annexed to the origi- 
 nal roll before its delivery to the supervisor is not a jurisdic- 
 tional error and cannot prevent the collection of the tax. Boyd 
 V. Gray, 34 How. Pr. 323 (1867). 
 
 The warrant and roll constitute the process, and the affidavit 
 of the assessors, or a copy thereof, need not be annexed to them 
 to protect the collector. Bradley v. Ward, 58 IST. Y. 401 (1874). 
 Although the persons signing the warrant are not described 
 therein as supervisors, or so designated in connection with their 
 signatures, nevertheless it is valid and protects the collector. 
 Sheldon v. Van BuskirTc, 2 IST. Y. 473 (1849). 
 
 Notice by collector. — Every collector, upon receiving a tax roll 
 and warrant, shall forthwith cause notice of the reception thereof to 
 be posted in five conspicuous places in the tax district, specifying one 
 or more convenient places in such tax district, where he will attend 
 from nine o'clock in the forenoon until four o'clock in the afternoon, 
 at least three days, and if in a city, at least five days, in each week 
 for thirty days from the date of the notice, which shall be the date of 
 the posting or first publication thereof, which days shall be specified 
 in such notice, for the purpose of receiving the taxes assessed upon 
 such roll. The collector shall attend accordingly, and any person may 
 pay his taxes to such collector at the time and place so designated, 
 or at any other time or place. In a city, the notice, in addition to 
 being posted, shall be published once in each week, for two weeks suc- 
 cessively, in a newspaper published in such city. On the written de- 
 mand of a non-resident owner of real property included in such tax 
 roll, and the payment by such owner to the collector of the sum of 
 twenty-five cents, the collector shall within twenty-four hours after 
 the receipt of such demand mail in a postpaid envelope directed to 
 such non-resident owner, to the address to be furnished in such de- 
 mand, a statement of the amount of taxes assessed against such prop- 
 
136 TAXATIOKT OF COEPOEATIONS 
 
 erty, with a notice of, the dates and places fixed by him for receiving 
 taxes. {See. 69, formerly Sec. 70, Tax Law, am'd hy L. 1899, eft. 342.) 
 
 Source: Sec. 29, ch. 180, L. 1845, as am'd by ch. 96, L. 1876. The 
 provisions as to notice to non-residents are new. 
 
 Collection by distress and sale. — The second method of col- 
 lecting taxes, which follows in order of time, is collection by 
 distress and sale. This method is general throughout the state, 
 except in so far as it may be modified as to time, or in other 
 respects by the charter provisions of various cities of the state. 
 The charter provisions of the City of New York are given in 
 Chapter XVI infra. The general statute providing for this 
 form of collection is as follows : 
 
 Collection of taxes. — After the expiration of such period of thirty 
 days, the collector shall call, at least once, on every person taxed upon 
 such roll, whose taxes are unpaid, at his usual place of residence, if 
 he is an actual inhabitant of such tax district, and demand payment 
 of the taxes charged to him on his property. If any person shall neg- 
 lect or refuse to pay any tax imposed on him, the collector shall levy 
 upon any personal property in the county belonging to or in the pos- 
 session of any person who ought to pay the tax, and cause the same to 
 be sold at public auction for the payment of such tax, and the fees and 
 expenses of collection; and no claim of property to be made thereto 
 by any other person shall be available to prevent such sale. Public 
 notice of the time and place of sale of the property to be sold shall be 
 given by posting the same in at least three public places in the tax 
 district where the sale is to be made, at least six days previous thereto. 
 If the proceeds of such sale shall be more than the amount of such 
 tax, the fees of the collection and the expenses of the sale, the surplus 
 shall be paid to the person against whom the tax was assessed. If 
 any other person shall claim the surplus, on the ground that the prop- 
 erty sold belonged to him, and such claim be admitted by the person 
 for the payment of whose tax the sale was made, such surplus shall 
 be paid to such other person. If such claim be contested by the person 
 for the payment of whose tax the property was sold, such surplus 
 shall be paid over by the collector to the supervisor of the town, who 
 shall retain the same until the rights of the parties thereto shall be 
 determined by due course of law or by agreement in writing made by 
 them and filed with the supervisor. The collector upon payment of 
 the taxes shall state in the column of the tax roll provided therefor. 
 
COLLECTION- OB TAXES '13Y 
 
 the date of such payment, and shall write his name after such date. 
 (Sec. 71, am'd by L. 1901, ch. 159.) 
 
 Source: R. S., part I, chap. XIII, title 3, sees. 1-5, without ma- 
 terial change; former sec. 71 of Tax Law of 1896. 
 
 What may be seized under a collector's warrant. — A town 
 collector may seize not only goods and chattels belonging to the 
 person taxed, but any goods and chattels in his possession. Shel- 
 don V. Van BusUrh, 2 E". Y. 4Y3 (1849). The interest of a 
 tenant in common of personalty may be levied upon. Dmehart 
 V. Wilson, 15 Barb. 595 (1853). EoUing stock of a railroad 
 is liable to seizure and sale to satisfy a tax against the com- 
 pany. Randall v. Elwell, 52 K Y. 521 (1873). 
 
 What is meant by personal property in possession under 
 above section. — Actual physical possession is meant and not 
 -mere legal or constructive possession, and an actual possession 
 by the consent of the owner, although unaccompanied by any 
 ovTnership in the possessor, is a possession within the meaning 
 of the statute; for instance, personal property mortgaged, and 
 after default still in the possession of the mortgagor. Hersee v. 
 Porter, 100 K Y. 403 (1885). 
 
 Constitutionality. — The seizure and sale of property, under 
 this section, found in possession of the tax debtor though not 
 owned by him has been held constitutional. Pauley v. Wahle, 
 29 Hun, 116 (1883). Nor is it to be considered as depriving a 
 person of property, without due process of law, or taking private 
 property for public use without just compensation. Hersee v. 
 Porter, 100 K Y. 403 (1885). 
 
 "Due process of law," in a proceeding in rem whereby a party 
 may be deprived of his property without personal service of 
 process upon him, or voluntary appearance, requires that the 
 res must be seized or attached, or at least must be within the 
 jurisdiction. Ward v. Boyce, 152 K Y. 191 (1897). 
 
138 TAXATION OF COEPOEATIONS 
 
 Presumption in favor of regularity of tax. — Where the war- 
 rant is regular on its face, it is presumed the collector acted 
 by authority. Downing v. Buger, 21 Wend. 178 (1839). This 
 is so even though the court from which the process issues is of 
 limited or general jurisdiction and has not in fact jurisdiction 
 of the case, provided it has jurisdiction of the subject matter 
 and there is nothing on the face of the warrant to apprise the 
 officer that the court has not also jurisdiction of the person 
 affected by the process. Savacol v. BougMon, 5 Wend. 170 
 (1830). The collector is protected by a warrant regular on its 
 face, though he knows of facts invalidating it. Thomas v. 
 Clapp, 20 Barb. 165 (1855). A warrant issued in due form by 
 the receiver of taxes in the city of N^ew York to a constable 
 protects the officer executing it, whether the tax was lawfully 
 assessed or not. Chegaray v. Jenkins, 5 N. Y. 376 (1851). 
 In the last named case it was held that the duplicate assess- 
 ment-roll annexed to the warrant and delivered to the collector, 
 of itself proves in his behalf the levying of the tax. 
 
 Defects which invalidate warrant. — The presumption in fa- 
 vor of the regularity of the assessment may be overthrown by 
 proof. Doughty v. Hope, 3 Denio, 594 (1847) ; aff'd 1 IST. Y. 
 79. The want of the assessor's certificate is a defect which 
 renders the warrant thereon no protection to the collector. Van 
 Bensselaer v. Witbeck, 7 N. Y. 517 (1852) ; rev'g 7 Barb. 
 133. Neither does an assessment-roll which shows that it was 
 sworn to by the assessors before the time for completing its final 
 review and correction, afford any protection to the collector. 
 Westfall V. Preston, 49 IST. Y. 349 (1872). If a warrant is 
 executed after the return day, it is void, but the officer issuing 
 the warrant is not liable unless he had notice that it was so 
 executed. Van Bensselaer v. Kidd, 6 N. Y. 331 (1852). 
 
 Defects which do not invalidate warrant. — Where the process 
 was against an individual bank, by the name in which it did 
 
COLLECTIOIT OF TAXES 139 
 
 business, apparently that of a corporation, the owner of the 
 bank could not as against the collector claim that it was not a 
 lawful corporation and not taxable in its business name. Patchin 
 V. Bitter, 27 Barb. 34 (1858). It would seem doubtful whether 
 such an assessment would stand under the present law. 
 
 Nor would the fact that the roll showed in express terms 
 that the amount assessed was a valuation of capital stock, but 
 was placed under a column headed "valuation of personal prop- 
 erty," indicate such an error on the part of the assessors as to 
 destroy the protection of the warrant. Niagara Elevating Co. 
 V. McNamara, 50 N. Y. 653 (1872). 
 
 Payment of tax. — The receipt of a check and credit of the 
 amount does not discharge the tax. McLanahan v. City of Syra- 
 cuse, 18 Hun, 259 (18'79). (See Chapter XVI, infra, as to 
 record proof of payment.) 
 
 Lien of the warrant. — The lien acquired by the issue of a 
 warrant for personal taxes takes precedence of the equitable 
 claim of a creditor who afterwards procures the appointment 
 of a receiver. In re Columhian Ins. Co., 3 Abb. Ct. of Ap. 
 Dec. 239 (1866). A tax levied on personal property after its 
 sale on execution, though under a voidable judgment, constitutes 
 no lien. Bordbeck v. Btehhins, 4 Abb. Ct. of Ap. Dec. 100 
 (1866). 
 
 Replevin. — Where goods seized for a tax are replevied, the 
 proper remedy of the collector is a motion to set aside the pro- 
 ceedings. O'Beilly v. Good, 42 Barb. 521 (1864). 
 
 Sale. — The sale should be public and not out of sight of those 
 wishing to bid — ^nor should the property be sold in one parcel, 
 where it consists of a horse and watches. Shiner v. Mosher, 39 
 Hun, 153 (1886). 
 
140 TAXATION OF COEPOEATIONS 
 
 Actions against collectors. — Trespass will lie against a col- 
 lector who levies on property under a warrant showing the tax 
 to be illegal. Bank of Utica v. City of Utica, 4 Paige, 399 
 (1834). And a tax officer seizing property and selling it un- 
 der a warrant by a sale which was not public or properly held 
 renders him a trespasser ab initio, and he can give no title. 
 Shimer v. Mosher, 39 Hun, 153 (1886). 
 
 But a bare levy under several processes, some valid and some 
 invalid, upon the personal property of the person against whom 
 they are issued, does not constitute the officer a trespasser. 
 Woolsey v. Morris, 96 N. Y. 311 (1884). 
 
 Payment of taxes by railroad and certain other corporations. — 
 
 Any railroad, telegraph, telephone, electric light or gas company, in- 
 cluding a company engaged in the business of supplying natural gas, 
 may, within thirty days after receipt of notice by the county treasurer 
 from the elerk of the board of supervisors, pay its tax, with one per 
 centum fees, to the county treasurer, who shall credit the same with 
 such fees, to the collector of the tax district, unless otherwise required 
 by law. If not so paid the county treasurer shall notify the collector 
 of the tax district where it is due, and he shall then proceed to collect 
 under his warrant. Until such notice from the treasurer, the collector 
 shall not force payment of such taxes, but may receive the same, with 
 the fees allowed by law, at any time. [Sec. 73, Tax Law, as am'd iy 
 ch. 221, L. 1912.) 
 
 Source: In substance the same as sections 2, 3, chap. 506, L. 1870, 
 except that it was extended to the telephone, telegraph, and electric 
 light companies by chap. 659, L. 1886, and to gas and natural gas 
 companies by chap. 221, L. 1912. 
 
 Enforcement of tax against telegraph, telephone and electric 
 light lines. Collection of tax against a telegraph, telephone or .elec- 
 tric light line may be enforced by sale of the instruments and batteries 
 connected with such line, and in case there is not sufficient personal 
 property, together with such instruments and batteries, to pay such 
 tax and the percentage due the collector, he shall return a statement 
 thereof to the county treasurer as other unpaid taxes are returned, 
 and the county treasurer shall proceed to sell such part of the line in 
 the tax district where the tax was levied as may be necessary to satisfy 
 the unpaid taxes and percentage, in the manner now provided by law 
 for the sale of lands on execution, and upon such sale shall execute to 
 
COLLECTION OF TAXES 141 
 
 the purchaser a conveyance of such part of said line, and the purchaser 
 shall thereupon hecome the owner thereof. Nothing herein contained 
 shall be construed to prevent collection of such taxes by any pro- 
 cedure now provided by law. {Sec. 74, Tax Law.) 
 
 Source: In substance the same as chap. 659, L. 1886, sees. 3, 6. 
 
 Fees of collector. — On all taxes paid within thirty days from the 
 date of notice that he has received the roll, the collector shall be en- 
 titled to receive, if the aggregate amount shall not exceed two -thousand 
 dollars, two per centum, and otherwise one per centum, in addition 
 thereto. On all taxes collected after the expiration of such period 
 of thirty days, the collector shall be entitled to receive five per cen- 
 tum in addition thereto. The collector shall be entitled to receive 
 from the county treasurer two per centum as fees for all taxes returned 
 to the county treasurer as unpaid. {Sec. 81, Tax Law, as am'd by 
 ch. 240, L. 1909.) 
 
 Source: In substance the same as sees. 29, 30, chap. 180, L. 1845, 
 as amended. 
 
 The purpose of the amendment of 1909 (ch. 240) was to 
 correct a clerical error in this section, the word "treasurer" in 
 the last paragraph reading "treasury" in the Consolidated 
 Laws, as first passed. 
 
 Return by collector of unpaid taxes. — Every collector who makes 
 and delivers to the county treasurer an account of unpaid taxes, upon 
 the tax roll annexed to his warrant, which he shall not have been able 
 to collect, verified by his aflBdavit that the sums mentioned therein 
 remain unpaid, and that he has not upon diligent inquiry been able 
 to discover any personal property out of which the same could be 
 collected by levy and sale, shall be credited by the county treasurer 
 with the amount of such account. In making such return of unpaid 
 taxes, the collector shall add thereto five per centum of the amount 
 thereof. In case such tax is uncollected upon lands assessed to a resi- 
 dent, he shall also state the reason why the same was not collected. 
 Any collector who has heretofore failed in making such return of un- 
 paid taxes, may make such return, whether his term of office has ex- 
 pired or not, verified by his affidavit, to the county treasurer any time 
 within eight years after such failure and before the lands against 
 which said taxes are assessed are advertised for sale pursuant to this 
 chapter, and in case any collector shall heretofore or hereafter fail 
 to add said five per centum the county treasurer shall add the afore- 
 
142 TAXATION OF COEPOEATIONS 
 
 said five per centum of the amount of said uncollected tax as afore- 
 said. Such return shall be endorsed upon or attached to said roll, 
 and shall be in the form to be prescribed by the state board of tax 
 commissioners. Such tax and percentage may be paid to the county 
 treasurer at any time before a return is made to the comptroller. The 
 county treasurer in counties in which lands are sold by him for the 
 non-payment of taxes, is hereby authorized to incur and pay for such 
 expenses as he may deem necessary for the examination of collector's 
 returns and descriptions of property to be sold pursuant to this chap- 
 ter, and the procurement of proper collector's returns and the exam- 
 inations and procurement of matters and facts as he may deem neces- 
 sary to make a valid tax sale hereunder, but such expense shall not 
 exceed the amount of the five per centum added as aforesaid. {Sec. 82, 
 Tax Law.) 
 
 Source: The first sentence covers sec. 10, ch. XIII, title 3, pt. 1, 
 E. S., the remainder being added by the Tax Law of 1896. The section 
 was amended by ch. 517, L. 1901, and appears in the same section of 
 the Consolidated Laws, without change. 
 
 Sufficient and insufficient returns. — The affidavit in a return 
 by a collector, which has no venue, is a nullity. A return that 
 does not state that the account is a transcript of the assessment- 
 roll, nor that the figures were taken from the assessment-roll, 
 nor that sums claimed to be due were for the taxes assessed 
 against the property, is insufficient. Thompson v. Burhans, 
 61 N. Y. 52 (1874) ; reversing 61 Barb. 260. But the ad- 
 dition by the collector of five per cent, to the gross amount of 
 the tax returned, without a separate item indicating the charge, 
 has been held to be no error. Colman v. Shattuck, 62 IS. Y. 
 348 (1875) ; aff'g 2 Hun, 497. 
 
 The return by a collector of the 5th ward of the city of 
 Rochester is not governed by section 82 of the General Tax 
 Law, but by provisions of the charter of that city, since it has a 
 complete system for the assessment and collection of taxes. In 
 re Yeith, 165 N. Y. 204. 
 
 Return when collection has been enjoined.— Any stay, lawfully 
 granted by any court of record by injunction or other order or proceed- 
 ing, of the collection of any tax existing at the expiration of the period 
 
COLLECTION OF TAXES 143 
 
 for the collection of the tax under any warrant or process in the 
 hands of the collector or other officer for the collection thereof, or ex- 
 isting at the time of the expiration of the term of office of the collector 
 or officer holding such warrant, shall operate as an extension of the 
 time within which such collector or other officer may collect such tax 
 until such stay is terminated and for the period of thirty days there- 
 after. As to all other taxes to be collected under any such warrant or 
 process, the collector or officer holding the warrant or process shall 
 make a return thereof within the time prescribed by law. (Sec. 83, 
 Taoe Law.) 
 
 Source: L. 1853, chap. 69, aa amended by L. 1879, chap. 492. The 
 provision in the present statute, as to time of stay, is, however, made 
 uniform. 
 
 Payment of money collected. — Every collector shall, within one 
 week after the time prescribed in his warrant for the payment of the 
 moneys directed therein to be paid, pay to the officers and persons 
 specified therein, the sums required in such warrant to be paid to them 
 respectively. The officers and persons other than the county treasurer, 
 to whom any such moneys shall be paid, shall deliver to the collector 
 duplicate receipts therefor, one of which duplicates shall be filed by 
 the collector with the county treasurer and shall entitle him to a credit 
 in the books of the county treasurer for the amount therein stated to 
 have been received, and no other evidence of such payment shall be re- 
 ceived by the county treasurer. If any greater amount of taxes shall 
 be levied in any town than the town charges thereof, and its propor- 
 tionate share of the state taxes and county charges, the surplus shall 
 be paid by the collector to the county treasurer, who shall place it to 
 the credit of such town, and it shall go to the reduction of the tax 
 upon the town for the succeeding year. (See. 84, Tax Law.) 
 
 Source: 1 R. S., chap. XIII, sees. 6, 7, without change of substance. 
 
 A town collector cannot pay debts of the county and credit 
 the amount to his account. Matter of Boyce, 2 Cow. 444. When 
 a tax is paid to the collector, the law presumes in behalf of the 
 taxpayer that the collector turned it in to the officer to whom 
 he is required by law to account for it. BanTc of Commonwealth 
 V. Mayor, &c., 43 IST. Y. 184 (1870). Moneys collected for the 
 poor and for highways should be paid by the collector to the 
 commissioners of highways and overseers of the poor directly. 
 The supervisor has no right to receive them. People v. Pen- 
 nock, 60 K Y. 421 (1875). 
 
144: TAXATION OF COEPORATIOH'S 
 
 Extension of time for collection.— The county treasurer upon ap- 
 plication of the supervisor of any town or common council of any city 
 in his county, may extend the time for collection of taxes remaining 
 unpaid to a day not later than May first, following, in case the col- 
 lector shall pay over all moneys collected by him, and renew his bond 
 in a penalty twice the amount of the taxes remaining uncollected ap- 
 proved by the proper officer upon filing the same, as the original bond 
 is required to be filed, and delivering a, certified copy thereof to such 
 ■treasurer. Receivers of taxes who have filed a bond as required by 
 statute shall not be required to renew their bonds. 
 
 This section shall not affect any special law relating to the extension 
 of time for the collection of taxes, nor be construed to extend the time 
 for the payment of the state tax by the county treasurer, as required 
 by this chapter. {Sec. 85, Tax Law, as amended by ch. 332, L. 1910.) 
 This amendment omits the words "and make his return of non-resident 
 taxes" in the fifth line after the words "moneys collected by him.'' 
 
 Source: L- 1857, ch. 7, as amended by L. 1885, ch. 10, and ch. 32, 
 ■without change of substance, to be read in connection with sec. 150 
 of the County Law, which reads as follows : 
 
 "Sec. 150. Extension of time for the collection of taxes. — ^The county 
 treasurer may extend the time for the collection of taxes in any town 
 or ward, but no extension shall be permitted until the collector of 
 taxes of the town, city or ward in which such extension shall be asked 
 shall pay over to the county treasurer all the taxes collected by him, 
 and renew his undertaking as the supervisor of his town shall approve, 
 and furnish evidence by his oath, and other competent testimony, if 
 any, as such treasurer shall require, that he has been unable for cause 
 stated, to collect all the taxes within the time required by his war- 
 rant; but such extension shall not in any case be made beyond the 
 first day of April in any year, unless ninety per centum of such taxes 
 shall have been collected and paid over to him.'' 
 
 The above provisions as to the extension of time for the col- 
 lection of taxes do not apply to the city of Wevsr York, which, 
 in this respect, is governed by the Ne-w York charter. 
 
 In cases of vacancy or failure to qualify. — Section 86 of the 
 Tax La'w provides for the appointment of a collector in the case 
 of vacancy, refusal to serve, or disability. 
 
 Section 87 of the Tax Law provides that in case the collector 
 does not file the required bond, or the bond is not approved, and 
 
COLLECTION OF TAXES 145 
 
 a new collector is not duly appointed, that the sheriff shall 
 execute the collector's warrant, with like power, duties and 
 obligations. 
 
 Where the supervisors do not deliver the tax rolls with the 
 warrant to the sheriff in a case under section 87, Tax Law, man- 
 damus appears to be the proper remedy. People ex rel. Super- 
 visors V. Hardenlurgh, 90 K Y. 411 (1882). 
 
 Receipt for taxes. — Every collector of taxes shall deliver a receipt 
 wholly written with ink or partly printed and filled out with ink to 
 each person paying a tax, specifying the date of such payment, the 
 name of such person, the description of the property as shown on the 
 assessment-roll, the name of the person to whom the same is assessed, 
 the amount of such tax, and the date of the delivery to him of the 
 assessment-roll on account of which such tax was paid. For the pur- 
 pose of giving such receipt, each collector shall have a book of blank 
 receipts, so arranged that when a, receipt is torn therefrom a cor- 
 responding stub will remain. The state board of tax commissioners 
 shall prescribe the form of such receipts, stubs and books and they 
 shall be furnished to the town collector by the board of supervisors, 
 at the expense of the county; to the city collector by the common 
 council, at the expense of the city; to the village collector by the 
 village trustees at the expense of the village; to the school collector 
 by the trustee or trustees at the expense of the school district. At 
 the time of giving such a receipt the collector shall make the same 
 entries on the corresponding stub as are required to be made on the 
 receipt. Such book shall be subject to public inspection and shall be 
 filed by the collector with his return, together with the assessment- 
 roll in the oflSee of the county treasurer, or such officer or board to 
 which such collector makes his return. (Sec. 94, Tax Law, as am'd 
 &2/ ch. 579, L. 1911.) 
 
 The statutory provisions of this chapter on the collection of 
 taxes apply to all the cities or towns of the state, in so far as the 
 matters herein provided for do not conflict with the special and 
 local laws of such cities and towns. (Section 95, Tax Law, 
 added by Chapter 489 of the Laws of 1897.) 
 
OHAPTEK XV. 
 
 COLLECTIO]Sr BY JUDICIAL PeOCEEDINGS. 
 
 The third step in the collection of local taxes in arrears from 
 corporations is collection by judicial proceedings. The collec- 
 tion of local taxes by supplementary proceedings is a method 
 usually resorted to throughout the state, and applies both to 
 real and personal taxes in arrears. In the city of New York 
 under the provisions of the Charter of Greater New York, there 
 is an additional remedy by action, but this remedy applies only 
 to personal taxes in arrears. 
 
 The statute regulating the bringing of supplementary pro- 
 ceedings for the collection of taxes is as follows : 
 
 Supplementary proceedings to collect tax. — If a tax exceeding ten 
 dollars in amount levied against a person or corporation is returned 
 by the proper collector uncollected for want of personal property out 
 of which to collect the same, the supervisor of the town or ward, or 
 the county treasurer or the president of the village, if it is a village 
 tax, may, within one year thereafter, apply to the court for the insti- 
 tution of proceedings supplementary to execution, as upon a judgment 
 docketed in such county, for the purpose of collecting such tax and 
 fees, with interest thereon from the fifteenth day of February after 
 the levy thereof. Such proceedings may be taken against a corpora- 
 tion, and the same proceedings may thereupon be had in all respects 
 for the collection of such tax as for the collection of a judgment by 
 proceedings supplementary to execution thereon against a natural per- 
 son, and the same costs and disbursements may be allowed against 
 the person or corporation examined as in such supplementary pro- 
 ceedings, but none shall be allowed in his or its favor. The tax, if 
 collected in such proceeding, shall be paid to the county treasurer or 
 to the supervisor of the town, and if a village tax, to the treasurer 
 of the village. The costs and disbursements collected shall belong to 
 the party instituting the proceedings, and shall be applied to the pay- 
 ment of the expense of such proceeding. The president of a village 
 and a county treasurer shall have no compensation for any such pro- 
 ceeding. A supervisor shall have no other compensation except his 
 
 146 
 
COLLECTION BY JUDICIAL PEOCEEDINGS 147 
 
 per diem pay for time necessarily spent in the proceeding. {See. 299, 
 formerly 259, Tax Law.) 
 
 Source: Ch. 361, L. 1867, as am'd by ch. 640, L. 1881; without 
 material change. 
 
 The application. — The application under this section must be 
 made to the court and not to a judge thereof. Matter of Wright, 
 Peters & Co., 73 App. Div. 75 (1902). The affidavit on which 
 the application is made need not allege all the facts necessary to 
 show jurisdiction in the assessors and supervisors. It is suffi- 
 cient if the formal requirements of the statute are observed. 
 Matter of Conhlin, 36 Hun, 588 (1885). 
 
 In the city of ISTew York, the city chamberlain acting as 
 county treasurer may make application under this section. The 
 additional provisions of distress and sale, and action given by 
 the New York Charter are not inconsistent with the remedy 
 under section 299. In re Oould, 75 App. Div. 576 (1902). 
 
 This section applies also to the city of Eochester. No formal 
 return of the warrant by the collector is necessary, and, if the 
 warrant has been returned to the county treasurer uncollected, 
 and the tax bill marked "not paid," it has been held to be a 
 sufficient return. In re Yeith, 165 N. Y. 204. 
 
 Motion for dissolution or vacation of order. — When an or- 
 der for the examination in supplementary proceedings has been 
 improvidently granted a motion for the vacation of the order 
 will lie. Bassett v. Wheeler, 84 JST. Y. 468 (1881). Such a mo- 
 tion will lie when the warrant for the collection of the tax was 
 issued without seal. City of Rochester v. Bloss, 77 App. Div. 
 28 (1902) ; aff'd 173 K Y. 646. 
 
 The examination. — The delinquent taxpayer cannot prove on 
 the examination that he had sufficient property out of which the 
 tax could be collected. In re Hartshorn, 17 IST. Y. Supp. 567 
 (1892) ; see, also. In re McLean v. Erlanger, 62 Hun, 3. 
 
148 TAXATION OF COEPOEATIONS 
 
 What may be reviewed on appeal. — On appeal to the Court 
 of Appeals the question as to whether the person proceeded 
 against was a resident will not be reviewed. Bassett v. Wheeler, 
 84 N. Y. 468 (1881). 
 
 Dismissal of suits or proceedings. — Where the person or corpora- 
 tion against whom a proceeding or suit is brought to collect a per- 
 sonal tax in arrears, is unable for want of property to pay the tax 
 in whole or in part, or where for other reasons, upon the facts as they 
 existed, either before or after the assessment was made, it appears to 
 the court just that said tax should not be paid, the court may dis- 
 miss such suit or proceeding absolutely without costs or on payment 
 of such part of the tax as may be just, or on payment of costs and 
 may direct the cancellation or reduction of the tax. {Sec. 301, Taco 
 Law, as am'd hy ch. 374, L. 1909; former see. 259a Tax Law.) 
 
 Source: This section was added by ch. 348, L. 1905. 
 
 This statute, which was amended in 1909, to give the court 
 greater power in the dismissal of actions to collect personal 
 taxes in arrears under the New York Charter, also gives the 
 court discretionary power in relation to the disposition of pro- 
 ceedings brought to collect personal taxes in arrears. It has 
 been held that the excess of a corporation's indebtedness over its 
 assets is not a sufficient reason for the dismissal under section 
 301, Tax Law, of an action brought to collect a personal tax 
 in arrears, particularly when the corporation made no attempt 
 to obtain a reduction of the assessment before the Tax Commis- 
 sioners or cancellation thereof by certiorari proceedings. City 
 of New York v. Chase Talbot & Co., 206 N. Y. 1 (1912) ; re- 
 versing 148 App. Div. 284. 
 
 An additional method of collecting taxes, applying only to 
 corporations, is in the nature of a sequestration proceeding 
 brought by the attorney-general of the state. Section 306 of the 
 Tax Law regulating this proceeding is as follows : 
 
 Attorney-general to bring action for sequestration. — It shall be 
 the duty of the attorney-general, on being informed by the comptroller 
 or by the county treasurer of any county that any incorporated com- 
 
COLLECTION BY JUDICIAL PROCEEDINGS 149 
 
 pany refuses or neglects to pay the taxes imposed upon it, pursuant to 
 articles one and two of this chapter (sees. 1-49 of the Tax Law), to 
 bring an action in the Supreme Court for the sequestration of the 
 property of such corporation and the court may so sequestrate the 
 property of such corporation for the purpose of satisfying taxes in 
 arrear, with the costs of prosecution, and may, also, in its discretion, 
 enjoin such corporation and further proceedings under its charter un- 
 til such tax and the costs incurred in the action shall be paid. The 
 attorney-general may recover such tax with costs from such delinquent 
 corporation by action in any court of record. (Sec. 306, Too; Law; 
 formerly sec. 263, Tax Law of 1896.) 
 
 Source: R. S., pt. 1, ch. XIII, title 4, sees. 21 to 23. 
 
 The above section in substance was contained in sections 21 to 
 23 of the Eevised Statutes of 1827, and has been retained in the 
 present Tax Law. While it seems rarely to have been enforced, 
 there is no reason to doubt that it supplements such other meth- 
 ods for the collection of taxes from corporations as may be pro- 
 vided for by the local charters, or by the general system of col- 
 lecting taxes. 
 
 The procedure under this section is, however, limited to the 
 collection of taxes imposed on corporations "pursuant to articles 
 1 and 2 of this chapter," the words quoted being added in the 
 present revision of the Tax Laws. Articles 1 and 2 of the pres- 
 ent Tax Law cover the assessment of persons and property for 
 local purposes, including the assessment of the real and personal 
 property of corporations and individuals, and the special fran- 
 chise tax. This limitation, therefore, does not make it ap- 
 plicable to the collection of the franchise tax from corporations 
 under section 182 et seq. of the Tax Law, although it seems that 
 prior to this limitation such taxes might also be collected there- 
 under. Central Trust Co. v. N. Y. C. & N. B. B., 110 N. Y. 
 250 (1888). 
 
CHAPTEE XVI. 
 
 PEOCEBDIlirGS UNDEB THE NeW YoEK ChABTEE TO COLLECT A 
 
 Tax. 
 
 The provisions of the l^ew York Charter govern the collection 
 of taxes in that city, but these provisions are supplemented by 
 the Tax Law, in so far as the charter may be silent or fail to 
 direct the method of collection. 
 
 Corrected roll to be delivered to receiver of taxes.— The board 
 of aldermen must also cause the assessment rolls of each borough, 
 when corrected according to law, and finally completed, or a fair copy 
 thereof, to be delivered to the receiver of taxes in and for the city on 
 or before the twenty-eighth day of March, with the proper warrant or 
 warrants annexed, signed by the president of said board and counter- 
 signed by the city clerk, directing and requiring him to collect from 
 the several persons named in the assessment rolls the several sums 
 mentioned in the last column of such roll opposite to their respective 
 names, and to pay the same from time to time, when so collected, to 
 the chamberlain of the city. {Sec. 911, Charter, as amended by ch. 455, 
 L. 1911.) 
 
 Source: Sec. 833, ch. 410, L. 1882; sec. 27, ch. 121, L. 1850; art. 
 2, sec. 2, ch. 230, L. 1843. 
 
 The provision requiring the rolls to be delivered to the re- 
 ceiver of taxes on or before a certain date is directory and not 
 mandatory. A delay of eighteen days in the delivery of the 
 rolls does not vitiate the assessment. City v. Watt, 40 Misc. 
 595 ; People ex rel. Rome, W. & 0. B. B. v. Haupt, 104 IST. Y. 
 377 ; Bradley v. Ward, 58 IST. Y. 408. The failure to follow 
 this provision of the charter does not vitiate the tax. It is 
 merely directory. City of N. Y. v. Ferris, 91 App. Div. 223, 
 (1904). 
 
 There is a presumption in favor of the regularity of the acts 
 of public officials, and, if the warrant annexed to the assessment 
 
 150 
 
PKOCEEDINGS UNDEE NEW TOKK CHAETEE 151 
 
 roll is signed by the vice-president of the board of aldermen in- 
 stead of by the president of the board, it may be assimied that it 
 was done under the authority of section 23 of the New York 
 Charter, vesting him in certain cases with the duties of the 
 president. City of New York v. Streeter, 180 E". T. 507 
 ^(1905) ; aff'g 91 App. Div. 206. 
 
 !A penalty is provided by statute, if the board refuse or neg- 
 lect to deliver the assessment rolls or make the necessary alter- 
 ations required by section 910 of the charter. 
 
 Penalty for board of aldermen's neglect. — If the board of alder- 
 men shall wilfully refuse or neglect to perform any of the duties re- 
 quired of them by the two preceding sections, each member so refusing 
 or neglecting shall forfeit to the City of New York, the sum of five 
 hundred dollars, to be recovered in a civil action; and shall also be 
 punishable for a misdemeanor and upon conviction thereof shall for- 
 feit his office. (8eo. 912, Charter.) 
 
 Source: Sec. 834, ch. 410, L. 1882 (Consolidated Act) without 
 change of substance. 
 
 The "two preceding sections" referred to in the above para- 
 graph are sections 911 and 910 of the New York Charter, the 
 first relating to the delivery of the assessment-rolls to the re- 
 ceiver of taxes, and the second to the duties of the board of al- 
 dermen, in relation to the alteration of the assessment-rolls and 
 the writing in of the tax, and to the estimating of the amount 
 of the tax opposite each assessment in the rolls, (supra.) 
 
 Where taxes are payable. — The receiver of taxes, upon receiving 
 the assessment rolls and warrants, shall immediately cause the assess- 
 ment roll and warrants for each of the several boroughs wherein he 
 shall have an office to be delivered at and filed in such office, and shall 
 thereafter proceed to collect and receive said taxes from the several 
 individuals and corporations assessed in the said assessment rolls in 
 the manner hereinafter prescribed. {Sec. 913 of the Charter.) 
 
 Source: In substance the same as sec. 840, chap. 410, L. 1882. 
 
 Receiver responsible for subordinates' acts. — Section 152, 
 charter, provides for the receiver of taxes giving a bond and by 
 
152 TAXATION OJ? COEPOEATIONS 
 
 section 156 of the New York Charter, he is made liable for the 
 acts and faults of deputies appointed by him. Upon the re- 
 ceiver rests the duty of the collection of taxes and he is respon- 
 sible for the acts of subordinates. People ex rel. Tate v. Dalton, 
 41 App. Div. 460 (1899). 
 
 Receiver of taxes to give public notice.— The receiver of taxes 
 shall immediately after he shall have received the assessment rolls 
 give public notice for at least five days in the City Record and in such 
 nevi'spaper or newspapers published in the several boroughs as may 
 b^ designated by the board of City Record, or in default of any news- 
 papers being published in any borough, in such newspaper or news- 
 papers having a general circulation in such borough as the board of 
 City Record shall direct, that said assessment rolls have been deliv- 
 ered to him and that all taxes shall be due and payable at his office 
 in the said respective boroughs as follows: 
 
 All taxes upon personal property and one-half of all taxes upon 
 real estate shall be due and payable on the first day of May and the 
 remaining and final one-half of taxes on real estate shall be due and 
 payable on the first day of November. All taxes shall be and become 
 liens on the real estate affected thereby on the respective days when 
 they become due and payable as hereinbefore provided, and shall re- 
 main such liens until paid. The second half of the tax on real estate 
 which is due as hereinbefore provided on the first day of November 
 following the payment of the first half, may be paid on the first day of 
 May or at any time thereafter, providing the first half shall have been 
 paid or shall be paid at the same time and on such payments of the 
 second half as may be made in such manner prior to November first, 
 a discount shall be allowed from the date of payment to November 
 first at the rate of four per centum per annum. (Sec. 914, Charter, 
 as am'd hy ch. 455, L. 1911.) 
 
 Source: In substance the same as sec. 841, chap. 410, L. 1882 (Con- 
 sol. Act), except as to the time of payment. The provision of rebate 
 for prompt payment was omitted by ch. 447, L. 1908. 
 
 The Eevised Charter of 1901 established a uniform date on 
 which taxes became due and payable, from which time a lien 
 attaches to real estate taxed. The date is now the first day of 
 May in the case of personal taxes, but real estate taxes may be 
 paid in two equal payments, one-half on May first, and the re- 
 maining half on November first following. (Chapter 455, Laws 
 
PEOCEEDINGS UNDER NEW YOBK CHAETEB 153 
 
 of 1911.) Prior to the Charter of 1901, the date of payment 
 was not uniform, varying with the time when the tax rolls were 
 delivered to the receiver of taxes and he had given notice 
 thereof. Much confusion also existed as to the date when the 
 lien on real estate attached. See Burr v. Palmer^ supra j Lathers 
 V. Keogh, supra. 
 
 The provision for a rebate formerly allowed for prompt pay- 
 ment of taxes under Section 915 of the charter has been re- 
 pealed by Chapter 447, Laws of 1908, Section 2. 
 
 Interest on unpaid taxes. — If any tax on personal estate or 
 the first one-half of any tax on real estate shall remain unpaid on the 
 first day of June, after it shall become due and payable, it shall be 
 the duty of the receiver of taxes to charge, receive and collect upon 
 such tax so remaining unpaid on that day, interest upon the amount 
 thereof, at the rate of seven per centum per annum, to be calculated 
 from the day on which said taxes or such part thereof became due 
 and payable, as provided by section nine hundred and fourteen of this 
 act, to the date of payment; and such increase of percentage shall 
 be paid over and accounted for by such receiver from time to time, 
 as a part of the tax collected by him. If the final half of any tax 
 on real estate shall remain unpaid on the first day of December, after 
 it shall be due and payable, it shall be the duty of {he receiver of 
 taxes to charge, receive and collect upon such tax so remaining un- 
 paid on that day, interest upon the amount thereof at the rate of 
 seven per centum per annum, to be calculated from the day on which 
 said final half of said tax became due and payable, as provided by 
 section nine hundred and fourteen of this act, to the date of payment; 
 and such increase of percentage shall be paid over and accounted for 
 by such receiver from time to time, as a part of the tax collected by 
 him. (Sec. 916 Charter, as am'd hy ch. 455, L. 1911.) 
 
 It shall be the duty of the said receiver, in person or by his deputies, 
 to charge, collect and receive upon all taxes or portions thereof re- 
 maining unpaid on and after the first days of June and December 
 respectively, as provided in section nine hundred and sixteen of this 
 chapter, interest at the rate of seven per centum per annum to be cal- 
 culated from the days on which the respective parts of said taxes be- 
 come due and payable as provided by section nine hundred and four- 
 teen of this act. (Sec. 917 Charter, as am'd by ch. 455, L. 1911.) 
 
 Corporations; tax for, how collected. — The said receiver of taxes 
 shall proceed in enforcing the collection and payment of taxes against 
 
154 TAXATION on? COEPOEATIOITS 
 
 corporations or associations and their officers and directors, or trus- 
 tees, in the same manner as against individuals; such taxes shall he 
 paid out of the funds of the company and shall be ratably deducted 
 from the dividends of those stockholders whose stock was taxed, or 
 shall be charged upon such stock, if no dividends be afterward de- 
 clared. {Sec. 921, Charter.) 
 
 Source: In substance same as sec. 848, chap. 410, Laws of 1882, as 
 amended by chap. 58, L. 1892. 
 
 No personal notice required.— No personal notice is required 
 to be given to a corporation or its officers before bringing suit 
 for payment of unpaid tax. Austen v. Westchester Telephone 
 Co., 8 Misc. 11 (1894) ; City v. Watt, 40 Misc. 595 (1903). 
 
 Sections 922-24 of the charter refer to the method of keep- 
 ing the receiver's accounts and the disposition of his daily re- 
 ceipts. Section 925 provides for the designation by the comp- 
 troller of a person to perform the receiver's duties in case of 
 sickness or absence. 
 
 Receiver's account of taxes received; how to be kept. — It shall 
 be the duty of the receiver, and of deputy receivers, from time to 
 time, to enter in a column, to be made for that purpose, upon the 
 assessment rolls in his possession, opposite to the names of the per- 
 sons mentioned therein, and who shall pay their tax, as aforesaid, to 
 the receiver of taxes, personally or by deputy, the fact of such pay- 
 ment, the amount thereof, and the day when paid, and to enter into 
 suitable books, to be kept for that purpose, on each day such payment, 
 and the names of the parties respectively on whose account the same 
 were paid; and at the expiration of the office hours, and on the same 
 day, he shall furnish to the comptroller of the said city, personally 
 or by deputy, a detailed statement of such sums, of the borough for 
 which received, and the names of the parties respectively on whose 
 account the same have been paid, which shall be filed by the said comp- 
 troller in his office. The comptroller shall, on each day, immediately 
 after receiving from said receiver or deputy the statement, compare 
 the same with a voucher furnished to him by the chamberlain for the 
 payment thereof to the chamberlain, and if the aggregate amounts 
 thereof shall correspond, shall credit the said receiver of taxes in his 
 books with such amount. (Sec. 923, Charter.) 
 
 Source: In substance the same as sec. 850, Consol. Act, chap. 410, 
 L. 1882. 
 
PEOCEEDIIfGS UNDEE NEW TOEK CHAETEE 155 
 
 Proof of entries in assessment rolls. — Proof that the assess- 
 ment-rolls come from proper custody, makes their contents ad- 
 missible in evidence. Where there is no entry under the head 
 of payment, this is evidence of the tax remaining unpaid. The 
 Mayor v. Goldman, 125 IST. Y. 399. 
 
 Collection of unpaid personal tax by distress and sale. — It shall 
 be lawful for the said receiver, if any tax for personal property and 
 the interest thereon, as hereinbefore provided, shall remain unpaid on 
 the fifteenth day of the month of January, succeeding the receipt by 
 him of the rolls, to issue his warrant under his hand and seal directed 
 to any marshal commanding him to levy the said tax, with interest 
 thereon at the rate of seven per centum per annum from the day on 
 which said taxes became due and payable, as provided by section nine 
 hundred and fourteen of this act to the time when the same shall be 
 paid by distress and sale of the goods and chattels of the person 
 against whom the said warrant shall be issued, or of any goods and 
 chattels in his or her possession, wheresoever the same shall be found 
 within the said city, and to pay the same to the said receiver and re- 
 turn such warrant within thirty days after the date thereof. For the 
 purposes of this section the jurisdiction of the marshal is co-extensive 
 with the city of New York. The comptroller of the city of New York, 
 however, may from time to time, as may be necessary to insure prompt 
 collection of said tax, extend or renew such warrant, but no single ex- 
 tension or renewal thereof shall in any event exceed sixty days. {Sec. 
 926, Charter.) 
 
 Source: In substance same as sec. 853, chap. 410, Laws of 1882. 
 
 See Chapter XIV, supra, for commentary on this subject 
 under head of "Collection of taxes." 
 
 Power to collect from non-residents. — While the question 
 never seems to have been clearly raised as to the marshal's power 
 to levy upon property of a non-resident within the state, it was 
 intimated in the case of Foster Pump Works v. The City of 
 'New YorJc, Special Term, Nov. 20, 1903, ISTew York Law 
 Journal, JSTov. 21, 1903, aff'd 100 App. Div. 515, that while 
 the tax could not be collected from the general property of the 
 non-resident, it could be collected from the capital invested in 
 
156 TAXATION OF COBPOEATIONS 
 
 the state, and that it was not unlawful for the marshal to de- 
 mand payment in the city of ll^ew York of a tax from a foreign 
 corporation doing business in that city, and in the possession of 
 capital invested in the state. 
 
 Demand no longer necessary. — The statute formerly required 
 a demand to be made in the case of corporations, but this pro- 
 vision was amended by section 2, chapter 58, Laws of 1892. 
 A demand is no longer necessary under the charter. City v. 
 Watt, 40 Misc. 595. 
 
 No stay to be issued. — The marshal and receiver of taxes 
 cannot be stayed in the collection of a tax. D. & H. Co. v. At- 
 Tcins, 121 ]Sr. T. 246. 
 
 May add costs of distress and sale. — In all cases where the said 
 receiver shall proceed by distress and sale of the goods and chattels 
 of any person for the payment of any tax due and payable, it shall be 
 lawful for him to authorize and empower the oflScer making such dis- 
 tress and sale to collect, in addition to the tax and the interest thereon, 
 the costs of such distress and sale, which costs shall be in addition ta 
 any disbursements, five cents for every dollar collected to the amount 
 of one hundred dollars, and two and one-half cents for every dollar col- 
 lected over one hundred dollars. (Bee. 927, Charter.) 
 
 Source: Laws of 1882, chap. 410, sec. 854, as amended. 
 
 Marshal's fees. — Under section 927, charter, re-enacting and 
 amending section 854, Consolidation Act, the marshal is now 
 entitled to charge as fees the amount above mentioned. Under 
 section 854, Consolidation Act, it was evidently not intended 
 to give the marshal the same fees for collecting by distress and 
 sale as under section 1710, Consolidation Act, for serving and 
 levying an execution. Manhattan By. Co. v. Merges, 38 App. 
 Div. 120. 
 
 Sale to be advertised. — The marshal to whom a warrant for the col- 
 lection of any tax is issued shall give public notice at the time and 
 place of sale of any property distrained by virtue thereof, and of the 
 property to be sold, at least six days previous to the sale, by adver- 
 
PEOCEEDINQS UNDEK ETEW YOEK CHAETEE 157. 
 
 tisements to be posted up in at least three public places in the ward 
 where such sale shall be made. The sale shall be by public auction. 
 {Sec. 928, Charter.) 
 
 Source: In substance same as sec. 855, chap. 410, Laws of 1882. 
 
 The officer conducting the sale must strictly comply with the 
 rules of law applicable thereto. Shiner v. Mosher, 39 Hun, 
 153. When too much has been sold under the warrant the offi- 
 cer is liable. Denton v. Carroll, 4 App. Div. 532. 
 
 Disposition of surplus. — If the property distrained shall be sold 
 for more than the amount of the tax, the surplus shall be returned 
 to the person in whose possession such property was when the distress 
 was made, if no claim be made to such surplus by any other person. 
 If any other person shall claim such surplus, on the ground that the 
 property sold belonged to him, and such claim be admitted by the per- 
 son for whose tax the same was distrained, the surplus shall be paid 
 to such owner; but if such claim be contested by the person for whose 
 tax the property was distrained, the surplus moneys shall be retained 
 by the said marshal until the rights of the parties shall be judicially 
 determined. {Sec. 929, Charter.) 
 
 Source: In substance same as sec. 856, Consol. Act. chap. 410, L. 
 1882. 
 
 Fine and imprisonment abolished. — Sections 930 and 931, 
 of the New York Charter, imposing fine and imprisonment for 
 the non-payment of a personal tax, have been repealed by the 
 amendatory act, section 2, chapter 466, Laws of 1901, sched- 
 ule 1. 
 
 Cases to be sent to corporation counsel. — It shall be the duty of 
 the receiver of taxes to send or cause to be sent to the corporation 
 counsel, monthly, all cases of personal taxes embraced in the assess- 
 ment rolls, when the assessment is one thousand dollars or more, and 
 upon which a warrant to any of the marshals of said city has been 
 issued and unsatisfied for a period of sixty days, or returned unsatis- 
 fied in whole or part, and of all other cases of personal taxes, except 
 in those cases where the comptroller may extend the warrant, when 
 application to any court may be made for the collection of the tax, and 
 the said counsel is authorized to make requisitions upon the said re- 
 ceiver for all such cases. {See. 932, Charter.) 
 
 Source: In substance same as sec. 859, chap. 410, Laws of 1882. 
 
158 TAXATIOBT OF COEPOEATIOlirS 
 
 The return of the marshal is conclusive and cannot be at- 
 tacked collaterally. In re McLean v. Erlanger, 62 Hun, 1. 
 
 Duties of corporation counsel.— The corporation counsel shall be 
 charged with the prosecution of all suits or proceedings, in any court 
 having jurisdiction, for the collection of all cases of personal taxes 
 sent to him by the receiver of taxes, or where, by any law of this 
 state, any suit or proceeding may be instituted by such receiver, or any 
 marshal acting under a tax warrant, in any court for the collection of 
 any tax on personal property, and shall, subject to such control, act 
 as counsel to the receiver of taxes, and to any marshal acting under 
 the warrant of said receiver in the collection of any tax for personal 
 property. The imposition of costs in such cases shall be discretionary 
 with the court. (Sec. 933, Charter, as am'd by ch. 12, L. 1908.) 
 
 Source: In substance same as sec. 860, Consol. Act (ch. 410, L. 
 1882). The provision as to costs was added in 1908. 
 
 Court to dismiss proceedings if satisfied that taxes on personal 
 property cannot be paid. — The court in which any suit or proceed- 
 ing may be commenced to enforce the payment of any tax for per- 
 sonal property may, on motion of either party, dismiss the suit or 
 proceedings absolutely without costs, or conditionally, upon the pay- 
 ment of costs, or may, on the facts, in its discretion, dismiss such suit 
 or proceedings on the payment of such part of the tax and costs as 
 shall be just, in any case where it shall be satisfied that the person 
 or persons taxed are unable, for want of property or other reason, to 
 pay any tax, or have an equitable defence to such suit or proceeding. 
 In cases where any suits or proceedings shall be dismissed under this 
 section, on payment of a portion of the tax, a copy of the order of the 
 court shall be filed with the receiver of taxes, and a note of the con- 
 tents of such order entered upon the assessment roll, and it shall be 
 the duty of said counsel to report all cases dismissed on account of the 
 inability of the person to pay the tax to the commissioner of taxes and 
 assessments, annually, on the thirty-first day of December in each 
 year ; and said commissioner is hereby authorized to strike the names 
 of all such persons from the assessment rolls for the succeeding year. 
 All suits or proceedings for the collection of personal taxes sent to the 
 corporation counsel by the receiver of taxes must be commenced within 
 one year from the date of the return by the marshal of the warrant to 
 enforce the payment of such tax. (Sec. 934, Charter, as amended hy 
 chap. 624, L. 1904.) 
 
 Source: In substance the same as see. 861, Conaol. Act, chap. 410, 
 L. 1882. 
 
PEOCEEDINGS TJNDEB NEW TOEK CHAETEE 159 
 
 The practice is to make tlie motion to dismiss at Special 
 Term, Part I, either before or after issue joined ; or it may be 
 made at the trial. 
 
 Section 301 of the Tax Law formerly Section 259a (supra, 
 Chapter XV), permitting the dismissal of suits or proceedings 
 brought to collect personal taxes in arrears applies to suits or 
 proceedings brought under section 934 of the New York Char- 
 ter. City V. Chase Talbot & Co., 206 N. Y. 1 (1912) ; rev'g 
 148 App. Div. 284 ; City v. Halsey, 132 App. Div. 192. 
 
 Section 934 of the charter, , before the amendment of 1904, 
 applied to proceedings to collect a personal tax. City v. Mc- 
 Caldin Bros. Co., 81 App. Div. 622; aff'd 176 K Y. 585 
 (1903). 
 
 Proceedings in the nature of fine and imprisonment for non- 
 payment of personal taxes were formerly brought under section 
 930, charter, but by the abolition of fine and imprisonment for 
 neglect to pay a tax (Chapter 766, Laws of 1897) and by the 
 repeal of section 930 in the revised charter of 1901, the remedy 
 under section 934 became inoperative, except in so far as it 
 might be applied to supplementary proceedings. Matter of 
 Gould, 75 App. Div. 576 (1902). 
 
 Chapter 624, Laws of 1904, now extends the remedy to suits 
 or actions to which it formerly did not apply. City v. McCaldin 
 Bros. Co., supra. 
 
 In the ease of City v. Holzderher, 4:4: Misc. 509 (1904) ; aff'd 
 102 App. Div. 615, mem., the court held that the delinquent tax- 
 payer should not be relieved unless he is unable in whole or in 
 part to pay the tax, or has such a defence that a court of equity 
 would recognize. Want of notice is not sufficient, but the remedy 
 could be applied to a defendant upon whom a tax has been im- 
 posed by mistake, resulting in illegal discrimination. Ibid. 
 
 Since the decision in the Holzderber case a new section has 
 been added to the Tax Law, Chapter 348, Laws of 1905, desig- 
 nated as section 259a (now 301, Chapter XV, supra). This 
 
160 TAXATION OF COEPOEATIOITS 
 
 general statute seems to give the court discretionary power to 
 dismiss any suit or proceeding brought to collect personal taxes 
 in arrears, not only in cases of inability to pay the tax, but 
 where, for other reasons, on the facts, it seems just. 
 
 In City V. Halsey, 132 App. Div. 192 (1909) it was held 
 that in an action brought to collect a personal tax, the defendant 
 had set forth an equitable defence under section 934 of the 
 charter, when he alleged that he had been refused an inspec- 
 tion of the tax record and had been informed by the commis- 
 sioner that there was no assessment against him, on which state- 
 ment he relied. 
 
 When city may sue for personal taxes.— Any tax duly imposed 
 for personal property upon any person or corporation in the city of 
 New York, which shall remain unpaid and in arrears on the fifteenth 
 day of January succeeding the year in which it shall have been im- 
 posed, may be recovered with interest and costs by the receiver of taxes 
 of said city in the name of the city, in an action in any court of 
 record in this state. {See. 936, Charter.) 
 
 Source: In substance same as sec. 863, chap. 410, L. 1882. 
 
 The remedy by action is purely statutory. Generally speak- 
 ing, a common-law action will not lie for the recovery of a tax 
 as a debt. This is, particularly, the case where the legislature 
 has provided some other method for collecting the tax. City of 
 'Rochester v. Gleichauf, 40 Misc. 446. 
 
 Statute of limitations.— The six years statute of limitations 
 formerly applied to an action brought under this section. Mc- 
 'Lean v. N. Y. & 8o. Brooklyn F. & 8. T. Co., IST. T. L. J., Oct. 
 7, 1892. 
 
 Since the passage of Chapter 624, Laws of 1904, such actions 
 must be commenced within one year from the date of the return 
 by the marshal of his warrant. 
 
 Proof and pleadings in actions under section 936. — It is not 
 
 a condition precedent to bringing the action under this section 
 
PBOCEEDINGS UNDEB NEW YOKE CHAETEE 161 
 
 to allege and prove that a warrant for . distress and sale had 
 been issued by the receiver of taxes and returned unsatisfied. 
 McLean v. Meyers, 134 IST. Y. 480. It is not necessary as a 
 condition precedent to bringing an action within this section to 
 show funds in possession of a person or corporation. Austin v. 
 Electric Construction & Supply Co., N. Y. Law Journal, Oct. 
 9, 1893. 
 
 Denials of knowledge or information sufficient to form a be- 
 lief as to matters of record alleged in a complaint in an action 
 brought under this section create no triable issue and a motion 
 for judgment will lie on the pleadings. McLean v. Julien Elec- 
 tric Co., 28 Abb. ISr. C. 249 ; see, also, City v. Matthews, 180 
 N. Y. 42 (1904). 
 
 The burden of attacking an assessment on an assessment roll 
 which has been completed by the municipal assembly and which 
 has been delivered and properly certified to the receiver of taxes 
 with the warrant for the collection of the tax annexed, is on the 
 defendant, and his defense must specifically show in pleadings 
 and proof wherein the proceedings were defective. City v. Mat- 
 thews, 180 K Y. 42 (1904). 
 
 It is no defense to an action brought under this section to 
 allege that the tax was excessive or erroneous. Defendant 
 should have taken its remedy by certiorari. Austin v. West- 
 chester Tel. Co., 8 Misc. 11 ; 28 Supp. 77, 58 St. K. 306 ; City 
 V. Watt, 40 Misc. 595 ; City v. Tucker, 91 App. Div. 214. 
 
 Action against non-resident under section 936, Charter. — 
 
 Under this section an action can only be brought against "any 
 person or corporation in the city of New York," hence, it was 
 not intended to apply to a non-resident, and, if it was so in- 
 tended, the legislature had no power to do so. A non-resident 
 ovsmer of bank stock cannot be made personally liable in an ac- 
 tion brought under section 936. City of New York v. McLean, 
 170 N. Y. 374. As the form of procedure under this section pro- 
 
162 TAXATION OF COEPOEATIOITS 
 
 vides for a judgment in personam it follows that an action 
 cannot be brought against a non-resident under this provision, 
 and, if brought, a demurrer will lie to the complaint. City of 
 N. Y. V. McKan, Special Term, Part I, Nov. 24, 1904, IST. Y. 
 Law Journal, iN'ov. 25, 1904. The marshal, however, appears 
 to have power to collect under section 926, charter. 
 
 In an action brought to collect a tax under section 936 of the 
 charter, it is not necessary to affirmatively prove that the books 
 of annual record were kept open for inspection where all the 
 certificates are made which are by law required to be made in 
 order to evidence a proper roll. It will, under the circum- 
 stances, be presumed that the books of annual record were kept 
 open for inspection, but, if that fact is specifically denied, the 
 mere publication of the notices that the books were open for in- 
 spection, would not be affirmative evidence. City v. Vanderveer, 
 91 App. Div. 303 (1904). 
 
 In an action brought under section 936 to collect a personal 
 tax in arrears, where the defense is that the assessors omitted 
 the names of persons who should have been assessed, evidence 
 offered by the defendant to prove that fact is incompetent, and 
 was properly excluded. Defendant's remedy should have been 
 in certiorari proceedings under section 906, charter. City v. 
 Tucker, 91 App. Div. 214 (1904) ; see, also, Matter of City of 
 Rochester v. Bloss, 77 App. Div. 28. 
 
 Proof required by plaintiff. — In an action brought under 
 this section, the plaintiff in its prima facie case, need not prove 
 the due appointment of the tax commissioners, or the proceed- 
 ings step by step of the various officers charged by the law with 
 making the assessment, imposing the tax, and the various pro- 
 ceedings incidental thereto. Documentary evidence of the an- 
 nual record, showing the assessment in question, supplemented 
 by the testimony of the deputy charged with the duty of making 
 the assessment, proof of the preparation of the assessment-rolls 
 
PEOCEEDINGS UlTDEE NEW YOKK CHAKTEE 163 
 
 from the annual record, the delivering of the rolls to the receiver 
 of taxes, with the warrant for the collection of the tax, docu- 
 mentary proof of the assessment-roll, the fixing of the tax rate, 
 and the proof of publication of the various tax notices make out 
 a prima facie case. A prima facie case being thus established, 
 the tax is presumed to be "duly imposed," and the burden then 
 rests on defendant of proving the contrary. City v. Btreeter, 
 91 App. Div. 206 (1904) ; aff'd 180 N. Y. 507 (1905). 
 
 If there is no entry under the head of payment in the assess- 
 ment-roll, this is evidence that the tax remains unpaid. Mayor 
 V. Goldman, 125 N. Y. 399. 
 
 Priority in the payment of taxes.— 1. Eeceivees. — Taxes are 
 entitled to a preference in payment by the receiver of an in- 
 solvent corporation. In re Columbian Ins. Co., 3 Abb. Ct. of 
 Ap. decision, 239 (1866) ; Central Trust Co. v. N. Y. C. & N. 
 R. B. Co., 110 E". Y. 250 (1888) ; In re Welshach Incandes- 
 cent Oas Light Co., 59 IST. Y. Suppl. 1006 (1894). The pref- 
 erence, however, will not defeat the claims of attaching credi- 
 tors secured by prior lien. Wise v. Wise, 153 !N". Y. 507 
 (1897) ; In re Atlas Constr. Co., 19 App. Div. 415 (1897). 
 
 2. Assignees. — Taxes are entitled to a preference in pay- 
 ment of claims of an assigned estate. In re Oinshurg, 27 Misc. 
 745 ; In re Blight, N". Y. Law Journal, Sept. 9, 1896. Per con- 
 tra, taxes held not to be entitled to a preference in payment 
 by assignee's estate. In the Matter of Ranger (Matter of De- 
 Freece), 26 E". Y. Suppl. 866. The last case was a Special 
 Term decision earlier in date than those mentioned in subd. 1 
 and 2 and would appear to be overruled by the later cases. 
 
 3. Bankeupts'' Estate. — Trustees in bankruptcy are re- 
 quired to pay all state and county taxes as preferred claims 
 out of the funds of a bankrupt estate. Sec. 64, Bankruptcy 
 Act. 
 
 Section 64a of the Bankruptcy Law provides as follows : 
 
164 TAXATION OF COEPOEATIOIfS 
 
 "Sec. 64a. Debts which have priority.— The Court shall order the 
 trustee to pay all taxes legally due and owing by the bankrupt to the 
 United States, State, County, district or municipality in advance of the 
 payment of dividends to creditors, and upon filing the receipts of the 
 proper public officers for such payment, he shall be credited with the 
 amount thereof, and in case any question arises as to the amount or 
 legality of any such tax, the same shall be heard and determined by 
 the court." 
 
 It has been held, under this section, that the Kef eree in Bank- 
 ruptcy will not order a trustee to pay a claim for taxes, where 
 the justness of the amount is in dispute, even though the per- 
 son taxed has failed to avail himself of his remedy by certiorari, 
 nor is the bankrupt limited to his remedy to obtain a reduction 
 of the tax in the State Court under Section 934, charter (or 
 Section 301, Tax Law). In re Claim of City of N. Y. v. Selwyn 
 Importing Co., 18 Am. B. E. 190 (N. Y. Law Journal, Mch. 
 6, 1907). 
 
 The decision in Seliuyn, supra, should be limited to cases 
 when bankrupts have not filed a statement with the Tax De- 
 partment. If the bankrupt has filed such a statement, he will 
 be concluded thereby as though it were a valid accord between 
 the city and the bankrupt. In re Wallace Co. bankrupt, TJ. S. 
 Dist. Ct., L. J., Mch. 15, 1911, Hand, J. 
 
 It seems the city is not even obliged to file a verified proof of 
 iclaim within the statutory period of one year under section 57, 
 subdivision l!^ of the Bankruptcy Law. See opinion of Referee 
 ^Pendleton; In re Claim of City of N. Y. v. Cleanfast Hosiery 
 'Co., filed I^ov. 1, 1900, U. S. Dist. Ct., So. Dist. of IsT. Y. Sec- 
 tion 17 of the Bankruptcy Act, provides that a discharge in 
 bankruptcy shall not release a bankrupt from taxes due and 
 "levied by the United States, the state, county, district or mu- 
 nicipality in which he resides." 
 
PART II. 
 
 THE SPECIAL FRANCHISE TAX. 
 
 CHAPTEK I. 
 
 The Statute and Peoceedings Regulating the Special 
 Feanchise Tax. 
 
 Origin of special franchise tax. — By Chapter Y12 of the 
 Laws of 1899, a class of property which had hitherto escaped 
 taxation became the subject of assessment. This law provided 
 for the taxation of the right to use the public streets by the 
 public service corporations, and included the taxation of the 
 tangible property in, over or under the streets in connection 
 with the special franchise. The special franchise tax applicable 
 to quasi-public corporations using the public streets should bo 
 distinguished from the tax imposed by the state on the organiza- 
 tion of every corporation for the right to become a corporation, 
 and also from the annual franchise tax imposed by the state for 
 the right to do business in the state. The special franchise tax 
 by a legal fiction is in the nature of a property tax and taxes the 
 incorporeal right together with the tangible property. The 
 organization tax and annual franchise tax apply to corporations 
 generally and tax the right to become a corporation or to do 
 business, to be computed on the basis of the value of the capital 
 stock. 
 
 A brief resume of the conditions leading up to the adoption 
 of this law will be helpful in obtaining a clearer conception of 
 its scope and purposes. 
 
 The property of every corporation has been defined as its 
 capital stock, surplus and franchises. People ex rel. Union 
 Trust Co. V. Coleman, 126 N. Y. 438. It has also been held 
 that the general franchise of a corporation is its right to exist 
 
 165 
 
166 TAXATION OF COEPOEATIONS 
 
 and exercise its corporate powers ; that the general franchise of 
 a street railway company is the special privilege to construct 
 and operate a street railway. People ex rel. Metropolitan St. 
 Ry. Co. V. State Board of Tax Commissioners, 1Y4 N. Y. 417. 
 
 Before the passage of the Special Franchise Tax Law, at- 
 tempts had been made by local assessors to tax the franchises of 
 public service corporations, which showed bonded and other in- 
 debtedness in excess of assets and at the same time sufficient 
 earnings to pay not only running expenses, interest on bonded 
 indebtedness and capital stock, but also a surplus. Where the 
 discrepancies were unexplained, the courts assumed that there 
 were assets over and above to pay outstanding indebtedness. 
 People ex rel. Equitable Gas Light Co. v. Barker, 144 N. T. 
 94. 
 
 While, therefore, in a case where the value of assets was in 
 dispute such a method might in fact, if not in name, lead to the 
 assessment of the franchise, there was no warrant under the law 
 as it then stood for the assessment of franchises as part of the 
 capital stock and they could not be so included by the assessors. 
 People ex rel. Manhattan By. Co. v. Barher, 146 'N. Y. 304 
 (1895) ; People ex rel. Manhattan Ry. Co. v. Barker, 152 N. 
 Y. 417 (1897) ; People ex rel. Subway Co. v. Barker, 7 App. 
 Div. 28, aff'd 151 IST. Y. 639 (1896) ; Edison Elec. Ilium. Co. 
 V. Nejf, 19 App. Div. 599 (1897) ; People ex rel. Consolidated 
 Gas Co. V. Feitner, 78 App. Div. 313 (1903). 
 
 It was quite clear that while the franchise as an asset was 
 of great value the law did not require its return for the purpose 
 of taxation. People ex rel. Brooklyn B. R. Co. v. Neff, 19 App. 
 Div. 595 (1897). 
 
 The inadequacy of the existing law to reach this class of 
 property through the general property tax led to the passage of 
 the Ford Special Franchise Bill, as it was then known, during 
 the administration of Governor Koosevelt in 1899. 
 
 The act as originally passed provided for the assessment of 
 
THE SPECIAL FEANCHISE TAX 167 
 
 the franchises by the local assessors, and made no provision for 
 the deduction of moneys paid to the various municipalities by 
 the owners of the franchises. This was remedied by the extraor- 
 dinary session of the legislature, which convened immediately 
 upon the passage of the original bill and enacted Chapter 712 
 of the Laws of 1899, amending the bill, then in the hands of the 
 governor, by requiring the assessments to be made by the state 
 board of tax commissioners and making allowances for moneys 
 paid to the various municipalities on account of the franchises. 
 
 THE STATUTE 
 
 The Tax Law, Art. I, Sec. 2, Subd. 3.— The terms "land," "real es- 
 tate," and "real property," as used in this chapter, include the land 
 itself above and under water, all buildings and other articles and 
 structures, substructures and superstructures erected upon, under or 
 above, or affixed to the same; all wharves and piers, including the 
 value of the right to collect wharfage, cranage or dockage thereon; 
 all bridges, all telegraph lines, wires, poles and appurtenances ; all sup- 
 ports and inclosures for electrical conductors and other appurtenances 
 upon, above and under ground; all surface, underground or elevated 
 railroads, including the value of all franchises, rights or permission to 
 construct, maintain or operate the same in, under, above, on or through 
 streets, highuxiys or public places, all railroad structures, substruc- 
 tures and superstructures, tracks and the iron thereon; branches, 
 switches and other fixtures permitted or authorized to be made, laid 
 or placed in, upon, above or under any public or private road, street 
 or ground; all mains, pipes and tanks laid or placed in, upon, above 
 or under any public or private street or place for conducting steam, 
 heat, water, oil, electricity or any property, substance or product ca- 
 pable of transportation or conveyance therein or that is protected 
 thereby, including the value of all franchises, rights, authority or per- 
 mission to construct, maintain, or operate in, under, above, upon or 
 through any streets, highways, or public places, any mains, pipes, tanks, 
 conduits or wires, with their appurtenances, for conducting water, 
 steam, heat, light, power, gas, oil or other substance, or electricity for 
 telegraphic, telephonic or other purposes; all trees and underwood 
 growing upon land, and all mines, minerals, quarries and fossils in and 
 under the same, except mines belonging to the state. A franchise, 
 right, authority or permission specified in this subdivision, shall, for 
 the purpose of taxation, be known as a "special franchise." A special 
 
168 TAXATION OF COEPOEATIONS 
 
 franchise shall be deemed to include the value of the tangible property 
 of a person, co-partnership, association or corporation situated in, 
 upon, under or above any street, highway, public place or public waters 
 in connection with the special franchise. The tangible property so in- 
 cluded shall be taxed as a part of the special franchise. No property 
 of a municipal corporation shall be subject to a special franchise tax. 
 
 Source: The special franchise tax amendment, italicized in the text, 
 was made by L. 1899, chap. 712, Sec. 1; the original of Sub. 3, Sec. 
 II is found in the old tax Tax Law (L. 1896, ch. 908) and was taken 
 from the Revised Statutes, Ft. I, chap. 13, tit. 1, Sec. 2 as amended by 
 L. 1881, chap. 293. 
 
 Special franchise defined. — Under this subdivision, a special 
 franchise of a street-railroad has been defined as a right of way 
 granted over a public street by the state or some municipal offi- 
 cer or body acting under its authority, with leave to construct 
 and operate thereon a street railroad. People ex rel. Metropoli- 
 tan 8t. By. Co. V. Tax Comm'rs, 174 IST. Y. 435. But if the 
 right to use the street has not been granted by some political 
 body having authority, but by abutting owners who own the 
 fee in the land, it cannot be taxed as a special franchise under 
 the above subdivision. People ex rel. Betsof Co. v. Priest^ 75 
 App. Div. 132 ; aff'd 175 K Y. 511. Property situated upon 
 a public highway and used in connection with a special fran- 
 chise is not assessable as real estate but only as part of the 
 special franchise. People ex rel. Olen Telephone Co. v. Hall, 
 57 Misc. 308; aff'd 130 App. Div. 360; People ex rel. Glen 
 Telephone Co. v. Failing, 57 Misc. 308; aff'd 130 App. Div. 
 888. Tangible property used in connection with the opera- 
 tion of a tunnel under public waters is included in the term 
 special franchise and is assessable as such. People ex rel. 
 Edison Illuminating Co. v. Comm'rs. of Taxes and Assess- 
 ments, 58 Misc. 249 ; People ex rel. Hudson & Manhattan B. B. 
 Co. V. State Board, 142 App. Div. 220, 143 App. Div. 26 ; re- 
 versed on another point, 203 !>]". Y. 119. To constitute a special 
 franchise, it would seem that the right to use a street or highway 
 
THE SPECIAL FEAITCHISE TAX 169 
 
 should result solely from the permission of the proper munici- 
 pal authorities. People ex rel. L. I. R. B. Co. v. State Board of 
 Tax Commissioners, 148 App. Div. 751. Where a railroad 
 company receives permission from the legislature to occupy a 
 certain street, upon obtaining the consent of the local au- 
 thorities, it cannot, after , securing such consent, question the 
 validity of its organic act and is estopped from denying its 
 right to maintain its railroad in the street ; its right to occupy 
 the street is taxable as a special franchise. People ex rel. N. Y. 
 C. & H. B. B. Co. V. Priest, 150 App. Div. 19 ; affirmed 206 
 N^. Y. 274. Where a public service corporation is using the 
 public streets under color of right, including a contract with the 
 city, it may not claim it is a v^rongful trespasser to escape the 
 special franchise tax. People ex rel. East Biver Terminal Bail- 
 way V. Tax Com'rSj 79 Misc. 134. Where a corporation has 
 laid pipes under a public highway without the express eon- 
 sent of the officials it is estopped from denying its liability to be 
 assessed for a special franchise tax. People ex rel. United Nat- 
 ural Gas Co. V. Priest, 152 App. Div. 249 ; aff'g 70 Misc. 69. 
 A foreign pipe line company that maintains its pipes under 
 country highways upon grants from abutting owners and obtains 
 authority to do business within the state continuing to operate 
 its lines for seventeen years thereafter, will be deemed to have 
 done so by the consent of the town commissioners of highways 
 and thus to have acquired a right taxable as a special franchise. 
 People ex rel. United Natural Gas Co. v. State Board, 70 Misc. 
 69. The crossing of a highway by a railroad constitutes a special 
 franchise and is taxable as such. LacJcawanna Bailroad Co. v. 
 Boll, 32 Misc. 321 ; but see Sec. 2, subd. 4, Tax Law. The term 
 "surface" embraces steam railroads and such railroads are tax- 
 able under the Special Franchise Tax Act.- People ex rel. Erie 
 B. B. V. Woodbury, 70 Misc. 261 ; People ex rel. N. Y. C. & 
 E. B. B. V. Woodbury, 203 N. Y. 167; People ex rel. N. Y. C. 
 
170 TAXATION OF COEPOKATIOWS 
 
 & E. E. B. V. Woodbury, 74 Misc. 130. A right granted by a 
 city to a railroad company to use sub-surface property but 
 creating no fee in the soil and containing other reservations, is 
 a special franchise. People ex rel. N. Y, C. & H. R. B. Co. v. 
 Woodbury, 206 K Y. 304. 
 
 What is not a special franchise. — A grant from the commis- 
 sioners of the land office of land under water conveys the fee 
 therein and a tunnel maintained upon such land is upon the re- 
 lator's own right of way and is not assessable as a special fran- 
 chise. People ex rel. Hudson & Manhattan R. B. Co. v. State 
 Board of Tax Commissioners, 203 N. Y. 119 ; reversing 142 
 App. Div. 220, 143 App. Div. 26; where no fee was granted, 
 see People ex rel. Bryan, etc. v. State Board, 67 Misc. 
 508; aff'd 142 App. Div. 796. But where the occu- 
 pancy of a street was at all times dependent upon the public 
 authorities, and a railroad company laid its tracks therein by 
 grant of the city under legislative authority, it is estopped 
 from denying its unqualified right to maintain such railroad 
 and is liable for special franchise tax for such right. People ex 
 rel. N. Y. C. & H. B. B. Co. v. Priest, 206 K Y. 274; dis- 
 tinguishing People ex rel. Hudson & M. B. B. Co. v. Com'rs 
 (supra). When a railroad is maintaining and operating its 
 road upon its own right of way, and what is done therein is 
 done by virtue of the ownership of the soil or of some interest 
 therein, even although this right of way may be included within 
 parallel lines upon either side thereof, constituting the boun- 
 daries of a street or highway, this right is not a special fran- 
 chise, subject to taxation. People ex rel. Long Island B. B. Co. 
 V. Com'rs, 148 App. Div. 751 ; aff'd 207 E". Y. 683. Property 
 owned by a municipal corporation, such as pump house, pipe 
 lines and land connected with the operation of a municipal 
 water plant, situated without the boundaries of the munici- 
 pality, is not subject to taxation as a special franchise being 
 especially exempted under the law. People ex rel. City of Au- 
 
THE SPECIAL FRANCHISE TAX lYl 
 
 hum V. Duryea, 59 App. Div. 488; People ex rel. City of 
 Rochester v. DeWitt, 59 App. Div. 493, afSrmed without opin- 
 ion, 167 E". Y. 575. A relator deriving its rights in operating 
 municipal property from a municipal corporation which was it- 
 self exempt, secures the same exemption and is not subject to a 
 special franchise tax. In this case the relator was specially ex- 
 empted by the laws of 1900, Chapter 616. People ex rel. Inter- 
 torough B. T. Co. v. State Board of Tax Commissioners, 126 
 App. Div. 610 ; affirmed 195 JST. Y. 618. A tunnel under a 
 public street between two buildings, situated on opposite sides of 
 the street belonging to a department store is not taxable as a 
 special franchise, for the reason that the tunnel was not for a 
 public use. People ex rel. Abraham v. State Board of Tax 
 Comm'rs, 67 Misc. 471. Mere permission by a city official to 
 connect pipes with the city water mains does not constitute a 
 special franchise and is not taxable as such. People ex rel. 
 Cooper Glue Factory v. Tax Comm'rs, 143 App. Div. 174. 
 Where the property which is claimed to constitute a special 
 franchise was originally situated upon private property which 
 was subsequently taken to form part of a public highway, the 
 right to use the highway is not derived from the legislature or 
 some other public body and does not constitute a special fran- 
 chise. People ex rel. Betsof Mining Co. v. Priest, 75 App. 
 Div. 131 ; People ex rel. Harlem River & Portchester R. R. Co. 
 V. State Board of Taxes and Assessments, E'ew York Law Jour- 
 nal, April 24, 1910; People ex rel. N. Y. C. & E. R. R. Co. v. 
 Woodbury, 203 N. Y. 167. A bridge over a river, the abut- 
 ments of which rest on land owned in fee and hence is not im- 
 mediately connected with a special franchise is not taxable as 
 such. People ex rel. N. Y. C. & H. R. R. Co. v. Woodbury, 
 206 N. Y. 304. 
 
 Scope and constitutionality. — No better exposition of the na- 
 ture and scope of the Special Franchise Tax Act can be had 
 
172 TAXATION OF COEPOEATIONS 
 
 than is found in the unanimous opinion of the Court of Appeals 
 delivered by Vann, J., in People ex rel. Metropolitan Street 
 Railway Co. v. Tax Commissioners, 174 N. Y. 417 (reversing 
 79 App. Div. 183). Judge Vann says: 
 
 "The statute in question authorizes the assessment or valuation, 
 for the purpose of general taxation, of all special franchises by a state 
 board of tax commissioners appointed by the governor. (L. 1899, ch. 
 712.) The general franchises of a, corporation is its right to live and 
 do business by the exercise of the corporate powers granted by the 
 state. The general franchise of a street railroad company, for instance, 
 is the special privilege conferred by the state upon a certain number 
 of persons known as the corporators to become a street railroad cor- 
 poration and to construct and operate a street railroad upon certain 
 conditions. Such a franchise, however, gives the corporation no right 
 to do anything in the public highways without special authority from 
 the state, or some municipal officer or body acting under its authority. 
 When a right of way over a public street is granted to such a cor- 
 poration with leave to construct and operate a street railroad thereon, 
 the privilege is known as a special franchise, or the right to do some- 
 thing in the public highway, which, except for the grant, would be a 
 trespass. 
 
 "The statute, which is an amendment of the General Tax Law, de- 
 clares, in substance, that the right, authority or permission to con- 
 struct, maintain or operate some structure, intended for public use, 
 "in, under, above, on or through streets, highways or public places," 
 such as railroads, gas pipes, water mains, poles and wires for electric, 
 telephone and telegraph lines, and the like, is a special franchise. For 
 the purpose of taxation such a, franchise is made real estate and is 
 "deemed to include the value of the tangible property of a person, co- 
 partnership or corporation situated in, upon, under or above any street, 
 highway, public place or public waters in connection with the special 
 franchise and taxed as a part thereof." {Sec. 2, clause 3.) This in- 
 cludes nothing but what is in the street, directly or indirectly, and 
 excludes power houses, depots and all structures without the lines of 
 the street. The taxes thus imposed are for general purposes, are col- 
 lected in- the same way, and used for the same objects as other taxes 
 upon the general assessment l-oll. 
 
 "Prior to the passage of this act general franchises had been taxed 
 for the benefit of the state under a valuation made by a state officer, 
 with the sanction of the court. (L. 1898, ch. 908, sees. 182, 190; Peo- 
 ple ex rel. W. & H. Co. v. Roberts, 154 N. Y. 101.) Special franchises, 
 however, had never been lawfully assessed either by local or state au- 
 
THE SPECIAL FEANCHISE TAX 173 
 
 thority, but were made taxable property by the act before us for the 
 first time in the history of the state. {People ex rel. Mwnhattan R. 
 R. Co. V. Barker, 146 N. Y. 304; People ex rel. Brooklyn City R. R. 
 Co. V. Neif, 19 App. Div. 590; aflSrmed on opinion of CuUen, J., below 
 in 154 N. Y. 763.) The right to assess special franchises by central 
 authority is challenged as a violation of the principle of home rule 
 embodied in the Constitution and especially the right to assess the 
 tangible property annexed thereto and included therein by the act, 
 because the latter is withdrawn from the jurisdiction of the local as- 
 sessors by whom it had been theretofore assessed. 
 
 "Every presumption is in favor of the constitutionality of an act 
 of the legislature and, if the Constitution and the act can be reason- 
 ably construed so as to enable the latter to stand, it is the duty of 
 the courts to give them that construction ; still, it is none the less their 
 duty to adjudge the statute void if it is in plain conflict with the real 
 intent of the fundamental law, when considered in the light of history 
 and in all its aspects. (Sweet v. City of Syracuse, 129 N. Y. 316; 
 People ex rel. Sinkler v. Terry, 108 N. Y. 1.) * * » * * * * 
 
 "It (the legislature) created a new system of taxation, brought 
 within its range a new character of property and assigned the duty 
 of making the valuation to the state board of tax commissioners, com- 
 posed of tax experts already in office, whose sole duty related to the 
 subject of taxation, in all its phases, throughout the entire state. It 
 made the tax commissioners assessors of this new kind of property 
 known as special franchises, clothed them with power to compel the 
 owners to furnish under oath, in addition to a general report contain- 
 ing many details, such information as they called for ; authorized them 
 to call upon the local assessors for all facts that they could furnish 
 and to summon aid from all available sources; required them to give 
 notice to the owner affected and an opportunity to be heard, and pro- 
 vided a remedy for review by the courts of every assessment as soon 
 as it was filed. It commanded that all sums, in the nature of a tax, 
 paid by the owner of a special franchise to a municipality for its ex- 
 clusive use, should be deducted from the tax imposed for local pur- 
 poses, and exempted the tangible property situated in public highways, 
 and used in connection with the special franchise, from all other forms 
 of taxation. {Sees. 2, 42, 43, 44, 45, 46.) The new kind of property 
 was termed real estate, just as it might have been termed personal 
 property, or neutral property, without changing its nature, which was 
 such as local assessors had never dealt with. 
 
 "The statute should be considered in the light of the circumstances 
 existing when it was passed, which were extraordinary and unprece- 
 dented. The system thus created had never been known before and, as 
 its main subject, the act dealt with special franchises, which had never 
 
174 TAXATION OP COEPOEATIONS 
 
 been taxed before. Property unknown as the subject of taxation to the 
 framers of any of our Constitutions was brought into the system, 
 which required new methods of valuation and the exercise of functions 
 which had never belonged to local assessors. The property was sui 
 generis, and from its nature could not be valued by local oificers. Un- 
 less it escaped taxation in the future as it had in the past, it was 
 necessary to commit the power to other officers with new functions, 
 wider experience and greater opportunities for observation, who would 
 be able to grasp the new scheme of taxation as a whole. We should 
 not be misled by the terms 'valuation' or 'assessment,' as the simple 
 exercise of judgment, for no work can be done without that, but should 
 .compare the intrinsic nature of the functions exercised by the local 
 assessors for time out of mind with those intrusted to the state tax 
 commissioners, which had never been committed to any board or officer 
 before ********************* 
 
 "The function of assessing a special franchise does not in its nature 
 belong to a county, city, town or village, for it has never been exer- 
 cised by officers of such localities, but to the state, by which it is now 
 exercised for the first time. It is not exclusively local in character 
 and home rule applies only to functions peculiar to localities. It 
 was unknown to our forefathers who brought over primitive home 
 rule, to the colonists who preserved or to the founders of the state, 
 who developed it. It is no part of local self-government as known to 
 history, or to learned judges who have written upon home rule in the 
 past. It did not come within the experience of former times and wa.s 
 not contemplated by the framers of our Constitutions. They kept 
 purely local affairs under local control, but this is not local in in- 
 trinsic character, for the power to be exercised is not confined to the 
 limits of one community. While some special franchises are within a 
 single tax district, others extend through several and sometimes into 
 diiTerent towns, cities and villages. The legislature could not make a 
 law for each case, and in bringing the new system into operation it 
 provided by general rule for all cases of the same general character, 
 whether then existing or expected in the future." 
 
 Constitutionality of the Special Franchise Tax Act affirmed 
 by United States Supreme Court. — This case was taken to the 
 United States Supreme Court upon a writ of error. It was 
 decided in the October Term of 1904, 199 TJ. S. 1. Justice 
 Brewer, in the opinion, says, at pages 35 and 39 : 
 
 "The main contention is that this tax legislation impairs the obliga- 
 tion of contracts. It must be borne in mind that presumptively all 
 
THE SPECIAL FEANCHISE TAX 175 
 
 property ■within the territorial limits of a state is subject to taxing 
 power. Whosoever insists that any particular property is not so sub- 
 ject has the burden of proof and must make it entirely clear that, 
 by contract or otherwise, the property is beyond its reach." * * * 
 "It would not be doubted that if a grant was of specific tangible 
 property, like a tract of land, and the payment therefor was a gross 
 sum, no implication of an exemption from taxation would arise. 
 Whether the amount paid was large or small, greater or less than the 
 real value, if the payment was distinctly the consideration of a grant 
 that which was granted would pass into the bulk of private property, 
 and, like all other such property, be subject to taxation. Nor would 
 this result be altered by the fact that the payment for the thing 
 granted was to be made annually instead of by a single sum in gross. 
 If it was real estate it would be equivalent to the conveyance of the 
 tract subject to ground rent, and the grantee taking the title would 
 hold it liable to taxation upon its value. If this be true in reference 
 to a grant of tangible property, it is equally true in respect to a grant 
 of a franchise, for a franchise, though intangible is none the less prop- 
 erty, and oftentimes property of great value. Indeed, growing out of 
 the conditions of modern business a large proportion of valuable 
 property is to be found in intangible things like franchises." 
 
 Note: For earlier eases upholding the constitutionality of the law, 
 see Buffalo Gas Co. v. Vols, 31 Misc. 160; also Lackawanna R. R. Co. 
 V. Roll, 32 Misc. 321; People em rel NeiD York Central d Hudson R. 
 R. Co. V. Woodbury, 74 Misc. 130. 
 
 In People ex rel. Bh'lyn City B. R. Go. v. N. Y., 199 U. S. 
 48 ; aff'g 174 IST. Y. 417, it was held that the failure of the 
 statute to provide a method for valuing the intangible property 
 in a special franchise was not an instance of failure of due 
 process of law, as the statute is only part of the General Tax 
 Law in which a method is indicated. 
 
 Interstate commerce and federal license. — T& fact that the 
 relator is engaged in interstate commerce in no way tends to 
 relieve it from the special franchise tax. People ex rel. Erie 
 B. B. Co. V. Woodbury, 70 Misc. 261 ; People ex rel. Hudson 
 & Manhattan B. B. Co. v. State Board of Tax Comm'rs, 203 
 N. Y. 119, 125. A relator operating under a federal license is 
 not thereby relieved from a special franchise tax. People ex 
 
176 TAXATION OF COEPOEATIONS 
 
 rel. Niagara Falls Co. v. State Board of Tax Comm'rs, 65 
 Misc. 213 ; aff'd 202 K Y. 426. 
 
 Special franchise grants. — A special franchise can only be 
 granted by the legislature or by the legislative body of a mu- 
 nicipality. People ex rel. Cooper Glue Factory v. Tax Com- 
 missioners, 143 App. Div. 174. A special franchise to a rail- 
 road company to construct and operate its roads across or above 
 public highways cannot be granted by a municipal corporation 
 but only by the legislature, which may prescribe the conditions 
 to be complied with before the company can construct or operate 
 its road. People ex rel. N. Y. C. & H. R. B. Co. v. Woodbury, 
 140 App. Div. 848. 
 
 Tax Law, Art. I, Sec. a, Subd. 4. — Railroad crossings. — The term 
 "special franchise" shall not be deemed to include the crossing of a 
 street, highway or public place outside the limits of a city or incorpo- 
 rated village where such crossing is less than two hundred and fifty 
 feet in length, unless such crossing be the continuation of an occu- 
 pancy of another street, highway or public place. This subdivision 
 shall not apply to any elevated railroad. {Subdiv. 4, Sec. 2, of the Taw 
 Law was added by L. 1901, ch. 490, and amended L. 1907, ch. 720; 
 L. 1908, ch. 295.) 
 
 In an earlier case {Lackawanna B. B. v. Boll, 32 Misc. 321), 
 decided before this section of the law was enacted, it was held 
 that the crossing of a highway by a railroad constituted a 
 special franchise. The crossing of a canal and an adjoining 
 highway at an oblique angle for a distance in excess of 250 feet 
 by means of a t;ontinuous bridge is not, as this section stood in 
 1907, to be deemed a single special franchise. People ex rel. 
 N. Y. C. & H. B. it. Co. V. Woodbury, 208 IST. T. 421 ; revers- 
 ing People ex rel. N. Y. C. & H. B. B. Co. v. State Board, 140 
 App. Div. 848. Where a street crossed by a railroad is subse- 
 quently closed and abandoned, it is, nevertheless, assessable as a 
 special franchise. People ex rel. N. Y. C. & H. B. B. Co. v. 
 
THE SPECIAL FEANCHISE TAX 177 
 
 Woodbury, 74 Misc. 130. The presumption is that the assess- 
 ments by the state board for special franchises of the railroad at 
 crossings are legal and proper and the burden is upon the re- 
 lators to show that they are erroneous or unlawful. People ex 
 rel. N. Y. G. & H. B. B. Co. v. Woodbury, 74 Misc. 130. 
 Crossings created by highways, which are laid out after a rail- 
 road has acquired its right of way are not subject to taxation as 
 a special franchise. People ex rel. N. Y. G. & H. B. B. Co. v. 
 Woodbury, 203 IST. Y. 167. So far as concerns assessment as 
 a special franchise, it is immaterial whether a crossing is at, 
 under or above grade. People ex rel. N. Y. G. & H. B. B. Co. 
 V. Woodbury, 74 Misc. 130. The exemption of crossings out- 
 side a city or incorporated village arid the authorization of as- 
 sessments upon crossings in cities or village is not a denial of the 
 equal protection of the laws within the Constitution of the 
 United States, as under said act every railroad company is as- 
 sessed in the same way upon the same class of property and the 
 burden falls upon each alike. People ex rel. N. Y. G. & H. B. 
 B. Co. V. Woodbury, 74 Misc. 130. 
 
 Tax Law, Art. II, Sec. 40. — Assessors to apportion valuation of 
 railroad, telegraph, telephone or pipe line companies and of 
 special franchises among school and special districts. — The asses- 
 sors of each town in which a railroad, telegraph, telephone or pipe line 
 company is assessed by them, upon property lying in more than one 
 school district therein or in one or more special districts therein in 
 which a tax is levied for district purposes, shall, prior to the final 
 completion of the roll pursuant to section thirty-nine of this chapter, 
 apportion the assessed valuation of the property of each of such corpo- 
 rations among such school and special districts. Such apportionments 
 shall be entered by the assessors in the appropriate column of the as- 
 sessment-roll and a certificate thereof signed by the assessors or a ma- 
 jority of them filed with the town clerk within five days thereafter, 
 and thereupon the valuations so apportioned shall become the valua- 
 tions of such property in such districts for the purpose of taxation. In 
 case of failure of the assessors to act, the supervisor of the town shall 
 make such apportionment on request of either the trustee of any school 
 district or the officers of any special district or of the corporation 
 
178 TAXATION OF COKPOEATIONS 
 
 assessed. In case of any alteration in any school district affecting the 
 valuation of such property, the officer making the same shall fix and 
 determine the valuations in the districts affected for the current year. 
 The assessors of each town in which an assessment haa been made by 
 the state board of tax commissioners in gross, upon a special franchise, 
 lying in more than one school or other special district therein, shall 
 within fifteen days after the receipt by the town clerk of the certified 
 statement of the equalized valuation of such special franchise, as pro- 
 vided in section forty-five-a of this chapter, apportion the assessed valu- 
 ation of each special franchise among, such school and special dis- 
 tricts. The apportionment shall be signed by the assessors or a majority 
 of them and be filed, within five days thereafter, with the clerk of the 
 board of supervisors, and a duplicate thereof shall be filed with the 
 town clerk. Such apportionments shall be entered by the board of su- 
 pervisors at their annual meeting in the appropriate column of the as- 
 sessment-roll for each town before the warrant is annexed thereto. 
 The valuations so apportioned shall be the valuations of the special 
 franchise in such school and special districts for the purpose of tax- 
 ation. The town clerk shall furnish the trustees of school districts a 
 certified statement of the valuations apportioned to their respective 
 districts. Provided, however, that the valuations of special franchises 
 as determined by the state board of tax commissioners and included 
 in the town assessment-rolls completed and filed in the town clerk's 
 oflices for the year nineteen hundred and eleven shall be taken by the 
 boards of assessors as the basis of the apportionment for school dis- 
 trict purposes for the levy of any school taxes which may be made 
 prior to the receipt by the town clerk of the statement of the assess- 
 ments of special franchises as finally fixed and equalized for the 
 year nineteen hundred and twelve. 
 
 Source: Tax Law of 1896, sec. 39; amended by L. 1912, chap. 271. 
 
 Apportionment of franchise tax.— Village assessors are with- 
 out power to fix values or apportion special franchise tax as- 
 sessments between villages. This is the duty of the state hoard. 
 People ex rel. N. Y. C. & H. B. B. Co. v. Oourley, 198 E". T. 
 486; aff'g 135 App. Div. 869; People ex rel. N.Y C.& H. B. 
 B. Co. V. Keno, 61 Misc. 345. Local assessors are empowered 
 to apportion the valuation of a single special franchise as be- 
 tween school districts. Failure to file a certificate of apportion- 
 ment within the time, as provided in this section, does not in- 
 validate the same. People ex rel. Troy Gas Co. v. Hall, 203 
 
THE SPECIAL FEANCHISE TAX 179 
 
 !N". Y. 312 ; aff'g 143 App. Div. 756. Where several crossings, 
 constituting one special franchise, are situated within the boun- 
 daries of a single municipality, there is no authority for re- 
 quiring the apportionment of the tax to cover separate crossings. 
 People ex rel. N. Y. Westchester & Boston R. E. Go. v. Hyde, 
 143 App. Div. 321. 
 
 Tax Law, Art. II, Sec. 43. — Assessment of special franchises. — 
 The state board of tax commissioners shall annually fix and determine 
 the valuation of each special franchise subject to assessment in each 
 city, town or village. The value so fixed and determined shall be the 
 full and actual value of such special franchise. 
 
 Source: Tax Law of 1896, §42, as added by L. 1899, chap. 712, 
 and amended by L. 1900, chap. 254; L. 1902, chap. 112; L. 1904, chap. 
 382; L. 1909, chap. 276; L. 1910, chaps. 7 and 458, and L. 1911, chap. 
 804, in effect Oct. 1, 1911. 
 
 Note: Sec. 2 of La^s of 1909, chapter 275 amending this section, 
 provided as follows: Nothing in this act contained shall require the 
 making and filing of new or further valuations of special franchises 
 in cities for which valuations have already been made and certified 
 for the year nineteen hundred and nine, nor affect in any manner the 
 special franchise valuations made and certified to cities before this 
 act takes effect, in accordance with the schedule of dates of certifica- 
 tion, set forth in section forty-three of the Tax Law. 
 
 No exclusive rule for valuing franchises. — The courts will not 
 lay down an exclusive rule or method of valuation of special 
 franchises. People ex rel. Jamaica Water Supply Co. v. State 
 Board, 196 E". Y. 39. The burden rests upon the relator to 
 show that a wrong method of valuation has been used, or the 
 proper method misapplied. There is no hard and fast rule for 
 determining special franchise valuations. People ex rel. N. Y. 
 C. & H. R. R. Co. V. Priest, 150 App. Div. 19. If the right 
 method of computation is used it is immaterial whether a tax 
 is produced on the intangible part or not. People ex rel. Bh'lyn 
 Hghts R. R. Co. v. Comm'rs, 146 App. Div. 372. 
 
 Net earnings rule. — The net earnings rule contemplates a 
 valuation upon the basis of the net earnings of the corporation, 
 
180 TAXATION OF COEPOEATIONS 
 
 which are attributable to its enjoyment of the special franchise. 
 The method is thus applied: 
 
 1. Ascertain the gross earnings. 
 
 2. Deduct the operating expenses. 
 
 3. Deduct a fair and reasonable return on that 
 
 portion of the capital of the corporation 
 which is invested in tangible property. 
 The resulting balance gives the earnings attributable to the 
 special franchise. If this balance be capitalized at a fair rate, 
 we have the value of the special franchise. People ex rel. Ja- 
 maica Water Supply Co. v. State Board of Tax Commissioners, 
 196 N". Y. 39 ; People ex rel. Manhattan Ry. Co. v. Woodbury, 
 203 K Y. 231. 
 
 Deduction from gross earnings not allowed. — Debts repu- 
 diated unless it be shown that the debtor was not liable. Peo- 
 ple ex rel. Queens Co. Water Co. v. State Board of Tax Com- 
 missioners, 67 Misc. 490; aff'd 143 App. Div. 618. Eighteen 
 hundred dollars for farm expenses claimed by a water company. 
 People ex rel. Queens Co. Water Co. v. State Board of Tax 
 Comm'rs, 67 Misc. 490; aff'd 143 App. Div. 618; but see to 
 the contrary People ex rel. Queens Co. Water Co. v. Tax 
 Comm'rs, 157 App. Div. 165. 
 
 Deduction from gross earnings allowed. — Obsolescence. — 
 An allowance for future obsolescence or inadequacy of equip- 
 ment as distinguished from depreciation from ordinary wear 
 is proper where it is capable of reasonable ascertainment. Peo- 
 ple ex rel. B. H. R. R. Co. v. State Board of Tax Comm'rs, 69 
 Misc. 646 ; aff'd 146 App. Div. 372 ; People ex rel Queens Co. 
 Water Co. v. State Board of Tax Comm'rs, 67 Misc. 490 ; aff'd 
 143 App. Div. 618 ; People ex rel. Third Ave. R. R. Co. v. 
 State Board of Tax Comm'rs, 136 App. Div. 155 ; aff'd 198 
 K Y. 608. 
 
 Depreciation. — In estimating net earnings, a reasonable 
 amount should be deducted from the gross earnings to make 
 
THE SPECIAL FKANCHISE TAX 181 
 
 good depreciation of depreciable property. People ex rel. 
 Queens Co. Water Co. v. State Board of Tax Commissioners, 
 67 Misc. 490; aff'd 143 App. Div. 61S; People ex rel. Third 
 Ave. B. B. Co. v. Tax Comm'rs, 136 App. Div. 155. 
 
 Uncollectible accounts. — A reasonable allowance for uncol- 
 lectible accounts is proper. People ex rel. Queens Co. Water 
 Co. V. State Board of Tax Comm'rs, 67 Misc. 490 ; aff'd 143 
 App. Div. 618. 
 
 Franchise tax. — The amount of all taxes including any fran- 
 chise tax actually paid is properly to be deducted from the 
 earnings in determining the net earnings. People ex rel. Ja- 
 maica Water Supply Co. v. State Board, 197 N. Y. 33 ; modi- 
 fying 196 ]Sr. Y. 39 ; People ex rel. Third Ave. B. B. Co. v. 
 State Board of Tax Comm'rs, 136 App. Div. 155 ; aff'd 198 IST. 
 Y. 608. 
 
 Reconstruction. — To provide against unforeseen contingen- 
 cies that may arise in the prosecution of the business of a cor- 
 poration, which may result in the impairment of the net earn- 
 ings, a gross sum should be deducted annually for the purposes 
 of reconstruction, and the rate of capitalization to meet depreci- 
 ation should be at least one per cent higher than the rate of in- 
 come allowed. People ex rel. Manhattan By. Co. v. Woodbury, 
 203 N. Y. 231. 
 
 Sums paid for damages. — Sums paid for injuries and dam- 
 ages are properly deductible from the net earnings and are to 
 be treated as ordinary disbursements incident to the business. 
 People ex rel. Third Ave. B. B. Co. v. State Board, of Tax 
 Comm'rs, 136 App. Div. 155. 
 
 Rate of capitalization of net earnings. — In capitalizing the 
 final returns to provide a sinking fund for unforeseen contin- 
 
182 TAXATION OF COEPOKATIOETS 
 
 gencies, in view of the character of its business, the surplus 
 earnings of the relator should be capitalized at seven per cent., 
 i.e.j one per cent higher than the rate allowed for the return on 
 the tangible property investment. People ex rel. Jamaica Water 
 Supply Co. V. State Board, 196 N. Y. 39 ; People ex rel. Man- 
 hattan B. B. Co. V. Woodbury, 203 N. Y. 231. 
 
 Valuation of tangible property. — The value of land occu- 
 pied by the relator should be taken at its present market value 
 and not at what it costs the relator. People ex rel. Jamaica 
 Water Supply Co., 196 IST. Y. 39. The value of the relator's 
 property in the streets crossed by its canal bears the same re- 
 lation to the total value of the canal as the number of lineal 
 feet of the canal in the street crossings bears to the total number 
 of lineal feet in the canal. The bridges at the street crossings 
 being necessary, for the maintenance of a canal are to be con- 
 sidered in determining its value. People ex rel. Niagara Falls, 
 etc. Co. V. State Board of Tax Comm'rs, 65 Misc. 213 ; affirmed 
 140 App. Div. 881. 
 
 Cost of engineering to be included. — The cost of engineering 
 is one of the items that should be included in an estimate of 
 the value of the structures belonging to a street railway system. 
 People ex rel. B. H. B. B. Co. v. State Board of Tax Commis- 
 sioners, 69 Misc. 646. 
 
 Indestructible property — how valued. — Where certain tangi- 
 ble property considered in valuing a special franchise is prac- 
 tically indestructible by use and much of it nearly new, the 
 cost of reproduction would fairly indicate its value and its ac- 
 tual value need not be considered. People ex rel. Third Ave. 
 B. B. Co. V. The State Board of Tax Comm'rs, 136 App. Div. 
 155. 
 
 What included in tangible property. — Where the net earn- 
 ings rule is used as the basis of assessment of a special fran- 
 
THE SPECIAL FRANCHISE TAX 183 
 
 chise, the value of the relator's interest in the subway or sub- 
 service conduits through vrhich its power and light cables pass, 
 the cash and cash items on hand and the cost of relator's assess- 
 ments should be included in the value of the tangible property. 
 People ex rel. Manhattan By. Co. v. Woodbury, 203 IST. Y. 231. 
 
 Apportionment of expense of operation. — In estimating the 
 value of a special franchise by the net earnings rule where the 
 company's lines are operated in connection with others by a 
 holding company with a single set of general officers, power 
 houses and repair shops an apportionment thereof among the 
 different lines operated, upon the basis of car mileage is al- 
 lowable; actual amount of earnings, etc., must form the basis 
 of apportionment where the same can be ascertained. People 
 ex rel. B. H. E. R. Go. v. State Board of Tax Gomm'rs, 69 
 Misc. 646; aff'd 146 App. Div. 372 
 
 Return on tangible property. — Six per cent, is a reasonable 
 rate of return upon the tangible property of a water supply 
 company in Queens County, used in the prosecution of its busi- 
 ness. People ex rel. Queens Co. Water Co. v. State Board of 
 Tax Comm'rs, 6Y Misc. 490 ; aff'd 143 App. Div. 618. In the 
 absence of evidence to the contrary, the court will regard 6% 
 as a fair rate of return upon the property of a public service 
 corporation in fixing the special franchise tax. People ex rel. 
 Third Ave. R. R. Co. v. State Board of Tax Comm'rs, 136 
 App. Div. 155 ; aff'd 198 IST. Y. 608 ; People ex rel. Jamaica 
 Water Supply Co. v. Tax Comm'rs, 196 K Y. 39. What is a 
 fair and reasonable return upon tangible property is one of 
 fact for the lower courts and will not be reviewed by the Court 
 of Appeals. People ex rel. Manhattan Ry. Co, v. Woodbury, 
 203 ]Sr. Y. 231. 
 
 Inapplicability of net earnings rule. — The franchises of a 
 railroad may have a value which is effective to prevent its tan- 
 
184 TAXATION OF COEPOEATIONS 
 
 gible property from depreciating to a mere junk value and yet 
 may not have a value upon which a franchise tax can be as- 
 sessed. This occurs where the relator fails to receive a proper 
 return upon its investment. People ex rel. Brooklyn Heights 
 S. B. Co. V. Tax Comm'rs, 69 Misc. 646 ; aff'd 146 App. Div. 
 3Y2. Where the value of a special franchise in a tunnel which 
 has never been in operation is to be determined and the net 
 earnings rule cannot be applied, the court may consider the 
 physical conditions of the tunnel in relation to transportation 
 lines and to other similar tunnels in operation, the population 
 of a contiguous territory, the length and cost of the tunnel, the 
 offerings of the relators to sell it and the facts bearing upon 
 its probable earning capacity. Prospects of future profit- 
 able operation, unless such as add to its present value, 
 are not to be considered. People ex rel. Bryan v. State Board, 
 67 Misc. 474. Where a special franchise (because of non- 
 operation) has not and cannot have present value, nothing 
 should be added to the value of the tangible property con- 
 nected therewith. People ex rel. Bryan v. State Board, 67 Misc. 
 474. The object of an assessment is not necessarily to produce 
 a tax upon the intangible right, but is to determine what the 
 special franchise is worth and if the basis of computation is 
 right. It is quite immaterial for the purpose of fairness whether 
 a tax on the intangible part of the franchise results or not. If 
 there is no value, there is no tax. People ex rel. Broohlyn 
 Heights R. B. Co. v. Tax Comm'rs, 146 App. Div. 372. The 
 net earnings rule necessitates ascertainment of gross earnings, 
 of gross operating expenses deductible therefrom, as well as a 
 fair and reasonable return on the portion of the capital in- 
 vested in tangible property. The balance, if any, capitalized 
 at a fair rate, represents the value of the special franchise. 
 To make this ascertainment, it is necessary to know the value 
 of the land to which capital is appropriated suitably for corpo- 
 rate purposes. Without such data computation tinder this rule 
 
THE SPECIAL FEANCHISE TAX 185 
 
 is impossible. People ex rel. Queens Co. Water Co. v. Wood- 
 lury, 143 App. Div. 618, aff'd 67 Misc. 490; see People ex rel. 
 Queens Co. Water Co. v. Tax Comm'rs, 157 App. Div. 165. 
 
 Stock and bond theory.— As the capital stock and bonds 
 represent all the property of the company, both tangible and 
 intangible, its selling value is some evidence of the value of all 
 the company's property. People ex rel. Queens Co. Water Co. 
 V. State Board of Tax Comm'rs, 67 Misc. 490, 501 ; aff'd 143 
 App. Div. 618. 
 
 Equalization. — The relator upon a certiorari proceeding is 
 entitled to have its assessment reduced upon the ground of 
 inequality so as to equalize it with other assessments where it 
 has been assessed at a higher proportionate valuation than other 
 property upon the same tax roll. People ex rel. Jamaica Water 
 Supply Co. V. State Board, 196 N. Y. 39 ; People ex rel. 
 Queens County Water Co. v. State Board, 67 Misc. 490, 143 
 App. Div. 618 ; People ex rel. Hudson & Manhattan R. R. Co. 
 V. State Board, 143 App. Div. 26, 203 N. Y. 119 ; People ex 
 rel. D. L. & W. R. R. Co. v. Tax Comm'rs, 134 App. Div. 765 ; 
 People ex rel. N. Y. C. & H. R. R. Co. v. Priest, 206 JST. Y. 
 274. Where the State Board of Equalization, after investiga- 
 tion in the discharge of its duty, made its tables showing that 
 real estate in Buffalo has, notwithstanding the formal oath of 
 the assessors that they have assessed it at its full value, been 
 assessed at only 76% of its value, such tables should not be 
 ignored on certiorari to review the action of the State Board 
 of Tax Commissioners, and a reduction of 24% should be made 
 in relator's assessments to equalize them with those of other 
 property on the local rolls. People ex rel. N. Y. C. & H. B. B. 
 Co. V. Woodhury, 74 Misc. 130. 
 
 Note A. — The only case to the coritrary, which is clearly overruled 
 by the cases above, is People ex rel. New England Tele- 
 graph Co. V. State Board of Tax Com'rs, 63 Misc. 1. 
 
186 TAXATION OF COEPOEATIONS 
 
 B. — Under the statute as amended by chapter 804 of the Laws 
 of 1911, the power of equalization is now vested in the 
 State Board of Tax Commissioners, but their decision 
 with respect to an equalized valuation still remains sub- 
 ject to review. 
 
 Tax Law, Art. II, Sec. 44. — Report to state board of tax com- 
 missioners.— Every person, co-partnership, association or corporation, 
 subject to taxation on a special franchise, shall, within thirty days 
 after such special franchise is acquired, make a written report to the 
 state board of tax commissioners, containing a full description of 
 every special franchise possessed or enjoyed by such person, co-partner- 
 ship, association or corporation, a copy of the special law, grant, ordi- 
 nance, or contract under which the same is held, or if possessed or 
 enjoyed under a general law, a reference to such law, a statement of 
 any condition, obligation or burden imposed upon such special fran- 
 chise, or under which the same is enjoyed, together with any other 
 information relating to the value of such special franchise, required by 
 the state board. The state board of tax commissioners may, from 
 time to time, require a further or supplemental report from any such 
 person, co-partnership, association or corporation, containing informa- 
 tion and data upon such matters as it may specify. Every report re- 
 quired by this section shall have annexed thereto the affidavit of the 
 president, vice-president, secretary or treasurer of the association or 
 corporation, or one of the persons or one of the members of the co- 
 partnership making the same, to the effect that the statements con- 
 tained therein are true. Such board may prepare blanks to be used 
 in making the reports required by this section. Every person, co- 
 partnership, association or corporation failing to make the report re- 
 quired by this section or failing to make any special report required 
 by the state board of tax commissioners within a reasonable time 
 specified by it, shall forfeit to the people of the state the sum of one 
 hundred dollars for every such failure and the additional sum of ten 
 dollars for each day that such failure continues, and shall not be en- 
 titled to review the assessment by certiorari, as provided by section 
 forty-six of this chapter. 
 
 Source: Tax Law of 1896, as added by L. 1899, ch. 712. 
 
 Publicity and filing. — The publicity of special franchise tax 
 reports is a matter within the discretion of the State Board of 
 Taxes and Assessments. The state board cannot be restrained 
 by injunction from disclosing reports. American District Tel, 
 
THE SPECIAL FKAITCHISE TAX 187 
 
 Co. V. 'State Board, 127 App. Div. 455. The report required 
 by Section 44 may be filed after the thirty days provided in 
 the section for the filing of such reports elapses. It is only 
 "where the report is not furnished before a final assessment is 
 made that the right to review that particular assessment by 
 certiorari is lost. This penalty does not apply to assessments 
 made after the report has been furnished. People ex rel. N. Y. 
 & Q. 0. E. R. Co. V. State Board of Tax Commissioners, 55 
 App. Div. 218. 
 
 Tax Law, Art. II, Sec. 45. — Hearing on special franchise assess- 
 ment, — On making the full and actual valuation of a special fran- 
 chise, the state board of tax commissioners shall immediately give no- 
 tice in writing to the person, co-partnership, association or corporation 
 aflfected, stating in substance that such valuation has been made, the 
 total valuation of such special franchise and the valuation thereof, 
 in each city, town or village ; and that the board will meet at its office 
 in the City of Albany on a day specified in such notice, which must 
 not be less than twenty nor more than thirty days from the date of the 
 notice, to hear and determine any complaint concerning such valua- 
 tion. Such notice must be served at least ten days before the day fixed 
 for the hearing; and it may be served on a co-partnership, association 
 or corporation, by mailing a copy thereof to it at its principal office 
 or place of business ; and on a person, either personally or by mailing 
 it to him at his place of business or last known place of residence. 
 Section thirty-seven of this chapter applies, so far as practicable, to 
 a hearing by the state board of tax commissioners under this section. 
 
 Source: Tax Law of 1896, sec. 44, as added by L. 1899, cb. 712, 
 amended by L. 1906, ch. 458, L. 1911, ch. 804. 
 
 Tax Law, Art. II, Sec. 45a. — Fixing final valuation; final delivery 
 of statement; information by local officers. — 1. After the time fixed 
 for hearing complaints the state board of tax commissioners, shall, 
 after making allowance for overvaluation, if any, in respect to the 
 special franchise valued, inquire into and ascertain, as near as may be, 
 the percentage of the full and actual value at which other real prop- 
 erty in the city, town or village, for which such valuation has been 
 made is being assessed, and shall equalize the valuation of such special 
 franchise to such amount as in their judgment will place it upon the 
 same basis as the assessment of such other real property in such 
 locality, and shall give notice in the manner provided in section forty- 
 
188 TAXATION OF COEPOEATIOIfrS 
 
 five of this chapter to the person, co-partnership, association or corpo- 
 ration affected, and to each city, town or village in which such special 
 franchise is subject to assessment that such equalization has been 
 made, which notice shall state the full and actual value of such special 
 franchise as finally fixed, and the value thereof as so equalized, and 
 that the board will meet at a place and time to be specified in such 
 notice, to hear and determine any complaint concerning such equaliza- 
 tion. The board shall keep a record which shall show separately the 
 amount of the full and actual value of each special franchise as finally 
 fixed and determined and the amount to which it has been equalized. 
 In ascertaining the basis of assessment of other real property or de- 
 termining the final full and actual valuation, as provided in this sec- 
 tion, the board may, in its discretion, take testimony and hear proof 
 under oath or otherwise, and may avail itself of all information on the 
 subject appearing of record in its office and all information which it 
 may acquire in the discharge of its duties, and may employ its con- 
 fidential agents, experts or other persons in procuring any informa- 
 tion it may require for such purpose. After the hearing of complaints 
 as to such equalization, and after decision thereon, the board shall 
 file with the clerk of the city or town in which such special franchise 
 is subject to assessment, a written statement duly certified by the 
 secretary of the board of the valuation of each special franchise as- 
 sessed therein as finally fixed and equalized. In a town, said state- 
 ment shall specify the total amount of the assessment of each special 
 franchise arid the amount thereof in any village or villages therein. 
 In the City of New York said statement shall be filed with the depart- 
 ment of taxes and assessments. Such statement shall be filed with 
 the clerk of the town not later than the first day of November, and 
 with the clerk of the city, or the department of taxes and assessments 
 in the City of New York, not later than thirty days before the final 
 completion, verification and filing of the assessment-roll. The board 
 on filing said statement of the equalized valuation of a special fran- 
 chise, shall give to the person, co-partnership, association or corpora- 
 tion aflfected written notice thereof, which notice shall contain a state- 
 ment of the full and actual value of such special franchise as finally 
 fixed and determined and the amount to which it has been equalized, 
 and such notice may be served on a co-partnership, association or 
 corporation by mailing a copy thereof to it at its principal office or 
 place of business, and on a person either personally or by mailing it to 
 him at his place of business or last known place of residence. 
 
 2. Each city clerk shall, within five days after the receipt by him of 
 the statement of the equalized valuation of a special franchise as 
 fixed by the hoard, deliver a copy of such statement, certified by him, 
 to the assessors or other officers charged with the duty of making 
 
THE SPECIAL FEAWCHISE TAX 189 
 
 local assessments in the said city. Each town clerk shall, within five 
 days after the receipt by him of the statement of the equalized valua- 
 tion, deliver copies of such statement certified by him, to the clerk of 
 the board of supervisors of the county, to the supervisor of the town, 
 and to the assessors of the village or villages within the town for which 
 assessments have been made. The equalized valuation of every special 
 franchise in a city or village as so fixed by the board shall be entered 
 by the assessors or other oiSoers thereof in the proper column of the 
 assessment-roll before the final revision and certification of such roll 
 by them and become part thereof with the same force and effect as if 
 such assessment had been originally made by such assessors. The 
 equalized valuation of every special franchise assessed in a town shall 
 be entered by the county board of supervisors at their annual meeting 
 in the proper column of the assessment roll for each town before the 
 warrant is annexed thereto, and become part thereof, with the same 
 force and effect as if such assessment had been originally made by the 
 town assessors. 
 
 3. The final and equalized valuation of every special franchise as 
 fixed by the board, shall be the assessed valuation on which all taxes 
 based on such special franchise for city, town, village, school, high- 
 way or other district purposes, shall be levied for the ensuing year. 
 
 4. The assessors or other taxing officers, or other local officers in any 
 city, town, village or district, or any state or county officer, shall on 
 demand, furnish to the state board of tax commissioners any informa- 
 tion required by such board for the purpose of determining the value 
 of a special franchise. 
 
 Source: Added by L. 1911, chap. 84. 
 Note: See Paragraph — Equalization. 
 
 Tax Law, Art. II, Sec. 46. — Certiorari to reviev7 assessment. — 
 An assessment of a special franchise by the state board of tax commis- 
 sioners may be reviewed in the manner prescribed by article thirteen 
 of this chapter, and that article applies, so far as practicable, to such 
 an assessment, in the same manner and with the same force and effect 
 as if the assessment had been made by local assessors; a petition for 
 a writ of certiorari to review the assessment in a city or village must 
 be presented within fifteen days after the final completion and filing 
 of the assessment-roll, and the first posting or publication of the 
 notice thereof as required by the law and in towns within thirty days 
 after the final revision of the roll by the county board of supervisors 
 and the annexation of their warrant thereto. Such writ must run 
 to and be answered by said state board of tax commissioners and no 
 writ of certiorari to review any assessment of a special franchise shall 
 run to any other board or officer, unless otherwise directed by the 
 
190 TAXATION OF COEPOEATIOITS 
 
 court or judge granting the writ. An adjudication made in the pro- 
 ceeding instituted by such writ of certiorari shall be binding upon the 
 local assessors and any ministerial officer who performs any duty in 
 the collection of said assessment in the same manner as though said 
 local assessors or officers had been parties to the proceeding. 
 
 Source: Tax Law of 1896, Sec. 45, as added by L. 1899, chap. 712, 
 amended L. 1900, ch. 254, L. 1911, ch. 804. 
 
 Note : ( See chapter on Certiorari Proceedings, Part I, supra, for de- 
 cisions on practice.) 
 
 Writ — where granted and where returnable. — In special 
 franchise eases the writ may be allowed by the Special Term 
 or a justice of the Supreme Court in the county where the 
 property affected is situated, but under section 2132 of the 
 Code, must be returnable in the third judicial district at the 
 office of the Albany County Clerk, the county in which the as- 
 sessment is made by the State Board. People ex rel. N. Y. C. 
 & H. R. B. Co. V. Priest, 169 N. T. 432 ; modifying same case 
 in 63 App. Div. 128 as to place of the return. 
 
 Defective petition. — Where the petition alleges that the pe- 
 titioner was not requested to appear before the State Tax Board 
 for further examination, and that said board had no evidence 
 other than that contained in its report, as the petitioner was 
 informed and believed, and that no evidence other than the re- 
 port was known to the board or considered by it, and that the 
 evidence presented by the petition was not denied and was ac- 
 cepted by the board, but stating no grounds of the petitioner's 
 belief or its sources of information, the allegations are without 
 probative force. People ex rel. H. & M. R. R. Co. v. Tax 
 Comm'rs, 143 App. Div. 26 ; reversed on other points in 203 
 IS. Y. 120. Where the petition fails to state the extent of the 
 alleged over-valuation, it is defective under section 290 of the 
 Tax Law. But a return to the writ and the submission of the 
 issues on the merits has the effect of waiving the defect. People^ 
 ex rel. N. Y. & R. B. R. Co. v. Tax Gom'rs, 79 Misc. 135. 
 
THE SPECIAL FEANCHISE TAX 191 
 
 When right to review is lost. — Where tlie report required by 
 Section 44 of the Tax Law has not been filed before the final 
 assessment of a special franchise has been made, the right to 
 review by certiorari that particular assessment is lost. People 
 ex rel. N. Y. & Queens Co. B. B. Co. v. Tax Gomm'rs, 55 App. 
 Div. 218. 
 
 When right to review is not lost. — In the case of an assess- 
 ment made without jurisdiction, the omission to file written ob- 
 jection on the day fixed by village assessors for hearing com- 
 plaints, pursuant to section 36 of the Tax Law, does not impair 
 the right of the person or corporation assessed to review the as- 
 sessment by writ of certiorari. People ex rel. N. Y. C. & H. B. 
 B. Go. V. Keno, et al, 61 Misc. 345. 
 
 Return. — The return should disclose the modus operandi by 
 which the commissioners made their assessment, as the Tax Law 
 distinctly provides that the return should contain "the grounds 
 for the valuation." People ex rel. Buffalo Gas Go. v. Tax 
 Gomm'rs, 199 K Y. 162 ; aff'g 137 App. Div. 358 ; People ex 
 rel. Lehigh V. B. Go. v. Woodbury, 199 'R. Y. 167 ; People ex 
 rel. Hudson & M. B. B. Go. v. Tax Gomm'rs, 142 App. Div. 
 220. These cases overrule earlier cases to the contrary, holding 
 that the method of valuation need not be disclosed. 
 
 Where the return does not disclose the grounds for the valu- 
 ation, the relator should move for an amended or additional 
 return, which should comply with section 293 of the Tax Law. 
 People ex rel. Hudson <& M. B. B. Go. v. Tax Gomm'rs, 142 
 App. Div. 220 ; People ex rel. Hudson & M. B. B. Go. v. Tax 
 Gomm'rs, 143 App. Div. 26 ; reversed on other grounds, 208 
 "N. Y. 120; People ex rel. Buffalo Gas Go. v. Tax Gomm'rs, 
 137 App. Div. 358. 
 
 Burden of relator. — The relator must sustain the burden of 
 showing that the method of computation for valuing the in- 
 
192 TAXATIOW OF COEPOEATIONS 
 
 tangible property is wrong, or that, if a proper method was 
 employed, it was erroneously applied. People ex rel. N. Y. C. 
 B, B. V. Priest, 150 App. Div. 19 ; Jamaica W. S. Co. v. Tax 
 Comm'rs, 196 N. Y. 39 ; People ex rel. Niagara Falls Hydrau- 
 lic Power Co. v. Tax Gomm'rs, 202 N. Y. 426 ; People ex rel. 
 Hudson & M. B. B. Co, v. Tax Comm'rs, 142 App. Div. 220 ; 
 reversed on other grounds, 203 N". Y. 120; People ex rel. N. 
 T. C. & H. B. B. Co. V. Priest, 150 App. Div. 19. The re- 
 lator must show affirmatively that the assessment complained 
 of was excessive and that the circumstances warrant a reduc- 
 tion of the assessment. People ex rel. Jamaica W. S. Co. v. 
 Comm'rs, 196 !N". Y. 39 ; People ex rel. Niagara Falls, etc. Co. 
 V. Comm'rs, 202 'N. Y. 426 ; People ex rel. Buffalo & Lake Erie 
 T. Co. V. Comm'rs, 156 App. Div. 466. 
 
 Re-valuation through certiorari. — In a certiorari proceeding 
 under the Tax Law, the court is authorized to take further 
 proof in order to try to determine the proper valuation of the 
 property assessed and hence the proceeding practically involves 
 a re-valuation of the property. People ex rel. Jamaica W. S. 
 Co. V. Tax Comm'rs, 196 N. Y. 39. 
 
 Local assessors cannot intervene. — The writ to the state 
 board cannot be amended, so as to run to the local assessors. 
 An application for intervention in a certiorari proceeding must 
 show some legal interest in the controversy. People ex rel. 
 ^Rochester Tel. Co. v. Priest, 181 IST. Y. 300; reversing 101 
 iApp. Div. 223. To same effect are People ex rel. Buffalo B. 
 Co. V. Priest, 101 App. Div. 263. 
 
 Over-valuation. — In certiorari proceedings to review taxes, 
 it is incumbent upon the relator to show affirmatively that the 
 assessment imposed is excessive where the relief asked is upon 
 the ground of excessive valuation. People ex rel. Niagara Falls 
 
THE SPECIAL FEAWCHISE TAX 193 
 
 Hydraulic Power & Mfg. Co. v. State Board of Tax Comm'rs, 
 202 N. Y. 426. Where the return to a writ of certiorari based 
 upon a claim of overvaluation fails to disclose the method used 
 by the state board in reaching the valuation, the issue as to 
 over-valuation is one of fact to be determined from the evi- 
 dence presented. People ex rel. Queens County Water Co. v. 
 State Board of Tax Comm'rs, 67 Misc. 490. The relation of 
 certain similar assessments by a relator and a showing that its 
 particular franchise under review is assessed at a higher valua- 
 tion than those selected is insufiBcient. It must be shown that 
 unless the assessment was reduced, the relator would be obliged 
 to pay more than its proportionate share of the taxes. People 
 ex rel. Hudson & Manhattan B. B. Co. v. State Board of Tax 
 Comm'rs, 143 App. Div. 26 ; reversed on another point, 203 N. 
 Y. 119. If the total valuation of the relator's property be cor- 
 rect, no ground of complaint exists against the tax commis- 
 sioners if they overvalued one portion of the relator's special 
 franchise. People ex rel. Niagara Falls Hydraulic Power Mfg. 
 Co. V. The State Board of Tax Comm'rs, 65 Misc. 213 ; aff'd 
 202 K Y. 426. 
 
 Assessment must be sustained unless it could not be upon 
 any possible theory of valuation. — It is not only to be presumed 
 that an assessment is valid, but it must be sustained unless the 
 relator has shown on the hearing that it cannot be sustained on 
 any theory or rule of valuation which the assessors might law- 
 fully have adopted or applied, and if the evidence leaves the 
 matter in doubt, then it is the province of the assessing officers 
 to determine the value and their determination cannot be dis- 
 turbed. People ex rel. Hudson & Manhattan B. B. Co. v. State 
 Board, 143 App. Div. 26 ; reversed on another point, 203 N. Y. 
 119. 
 
 State Board of Tax Commissioners assumed to assess 
 at full value. — It will be assumed that the State Board of Tax 
 
194 TAXATION OF COEPOEATIONS 
 
 Commissioners has assessed the special franchise of the re- 
 lator including the tangible property at its full value. It is 
 their duty so to assess it and the court will not find, without 
 evidence, that they violated their duty. People ex rel. Queens 
 Borough Gas & Electric Co. v. Woodbury, 67 Misc. 481 ; Peo- 
 ple ex rel. Hudson & M. R. B. Co. v. State Board, 143 App. 
 Div. 26 ; reversed on another point, 203 N. Y. 119. 
 
 Tax Law, Art. II, Sec. 46a. — Special franchise valuations made 
 prior to passage of ch. 804, L. 191 1, not affected by that statute. — 
 
 Nothing in the tax law as amended by Chapter eight hundred and four 
 of the laws of nineteen hundred and eleven contained shall require the 
 making and filing of new or further valuations of special franchises 
 in cities, towns, or villages for which valuations have already been 
 made and certified for the year nineteen hundred and eleven, nor 
 affect in any manner the special franchise valuations made and certi- 
 fied to cities before this act takes effect, in accordance with the sched- 
 ule of dates of certification set forth in section forty-three of the tay 
 law before the same was amended by chapter eight hundred and 
 four of the laws of nineteen hundred and eleven and when the assess- 
 ment-roll of any city of this state for the year nineteen hundred and 
 twelve shall be required by the charter of such city, to be finally com- 
 pleted, verified and filed on or before the fifteenth day of December, 
 nineteen hundred and eleven, the assessors or other officer or officers 
 whose duty it is to make local assessments for said city, shall, before 
 the final completion, verification and filing of said assessment-roll, 
 enter in the proper column of the assessment-roll, the valuations of the 
 special franchises subject to assessment, in such city which were 
 certified to the city clerk of such city in accordance with the schedule 
 of dates of certification set forth in section forty-three of the tax law 
 before said amendment of nineteen hundred and eleven, with the same 
 force and effect as if said valuations had been made as provided by 
 sections forty-three, forty-five and forty-five-a, of the tax law as 
 amended by chapter eight hundred and four of the laws of nineteen 
 hundred and eleven, and such assessments may be reviewed in the man- 
 ner prescribed by article thirteen of this chapter, and that article 
 applies so far as practicable to such assessments in the same manner 
 and with the same force and effect as if the assessment had been made 
 by local assessors; a petition for a writ of certiorari to review the 
 assessment of such special franchises in such city must be presented 
 within fifteen days after the final completion and filing of such as- 
 sessment-roll. Such writ must run to and be answered by said state 
 
THE SPECIAL FEAWCHISE TAX 195 
 
 board of tax commissioners and no writ of certiorari to review such 
 assessment of a special franchise shall run to any other board or 
 oflScer unless otherwise directed by the court or judge granting the 
 writ. An adjudication made in the proceeding instituted by such writ 
 of certiorari shall be binding upon the local assessors and any minis- 
 terial oflScer who performs any duty in the collection of said assess- 
 ment in the same manner as though said local assessors or officers 
 had been parties to the proceeding." (Added by Chapter 875 of the 
 Laws of 1911.) 
 
 Tax Law, Art. II, Sec. 47. — Tax commissioners to appear by 
 counsel; employment of experts. — In any proceeding for the review 
 of an assessment of a special franchise made by the state board of 
 tax commissioners, said state board of tax commissioners is autho- 
 rized to appear by counsel to be designated by the attorney-general. 
 The attorney-general or such counsel may employ experts and the 
 compensation of such counsel and experts and their necessary and 
 proper expenses and disbursements, incurred or made in such proceed- 
 ing, and upon any appeals therein, shall, when audited and allowed as 
 are other charges against such tax district, be a charge upon the 
 tax district upon whose rolls appears the assessment sought to be 
 reviewed. Where, in one proceeding, there is reviewed the assessment 
 of a special franchise in more than one tax district, separate accounts 
 shall be rendered for said costs, expenses and disbursements to the 
 proper officer of each of said tax districts and audited and allowed by 
 him as aforesaid. For the purposes of this section, the City of New 
 York shall be deemed one tax district. If provision shall not have been 
 made for the payment of such expense in any year, then the officers 
 who are empowered by law to make such-, provision in any county, 
 city, town or other political subdivision of the state, are hereby au- 
 thorized and directed to raise money to such an amount as may be 
 necessary, in any manner provided by law for meeting expenses in 
 anticipation of the collection of taxes and to pay such expense there- 
 from. The amount so raised shall be included in the amount to be 
 raised by tax in the ensuing year. 
 
 Source: Tax Law of 1896, see. 45a, added by L. 1906, ch. 155; 
 amended L. 1911, ch. 471, amended L. 1913, eh. 134. 
 
 Tax Law, Art. II, Sec. 48. — Deduction from special franchise 
 tax for local purposes. — If, when the tax assessed on any special 
 franchise is due and payable under the provisions of law applicable to 
 the city, town or village in which the tangible property is located, 
 it shall appear that the person, co-partnership, association or corpo- 
 ration aflFected has paid to such city, town or village for its exclusive 
 
196 TAXATION OF COEPOEATIONS 
 
 use within the next preceding year, under any agreement therefor, 
 or under any statute requiring the same, any sum based upon a per- 
 centage of gross earnings, or any other income or any license fee, or 
 any sum of money on account of such special franchise, granted to or 
 possessed by such person, co-partnership, association or corporation, 
 which payment was in the nature of tax, all amounts so paid for the 
 exclusive use of such city, town or village, except money paid or ex- 
 pended for paving or repairing of pavement of any street, highway or 
 public place, shall be deducted from any tax based on the assessment 
 made by the state board of tax commissioners for city, town or village 
 purposes, but not otherwise; and the remainder shall be the tax on 
 such special franchise payable for city, town or village purposes. The 
 chamberlain or treasurer of a city, the treasurer of a village, the 
 supervisor of a town, or other officer to whom any sum is paid for 
 which a person, co-partnership, association or corporation is entitled 
 to credit as provided in this section, shall, not less than five nor more 
 than twenty days before a tax on a special franchise is payable, make 
 and deliver to the collector or receiver of taxes or other officer au- 
 thorized to receive taxes for such city, town or village, his certificate 
 showing the several amounts which have been paid during the year end- 
 ing on the day of the date of the certificate. On the receipt of such cer- 
 tificate the collector, receiver or other officer shall immediately credit 
 on the tax-roll to the person, co-partnership, association or corporation 
 aflfected, the amount stated in such certificate, on any tax levied 
 against such person, co-partnership, association or corporation on an 
 assessment of a special franchise for city, town or village purposes 
 only, but no credit shall be given on account of such payment or 
 certificate in any other year, nor for a greater sum than the amount 
 of the special franchise tax for city, town or village purposes, for the 
 current year; and he shall collect and receive the balance, if any of 
 such tax, as required by law. 
 Source: Tax Law of 1896, sec. 46, as added by L. 1899, eh. 712. 
 
 Payment in the nature of a tax.— A toll paid by a street rail- 
 way company upon its cars crossing the Brooklyn Bridge is a 
 payment in the nature of a tax and should be deducted from 
 the amount of the special franchise tax assessed against the 
 relator. People ex rel. Nassau Railway Co. v. Grout, 119 App. 
 Div. 130 ; aff'd without opinion, 189 N. T. 510. An annual 
 percentage of the gross earnings paid to a city by a railroad 
 corporation under the contract through which it obtained its 
 franchise is a payment in the nature of a tax and should be 
 
THE SPECIAL FKANCHISE TAS 197 
 
 deducted from the amount of the special franchise tax against 
 the relator. Heenvagen v. Crosstown Street Ey. Co., 179 E". Y. 
 99, mod. 90 App. Div. 275. Where a railroad received a special 
 franchise to construct and operate a railroad across certain 
 streets, one of the conditions being an annual payment to the city 
 granting the franchise, such payment is in the nature of a tax 
 and the relator is entitled to have the whole of it deducted from 
 the whole amount of the special franchise tax assessment and 
 this where only a part of the special franchise is in actual use, 
 there being no authority to apportion the annual payment among 
 the franchises in use and not in use, notwithstanding that the 
 state board had assessed but thirteen crossings out of over one 
 hundred. People ex rel. N. Y. Westchester & Boston R. B. Co. 
 V. Hyde, 143 App. Div. 321. Payments in the nature of a tax 
 under Section 46 of the Special Franchise Tax Act are con- 
 fined to money payments only. Matter of Consolidated Tele- 
 graph & Electrical Subway Co., 119 App. Div. 835 ; afE'd with- 
 out opinion, 189 IST. Y. 549. 
 
 Tax Law, Art. II, Sec. 49. — Special franchise tax not to affect 
 
 other tax. The imposition or payment of a, special franchise tax as 
 
 provided in this chapter shall not relieve any association, co-partner- 
 ship or corporation from the payment of any organization tax or fran- 
 chise tax or any other tax otherv^ise imposed by article nine of this 
 chapter, or by any other provision of law; but tangible property sub- 
 ject to a special franchise tax situated in, upon, under or above any 
 street, highway, public place or public waters, as described in sub- 
 division three of section two, shall not be taxable except upon the as- 
 sessment made as herein provided by the state board of tax commis- 
 sioners. 
 
 Source: Tax Law of 1896, sec. 47, as added by L. 1899, oh. 712. 
 
 Local assessors violate this section in including special franchises in 
 their assessments. Such violation cannot be urged in proceedings 
 against the state board ; the remedy is to be pursued against the local 
 assessors. People ex rel. N. F. H. P. Co. v. Tax Com'rs, 65 Misc. 213. 
 
198 TAXATION OF COEPOEATIONS 
 
 Note: The following eases comprise decisions which involve de- 
 terminations with reference to special franchises but do not properly 
 fall under any of the sections of the law relating to special franchises : 
 
 Sufficiency of advertisement to sell special franchise for non- 
 payment of tax. — A notice of a proposed sale of a special fran- 
 chise for non-payment of taxes is insuflBcient unless it correctly 
 states the amount of the taxes required to be paid ; credits al- 
 lowed under section 48 must be deducted from the tax assessed. 
 Guaranty Trust Co. v. Moynahan, 65 Misc. 623. 
 
 Debt limit — special franchises to be considered in fixing. — 
 
 Special franchises appearing upon the assessment rolls of a 
 municipality or real property and the value thereof, is to be 
 considered as a part of the assessable real estate of the munici- 
 pality in ascertaining the amount of property upon which the 
 debt limit is to be computed. Kronsbein v. The City of Roch- 
 ester, 76 App. Div. 494. 
 
 Evidence before local assessors of special franchise assess- 
 ment to secure reduction of local tax assessment cannot be 
 disregarded. — Local assessors cannot capriciously disregard evi- 
 dence presented before them to secure a reduction. People ex 
 rel. Glen Telephone Co. v. Hall, 130 App. Div. 360 ; People ex 
 rel. Glen Telephone Co. v. Failing, 130 App. Div. 888. 
 
 A special franchise is not assessable for a local improvement. 
 
 — The property of the class embraced in that covered by the 
 special franchise tax law is not subject to assessment for a 
 local improvement. Matter of Anthony Avenue, 46 Misc. 525 ; 
 followed in Matter of West Farms Road, 47 Misc. 216. 
 
CHAPTER II. 
 
 Assessing the Value of Special Eeanchises. 
 
 The Tax Law does not contam any rule for ascertaining the 
 value of special franchises ; it merely provides (Art. I, See. 2, 
 Subd. 3) that "a special franchise shall be deemed to include 
 the value of the tangible property of a person, co-partnership, 
 association or corporation situated in, upon, under or above 
 any street, highway, public place, or public waters in connec- 
 tion with the special franchise." There is no hard and fast 
 rule by which the value of a special franchise must be de- 
 termined. The assessors may ascertain the real value by avail- 
 ing themselves of all tests within their reach and all informa- 
 tion which, in their judgment, bears upon the value. People 
 ex rel. N. Y. C. & R. B. B. Co. v. Priest, 150 App. Div. 19. 
 
 The Court of Appeals has pointed out (People ex rel. Ja- 
 maica W. S. Co. V. Tax Comm'rs, 196 IST. Y. 39) that it is be- 
 yond the province of the courts to lay down an exclusive rule 
 for measuring the special franchise valuations ; that if there 
 were only one method, it would be the duty of the assessing 
 authorities to adopt it, but that it is conceded that there are 
 many reasonable methods and that the legislature has left the 
 assessors free to use them; that the duty of Appellate Courts 
 is to inquire whether the rule adopted in any case is adaptable 
 to the facts of the case and has been correctly and consistently 
 applied to those facts. 
 
 Management. — In trying to determine what rule or method 
 should be applied in a particular case, consideration must be 
 given to the nature of the management operating the special 
 franchise. Judge Earl in his opinion as referee, in the Special 
 Franchise Tax cases observed : 
 
 199 
 
200 TAXATION OF COEPOEATIONS 
 
 "It is said that the value of these franchises depends very much 
 upon skill in their management, and as such skill cannot be valued, 
 and cannot be eliminated in the valuation of the franchises, there is 
 great difficulty in estimating their value, as they would have little 
 value but for skill in their management. But it is possible to obtain 
 skill by the payment of salaries, which enter into the expense of man- 
 agement. Such property must not be valued at what it is worth un- 
 der bad management, but it may be valued at what it is worth under 
 good management. These properties must be taken for assessment 
 for what they are, with all their capabilities and possibilities under 
 such management as can ordinarily be obtained. A person buying one 
 of these franchises, would consider, in fixing his price, not what it was 
 capable of producing under poor management, but under good man- 
 agement. Its actual earning power, its capabilities, fix its value. It 
 is not the use to which one of these franchises is actually put that is 
 the sole test of its value, but the uses to which it may be put may 
 be considered." 
 
 The Court of Appeals in the Jamaica Water Supply Co. 
 case (196 E". Y. 39), says: 
 
 "Take, for example, the case of a corporation enjoying a special 
 franchise which by reason of mismanagement or other causes had 
 yielded no earnings perhaps for many years; there it might be wholly 
 contrary to the truth to hold that the special franchise of such corpo- 
 ration had no value simply because there happened to have been no 
 earnings by which that value could be measured." 
 
 Rules of valuation.— The so-called "net earnings" rule which 
 has been applied more generally than any other is an 
 ascertainment of the value by a capitalization of the net earn- 
 ings. Another rule is the "stock and bond method," which is 
 the multiplication of the par value of the outstanding corporate 
 securities by their market quotations. 
 
 In People ex rel. Queens County W. Co. v. Woodbury (67 
 Misc. 490-501), the Court, in his opinion, gives an illustra- 
 tion of using the "stock and bond method" as a test. 
 
 "The issued capital stock of the company is $1,050,000, and its 
 bonded indebtedness $500,000. Four and one-half per cent, dividends 
 were paid on the stock last year and interest at five per cent, on the 
 
THE SPECIAL rEAWCHISE TAX 201 
 
 bonds. The bonds are presumably worth par and the stock has never 
 sold above par, the last sale of which we have knowledge being eighty 
 cents on the dollar. As the capital stock and bonds represent all the 
 property of the company, both tangible and intangible, its selling 
 value is some evidence of the value of all the company's property. 
 If it should appear that the value of the tangible property is equal 
 to or greater than the selling value of all its stocks and bonds, this 
 would furnish some evidence that the intangible property has no 
 value." 
 
 Judicial comment on "net earnings" rule. — Other rules ap- 
 plicable to particular cases have also been invoked ; for instance, 
 where neither of the foregoing rules is applicable as in the case 
 of a railroad constructed but not in operation. People ex rel. 
 H. & M. B. B. Co. V. Tax Comm'rs, 142 App. Div. 220. In 
 that case it was finally held that the structure was properly 
 assessable at the cost of reproduction but under the circum- 
 stances no assessment should have been placed upon the fran- 
 chise. People ex rel. H. & M. B. B. Go. v. Tax Comm'rs, 203 
 N. T. 119-130. CuUen, J., in his opinion in this case referring 
 to the net earnings rule, says : 
 
 "It is also true that that method of computation is not universally 
 applicable. Nevertheless, in ordinary cases it is the best practical 
 method that the taxing oflBcers and the courts have as yet been able 
 to evolve. I have said that in some cases it would be inapplicable; 
 for instance: We all know that a franchise to maintain a street 
 railroad on Fifth Avenue in New York City would be worth a for- 
 tune and could be easily disposed of by the holder though not a rail 
 had been laid or bought. If in that case the owner of the franchise 
 were hawking it for sale, the mere privilege or franchise might prob- 
 ably be assessed at a large sum, its value being so great in proportion 
 to the cost of the plant necessary for the exercise of the franchise." 
 
 "The more the net earnings rule is examined, the more apparent be- 
 comes the wisdom of our appellate tribunals in holding that it does 
 not furnish a method which is necessarily controlling in determining 
 the value of a special franchise. It is obvious that the application 
 of this rule reduces the value of the special franchises by the amount 
 of every increase in the tangible property and in the business.'' 
 (People ex rel. Q. C. Water Go. v. Woodbury, 67 Misc. 490, 499.) 
 
202 TAXATION OF COEPOEATIOWS 
 
 Application of "net earnings" rule. — The "net-earnings" rule 
 was first applied in this state by the referee in People ex rel. 
 Brooklyn City B. E. Co. v. Tax Comm'rs, 'Hew York Law 
 Journal, March 5, 1907, and followed by the referee in re Peo- 
 ple ex rel. Jamaica Water Supply Co. v. Tax Comm'rs (report 
 confirmed Albany Special Term, April 9, 1908). The Appel- 
 late Division, Third Department, modified the rule as applied 
 by the referee in the latter case (People ex rel. Jamaica W. S. 
 Co. V. Tax Comm'rs, 128 App. Div. 13) and the Court of 
 Appeals approved the method adopted by the referee and modi- 
 fied the order of the Appellate Division. People ex rel. Ja- 
 maica W. 8. Co. V. Tax Comm'rs, 196 IST. Y. 39. 
 
 The definition of the net earnings rule and the method of 
 its application as laid down in the Jamaica Water Supply Co. 
 case (supra) is as follows: 
 
 "The net earnings rule contemplates a valuation upon the basis of 
 the net earnings of the corporation which are attributable to its en- 
 joyment of the special franchise. The method is thus applied: 
 
 (1) Ascertain the gross earnings. 
 
 ( 2 ) Deduct the operating expenses. 
 
 (3), Deduct a fair and reasonable return on that portion of the 
 capital of the corporation which is invested in tangible property. 
 
 The resulting balance gives the earnings attributable to the special 
 franchise. If this balance be capitalized at a, fair rate we have the 
 value of the special franchise." 
 
 Having thus determined the value of the intangible right of 
 the special franchise, the value of the tangible property "sit- 
 uated in, upon, under or above any street, highway, public 
 place or public waters in connection with the special franchise" 
 (Tax Law, Article I, Sec. 2, Subd. 3) is then added and 'the 
 resiilt obtained is the total value of the special franchise under 
 the Tax Law. 
 
 Deductions in application of net earnings rule. — Many 
 questions have arisen as to deductions allowable under this rule. 
 
THE SPECIAL FBAWCHISE TAX 203 
 
 The following items have been approved by the courts : 
 
 (a) Taxes. 
 
 (b) Allowance out of gross earnings for depreciation. 
 
 (c) Deduction to meet general deterioration {functional de- 
 preciation; obsolescence). 
 
 (d) Money paid for claims for personal injuries. 
 
 (e) Allowance for a return upon the investment in tangible 
 property; what may he included therein and its valuation. 
 
 (a) Taxes. — ^Taxes should be deducted from the gross earn- 
 ings to determine the net earnings; but not the estimated 
 amount of the special franchise tax itself. {Re-argument of 
 Jamaica Water Supply Co. case, 197 E". Y. 33 ; People ex rel. 
 Third Avenue R. R. Co. v. Woodbury, 136 App. Div. 155.) 
 
 (b) Allowance out of gross earnings for deterioration. — 
 
 "Judicial notice may be taken of the fact that in the conduct of 
 many industrial enterprises there is a constant deterioration of the 
 plant which is not made good by ordinary repairs which, of course, 
 operates continually to lessen the value of the tangible property which 
 it affects. The amount of this depreciation differs in different enter- 
 prises, but the annual rate is usually capable of estimate and proof 
 by skilled witnesses. No corporation would be regarded as well con- 
 ducted which did not make some provision for the necessity of ulti- 
 mately replacing the property thus suffering deterioration; and we 
 cannot see why an allowance should not be made out of gross earn- 
 ings in order to ascertain the true earning capacity." (Jamaica "Water 
 Supply Co. case, 196 N. Y. 39.) 
 
 "A public service corporation, with reference to its property which 
 will become worthless by use and must be replaced, is entitled to set 
 aside each year from its earnings a reasonable sum to provide for its 
 replacement. This is outside of the ordinary annual expenses for 
 maintenance, renewals and repairs." (People ex rel. Third Ave. R. R. 
 Co. V. Tax Comm'rs, 136 App. Div. 155; affirmed 198 N. Y. 608.) 
 
 In the case of People ex rel. Manhattan Ry. Co. v. Wood- 
 bury (203 E". Y. 231), Judge Haight, writing the concurring 
 opinion, says: 
 
204 TAXATION OP COEPOEATIONS 
 
 "The Special Term in this case, however, adopted a plan of amorti- 
 zation upon which an annual sum was authorized to be set apart as a 
 sinking fund, which, by compounding the interest thereon for a period 
 equal to the life of the structure, tracks, engines, machinery and roll- 
 ing stock, would at the end of that period create a fund suificient to 
 replace the property. The difficulty with such holding is that railroad 
 corporations do not reconstruct their railroads and rolling stock in 
 that way. In order to afford proper protection to the public, they are 
 required to maintain a, high state of efficiency both in roadbed and 
 rolling stock. The relator's railroad has been in existence already for 
 about thirty years and some portion of its property has already suf- 
 fered from decay and use to such extent that portions thereof have to 
 be reconstructed and made new each year. Old ties have to be re- 
 moved and replaced with new ones; old rails that have become worn 
 and battered have to be removed and their places supplied with new 
 rails, and so the work of reconstruction progresses from year to year. 
 It is not the waiting forty or sixty years to reconstruct, during which 
 time the amount set apart as a sinking fund may be doubled many 
 times over by compounding the interest, but it is the annual expendi- 
 ture for reconstruction which is to be paid for at the time that the 
 construction is made. To illustrate: Suppose the average life of the 
 tangible property of a railroad, outside of the land itself, to be sixty 
 years and the cost of reconstruction to be sixty million dollars, it 
 would follow that one million dollars would have to be used each year 
 in reconstruction and that amount would have to be annually used 
 for that purpose, but under the plan adopted in this case, instead of 
 deducting from the gross earnings the amount necessarily expended 
 for that purpose a small fraction of that sum, viz.: $4,200 only, is 
 allowed to be deducted, a sum which, with the interest compounded 
 for the next sixty years, would amount to a million dollars. Under 
 such a plan the company would be practically prohibited from an- 
 nually constructing a portion of its road and thus prevented from 
 keeping it in that state of efficiency which the public demands. Of 
 course, the necessities of reconstruction vary from year to year; some 
 years it may be greater than others, but the assessors each year can 
 easily ascertain the sum required for that purpose. I think, there- 
 fore, that we should adhere to the rule sanctioned in the Jamaica 
 case and that a, gross sum should be deducted annually for the pur- 
 poses of reconstruction." 
 
 (c) Deduction to meet general deterioration (functional 
 depreciation; obsolescence). — In writing the concurring opin- 
 ion in the Manhattan Railway Co. case (supra), Judge Haight 
 observed further, 
 
THE SPECIAL FEANCHISE TAX 205 
 
 "I am aware that some corporations have in the past met with heavy 
 losses by reason of their machinery becoming obsolete. This is espe- 
 cially true with reference to those corporations using electricity for 
 power and other purposes. Such use is the result of modern inven- 
 tions which have been improved from year to year, thus rendering 
 obsolete and practically useless expensive dynamos and machinery, 
 but there is a difficulty in making any estimate as to the amount of 
 depreciation in the assessment of the value of tangible property which 
 may result from future invention, and therefore, this species of prop- 
 erty should be left to be considered when such depreciation occurs." 
 
 An illustration of the application of the rule of allowance 
 for functional depreciation is found in People ex rel. Queens 
 County Water Company v. Woodbury, 6Y Misc. 490 ; aff'd 143 
 App. Div. 618. The Court there said: 
 
 "So long as depreciation of property is a proper factor to take into 
 account in determining the net earnings, I cannot see why the rule 
 should not be applied as well to functional as to physical deprecia- 
 tion. In both cases the property becomes valueless because no longer 
 capable of being applied to the purposes for which it was designed. 
 It would be a. false system of accounting which did not take into con- 
 sideration the destruction of the value of property from whatever 
 cause, so long as that cause is in constant operation and can be fore- 
 seen with reasonable certainty. A loss due to functional depreciation 
 is incurred in the operation of the business and, therefore, should 
 be charged as an expense of operation. (City of Knoacville v. Knoac- 
 ville Water Co., 212 U. S. 1.) Machinery which to-day is sufficient 
 for its purpose may become scrap iron through the development of 
 inventions; and so pipes and mains sufficient for a system of water 
 supply as it now exists, may become valueless through changes in the 
 conditions under which it is used. Because an iron pipe will lie 
 fifty years in the ground without disintegration, it does not follow 
 that the pipe will be of value to the company for fifty years." 
 
 In the Brooklyn Heights R. R. Co. v. Tax Commrs, 69 Misc. 
 646 ; aff d 146 App. Div. 372, the court observed : 
 
 "As surely as humanity travels to the grave, the machinery and 
 equipment of a public service corporation travel toward the scrap 
 pile. The plant and structures depreciate in less degree but as cer- 
 tainly. This is ordinary depreciation. But another form of deprecia- 
 tion in the case of properties here being valued takes place. The 
 
206 TAXATION OF COEPOEATIONS 
 
 machinery or equipment, while still capable of years of service, becomes 
 inadequate to do the work demanded — not only by the corporation, but 
 by the law itself. In the case particularly of electrical machinery, 
 the type becomes obsolete by reason of invention, and increasing public 
 demands frequently require in aid of safe and adequate service that 
 the obsolete appliance or equipment give way to the new. Property 
 which in itself may be almost indestructible in the hands of a public 
 service corporation may be required to be replaced by the requirements 
 of the public which the corporation serves. These requirements for 
 change of plant, structure and equipment and their replacement, can 
 be and are made by the State itself. Some of these changes are ca- 
 pable of definite ascertainment. Others are not so readily ascertain- 
 able. Many of them, however, may be provided against for the fu- 
 ture by setting apart from the gross earnings a reasonable sum to 
 create a reserve against the day when they shall come." 
 
 In People ex rel. Third Ave. B. B. Co. v. Tax Comm'rs, 136 
 App. Div. 155 ; affirmed 198 IST. Y. 608, the court, following 
 the Jamaica Water Supply case, held: 
 
 "that a public service corporation, with reference to its property which 
 will become worthless by use and must be replaced, is entitled to set 
 aside each year from its earnings a reasonable sum to provide for its 
 replacement. This is outside of the ordinary annual expenses for 
 maintenance, renewals and repairs." 
 
 (d) Allowance for money paid on claims for personal in- 
 juries. — Where a railroad company has made payments on 
 claims for personal injuries and there is no evidence that such 
 injuries were caused by reason of defective machinery, incom- 
 petent servants or wrongful or negligent acts of its officers or 
 employees, the payments for such purposes are properly treated 
 as ordinary disbursements incident to the business. People ex 
 rel. Third Avenue B. B. Co. v. Tax Comm'rs, 136 App. Div. 
 156 ; afE'd 198 N. T. 608. 
 
 (e) Allowance for return on investment in tangible prop- 
 erty ; what may be included therein and its valuation. The rate 
 of return a question of fact. — In the Jamaica Water Supply 
 Co. case the Court of Appeals laid down the following: 
 
THE SPECIAL FEAITCHISE TAX 20T 
 
 "In the case of Willoox v. Consolidated Gas Company (212 U. S. 
 19) the Supreme Court of the United States agreed with the District 
 Court that the complainant was entitled to 6% on the fair value of 
 its property devoted to the puhlic use; and in a case like the present 
 where the net earnings rule is applied, we think that the court below 
 might properly assume, as a matter of general knowledge in the busi- 
 ness community, that a prospective return of at least the legal rate 
 of interest, which is 6% in this state, is requisite to induce investors 
 to embark their money in enterprises of such a nature as that under- 
 taken by this corporation. It is true that this is a question of fact, 
 but the doctrine of judicial notice generally applies only to matters of 
 fact. While evidence as to what constitutes a fair and reasonable 
 rate of return in the business of a corporation was received in this 
 Consolidated Gas Co. ease (157 Fed. Rep. 849, 869), and may prop- 
 erly be taken by the court in certiorari proceedings under the Tax 
 Law if the parties see fit to offer it, the court may, in the absence of 
 such evidence, adopt 6% as a fair rate for the purpose of calculating 
 the value of a special franchise under the net earnings rule." 
 
 In People ex rel. Manhattan Railway Co. v. Woodbury, 
 203 'N. Y. 231, the Court of Appeals reiterated the rule that 
 the rate of return to be allowed upon the tangible property is 
 a question of fact. In this case, Judge Haight, writing the 
 concurring opinion, says: 
 
 "The courts below have allowed the relator six per cent on the value 
 of its tangible property as a fair and reasonable return for the in- 
 vestment. The relator claims that the rate should have been higher; 
 that the business engaged in, of constructing and operating an elevated 
 road, involved a great hazard, but has resulted in a great public bene- 
 fit, and that investors in such an enterprise ought to be allowed a 
 greater income therefrom than the ordinary rate of interest allowed by 
 statute upon the loan of money. It may be, as claimed, that the con- 
 fining of the income to the statutory rate of interest will operatft 
 to prevent persons having money to loan from investing in new and 
 dangerous enterprises. But the question of the fair and reasonable 
 return, we regard as one of fact under the control of the courts below 
 and one which this court should not review." 
 
 In determining, as a question of fact, what rate of return 
 should be allowed upon the investment in tangible property, 
 consideration must be given to the value of the entire property 
 
208 TAXATION OF COEPOEATIONS 
 
 used in the operation of the franchise, in the light of the nature 
 of the business. In the Third Avenue B. B. Co. case, 136 App. 
 Div. 155 ; affd 198 IST. Y. 608, the Court said: 
 
 "The question is not what return should be made upon the real 
 estate or the actual tangible property, but what return should be made 
 upon the investment represented by all of the property, tangible and 
 intangible — that is, upon the actual money value engaged in the busi- 
 ness. As stated by this Court in the Jamaica Water Supply Go. case, 
 we cannot assume that the intangible part of the relator's property 
 earns any greater per cent, of return than its tangible property. The 
 return comes from the combined use of both. We are, therefore, to al- 
 low a fair return upon the value of the entire property, considering 
 the risks and all the circumstances surrounding the business." 
 
 The rate of return so determined is then applied to the tan- 
 gible property and the result obtained is the allowable deduc- 
 tion. 
 
 What may be included in the tangible property and its valu- 
 ation. — The tangible property investment includes whatever the 
 operator of the franchise invests in for the actual use and pur- 
 pose of its franchise operation. A street pavement laid by a 
 railroad company is no part of the construction of the road, but 
 is part of the municipal property incident to the street, hence 
 it is not "tangible property" belonging to the company. People 
 ex rel. B. & L. E. T. Co. v. Comm'rs, 77 Misc. 235 ; aff'd on 
 this point in 156 App. Div. 466; aff'd. by Ct. of Appeals, 
 Dec. 1913. 
 
 In People ex rel. Queens County "Water Co. v. Woodbury, 
 67 Miscell. 490; s. c. 143 App. Div. 618, is had an illustra- 
 tion of the difficulty in determining just what tangible property 
 may be considered as being necessary to the use of the franchise. 
 The relator claimed a return upon the value of a number of 
 acres of land and respondents contended that but a small fraction 
 thereof was required by the corporation in the operation of the 
 franchise. 
 
 At Special Term, Judge Blackmar observed, 
 
THE SPECIAI. FRANCHISE TAX 209 
 
 "This contest illustrates the difficulty of the operation of the net 
 earnings rule. How much land is necessary for the proper operation 
 of the water company and for the preservation of the water supply 
 is largely a question which, in the nature of things, must be de- 
 termined by the judgment of the directors of the company. At the 
 best, it is a matter resting in opinion merely. If the land is rapidly 
 advancing in value, the probability is that the directors would favor 
 more liberal purchases. There is a difference of opinion as to the 
 source of the water supply of Long Island, and as to the necessity of 
 extensive land holdings to protect the supply. There is a difference 
 of opinion as to the necessity of owning land upon the banks of the 
 streams in order to protect the purity of the water supply. I do not 
 see how the purchase of land to prevent its acquisition by some one 
 else and not for the purpose of securing water can be said to be neces- 
 sary for the purpose of securing and distributing the supply of water." 
 
 The Appellate Division, in its opinion in this case, affirming 
 the Special Term, said, 
 
 "The difficulty is that the relator affirmatively shows that some 
 part of such land is not required for its purposes, inasmuch as the 
 reason given for its acquisition furnishes no just ground therefor. 
 The court in this proceeding should not unduly disturb the sound dis- 
 cretion of its directors in determining the quantity of land needed 
 for its present wants, or those reasonably expectable. But it is stated 
 by relator's engineer that all the land is necessary 'in the first place, 
 to properly protect us against suits for damages to farms for drain- 
 ing the land, and probably the most important thing is to protect us 
 against the City of Brooklyn; that it was purchased by his advice 
 for the protection and increase of the water supply of the company. 
 But it appears that the relator had ample power to enjoin the city 
 from taking land for such use as would interfere with its watershed, 
 and that indeed it did restrain the city in such attempt. Hence some 
 portion of the land held by the relator is for its authorized use, and a 
 residue not defined or valued, is to prevent its acquisition by the city 
 for a purpose injurious to the relator. But such act on the part of 
 the city was not fairly apprehendible, because it would not have been 
 legally possible. Hence the court is met with the impossibility of 
 determining how much of the land held by the relator is necessary for 
 its corporate purposes. The defendants' estimate is too limited. The 
 relator's holding is too much. This condition of the record baffles 
 inquiry, for the acreage with its value is a necessary factor in ascer- 
 taining the amount of a correct assessment." 
 
 Note — See People ex rel. Queens Go. Water Co. v. Tax Com'rs, 157 
 App. Div. 165. 
 
210 TAXATION OF COEPOEATIONS 
 
 Illustration of tangible property upon which a return is al- 
 lowable. — In People ex rel. Manhattan Railway Co. v. Wood- 
 lury, 203 N, Y. 231, the Court held, 
 
 "That there should have been included the value of the relator's in- 
 terest in the subway, or sub-service conduits, through which its power 
 and light cables pass. While it is true that this subway property, or 
 structure, was owned by another corporation, the Consolidated Tele- 
 graph and Electrical Subway Company, nevertheless, the relator had 
 invested in it the sum of $936,879. This investment was essential to 
 the operation of the relator's road and there is no good reason why 
 it should not be entitled to a return upon it." 
 
 In the same case it was also held: 
 
 "That there should have been included in the tangible property the 
 sum of $537,139 consisting in cash and other cash items on hand. This 
 item may, properly, be considered as a part of the relator's working 
 capital, which was entitled, in the prudent management of its business, 
 to keep on band. Whether or not it was, in fact, essential to the 
 operation of the railroad is not material; but it was, nevertheless, an 
 item of its property, which it may fairly claim to have considered 
 with the rest of its tangible property, upon which the return should 
 be estimated." 
 
 The valuation of the tangible property. — The tangible prop- 
 erty is to be taken at its present value. On this point the Ja- 
 inaica Water Supply Co. case holds as follows: 
 
 "Where, however, the value of a special franchise is to be ascer- 
 tained by the net earnings rule, which involves a capitalization of the 
 surplus, it must be assumed that the present owners are entitled to a 
 reasonable return upon the value of their property now. A stockholder 
 who has recently acquired his stock will probably have paid an in- 
 creased price therefor by reason of the increase in the market value 
 of the very land in question. The taxes upon this land are based 
 upon the present value, not upon its cost to the corporation when 
 originally acquired. So we think its present value must be taken 
 into account in applying the net earnings rule to the valuation of 
 the special franchise." 
 
THE SPECIAL PEABTCHISB TAX 211 
 
 In estimating the value of structures, the cost of engineering 
 in the erection of the same is one of the items that should be 
 included. People ex rel. BrooUyn Heights E. B. Co. v. Tax 
 Comm'rs, 69 Misc. 646 ; aff'd 146 App. Div. 372. 
 
 Structures in the street become lawful by reason of the ac- 
 quisition of the necessary easements from abutting property 
 owners and the cost of such easements should be included in 
 the value of the tangible property ; they become appurtenant to 
 the railroad property and enhance its value. People ex rel. 
 Manhattan By. Co. v. Woodbury, 203 IST. Y. 231. 
 
 The rate of capitalization of the net earnings. — Under the 
 net earnings rule the rate of capitalization is one per cent, 
 higher than the rate allowed for the return on the investment 
 in the tangible property. 
 
 Upon the question of the rate of capitalization of the net 
 earnings, the Court of Appeals in the Jamaica Water Supply 
 case said, 
 
 "In capitalizing the final returns, the referee adopted the rate of 
 7% to provide a sinking fund for unforeseen contingencies while the 
 Appellate Division, without giving any reason for the difiference of 
 opinion, said that the surplus earnings should be capitalized at 6%. 
 In view of the character of the business of the relator we think the 
 rate adopted by the referee is preferable." 
 
 In the People ex rel. Manhattan Bailway Co. v. Woodbury, 
 143 App. Div. 905, the Appellate Division again held that the 
 net earnings should be capitalized at 6%, although two justices 
 dissented on the ground that 7% should be allowed as the basis 
 of capitalization. Upon the appeal of this case, 203 IST. Y. 231, 
 Judge Haight, writing the concurring opinion, clearly stated 
 the correct rule, saying, 
 
 "The courts below have also held that the net earnings should be 
 capitalized upon the basis of six per cent, the same percentage that 
 was allowed for income on the tangible property. In this determina- 
 
212 TAXATION OF COEPOEATIOITS 
 
 tion I think the court failed to follow the net earnings rule. That 
 rule is not a question of fact but a plan devised for the purpose of 
 ascertaining the value of intangible property, which has me^ the ap- 
 proval of this court in cases of this character, for the reason that 
 it seemed just and fair, and perhaps as furnishing as safe a rule as 
 any that has thus far been devised. Prominent authorities in dis- 
 cussing this method of valuing special franchises have suggested that 
 the rate of capitalization should be at least one per cent higher than 
 the rate of income allowed. The purpose of this is to provide against 
 unforeseen contingencies that may arise in the prosecution of the busi- 
 ness of the corporation, such as unusual storms, floods, fires, ex- 
 plosions and accidents, which may result in the impairment of the 
 net earnings, and cannot be foreseen and estimated in advance. This 
 question was considered by this court in the case of People ex rel. 
 Jamaica Water Supply Co. v. State Board of Tax Commissioners (196 
 N. Y. 39), and we then reached the conclusion that such a rule was 
 reasonable and fair to the parties and should be followed, and we 
 consequently revised the determinatioil of the Appellate Division 
 which fixed the rate of capitalization at the same percentage allowed 
 for income and affirmed the rate adopted by the referee. This was 
 done, not upon the ground that it involved any question of fact, but 
 because it was part of the plan or rule which we approved for de- 
 termination of a just result between the parties." 
 
 For full valuation add to the capitalized value of the intangi- 
 ble rights the value of the tangible property. — The total value 
 of the tangible property situated in, upon, under or above the 
 public way being ascertained and then added to the value of 
 the intangible right (Tax Law, Art. I, Sec. 2, Subd. 3) gives 
 the full value of the special franchise. 
 
 Equalization. — The total value of the tangible and intangible 
 property is then equalized with other assessments where other 
 property on the same tax roll is assessed at a lower proportion- 
 ate valuation. (Tax Law, Art. II, Sec. 45a.) 
 
 Application of net earnings rule in case of operation by a 
 holding company. — Where a holding company operates the re- 
 lator's lines in connection with others through one set of gen- 
 eral officers, power houses and repair shops, an apportionment 
 
THE SPECIAL FRANCHISE TAX 213 
 
 of such general operating cost among the various lines oper- 
 ated, based upon car mileage, is permissible. And in such cir- 
 cumstances, where the proof of gross earnings of the system as 
 a whole is given, they must be taken ; to adopt instead an esti- 
 mate based upon gross earnings of the entire system appor- 
 tioned on a car mileage basis, is improper. Neither should 
 items for depreciation, obsolescence, power, repairs and other 
 operating expenses be estimated in like manner. People ex rel. 
 Brooklyn Heights B. R. Co. v. Tax Comm'rs, 69 Misc. 646 ; 
 affirmed, 146 App. Div. 372. 
 
 ^Note: a convenient form for use in estimating an assess- 
 ment under the net earnings rule is found in Union Ewy. v. 
 State Tax Comm'rs, IST. Y. Law J., April 17, 1913, as follows: 
 
 Gross revenue from fares $1,987,343.29 
 
 Other income, including — 
 
 Eent of equipment $1,236.00 
 
 Adv. in cars 28,650.00 
 
 Rent of tracks 31,517.13 
 
 Car and station privileges 49.47 
 
 Sale of power 2,555.95 
 
 Interest 715.76 
 
 64,724.31 
 
 Total grosa earnings $2,052,067.60 
 
 (Continued on next page) 
 
214 TAXATION OF COEPOEATIONS 
 
 Total gross earnings (brought forward) $2,052,067.60 
 
 Less operating expenses 1,232,595.97 
 
 Net income from transportation 819,471.63 
 
 Less taxes and other expenses 82,319.12 
 
 $737,152.51 
 
 Less 6% return on the amount of relator's 
 entire property used in operation, including 
 
 ( 1 ) Property in the streets $1,636,738.89 
 
 (2) Property outside streets 905,026.89 
 
 (3) Eeal estate 418,600.00 
 
 $2,960,365.78 177,621.68 
 
 $559,530.73 
 Less depreciation fund 151,366.18 
 
 Net earnings attributable to special franchise 408,164.55 
 
 Latter capitalized at 6% is the value of the intangible 
 
 right, or $6,802,742.50 
 
 Add value of tangible property 1,636,738.89 
 
 Gives value of special franchise $8,439,481.39 
 
 Equalize at 90% gives 7,595,533.25 
 
PART III. 
 
 STATE TAXATION 
 
 CHAPTER I. 
 
 The System of Taxikg Stock Coepoeatiows poe State 
 
 pueposes. 
 
 The present system of taxing corporations for state purposes 
 dates from the year 1880. Until that time the largest part of 
 the revenue of the state was derived from a direct tax on land 
 assessed and collected by the various counties of the state. 
 
 Annual franchise tax.— By Chapter 542 of the Laws of 1880 
 a general scheme of state taxation of stock corporations, except- 
 ing certain specified corporations, was inaugurated. A tax was 
 imposed by this law on all stock corporations, resident and for- 
 eign, excepting savings banks, life insurance companies, foreign 
 insurance companies and companies carrying on manufacturing 
 and mining within the state, the basis of computing the tax in 
 each case being the value of the capital stock. 
 
 Organization tax.— To this law, in 1886 (Chapter 143), was 
 added an organization tax, to be paid by every domestic stock 
 corporation, with the exception of banking and building loan 
 associations, upon the organization of the company, the basis of 
 computation being the par value of the authorized capital stock. 
 
 This act did not apply to literary, scientific, medical and 
 religious associations or corporations. 
 
 215 
 
216 TAXATION OF COEPOEATIONS 
 
 License tax. — By Chapter 240 of the Laws of 1895 a tax 
 similar to the organization tax, and known as a license tax, was 
 required to be paid by every foreign corporation upon its com- 
 mencing business within the state, for the privilege of carrying 
 on such business, to be computed on the basis of the capital 
 stock employed within the state. 
 
 Additional franchise tax based on gross earnings. — Chapter 
 361 of the Laws of 1881 provided for an additional annual 
 franchise tax on transportation and transmission companies, 
 based on gross earnings within the state. This tax was in 1896 
 also imposed on elevated and surface railroads not operated by 
 steam; and on water, gas, electric, steam heating, light and 
 power companies at a higher rate. The latter companies were, 
 however, relieved from the payment of the annual franchise tax 
 on capital stock. 
 
 Franchise tax on insurance companies, trust companies, 
 banks. — Chapter 361 of the Laws of 1881 imposed an annual 
 franchise tax on insurance companies, based on gross premiums 
 or earnings, for business done in the state. Chapter 679 of the 
 Laws of 1886 amended the Law of 1881 by reducing the amount 
 of tax on the premiums of fire and marine insurance companies 
 and exempting them from payment of the tax on capital stock. 
 
 In 1901 the annual franchise tax was also extended to trust 
 companies and savings banks, to be computed on the basis of 
 surplus and undivided profits. 
 
 The entire system of state taxation on stock corporations is 
 based on the theory of an annual tax to be paid by each stock 
 corporation for the privilege of exercising its corporate fran- 
 chise or carrying on its business in the state, whether the cor- 
 poration be foreign or domestic, and whether the tax be com- 
 puted on the basis of capital stock or gross earnings. The state 
 
DEVELOPMENT OF STATE TAXATION^ 217 
 
 leaves the various local subdivisions free to tax the corporations 
 on property, reserving to itself the right to tax them on their 
 franchises or business. 
 
 In 1906 and 1907 the method of computing the franchise 
 tax and the license tax under sections 181 and 182 of the Tax 
 Law was materially changed. While the basis of the tax re- 
 mained capital stock employed in the state, the value of the 
 capital stock and the rate of the tax were fixed by certain arbi- 
 trary rules. Heretofore, the value of the capital stock employed 
 within the state had been in most cases determined by the value 
 of the property itself. People ex rel. Commercial Cable Co. v. 
 Morgan, 178 N. Y. 433 (1904). The method of ascertaining 
 the amount of the capital stock employed in the state by means 
 of the property or gross assets in the state is now incorporated 
 in the statute, and very little is left to the discretion of the 
 comptroller in making an assessment. 
 
 Power of the State to tax corporations. — The inherent power 
 of the state to tax, apart from any statutory provisions or con- 
 stitutional limitations, is necessarily dependent upon whether 
 the person, property or business is Avithin its jurisdiction. 
 State Tax on Foreign Held Bonds, 15 Wall. 300 (319). 
 
 In the case of a domestic corporation, except in so far as it 
 may be restrained by the constitution of the United States, the 
 power of the state to tax as to mode, form and extent is unlim- 
 ited. (Ibid.) 
 
 In respect to foreign corporations its power is limited by the 
 property located, or business done, within its borders. 
 
 The state of New York has proceeded to exercise its powers 
 to tax corporations for state purposes by levying a tax on their 
 franchises or business. While this is the general scheme of 
 corporate taxation for' state purposes, the basis on which the 
 tax is computed, and the rate or amount of the tax, differ in 
 various classes of corporations. In some cases the basis on 
 
218 TAXiTIOW OF COEPOKATIOITS 
 
 ■which the tax is computed, depends upon the value of the capital 
 stock or property of the corporation. In other cases it depends 
 on earning power, and in a third class, on surplus or undivided 
 profits. In a number of the classes of corporations named be- 
 low, a combination of these methods of computation is used 
 in estimating the tax or taxes to be paid. 
 
 Corporations subject to franchise tax and basis thereof. — 
 
 The following classification will show the various taxes paid 
 by corporations to the state for the privilege of exercising their 
 corporate franchises or business in the state: 
 
 1. Domestic corporations, paying an incorporation or organ- 
 ization tax based on the amount of the authorized capital stock. 
 
 2. Foreign corporations, paying a license or business tax 
 based on the amount of the capital stock used within the state 
 represented by property in the state. 
 
 3. Domestic and foreign corporations, with the exception of 
 certain special corporations hereinafter named, paying an an- 
 nual tax based on the value of capital stock employed within 
 the state. 
 
 And the following special classes of corporations: 
 
 4. Transportation, heating, power, lighting, water and trans- 
 mission companies, paying an annual tax based on gross 
 earnings. 
 
 5. Elevated and surface railroads not operated by steam, 
 paying an annual tax based on gross earnings. 
 
 6. Insurance companies, paying an annual tax based on gross 
 premiums or earnings. 
 
 Y. Trust companies, paying an annual tax based on capital 
 stock, surplus and undivided profits. 
 
DEVELOPMENT OF STATE TAXATIOIT 219 
 
 8. Savings banks, paying an annual tax based on surplus 
 and undivided earnings. 
 
 9. Foreign bankers, which class includes corporations, pay- 
 ing an annual tax on net earnings or interest earned. 
 
CHAPTEE II. 
 
 The Oeganization Tax to be Paid by Domestic Cobpoea- 
 
 TIOWS. 
 
 Defined. — The organization or incorporation tax is the charge 
 to be paid by every domestic stock corporation except banking, 
 building, mutual loan, accumulative and co-operative associa- 
 tions, and is paid for the privilege of receiving its charter or 
 exercising its corporate franchise in the state. 
 
 The basis of the tax. — The basis of the tax is the authorized 
 capital stock. In this respect, it differs from the license tax or 
 initial tax paid by a foreign corporation for the privilege of 
 coming into the state to do business, which is based on that part 
 of its issued capital stock represented by the proportion which 
 the property or assets in the state bear to its entire property 
 or assets. 
 
 Rate of tax. — The rate or amount of the tax is one-twentieth 
 of one per cent, on the authorized amount of capital stock, but 
 in no case shall this tax be less than five dollars. Prior to 1901, 
 the rate for the organization tax was the same as for the license 
 tax to be paid by a foreign corporation on coming into the 
 state to do business, viz., one-eighth of one per cent. The 
 Comptroller's Report of 1900 recommended a reduction of the 
 organization tax, and by Chapter 448, Laws of 1901, it was 
 reduced to one-twentieth of one per cent., the present rate. 
 
 In many states the rate paid by domestic and foreign cor- 
 porations is the same, but there is no unconstitutionality in 
 imposing a different rate on foreign corporations coming into 
 the state. Eorn Silver Mining Co. v. N. Y., 143 U. S. 305. 
 
 220 
 
OEGAlSriZATIOIT TAX 221 
 
 When the organization tax is payable, how paid, and to 
 whom. — The organization tax is payable at the time the certifi- 
 cate of incorporation is filed with the secretary of state. A 
 check for the amount of the tax should be sent to the state treas- 
 urer, and the receipt for the same should be annexed to the certi- 
 fied copy certificate of incorporation or duplicate of original 
 when filed in the office of the clerk of the county in which the 
 principal office is situated. 
 
 The present statute reads as follows : 
 
 Organization tax. — Every stock corporation incorporated under any 
 law of this state shall pay to the state treasurer a tax of one-twen- 
 tieth of one per centum upon the amount of capital stock which the 
 corporation is authorized to have and a like tax upon any subsequent 
 increase. Provided, that in no case shall such tax be less than five dol- 
 lars. Such tax shall be due and payable upon the incorporation of such 
 corporation, or upon the increase of its capital stock. Except in the 
 case of a railroad corporation, neither the secretary of state nor 
 county clerk shall file any certificate of incorporation or article of 
 association, or give any certificate to any such corporation or associa- 
 tion until he is furnished a receipt for such tax from the state treas- 
 urer, and no stock corporation shall have or exercise any corporate 
 franchise or powers, or carry on business in this state until such tax 
 shall have been paid. And in case of a decrease of capital stock, upon 
 which the tax required by law has been paid, and a subsequent in- 
 crease thereof, a tax shall be paid only upon so much of such increase 
 as exceeds the amount of capital stock upon which a tax has been 
 before paid. In case of the consolidation of existing corporations into 
 a corporation, such new corporation shall be required to pay the tax 
 hereinbefore provided for only upon the amount of its capital stock 
 in excess of the aggregate amount of capital stock of said corporations. 
 This section shall not apply to state and national banks or to build- 
 ing, mutual loan, accumulating fund and co-operative associations. A 
 railroad corporation need not pay such tax at the time of filing its 
 certificate of incorporation, but shall pay the same before the public 
 service commission shall grant a certificate, as required by the rail- 
 road law, authorizing the construction of the road as proposed in its 
 articles of association, and such certificate shall not be granted by the 
 public service commission until it is furnished with a receipt for such 
 tax from the state treasurer. If the board of railroad commissioners 
 
222 TAXATiojsr of coepoeations 
 
 or public service commission shall have heretofore granted, or the pub- 
 lic service commission shall hereafter grant, such certificate and upon 
 an appeal from the determination of such board of railroad commis- 
 sioners or public service commission, such certificate has been or may 
 hereafter be denied the comptroller shall refund the amount of tax 
 so paid to the railroad corporation or corporations by which such tax 
 was paid, upon proof of payment being presented and appropriation 
 being made therefor. {Sec. 180, former see. 180, Tacc Law, as amended 
 by ch. 369, L. 1897, eft. 448, L. 1901, eft. 524, L. 1906, ch. 472, L. 1910 
 and ch. 91, L. 1911.) 
 
 Source: Ch. 143, L. 1886, as amended by ch. 668, L. 1892. 
 
 Tax on re-organization of corporations. — 'Ho organization 
 tax is due on the re-organization of a manufacturing corporation 
 under the Business Corporation Law. Matter of Consol. Kan- 
 sas City Smelting Co., 13 App. Div. 50 (1897). But where 
 railroad corporation property and franchises have been fore- 
 closed and sold, and a new corporation formed under a re-or- 
 ganization act (Chapter 430, of Laws of 1874, as amended), 
 an organization tax is payable. People ex rel. Schurz v. Cook; 
 same v. Mertens, 110 !N". Y. 443. The law imposing this tax 
 does not impair the obligation of contracts. Ihid. 
 
 Consolidated corporations.— Before the amendment of 1892 
 (Chapter 668, Laws of 1892), consolidated corporations were 
 required to pay the organization tax. After this amendment no 
 tax was required from a consolidated corporation except upon 
 the excess stock. 
 
 Organization tax payable by corporations with shares without 
 designated monetary value. — ^The organization tax payable under 
 section one hundred and eighty of the tax law by any corporation issu- 
 ing such shares without designated monetary value shall be at the rate 
 of five cents on each such share which the corporation is authorized to 
 issue, and a like tax upon any subsequent increase thereof. (Chap. 351, 
 L. 1912.) 
 
OHAPTEE III. 
 
 License Tax; Toeeign Coepoeations. 
 
 License tax defined. — The license tax is the fee or tax paid 
 by a foreign corporation for the privilege of exercising its cor- 
 porate franchise, or for carrying on its business, in its corpo- 
 rate or organized capacity within the state. 
 
 History. — This tax corresponds very closely to the organiza- 
 tion tax to be paid by domestic corporations for the privilege of 
 receiving its charter, or exercising its corporate franchise in the 
 state. The organization tax, or tax on incorporation of domestic 
 corporations, has existed in this state since 1886, but it was not 
 until 1895 that a foreign corporation was required to pay any 
 fee or tax for the privilege of exercising its corporate franchise 
 in the state. The comptroller of the state, in his report for the 
 year 1895, in order to bring within the jurisdiction of the state 
 certain corporations organized under the laws of other states, 
 but practically domestic, as far as their business was concerned, 
 recommended that foreign corporations be taxed on the basis of 
 the capital stock employed in the state. By Chapter 240 of the 
 Laws of 1895, a foreign corporation was required to pay a 
 license fee or a tax of one-eighth of one per centum "for the 
 privilege of exercising its corporate franchise or carrying on 
 its business in such corporate or organized capacity in the state 
 . . . computed upon the basis of the amount of its capital stock 
 employed within the state" during the first year. This has 
 practically remained the law to this date. The amendment 
 of 1901 included manufacturing corporations, and the amend- 
 ment of 1906 changed the method of computing the amount of 
 capital stock employed within the state. 
 
 223 
 
224 TAXATION OF COEPOEATIONS 
 
 The present law reads as follows : 
 
 License tax on foreign corporations.— Every foreign corporation, 
 except banking corporations, fire, marine, casualty and life insurance 
 companies, co-operative fraternal insurance companies, and building 
 and loan associations, authorized to do business under the general 
 corporation law, shall pay to the state treasurer, for the use of the 
 state, a license fee of one-eighth of one per centum 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 stock employed by it within this state, during the 
 first year of carrying on its business in this state; and if any year 
 thereafter any such corporation shall employ an increased amount of 
 its capital stock within this state, the same license fee shall be due 
 and payable upon any such increase. The measure of the amount of 
 capital stock employed in this state shall be such a portion of the is- 
 sued capital stock as the gross assets employed in any business within 
 this state bear to the gross assets wherever employed in business. 
 For purposes of taxation, the capital of a corporation invested in the 
 stock of another corporation shall be deemed to be assets located where 
 the physical property represented by such stock is located. 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 em- 
 ployees thereof, and the same power to issue his warrant for the col- 
 lection of such taxes as he now has with regard to domestic corpo- 
 rations. No action shall be maintained or recovery had in any of the 
 courts in this state by such foreign corporation after thirteen months 
 from the time of beginning such business within the state, without 
 obtaining a receipt from the comptroller for the payment of the license 
 fee upon the capital stock employed by it within this state during 
 the first year of carrying on its business in this state. (Former sec. 
 181, TatB Law, as amended ty L. 1910, ch. 340.) 
 
 Source: Ch. 240, L. 1895, without change of substance. 
 
 When the license tax should be paid. — The tax should be 
 paid at any tinae between the twelfth and thirteenth month 
 after the corporation has commenced to do business in the state. 
 ^People ex rel. Dutilh-Smith Co. v. Miller, 90 App. Div. 545 
 (1904). 
 
 Change in computing amount of capital stock. — While the 
 basis of the tax remains the same as in the past, viz., "Capital 
 
LICENSE TAX 225 
 
 stock employed within the state," the method of computing the 
 tax, as in the case of a domestic corporation, has heen ma- 
 terially changed by the amendment of 1906. (Ch. 474.) For- 
 merly it was the amount of capital employed within the state, 
 regardless of the share stock. People ex rel. Consolidated Gin- 
 seng Co. V. Kelsey, 182 'E. Y. 526; affirming 105 App. Div. 
 1Y5 (1905) ; People ex rel. National Enameling Go. v. Miller, 
 112 App. Div. 880 (1906). "Now, it approximates very closely 
 to the organization tax paid hy the domestic corporation upon its 
 incorporation, except that the tax is computed on the issued 
 share stock and not on the authorized stock, as in the organiza- 
 tion tax paid by domestic corporations. The use of the words 
 "issued capital stock" in the amendment of 1906 clearly shows 
 that the par value of the issued stock was to be the basis of tax- 
 ation rather than the appraised value. People ex rel. Elliott- 
 Fisher Co. V. Sohmer, 148 App. Div. 514 (1911). 
 
 Foreign corporations not citizens. — Foreign corporations are 
 not citizens within the meaning of the fourteenth amendment 
 to the United States Constitution, guaranteeing equal privi- 
 leges to citizens of other states. H^or are they citizens within 
 the meaning of section 2, article 4, of the United States Consti- 
 tution, entitling citizens of each state to all privileges and im- 
 munities of citizens of the several states, and the right of a state 
 to exclude foreign corporations is well settled. A state may im- 
 pose on a foreign corporation a tax for the privilege of doing 
 business in the state measured by the amount of capital em- 
 ployed in such business within this state. People ex rel. Parhe, 
 Davis & Co. V. Roberts, 91 Hun, 158 (1895) ; aff'd 149 IST. T. 
 608, 171 U. S. 658. 
 
 The United States Supreme Court has held that a license tax 
 imposed on a drummer or sales agent was unconstitutional. 
 Carson v. Maryland, 120 U. S. 502 (1887) ; Bobbins v. Shelby 
 County Taxing District. Id. 489, but there is a distinction be- 
 
226 TAXATION OF COEPOEATIONS 
 
 tween a license tax on a sales agent or drummer sent here to 
 make sales and a tax on a corporation bringing property into the 
 state and carrying on business here. People ex rel. Southern 
 Cotton Oil Co. V. Wemple, 61 Hun, 83 (1891) ; aff'd 131 N. 
 Y. 64. 
 
 When foreign corporations carry on business or employ 
 capital in the state. — In order that corporations shall be liable 
 to pay the license tax imder section 181 of the Tax Law they 
 must (1) carry on business in the state, and (2) employ capital 
 in such business. These are also conditions precedent before 
 foreign corporations are liable to taxation for the annual fran- 
 chise tax under section 182 of the Tax Law, and as they are 
 more conveniently discussed under that heading, the subject 
 is treated at length in Chapter V infra. 
 
 Foreign corporations to file certificate before doing business. 
 
 — Section 15 of the General Corporation Law requires every 
 foreign corporation, with some exceptions, to file a certificate 
 vdth the secretary of state, giving certain information as to 
 business, capital and officers, before it can do business in the 
 state. Failing to do this it subjects itself to certain disabili- 
 ties, such as being unable to maintain an action in the courts of 
 the state upon any contract made by it in the state. 
 
 If it files such certificate, however, it may be considered as 
 prima facie evidence that it is doing business in the state, as 
 has been held in the case of corporations assessed for local pur- 
 poses. People ex rel. Armstrong Corh Co. v. Comm'rs, 157 IN". 
 Y. 159 (1898). The failure to file the certificate does not, on 
 the other hand, imply that the corporation is not engaged in 
 business in the state. 
 
 Failure to pay license tax bar to action.— The last paragraph 
 of section 181 requires every foreign corporation to pay the 
 license fee or tax within thirteen months after beginning to do 
 
LICENSE TAX 227 
 
 business in the state before it can commence an action in the 
 state. The provisions of this section should not be confused 
 "with section 15 of the General Corporation Law (above referred 
 to) requiring every foreign corporation doing business in the 
 state to file a certificate with the secretary of state before it can 
 maintain an action upon any contract made by it in the state. 
 A corporation may undoubtedly be engaged in business in the 
 state without having capital employed in such business, and 
 while the doing of business in the state would subject it to the 
 provisions of section 15 of the General Corporation Law, it need 
 not pay the license fee under section 181 of the Tax Law re- 
 quired of a corporation engaged in business and employing its 
 capital in the state. A number of the decisions hold that a com- 
 plaint by a foreign corporation, which alleges that it is doing 
 business in the state must also affirmatively show that it has 
 filed a certificate under section 15 of the Corporation Law. 
 Welsbach v. Norwich Oas. Co., 96 App. Div. 52, affirmed with- 
 out opinion, 180 IST. Y. 533; Wilson McNeill Co. v. Standard 
 Oil Co., 110 App. Div. 888 ; Wood & Sellick Go. v. Ball, 114 
 App. Div. 744 (1906) ; aff'd 190 1^. Y. 219. The general 
 requirements of section 15 of the General Corporation Law have 
 been confounded with the provisions of section 181 of the Tax 
 Law. This would seem to be so from the case of Reedy Ele- 
 vator Go. V. American Grocery Co., 24 Misc. 678 (Appellate 
 Term), holding that compliance with section 181 is a jurisdic- 
 tional fact and must be set forth in an application for attach- 
 ment. In Kinney v. Beid Ice Cream Co., 57 App. Div. 208, 
 it was held that if it be shown in the pleadings that the foreign 
 corporation has been engaged in business for more than a year, 
 having capital employed in such business, and has not paid the 
 license tax under section 181 of the Tax Law, a demurrer to 
 the pleadings will lie, and that the assignee of the foreign cor- 
 poration, defaulting in this respect, is in no better position than 
 the corporation itself. The court said in this case: "We see 
 
228 TAXATION OP COEPOEATIONS 
 
 no reason why the rule applied in the cases cited in reference 
 to section 15 of the General Corporation Law should not apply 
 to section 181 of Chapter 908 of the Laws of 1896." This 
 case was followed by Halsey v. Jewett Dramatic Co., 114 App. 
 Div. 420 (1906). The dissenting opinion in the last named 
 case, by Judge Houghton, is valuable, in that it points out the 
 distinction in the objects of section 15 of the General Corpo- 
 ration Law and section 181 of the Tax Law. While it would 
 be necessary to afBrmatively allege the filing of the certificate 
 under the former section, it is not necessary to allege the pay- 
 ment of the tax under section 181 of the Tax Law, as a part of 
 the pleading. 
 
 In the case of Wood & Sellick v. Ball, which was affirmed in 
 190 N. Y. 217-218, the court points out the distinction between 
 the Welsbach case and Parmele v. Haas, 111 N. Y. 579. In the 
 Parmele case the payment of the license fee was a condition 
 subsequent. The corporation was permitted to carry on business 
 in the state and after carrying on business for a certain length 
 of time, must then pay the license tax. There was no express 
 prohibition against doing business without paying the license 
 tax, but a penalty was imposed through withholding the right 
 to sue unless the license fee was paid within the statutory 
 period. It was, therefore, held that it was not absolutely neces- 
 sary to allege compliance with the section of the Tax Law be- 
 fore commencing an action. This is in accordance with the 
 general rule that performance of a condition subsequent which 
 continues in force a right already acquired, need not be pleaded, 
 while performance of a condition precedent by which the right 
 itself is acquired in the first instance must be pleaded. On the 
 other hand, section 15 of the Corporation Law which led to the 
 result in the Welsbach case, is a condition precedent to the right 
 of a foreign stock corporation to do business. It was, therefore, 
 held in Wood & SellicTc v. Ball, that compliance with section 
 15 of the General Corporation Law should be alleged and 
 
LICENSE TAX 229 
 
 proved by a foreign corporation in order to establish a cause 
 of action in the courts of this state. 
 
 Whatever the rule may be as to section 15 of the General 
 Corporation Lav7, it would seem to be well settled by the case 
 of Parmele v. Haas, and of Wood v. Ball, supra, that it is un- 
 necessary to afiSrmatively plead compliance with section 181 of 
 the Tax Law ; that the matter covered by this section is no part 
 of an affirmative case and that the corporation will "be presumed 
 to have complied with the section unless the contrary is shown. 
 The Welshach case, supra, does not seem to affect the decision 
 in Parmele v. Haas, since the complaint in the former case 
 showed upon its face that the plaintiff company was engaged 
 in business within the state. Consequently, the presumption 
 that it has complied with the law did not arise. 
 
 In Emmerich v. Sloane, 108 App. Div. 330 (1905), the court 
 distinguished section 15 of the General Corporation Law from 
 section 181 of the Tax Law, saying that the requirements of the 
 latter law were not to be strictly construed, since they were mere 
 revenue regulations for the benefit of the state, which the latter 
 had the right to waive; that if the tax under section 181 were 
 paid before the commencement of the action, the certificate 
 might be obtained thereafter. 
 
 Foreign corporation, shipping goods into the state, not doing 
 business, and may commence action. — A foreign corporation 
 shipping goods into the state on orders addressed to the home 
 officCj is not doing business within the state, and therefore not 
 subject to the above limitations as to commencement of action. 
 Harvard Co. v. Wichi, 99 App. Div. 507 (1905); Novelty 
 Manufacturing Co. v. Connell, 88 Hun, 254 (1895). Nor does 
 this tax apply to a foreign corporation, which sold no goods 
 here but received from its agents abroad reports of orders, which 
 these agents transmitted for execution to another corporation 
 outside of the state. People ex rel. Dutilh-Smith Co. v. Miller, 
 90 App. Div. 545 (1904). 
 
230 TAXATION OF COEPOEATIONS 
 
 Not applicable to foreign corporations in business less than 
 thirteen months. — A foreign corporation not having employed 
 its capital in the state for a period of thirteen months may sue 
 out a writ of attachment without first obtaining the certificate 
 required by section 181, Tax Law. Reedy Elevator Co. v. 
 American Grocery Co., 82 N. T. St. Eep. 619. The provisions 
 of the Tax Law of 1896, that the tax must be paid within thirty 
 days after December 1, 1901, by a foreign corporation en- 
 gaged in business for more than thirteen months previous to 
 that date does not bar it from maintaining an action, if the tax 
 has been paid prior to the commencement of the action. Dun- 
 harton Flax Spinning Co. v. G. & J. B. Co., 87 App. Div. 21 
 (1903). The amendment of 1910 makes this point clear, be- 
 cause the action may be commenced after thirteen months from 
 the time the corporation has begun business in the state, pro- 
 vided the tax has been paid. 
 
 Corporation not within jurisdiction until license fee paid. — 
 
 While corporations are not "citizens," they have been deemed 
 "persons" within the meaning of the 14th amendment, by which 
 no state shall "deprive any person of life, liberty or property 
 without due process of law, nor deny to any person within its 
 jurisdiction the equal protection of the law ;" but a foreign cor- 
 poration that has not paid its state license fee, was held to be 
 not within the "jurisdiction," although a "person," until it 
 complied with this prerequisite. Phila. Fire Ins. Co. v. N. Y., 
 119 U. S. 110 (1886). Nor is there any doubt about the right 
 of the state to impose a tax on a foreign corporation for the 
 privilege of doing business in the state. Ducat v. Chicago, 10 
 Wall. 410. 
 
 Measure of the amount of capital stock employed in the 
 state. — This subject applies to the annual tax as well as to the 
 license tax and is, therefore, treated under that head in the next 
 chapter. 
 
CHAPTER IV. 
 
 Annual Feanchise Tax; Domestic and Fobeign Coepoea- 
 
 TIONS. 
 
 Besides paying a tax upon its organization, or when it be- 
 gins to do business in the state, an annual franchise tax "for 
 the privilege of doing business or exercising its corporate fran- 
 chise within the state" must be paid every year by each of the 
 following classes of corporations doing business in the state : 
 
 1. Every corporation, joint stock company or association or- 
 ganized, incorporated or formed under the laws of this state. 
 
 2. Every corporation, joint stock company or association or- 
 ganized, incorporated or formed under the laws of any other 
 state, territory or foreign government. 
 
 The following corporations are excepted from the provisions 
 of the annual franchise tax, payable under section 182 of the 
 Tax Law : 
 
 1. Banks, savings banks, and institutions for savings. 
 
 2. Title guaranty companies ; 
 
 3. Insurance companies; 
 
 4. Surety companies; 
 
 5. Trust companies. 
 
 6. Laundering, manufacturing and mining companies to the 
 extent of the capital employed in laundering, manufacturing 
 and mining, provided at least 40 per cent, of the capital stock 
 is invested in property in the state. 
 
 7. Elevated and surface railroads, liable under section 185, 
 Tax Law. 
 
 8. Water, lighting and power companies liable under section 
 186, Tax Law. 
 
 9. Agricultural and hortictiltural associations and corpora- 
 tions. 
 
 231 
 
232 TAXATION OF COEPOEATIONS 
 
 Franchise tax on corporations.— For the privilege of doing busi- 
 ness or exercising its corporate francliises in this state every corpora- 
 tion, joint stock company or association, doing business in this state, 
 shall pay to the state treasurer annually, in advance, an annual tax to 
 be computed upon the basis of the amount of its capital stock, em- 
 ployed during the preceding year vpithin this state, and upon each dol- 
 lar of such amount. The measure of the amount of capital stock em- 
 ployed in this state shall be such a portion of the issued capital stock 
 as the gross assets employed in any business v^ithin this state bear to 
 gross assets wherever employed in business. For purposes of taxation, 
 the capital of a corporation invested in the stock of another corpora- 
 tion shall be deemed to be assets located where the physical property 
 represented by such stock is located. If the dividends upon the capital 
 stock amount to six, or more than six per centum upon the par value 
 of the capital stock, during any year ending with the thirty-first day 
 of October, 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 par value 
 of the capital stock during said year. If such dividend or dividends 
 amount to less than six per centum on the par value of the capital 
 stock, and 
 
 1. The assets do not exceed ths liabilities, exclusive of capital 
 stock, or 
 
 2. The average price at which such stock sold during said year, 
 did not equal or exceed its par value, or 
 
 3. If no dividend was declared. 
 
 Then each dollar of the amount of capital stock employed in this 
 state, determined as hereinbefore provided, shall be taxed at the rate 
 of three-fourths of one mill. If such dividend or dividends amount to 
 less than six per centum on the par value of the capital stock, and 
 
 1. The assets exceed the liabilities, exclusive of capital stock, by an 
 amount equal to or greater than the par value of the capital stock, or 
 
 2. The average price at which such stock sold during said year is 
 equal to or greater than the par value. 
 
 Then the amount of capital stock, determined as hereinbefore pro- 
 vided to be employed in this state, shall be taxed at the rate of one 
 and one-half mills on each dollar of the valuation of the capital stock 
 employed in this state, but such valuation shall not be less than 
 
 1. The par value of such stock. 
 
ANNUAL FRANCHISE TAX 233 
 
 2. The difference between the assets and liabilities, exclusive of 
 capital stock. 
 
 3. The average price at which such stock sold during said year. 
 
 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 
 percentum 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 percentum of dividends made or 
 declared upon the capital stock upon the par value of which the divi- 
 dend or dividends made or declared amount to six or more than six 
 percentum, and in addition thereto a tax shall be charged upon the 
 capital stock, 
 
 1. Upon which no dividend was made or declared, or 
 
 2. Upon which the dividend or dividends made or declared did not 
 amount to six per centum upon the par value. 
 
 At the rate as hereinbefore provided for the taxation of capital stock 
 upon which no dividend was made or declared, or upon which the divi- 
 dend or dividends made or declared did not amount to six percentum 
 on the par value. 
 
 All corporations not taxable under the preceding paragraphs of this 
 section shall be taxed in an amount not less than would be produced 
 by an assessment of one and one-half mills on each one dollar of the 
 actual value of its capital stock, determined to be employed in this 
 state as hereinbefore provided, or one and one-half mills upon each 
 dollar of such capita] stock at the average price at which said stock 
 sold during the said year. (Sec. 182, former sec. 182, Tax Law, as 
 amended ly ch. 558, L. 1901, oh. 474, L. 1906, and ch. 734, L. 1907.)* 
 
 Source: Ch. 542, L. 1880, as amended by ch. 361, L. 1881. 
 
 Value of stock to be appraised. — If the dividend or dividends 
 amount to less than six per centum on the par value of the capital 
 stock, or no dividend is declared the president, treasurer or secretary 
 of the company liable to pay a tax under the provisions of section one 
 hundred and eighty-two of this chapter, shall, under oath, between the 
 first and fifteenth days of November in each year, estimate and ap- 
 praise the capital stock of such company at its actual value. 
 
 And shall forward the same to the comptroller with the report pro- 
 vided for in the last section. If the comptroller is not satisfied with 
 
 *NoTE : For amount of franchise tax payable by corporations incorporated 
 under Chap. 351 L. 1912, providing for shares of capital stools without nomi- 
 nal or par value, see end of this chapter. 
 
234 TAXATION OF COEPOEATIOlirS 
 
 the valuation 30 made and returned he is authorized and empowered 
 to make a valuation thereof, and settle an account upon the valuation 
 so made by him, and the taxes, penalties and interest to be paid the 
 state. [Sec. 193, former sec. 190, Tax Law, as amended by ch. 474, 
 L. 1906, ch. 734, L. 1907.) 
 Source: Ch. 540, L. 1880, as amended by ch. 361, L. 1881. 
 
 Section 182 of the Tax Law must be taken in connection 
 with section 193 (former section 190) which it supplements. 
 People ex rel. N. Y. & E. B. Ferry Co. v. Roberts, 168 N. Y. 
 14 (1901). 
 
 By Chapter 474, Laws of 1896 and Chapter Y34, Laws of 
 1907, the provisions governing the annual franchise tax (Sec- 
 tions 182, 193 Tax Law) were materially amended in the fol- 
 lowing particulars: 
 
 1. The franchise tax was declared to be payable in advance. 
 
 2. A rule was provided in the statute itself, by which the 
 amount of capital stock employed within and without the state 
 could be easily determined. 
 
 3. A method was provided in the statute for determining 
 the amount of capital stock employed within the state repre- 
 sented by stock in other corporations, owned by the company 
 taxed. 
 
 4. Corporations paying less than 6 per cent, dividends, or 
 paying no dividends, were re-classified in two divisions, so that 
 a different rate applied to them as they fell into one or the 
 other classification. 
 
 The arrangement under section 182 is inartificial and does 
 not lend itself easily to any accurate grouping or classification 
 of corporations. The evident intent of the statute was to group 
 corporations into classes according to the amount of dividend 
 paid, and vary the rate on that basis. In the case of corpora- 
 tions paying dividends of less than six per cent., there is also 
 a variation of the rate, depending upon the market price of the 
 stock or the value of the net assets. The following general 
 classification seems to be called for by the statute : 
 
ANNUAL FEANCHISE TAX 235 
 
 (1) Corporations paying dividends of six per cent, or more, 
 which are taxed at the rate of one-quarter of a mill for each 
 per cent, of dividend declared on the par value of the capital 
 stock, without reference to the market price of the stock or the 
 value of the assets. There is no change here from the law prior 
 to the amendment of 1906. 
 
 (2) Corporations paying no dividend, which are taxed at the 
 rate of three-quarters of a mill on the appraised value of the 
 capital stock. There is no minimum valuation here, and under 
 the appraisement provided by section 193 (formerly 190), the 
 tax may be nominal. 
 
 (3) Corporations paying dividends of less than six per cent., 
 which are subdivided into two classes : 
 
 (a) Corporations paying dividends of less than six per cent., 
 whose assets exceed the liabilities by an amount equal to or 
 greater than the capital stock, or in which the average price of 
 the stock sold during the year was par or over, and not included 
 in the classification provided for in subdivision (b) infra^ 
 of corporations paying at the three-quarter mill rate. In either 
 case, the capital stock is taxed at the rate of one and one-half 
 mills on the appraised value, but such appraised value shall 
 not be 
 
 less than the par value of the stock or 
 
 less than the difference between the assets and 
 liabilities, or 
 
 less than the average price at which the stock 
 sold during the year. 
 The minimum valuation here is the par value of the stock. 
 
 (b) The second subdivision of corporations paying dividends 
 of less than six per cent., is that class of corporations in which 
 the average price of the stock sold during the year was less than 
 par, or whose assets do not exceed the liabilities exclusive of 
 capital stock. In either case, the tax to be paid is three-quarters 
 
236 TAXATION OF COEPOEATIONS 
 
 of a mill on the appraised value of the capital stock. There is 
 no minimum valuation in this class, and under the appraise- 
 ment provided for by section 193 (formerly section 190) the 
 tax may be nominal. It may have been intended by 
 the framers of the amendment of 1906 to take into ac- 
 count a minimum valuation of par for this class of cor- 
 porations, but the statute did not clearly express it, and 
 after the amendment of section 193 (formerly section 190), it 
 was decided by a divided court of four to three in People ex 
 rel. N. T. Mail & Transportation Co. v. Gaus, 198 IS". Y. 250, 
 that the valuation referred to in this part of section 182 by the 
 words "each dollar of the amount of capital stock employed in 
 this state" was the appraised valuation provided by section 193 
 (formerly 190). 
 
 (4) There is yet another group or class of corporations, con- 
 sisting of all corporations not taxable under the preceding classi- 
 fications. An example of this class would be corporations pay- 
 ing dividends of less than six per cent., where there was no stock 
 sold during the year, and hence no market price, and where the 
 assets exceed the liabilities, but not by an amount equal to or 
 greater than the capital stock. This class is taxable at the rate 
 of one and one-half mills on the actual (or appraised) value of 
 the capital stock. This group was added by the drag-net clause 
 of the amendment of 1907. 
 
 Ambiguity as to rate decided in taxpayer's favor. — If a cor- 
 poration, paying dividends of less than six per cent, falls un- 
 der one alternative subdivision, in the second paragraph of 
 section 182, requiring it to pay the rate of three-quarters of a 
 mill, and also an alternative subdivision of the third para- 
 graph or class of section 182, providing for the rate of one 
 and one-half mills, the practice in the state comptroller's office 
 has been to assess the tax at the higher rate. For example, if 
 the average market price of the stock of such a corporation is 
 below par, but the assets exceed the liabilities by more than the 
 
ANNUAL PEANCHISE TAX 237 
 
 capital stock, it comes at the same time under an alternative 
 subdivision of the second class, paying the three-quarters mill 
 rate, and also of the third class paying the one and one-half mill 
 rate. The legality of this practice has been open to question 
 on the general theory that revenue lavfs should be strictly con- 
 strued, and that any ambiguity in the Tax Law should be re- 
 served in favor of the public. Brown v. Commonwealth, 98 
 Va. 366; San Francisco F. L. Co. v. Banbury, 106 Cal. 129; 
 Cooley on Taxation, 3rd Ed. 459. 
 
 In a recent case, People ex rel. American Banlc Note Co. v. 
 Sohmer, 157 App. Div. 1, decided in May, 1918, this question 
 was raised, and the court held that since the reading of the 
 statute disclosed an inconsistency under the general principles 
 of interpretation, the taxpayer was entitled to the most favor- 
 able reading, and that the common stock of the corporation 
 should therefore be taxed at the three-quarter mill rate. This 
 decision is in line with the opinion in People ex rel. N. Y. Mail 
 & N. T. Co. V. Gaus, 198 W. Y. 255, interpreting another phase 
 of the same statute, and holding that "the benefit of the doubt 
 and uncertainty as to the meaning of the statute must be given 
 to the relator and not to the state." 
 
 Measure of the amount of capital stock employed in the 
 state and method of computing franchise tax in any given 
 case. — The amount of the franchise tax to be paid under sec- 
 tion 182 of the Tax Law in any given case depends upon the 
 following facts : 
 
 In the case of all corporations having property or assets 
 within and without the state, it depends upon the proportion- 
 ate amount of gross assets or capital employed within the state. 
 
 In the case of corporations paying dividends of six per cent. 
 or more, it depends upon the amount of issued capital stock at 
 par employed within the state and the rate of dividend. The 
 
238 TAXATION OF COEPOEATIONS 
 
 metliod of determining the amount of issued stock employed 
 within the state is set forth in the first paragraph of section 182. 
 
 In the case of corporations paying no dividend, it depends 
 upon the actual value of the amount of capital stock, which, as 
 we have seen, may be nominal, and the tax may be nothing. 
 So also in the case of corporations paying dividends of less than 
 six per cent., whose assets do not exceed the liabilities, or whose 
 average market price is below par. In this case, too, the tax 
 may be nominal. 
 
 In the case of corporations paying dividends of less than six 
 per cent., whose assets exceed the liabilities by an amount equal 
 to or greater than the capital stock, or whose average market 
 price is above par (and not coming under the three-quarter mill 
 rate supra), it depends upon the value of the net assets, the 
 market price of the stock and the par value of the capital stock 
 whichever of these values is highest. The minimum appraise- 
 ment is here the par value of the capital stock. 
 
 If all the corporation's assets are in the state, the amount of 
 the capital stock employed in the state will equal the issued 
 capital stock. The value of the capital stock in this instance and 
 the rate at which the franchise tax is computed will depend 
 upon the conditions set forth in the illustrations hereinafter 
 mentioned. 
 
 If only a part of the corporation's assets is within the state 
 and the remainder without the state, the amount of capital 
 stock employed within the state shall be such a portion of the 
 issued stock as the gross assets employed in any business within 
 the state bear to the gross assets wherever employed in business. 
 The value of the capital stock in this instance, and the rate at 
 which the franchise tax is to be computed will depend upon 
 gonditions hereinafter enumerated. 
 
ANNUAL PEANCHISE TAX 239 
 
 ILLUSTRATIONS 
 
 Corporations paying dividends of 6% or more; rate J^ of a 
 mill for each i% of dividend, at par.— If a corporation whose 
 entire capital stock of $100,000 is invested in this state, paid a 
 dividend of eight per cent., it would be subject to a franchise 
 tax under section 182 of the Tax Law of one-fourth of a mill 
 for each one per cent, of dividend, or two mills on $100,000, of 
 capital stock, viz., $200. Under section 182 this rate is on the 
 par value of the issued capital stock without regard to the mar- 
 ket price or to the actual value of the assets. 
 
 If the corporation's capital is $100,000, all of which is is- 
 sued, and it is engaged in business within this state and also 
 without the state, and if the gross assets within the state are 
 $120,000 and its gross assets without the state are $30,000, the 
 proportion of capital stock within the state subject to taxation 
 under section 182 of the Tax Law would be 120,000/150,000, or 
 four-fifths of $100,000=$80,000. If the dividend declared on 
 the capital stock was eight per cent., the tax under section 182 
 would be at the rate of one-fourth of a mill for each per cent 
 of dividend or two mills on $80,000, viz., $160. 
 
 Corporations paying no dividend. Rate Ya "liH st appraised 
 value. — If we take the case of the corporation mentioned with 
 $100,000 of capital, but paying no dividend, it would be sub- 
 ject to a franchise tax at the rate of three-fourths of a mill on 
 the appraised value of the capital stock employed within the 
 state at its actual or appraised value under sections 182 and 
 193 (formerly 190), of the Tax Law. There is no minimum 
 valuation here and under the appraisement provided for by 
 section 193, the tax may be nominal; for instance, if the gross 
 assets are $150,000 and the liabilities $90,000, making the net 
 assets $60,000, and the average market price of the stock $80, 
 the tax to be paid would be appraised at a valuation of $80 
 
240 TAXATION OF OOEPOEATIONS 
 
 per share, whicli would mean that the valuation would be 
 $80,000 at three-fourths of a mill or $60 for the tax. But if 
 the assets were $150,000 and the liabilities $160,000, with no 
 market price (no stock sold), the tax would be three-fourths 
 of a mill on a net valuation of zero, and the tax would be 
 nothing. 
 
 Corporations paying dividends of less than six per cent., 
 whose assets do not exceed the liabilities by an amount at 
 least equal to the capital stock, or the average market price 
 of whose stock did not equal or exceed par. Rate % mill on 
 appraised valuation. — The first case presented under this sub- 
 division is hardly a practical or even a legal proposition, for it 
 presents the hypothesis of an insolvent corporation paying divi- 
 dends, for instance: 
 
 If we take the corporation having a capital stock of $100,000 
 all issued and employed within the state, paying a dividend of 
 less than six per cent. ; if it had gross assets of $100,000 and 
 liabilities $110,000, or if its market price was not equal to or 
 greater than par, it would pay a franchise tax of three-fourths 
 of a mill on the actual or appraised value of the capital stock 
 employed within the state. This is a possible case under this 
 subdivision as the law is framed, but not at all probable. 
 
 If we take the case of the corporation mentioned in the last 
 paragraph, with a capital stock of $100,000, all issued and em- 
 ployed in the state, paying a dividend of less than six per cent, 
 and with the market price of the stock at $80, it will only pay a 
 tax of three-fourths of a mill on the appraised value of its capi- 
 tal stock employed within the state. If the gross assets were 
 $150,000, and the liabilities $90,000, an appraisement of $60,- 
 000 might be justified, though less than the market price, in 
 which event the tax would be $45. 
 
 A corporation having part of its assets within and part with- 
 out the state is taxed under the same rules, except that in each 
 
ANNUAL FEAH-CHISE TAX 241 
 
 case it would be taxed on the proportion of the capital stock 
 represented by the gross assets within the state. 
 
 Corporations paying dividends of less than six per cent, 
 showing a surplus, or with market price above par. Rate ly^ 
 mills. — The next subdivision brings into consideration those 
 corporations paying less than six per cent., not coming under the 
 three-quarter mill rate supra, whose assets exceed the liabilities 
 by an amount equal to or greater than the capital stock {i.e., 
 corporations with a surplus), or whose market price is equal to, 
 or above par. 
 
 If we take the case of the corporation mentioned, having a 
 capital stock of $100,000, all employed within the state and 
 paying dividends of less than six per cent., with gross assets 
 of $220,000 and liabilities of $100,000, the net assets would 
 be $120,000, and if the average market price for the stock 
 were $110, in this case, the rate would be 1% mills, to be com- 
 puted not on the $100,000 of capital stock at par value, or at 
 the market price of $110, but on $120,000, the net assets, which 
 under the third paragraph of section 182 are deemed to be the 
 value of the capital stock employed within the state. 
 
 If we take the same corporation paying a dividend of less 
 than six per cent, with the same net assets of $120,000, but 
 with the market price of the stock at $125, making the value 
 of the capital stock employed within the state $125,000, the 
 rate of 1% mills would then be computed on this latter amount, 
 which is higher than either the par value of the capital stock 
 or the net value of the assets. 
 
 If we take the same corporation paying dividends of less than 
 six per cent., with gross assets of $200,000 and liabilities of 
 $100,000, making the net assets exactly $100,000 or par, the 
 rate of II/2 mills would be computed on that figure, provided 
 the market price is not less than par. 
 
 Again taking the case of the corporation with $100,000 of 
 
242 TAXATION OP COEPOEATIONS 
 
 capital, all employed within the state, and paying less than six 
 per cent., if the average selling price of the stock was at $120 
 during the year, and if the gross assets were $150,000, and the 
 liabilities $70,000, making the net assets $80,000, or less than 
 par, in this case the rate would be 1% mills, to be computed 
 on the capital stock of $100,000, at $120, or on $120,000, mak- 
 ing the tax $180. 
 
 The same figures in the last paragraph might be applied to 
 the case of a corporation whose capital was partly employed 
 within and partly without the state, the only difference in each 
 case being that the tax would be based on the proportion of 
 the capital stock represented by the amount of the gross assets 
 within the state. 
 
 Drag net clause. Rate i% mills.— The next subdivision in- 
 cludes all corporations not coming under any other paragraph. 
 An example of this class would be one whose assets exceed the 
 liabilities, but by an amount less than the par value of the capi- 
 tal stock. 
 
 For example, we will take a corporation whose capital stock 
 is $100,000, all issued and employed in the state. The gross 
 assets are $150,000 and the liabilties are $70,000, with a divi- 
 dend of four per cent, declared, but no stock sold during the 
 year. It manifestly does not come under subdivision 1, paying 
 dividends of six per cent, or more, because the dividend is less 
 than six per cent., nor does it come under subdivision 2, of 
 section 182, because its assets exceed its liabilities by an amount 
 not equal to or greater than the capital stock, nor was its market 
 price below par, because the stock was not sold during the year. 
 iNeither does it come under subdivision 3, of section 182, be- 
 cause its assets did not exceed its liabilities by an amount equal 
 to or greater than the capital stock at par, nor was its market 
 price above par, there being no stock sold. It therefore comes 
 under subdivision 4, and pays a tax, in this case, of 1^/2 mills 
 
ANNUAL FEANCHISE TAX 243 
 
 under the last paragraph of section 182 on the actual value of 
 the capital stock, or on $80,000, viz., $120. 
 
 Corporations having more than one kind of capital stock. — 
 
 A class of cases, for which no illustrations have yet been fur- 
 nished, is the fourth or last class but one, mentioned in section 
 182, viz., that of a corporation paying a dividend on tv?o kinds 
 of stock, or paying no dividend on one kind of stock, and paying 
 dividends of six per cent, or more, or less than six per cent, on 
 the other kind of stock. Take for instance, a corporation having 
 a capital stock of $100,000, divided into $40,000 of preferred 
 and $60,000 of common stock, which pays a dividend of eight 
 per cent, on the preferred and four per cent, on the common, 
 with the common stock selling at $60 and the net assets, $120,- 
 000. It will pay a tax on the par value of $40,000 of preferred 
 stock at the rate of two mills, making the tax $80. The com- 
 mon stock will pay a tax of % mill on $60,000, at a valua- 
 tion of $120,000 for the $100,000 of capital stock, or at 6-5 of 
 $60,000, making the valuation of the common stock $72,000, 
 and the tax will be $54. The entire tax to be paid by this cor- 
 poration will be $134. 
 
 The provision in the statute covering this subdivision has 
 evident reference to the ordinary ease of preferred and common 
 stock. People ex rel. N. Y. 0. & H. B. E. Co. v. Gaus, 200 IT. 
 Y. 328 (1911). 
 
 Annual franchise tax payable in advance. — The amendment 
 of 1906 makes the annual franchise tax payable in advance, but 
 the basis of the tax is computed on the capital stock employed 
 during the preceding year, unless the capital stock was increased 
 prior to October 81st, when it seems the tax will be payable on 
 the increased amount, because payable in advance. People ex 
 rel. N. Y. C. & H. B. B. Co. v. Gaus, 200 K Y. 328 (1911). 
 In the very recent case. People ex rel. Mercantile S. D. Co. v. 
 
244 TAXATION OF COEPOEATIONS 
 
 Sohmer, 158 App. Div. 110 (September, 1913), where there 
 had been a distribution of profits of $880,250 on $300,000 of 
 outstanding capital stock, and the stock reduced at the end of the 
 year to $100,000, the court held that it was the capital stock on 
 which the dividends were paid within the year, and not the 
 amount outstanding at the end of the year on which no dividends 
 were paid, that determined the rate of dividend and the basis of 
 the tax. If the corporation ceases to do business before the end 
 of the fiscal year, it escapes taxation for the ensuing year. If 
 the corporation was organized during the preceding year and 
 only in business for a portion of the year, on October 31st it 
 will pay on the average capital, irrespective of the time em- 
 ployed, because the tax is payable in advance. 
 
 Average capital and average market price. — ^Where section 
 182 of the Tax Law requires the actual capital to be ascertained, 
 the rule for determining it, is to take it for the entire fiscal 
 year and divide it by the number of days. The same general 
 principles were applied prior to the amendment of 1906 in 
 ascertaining the average value of the capital employed during 
 the year. If the capital was employed for less than a year, the 
 tax was based on its average employment for the year. People 
 ex rel. BrooTdyn Rapid Transit Co. v. Morgan, 57 App. Div. 
 335, aff'd 168 K T. 672 ; People ex rel. Mutual Trust Co. v. 
 Miller, 111 K Y. 51 (1903) ; People ex rel. Bees' Sons v. Mil- 
 ler, 90 App. Div. 592 (1904) ; People ex rel. Cohen & Co. v. 
 Miller, 94 App. Div. 564 (1904). Since the amendment of 
 1906, it would seem that where the capital stock has been in- 
 creased during the year the capital employed at the end of the 
 preceding fiscal year, viz., the capital stock outstanding on Oc- 
 tober 31st, would govern the amount on which the tax was pay- 
 able. People ex rel. N. Y. C. & H. B. B. Co. v. Gaus, 
 supra. The average price of stock is to be determined 
 from the different sales irrespective of the amount sold on the 
 
ANNtTAL FEANOHISE TAX 245 
 
 various sales. People ex rel. Amer. B'h Note Go. v. Sohmer, 
 157 App. Div. 1 (1913). 
 
 How intrinsic value is ascertained ; debts to be deducted. — 
 
 Where the various provisions of section 182 require the in- 
 trinsic or actual value to be ascertained, it should be determined 
 by deducting the liabilities from the assets. People ex rel. 
 Lorena Co. v. Morgan, 55 App. Div. 265 (1900) ; People ex 
 rel. J. B. Co. v. BoheHs, 37 App. Div. 1 (1899). If the good 
 will of the business has any value that is to be added to the 
 net assets so ascertained. People ex rel. Wieiusch & Hilger 
 Co. V. Boberis, 19 App. Div. 574; aff'd 154 N. Y. 101 (1897). 
 Under the law, prior to 1906, the comptroller was not required 
 to ascertain the intrinsic or actual value of the stock in cash 
 unless such intrinsic value exceeded the market value. People 
 ex rel. Brooklyn El. B. B. Co. v. Boberts, 90 Hun, 537 (1895). 
 This was so even though the assessment made by the comp- 
 troller, based on such average price, was more than the par 
 value of the stock and thus indirectly assessed on surplus, for 
 the dividends over six per cent, may be accumulated in the form 
 of surplus, which, if profits had been declared, would have in- 
 creased the assessment. People ex rel. Colonial Trust Co. v. 
 Morgan^ 47 App. Div. 126 (1900). Under the present statute, 
 if the dividends are six per cent, or more, the intrinsic value 
 need not be ascertained, and no appraisement is necessary under 
 section 193 (former sec. 190) of the Tax Law. 
 
 What debts not deducted. — A foreign corporation cannot de- 
 duct its general indebtedness arising from its business done 
 throughout the country generally, but only the specific indebted- 
 ness arising out of the business done in this state. People ex rel. 
 Nat'l Enameling Co. v. Miller, 112 App. Div. 880 (1906). In 
 an earlier case {People ex rel. Hyde & Sons v. Miller, 90 App. 
 Div. 599 [1904] ; aff'd 179 IST. Y. 564) it was held that only 
 
246 TAXATION OF COEPOEATIOITS 
 
 that part of the total indebtedness should be deducted, which 
 the assets within the state bore to the total assets of the company. 
 
 Actual value not "book value" ; good will. — "Book value" 
 does not govern the valuation to be made where intrinsic value is 
 to be ascertained. Where a corporation's entire business is in 
 New York and has been acquired from a firm of similar name 
 doing business in New York, together with the good will of that 
 firm, the value of the good will and name of the firm is part of 
 the capital employed in the state. J. B. Co. v. Roberts, supra. 
 The right to tax the good will was upheld in People ex rel. 
 Johnson Co. v. Roberts, 159 N. Y. 70 (1899), and in the Wie- 
 busch case, supra. 
 
 No unequal taxation because lesser dividends pay higher 
 tax. — Where the dividends are less than six per cent, and the 
 price of the stock above par there is no unequal or unjust taxa- 
 tion, because the corporation is obliged to pay a larger tax than 
 for paying a dividend of six per cent, or over. People v. Presi- 
 dent, &c., D. & H. Canal Co., 54 Hun, 598 (1889) ; see, also, 
 People ex rel. N. Y. C. & H. R. R, Co. v. Knight, 173 N. Y. 
 255 (1903) ; People ex rel. Hyde & Sons v. Miller, 90 App. 
 Div. 599 (1904) ; aff'd 179 N. Y. 564. 
 
 Stock dividends. — Whether the payment of a stock dividend 
 shall be considered a distribution of profits or an adjustment 
 of capital depends upon the circumstances in each case. If it 
 is paid out of surplus profits, it will be considered a dividend 
 and taxed accordingly. People ex rel. Pullman Co. v. Olynn, 
 130 App. Div. 332 (1909), affirmed, 198 N. Y. 605. If it is 
 a distribution of the capital not representing profits, it will not 
 be considered the basis for computing the tax. People ex rel. 
 North American Trust Company v. Knight, 96 App. Div. 120. 
 Where stock is surrendered equal in amount to the dividend 
 
ANNUAL FRANCHISE TAX 247 
 
 paid it will be considered a depletion of capital stock and not 
 a payment of dividend. People ex rel. Port Morris Land & Im- 
 ■provement Co. v. Glynn, 205 K Y. 578 (1912), modifying 148 
 App. Div. 908 ; but if a corporation having issued $300,000 of 
 capital stock and having purchased with $200,000 thereof, the 
 good-will, business and lease of another company and invested 
 the remaining $100,000 in securities, afterwards realized $1,- 
 050,000 for its lease, and divides this amount among its share- 
 holders representing the $300,000 of capital stock, which is then 
 reduced to $100,000, under such circumstances, the sum of 
 $850,000 will be considered as a stock dividend and not as a dis- 
 tribution of capital. People ex rel. Mercantile 8. D. Co. v. 
 SoTimer, 158 App. Div. 110 (1913). 
 
 Distribution of amount realized in condemnation proceed- 
 ings not to be construed as dividends. — Where a corporation 
 distributes the greater part of an award it has received in con- 
 demnation proceedings, among its stockholders, and thereafter 
 does no business, the comptroller in assessing the franchise tax 
 should not consider such award so distributed as dividend. Peo- 
 ple ex rel. Jerome Park Villa Site & Imp. Co. v. Roberts, 41 
 App. Div. 21 (1899). 
 
 United States securities. — The property of a corporation in- 
 vested in United States securities is taxable under section 182 ; 
 the tax is not on the property, but on the corporate franchises. 
 Home Ins. Co. v. N. Y., 134 U. S. 594 (1890). 
 
 Patent rights. — The tax on that part of a corporation's capi- 
 tal invested in patent rights is not contrary to the United States 
 Constitution. The tax is on the franchise or business, no matter 
 how the corporate capital is invested. People ex rel. Edison 
 E. Ilium. Co. V. Wemple, 61 Hun, 53 (1891) ; see, also. Home 
 Ins. case, supra. And if the entire capital is invested in patent 
 
248 TAXATION OF COEPOEATIONS 
 
 rights, the rule is not otherwise. People ex rel. U. 8. Aluminum 
 Plate Co. V. Knight, 174 IST. Y. 475 (1903) ; rev'g 67 App. 
 Div. 333. 
 
 Trade marks. — The same rule applies to the case of a foreign 
 corporation doing business in this state, having part of its capi- 
 tal invested in a trade mark. People ex rel. Spencerian Pen Co. 
 V. Kelsey, 105 App. Div. 133 (1905). 
 
 How good will and patents may be valued. — In estimating 
 the value of the good will it is not improper to assume that it is 
 worth the price paid for it. People ex rel. Keochl & Co. v. Mor- 
 gan, 96 App. Div. 110 (1904). This rule also appears to be 
 true in the case of patents. People ex rel. Automatic Vending 
 Co. V. Kelsey, 101 App. Div. 325 (1905) ; particularly if the 
 company has been paying dividends of six per cent, on its entire 
 authorized capital stock. Ihid. 
 
 "Capital employed"; realty corporations. — There has been a 
 lack of uniformity in the law in cases affecting the taxation of 
 corporations investing their capital in real estate. For example, 
 it has been held that the capital of a corporation invested in 
 jmproductive real estate, like swamp land, was not "capital em- 
 ployed within the state" and, therefore, not taxable. People ex 
 rel. Niagara B. Hydraulic Co. v. Roberts, 30 App. Div. 180 
 (1898) ; aff'd 157 K Y. 676. And in an earlier case, it was 
 held that the franchise tax did not apply to real estate invested 
 in the surplus of the corporation and not used in the business. 
 People ex rel. Singer Mfg. Co. v. Wemple, 150 N. Y. 46 
 (1896). A more recent case to the same effect is that of People 
 ex rel. Fort Oeorge Co. v. Miller, 179 N. Y. 49 (1904), in 
 which the Court of Appeals by a divided court of four to three 
 held that the capital stock of a corporation invested in unim- 
 proved New York City land was not employed in business in the 
 state. 
 
 n 
 
AWNTrAL PEANCHISE TAX 249 
 
 On the other hand, in a late case, People ex rel. Wall & II. 
 St. Realty Co. v. Miller, 181 IST. Y. 328 (1905) ; a realty cor- 
 poration incorporated for the purpose of, and actively engaged 
 in, leasing and managing a large office building, with the right 
 to acquire and sell both real and personal property and to carry 
 on any other business which could be conveniently conducted, 
 was held to be taxable on this property as "capital employed." 
 
 The Court of Appeals in the last named case, by a divided 
 court, of four to three, in its prevailing opinion, distinguishes the 
 three cases cited in the last paragraph from the one then before 
 it on the ground that the company in that case- was found to do 
 a realty business, and was not exempt by reason of its busi- 
 ness from the franchise tax. The dissenting opinion, in this 
 case, which is concurred in by two of the judges who wrote the 
 prevailing opinion in the Fort George case, points out that there 
 is no material difference between the three cases above cited 
 and that of the Fort. George Company, and that if the court 
 is to stand on the doctrine of stare decisis, the Wall Street 
 Realty Co. would be exempt from taxation on similar grounds. 
 The Wall Street Realty Go. case was followed very recently in 
 People ex rel. Hubert Apt. Assn. v. Kelsey, 110 App. Div. 618 
 (1906). 
 
 The amendment of 1906 bases the amount of "capital stock 
 employed" on the gross assets wherever employed, and realty 
 companies would hence seem to be taxable thereunder whether 
 the capital was productively or unproductively invested. 
 
 It matters not whether the capital stock of a realty company 
 be employed in business. If it be employed at all, it is sufficient. 
 People ex rel. Waclarh R. Co. v. Williams, 198 N. Y. 54 
 (1910) ; rev'g 134 App. Div. 83. 
 
 Recent case defining "capital," "capital stock," and "capital 
 stock employed." — In a recent case, People ex rel. Coney 
 Island Jockey Club v. Sohmer, 140 N. Y. Supp. 507 (1913), 
 
250 TAXATION OF COEPOBATIONS 
 
 the words "capital" and "capital stock" as well as the words 
 "employed" in reference to capital, are defined. In that case 
 it was held that a domestic corporation incorporated "for im- 
 proving the breed of horses" and owning two tracts of land, one 
 of which was paid for out of the capital stock, the other- of which 
 was paid for out of profits, is subject to a franchise tax under 
 section 182 of the Tax Law, although it claimed it was not 
 exercising its franchise under its certificate of incorporation, 
 and that its capital was simply lying dormant. When the com- 
 pany used its capital to purchase real estate, it was employing 
 its capital in the state. "Using" is employing. Citing People ex 
 rel. Fifth Ave. Bldg. Co. v. Williams, 198 IST. Y. 238 (1910) ; 
 People ex rel. Vandervoort v. Glynn, 194 'S. Y. 387 ; People ex 
 rel. lUh St. Realty Co. v. Eelsey, 110 App. Div. 797 (1909). 
 The fact that one of the two tracts of land was paid for out of 
 the capital stock and the other out of profits is immaterial. Both 
 are capital. The words "capital stock" and "capital" are prac- 
 tically equivalent within the meaning of the provisions of the 
 franchise tax. By "capital stock" is meant the value of the net 
 assets, and since surplus forms part of the capital, it must be 
 taken into account in valuing the capital stock. People ex rel. 
 Commercial Cable Co. v. Morgan, 178 K Y. 433 (1904) ; Peo- 
 ple ex rel. Wiebusch & Hilger Co. v. Roberts, 154 N. Y. 101 
 (1897). 
 
 Real estate ; property without the state. — Keal estate em- 
 ployed in business within the state may be taxed, even though 
 it results in double taxation. This does not make the law uncon- 
 stitutional. People ex rel. Postal Tel. Co. v. Campbell, 70 Hun, 
 507 (1893). If the real estate is not within the state, the capital 
 so invested is not taxable here. People ex rel. American Surety 
 Co. V. Campbell, 74 Hun, 101 (1893) ; aff'd 143 N. Y. 625. 
 The same rule applies to United States bonds deposited in other 
 states. Ibid. 
 
ANNTJAL FEANCHISE TAX 251 
 
 E"or will freight cars permanently outside of the state be 
 taxed as capital employed within the state. People v. Camp- 
 hell and Roberts, 88 Hun, 545 (1895). 
 
 Outstanding accounts of domestic corporations. — Out- 
 standing accounts, representing property of a domestic corpora- 
 tion invested outside of the state, and which has never come 
 within the state, have been held to be capital employed without 
 the state. People ex rel Bees v. Miller, 90 App. Div. 591 (1904). 
 This decision has been modified, but does not seem to have been 
 overruled, on the point cited in People ex rel Williams v. 
 Sohmer, 151 App. Div. 764 (1912). 
 
 Joint stock company taxable. — Joint stock companies were 
 
 held liable to taxation under the law as amended. The insertion 
 
 of words "or organized" in Chapter 361 of the Laws of 1881 
 
 indicated that the legislature did not intend to confine the third 
 
 section of Chapter 542 of the Laws of 1880 to bodies which 
 
 were strictly incorporated. People ex rel. Piatt v. Wemple, 
 
 117 ]Sr. Y. 136; aff'g 52 Hun, 434 (1889). The legislature 
 
 amended this section by making it applicable to a "corporation, 
 
 joint stock company or association, incorporated, organized or 
 
 formed." {Chap. 353, L. 1889, now included in sec. 182 Tax 
 
 Law.) 
 
 Amount of franchise tax payable by corporations with shares 
 without nominal or par value under chap. 351, L. 1912. — The franchise 
 tax upon any corporation issuing such shares of stock payable under 
 see. 182 of the tax law shall be determined by the amount of the gross 
 assets of such corporation employed in any business within this state, less 
 such proportion of its liabilities as shall represent the ratio of its gross 
 assets employed in any business within this state to its entire gross 
 assets wherever employed in business, and the rate of such franchise tax 
 shall be fixed in the manner provided in said sec. 182 of the tax law. For 
 this purpose the rate of dividends shall be computed by dividing the total 
 amount of dividends which have been paid during the year by the amount 
 of assets of the corporation upon the first day of such year. 
 
 Note. — After ascertaining the total amount taxable as above, if there 
 are several classes of stock, the preferred having preference in payment 
 of principal, it would appear that the value of the common may be deter- 
 mined by deducting the proportionate share of the par value of the pre- 
 ferred from such amount. 
 
CHAPTEE V. 
 
 Peinciples' Deteemining Taxatiom" of Foeeign Coepoea- 
 TioNs Ubtdee Section's 181 and 182 of the Tax Law. 
 
 Same principles of taxation apply to domestic and foreign 
 corporations in determining the amount of capital stock em- 
 ployed within the state for the purposes of the annual franchise 
 tax. If there is no property or business done in the state there 
 is no basis for the tax. Where a domestic corporation with a 
 principal office in New York moves its office for the transaction 
 of business to Pennsylvania and carries on all operations there, 
 although maintaining a bank account in !New York, the tax 
 can be levied only on the bank account, as the rest of the capital 
 is employed without the state. People ex rel. Davis-Colby Ore 
 Roasting Co. v. Campbell, 66 Hun, 146 (1892). 
 
 What is meant by a foreign corporation doing business, or 
 exercising its corporate franchises within the state. — Two 
 concurring conditions are necessary for the taxation of foreign 
 corporations under sections 181 and 182 of the Tax Law: 
 
 1. Foreign corporations shall be doing business in the state ; 
 
 2. Its capital, or some part thereof, shall be "employed within 
 this state." 
 
 People ex rel. Chicago June. By. Co. v. Poherts, 154 
 IS. Y. 1 (1897) ; rev'g 90 Hun, 474. 
 
 See also People ex rel. Harlin & H. Co. v. Campbell, 
 139 K Y. 68 (1893). 
 
 Outstanding accounts of foreign corporations. — A foreign 
 corporation engaged in the advertising business in New York 
 
 252 
 
STATE TAXATION OF FOEEIGN COEPOEATIONS 253 
 
 City and doing all of its business from its New York office, 
 where its moneys were collected, contracts made, and funds de- 
 posited in bank, is taxable there for outstanding accounts due 
 on advertising from non-residents of the state, the business being 
 conducted as an entirety and managed from the New York 
 office. People ex rel. Williams Company v. Sohmer, 151 App. 
 Div. 764 (1912). 
 
 Interstate commerce not taxable. — A railroad incorporated 
 in another state, having terminal facilities and real estate here, 
 employing workmen and keeping money in bank in this state, 
 incidental to its business, of forwarding and receiving passen- 
 gers between New York and other states, is engaged in inter- 
 state commerce and not taxable on its capital employed here. 
 People ex rel. Pa. B. B. v. Wemple, 65 Hun, 252 (1892). But 
 a railroad employing its capital in cab service, beginning and 
 ending in this state, for which a separate charge is made, is 
 taxable thereon, since it is not a part of the interstate com- 
 merce of a railroad company. The tax is not on the property 
 of the company, but on its privilege of exercising its corporate 
 franchises. People ex rel. Penn. B. B. v. Knight, 67 App. Div. 
 398 (1901) ; aff'd 171 N. Y. 354 (1902) ; aff'd in 192 U. S. 
 21 (1904). 
 
 A very recent case, People ex rel. International Elevator Co. 
 V. Boterts, 116 App. Div. 30 (1906), intimates that the fran- 
 chise tax may be imposed on a corporation engaged in interstate 
 commerce, provided part of its business is done in the state. 
 
 Foreign commerce ; imported goods. — ^A foreign corporation 
 partly engaged in foreign commerce and partly engaged in do- 
 mestic commerce is taxable under Chapter 542, Laws of 1880 
 (section 182, Tax Law), on imported goods. The imposition 
 of the tax is not an interference with commerce. If the company 
 is wholly engaged in interstate or foreign commerce the ques- 
 
254 TAXATION OP COBPOKATIONS 
 
 tion as to whether the business is a private one or of a quasi- 
 public character like that of a common carrier is then to be 
 considered. People ex rel. Klipstein v. Roberts, 36 App. Div. 
 697 (1899). 
 
 The fact that a foreign corporation employs its capital in 
 the state in the business of foreign commerce does not exempt 
 it from taxation. People ex rel. Eppens, Smith & Wieman Co. 
 V. Roberts, 51 App. Div. 152 (1900). 
 
 Good will ; United States copyrights ; patents. — Good will of 
 a foreign corporation carrying on business in this state and 
 nowhere else is subject to a franchise tax. People ex rel. Johnson 
 Co. V. Roberts, 159 N. Y. 70 (1899). In the last named case 
 it was held that the copyrights were not taxable, but a later 
 case overruled so much of the decision as was applicable to the 
 taxation of copyrights and clearly upheld the right of the state 
 to impose a franchise tax on a corporation owning letters patent 
 or copyrights. People ex rel. U. S. Aluminum Printing Co. v. 
 Knight, 174 'N. Y. 475 (1903) ; see, also, People ex rel. Edison 
 El. III. Co. V. Wemple, 61 Hun, 53 (1891). 
 
 WHEN FOREIGN CORPORATIONS HAVE BEEN HELD TO 
 
 BE DOING BUSINESS OR EMPLOYING CAPITAL 
 
 WITHIN THE STATE 
 
 Selling western mortgages. — A foreign corporation having 
 an ofEce in ITew York for the sale of mortgages on western real 
 estate, depositing the proceeds of sale in New York, and send- 
 ing the funds to the home office for re-investment, is doing busi- 
 ness within the state. People ex rel. N. E. Loan & Invest. Co. 
 V. Roberts, 25 App. Div. 16 (1898). 
 
 A foreign corporation is doing business when it becomes a 
 special partner in a limited partnership within this state, and 
 is liable to taxation on the amount of its capital contributed to 
 
STATE TAXATION OF FOEEIGN COEPOEATIONS 255 
 
 the partnership. People ex rel. Badische Anilin & Soda Fabrih 
 Co. V. BoheHs, 152 :N. Y. 59 (1897) ; O'Brien, J., dissenting. 
 
 WHEN FOREIGN CORPORATIONS ARE NOT DOING 
 BUSINESS OR EMPLOYING CAPITAL IN THE STATE 
 
 Foreign corporation carrying on business through brokers. 
 
 — A foreign corporation carrying on business through brokers 
 in this state, consigning goods to them for sale at a price fixed 
 by it, or in fulfillment of orders approved by it, was held not to 
 be carrying on business here, although the proceeds of sale were 
 deposited in bank in New York to its credit. People ex rel. 
 Southern Cotton Oil Co. v. Roherts, 25 App. Div. 13 (1898). 
 The court said in this case that "the goods consigned to com- 
 mission merchants were in their possession and control, and 
 their disposition in accordance with the directions of the re- 
 lator was a part of their business, not the business of the re- 
 lator. A commission merchant has ordinarily a right to sell in 
 his own name (Story's Agency, Sees. 33 and 34). As to the 
 public he is the dealer." 
 
 In another case, People ex rel. Washington Mills v. Roberts, 
 8 App. Div. 201 (1896), it was held that where a foreign cor- 
 poration solicited orders through agents in the state, which were 
 filled from the factory in the home office, and leased offices, 
 kept samples and a bank account in New York State, it was 
 not taxable here. This case was followed in People ex rel. H. 
 P. Smith V. Roberts, 27 App. Div. 455 (1898). The court 
 held in these cases that the business of soliciting orders in the 
 state was not taxable, and that the bank account and samples 
 were not taxable, but merely incidental to the business of solicit- 
 ing orders. 
 
 Newspaper advertising agency forwarding printed matter. — 
 
 A ease on the same lines is that of People ex rel. A. M. Kel- 
 
256 TAXATIOIT OF COEPOEATIOH'S 
 
 logg Newspaper Co. v. Roberts, 30 App. Div. 150 (1898). 
 This was a foreign corporation with a home oflSce at Chicago, 
 Illinois, which was engaged in forwarding printed matter from 
 its home office to be used by ITew York newspapers, and had 
 an office in New York for soliciting advertisements. These 
 advertisements were forwarded to Chicago and the collections 
 made thereon were deposited in a New York bank and credited 
 to the Chicago office. It was held not to be capital employed 
 in the state. 
 
 An earlier and frequently cited case in which the right of a 
 foreign corporation to maintain an office and salaried agent 
 here, was maintained, was People ex rel. Harlin & Hollings- 
 worth Co. V. Campiell, 139 N. Y. 68 (1893). The business of 
 this corporation was manufacturing and equipping railway and 
 steamship cars in the State of Delaware, where all its business 
 was transacted and manufacturing done. While the mainte- 
 nance of a New York office might be doing business, there was 
 no capital employed by the corporation which would subject it 
 to a tax under the statute. 
 
 Telephone companies leasing telephones to local companies. 
 
 — In People v. Ant,erican Bell Telephone Co., 117 N. Y. 241 
 (1889), reversing 50 Hun, 114, it was held that where a Massa- 
 chusetts company leased to certain corporations in this state, 
 under contracts executed in Boston, telephones which were de- 
 livered to lessees in that city, at its office, the local companies 
 supplying poles, wires, plant, agents, etc., but the lessor com- 
 pany supplying much of the capital of the local companies, 
 the lessor company was not carrying on business in this state 
 within the act. 
 
 Cases which seem to be overruled by the amendment of 
 1906. — Under the law prior to 1906 a foreign corporation in- 
 vesting its capital in the stock of another corporation, domestic 
 
STATE TAXATION OF FOREIGN COEPOKATIONS 257 
 
 or foreign, was not engaged in business in the state, even if the 
 corporation in whose stock its capital was invested was so en- 
 gaged in business. People ex rel. Chicago June. By. Co. v. 
 Roberts, 154 K Y. 1 (1897) ; People ex rel. Edison Co. v. Kel- 
 sey, 101 App. Div. 205 (1905) ; People v. American Bell Tele- 
 phone Company, 117 K Y. 241 (1889). 
 
 The present statute expressly declares that "for the purposes 
 of taxation the capital of a corporation invested in the stock of 
 another corporation shall be deemed to be assets located where 
 the physical property represented by such stock is located." 
 
 This also changes the rule in the case of a domestic corpora- 
 tion investing its capital in the stock of another corporation, 
 domestic or foreign. Such a corporation investing its capital 
 in the stock of a foreign corporation was formerly not taxable, 
 but if its capital was invested in the stock of a domestic cor- 
 poration it was held to be taxable. People ex rel. Edison Elec- 
 tric Light Company v. Camphell, 138 IST. Y. 543 (1893) ; same 
 V. same, 148 N. Y. 690 (1896). Under the present law such 
 corporations are taxable only if the physical property repre- 
 sented by such stock is located in the state. 
 
CHAPTER VI. 
 
 Exemption of Manufactueing and Otheb Coeporations 
 FEOM Annual Feanchise Tax. 
 
 The section of the Tax Law exempting manufacturing and 
 other corporations has been materially changed since the enact- 
 ment of Chapter 361, Laws of 1881, which had its origin in 
 that part of Chapter 542, Laws of 1880, excepting certain cor- 
 porations from the payment of the franchise tax. 
 
 The original law, besides exempting manufacturing and min- 
 ing corporations, also exempted banks, foreign insurance com- 
 panies and life insurance companies, and, later, other amend- 
 ments exempted various other classes of corporations. 
 
 By Chapter 542, Laws of 1880, manufacturing corporations 
 were required to be wholly engaged in manufacturing within 
 the state. 
 
 The courts interpreted the amendment to signify that if any 
 part of the capital of the corporation was not actively employed 
 in manufacturing within the state, the entire capital was tax- 
 able. 
 
 The cases of People ex rel. Western Elec. Co. v. Camfbell, 
 145 K Y. 587, affg 80 Hun, 466 (1895) ; People ex rel. F. 
 A. Stohes V. Eoherts, 90 Hun, 533 (1895) ; People ex rel. 
 Schwarzchild Co. v. Boherts, 11 App. Div. 449 (1896), brought 
 out the hardship of the law. 
 
 It was held, however, in People ex rel. Tiffany Co. v. Camp- 
 hell, 144 N. Y. 166 (1894), that a domestic corporation, which 
 employed ultra vires a small part of its capital in business other 
 than manufacturing and with this exception was wholly en- 
 gaged in manufacturing within the state, was only taxable on 
 the capital employed ultra vires. 
 
 258 
 
EXEMPTION OF MANUFACTUEING COEPOEATIONS 259 
 
 In the Tax Law of 1896 (section 183) the rigor of this rule 
 was relaxed ; the corporation was not required to be wholly en- 
 gaged in manufacturing, but was exempt only to the extent of 
 the capital actually so employed. 
 
 By Chapter 558, Laws of 1901, another important amend- 
 ment was added by which at least forty per cent, of the capital 
 stock of a manufacturing corporation must be invested by it in 
 the state and used in manufacturing to entitle it to the exemp- 
 tion. 
 
 The present provisions of the statute read as follows : 
 
 Certain corporations exempt from tax on capital stock. — Banks, 
 savings banks, institutions for savings, title guaranty, insurance or 
 surety corporations, every trust company incorporated, organized or 
 formed, under, by or pursuant to a law of this state, and any company 
 authorized to do a trust company business, solely or in connection with 
 any other business, under a general or special law of this state, 
 laundering corporations, manufacturing corporations to the extent only 
 of the capital actually employed in this state in manufacturing, and 
 in the sale of the product of such manufacturing, mining corporations 
 wholly engaged in mining ores within this state, agricultural and horti- 
 cultural societies or associations, and corporations, joint stock com- 
 panies or associations owning or operating elevated railroads or sur- 
 face railroads not operated by steam, or formed for supplying water 
 or gas for electric or steam heating, lighting or power purposes, and 
 liable to a tax under sections one hundred and eighty-five and one 
 hundred and eighty-six of this chapter, shall be exempt from the pay- 
 ment of the taxes prescribed by section one hundred and eighty-two 
 of this chapter. But such a laundering, manufacturing or mining 
 corporation shall not be exempted from the payment of such tax, unless 
 at least forty per centum of the capital stock of such corporation is 
 invested in property in this state, and used by it in its laundering, 
 manufacturing or mining business in this state. (Former sec. 183, 
 Tax Law, as amended hy ch. 785, L. 1897, ch. 558, L. 1901, and ch. 
 474, L. 1906.) 
 
 Source: Ch. 542, L. 1880, as amended by ch. 361, L. 1881. 
 
 Purpose of exempting manufacturing companies. — The pur- 
 pose of exemption granted by Chapter 542 of the Laws of 1880, 
 as amended by Chapter 522 of the Laws of 1890, was the de- 
 
260 TAXATION' OF COKPOEATIONS 
 
 sire on the part of the state to bring within its borders large 
 manufacturing establishments. People ex rel. Blackinton Co. 
 V. Boherts, 4 App. Div. 388 (1896). 
 
 What are and what are not manufacturing corporations 
 under the law; mining companies. — A Utah mining company 
 sending its bullion to the ISTew York assay office for refining and 
 receiving therefor certificates which were sold by it, is not en- 
 gaged in manufacturing in New York state. People v. Horn 
 Silver Mining Co., 38 Hun, 276 (1885). 
 
 Asphalt company. — A corporation engaged in testing and 
 mixing asphalt, oil, sand and limestone, producing a new paving 
 compound, was held to be a manufacturing corporation. People 
 ex rel. Eastern Bermudez Asph. Co. v. Morgan, 61 App. Div. 
 373, Kellogg, J., dissenting (1901). But a corporation engaged 
 in preparing a street for an asphalt pavement and in laying the 
 pavement is not a manufacturing corporation. People ex rel. 
 Syracuse Imp. Co. v. Morgan, 59 App. Div. 302 (1901). 
 
 The rule laid down in the last two cases was again affirmed 
 in the later case of People ex rel. Fruin-Bambrick Paving Co. 
 V. Knight, 99 App. Div. 62 (1904). 
 
 Paint and chemical company. — A corporation engaged in 
 making dry colors from various chemicals and in the making of, 
 colored paints by mixing these dry colors with materials not 
 made by it, is employed in manufacturing. Such a corpora- 
 tion is taxable upon that part of its capital employed other- 
 wise than in manufacturing, even though under its charter, it 
 was not authorized so to employ it. People ex rel. Devoe & Bay- 
 nolds Co. V. Boherts, 51 App. Div. 77 (1900). 
 
 Fountain pen company. — A corporation which purchases the 
 constituent parts of a fountain pen and puts them together, 
 
EXEMPTION" OF MAITUFACTtTEING COEPOEATIONS 261 
 
 is a manufacturing corporation. People ex rel. L. E. Waterman 
 Co. V. Morgan, 48 App. Div, 395 (1900). 
 
 Wood pulp company. — ^A corporation manufacturing linings 
 for wood pulp digesters is exempt. People ex rel. Non-Antem 
 Sulphite Digester Co. v. Knight, 67 App. Div. 365 (1901). 
 
 Company publishing newspaper.— A corporation which pub- 
 lishes a newspaper but does not own or operate any plant for 
 printing it, is not a manufacturing corporation. People ex rel. 
 Jewelers' Circular Pub. Co. v. Boherts, 155 K Y. 1 (1898). 
 
 Buying sheep, slaughtering them and preparing the products. 
 
 — Purchasing sheep, slaughtering them, selling the hides and 
 preparing them for shipment and shipping them in refrigerator 
 cars is not "carrying on manufacture." People ex rel. N. Eng. 
 Dressed Meat & Wool Co. v. Boherts, 155 K T. 408 (1898) ; 
 rev'g 20 App. Div. 521. See also People v. Knickerbocker Ice 
 Co., 99 N. Y. 181. 
 
 The preparation for market of goods manufactured outside 
 the state does not entitle a foreign corporation to exemption. 
 — A foreign corporation engaged in the manufacture of iron or 
 steel wire rope in !N^ew Jersey and having a place of business 
 in this state, where men were employed to fit goods for the 
 market, is not engaged in manufacture in this state, and not 
 entitled to exemption. People ex rel. Boehling's Sons' Co. v. 
 Wemple, 138 ¥. Y. 582 (1893). 
 
 Company engaged in tea and coffee business. — A corpora- 
 tion engaged in the sale of spices, coffee and tea, purchased in 
 bulk, the tea being mixed and sold in smaller packages, the 
 coffee purchased in the raw bean, then roasted and ground, is 
 not a manufacturing corporation. People ex rel. U. P. Tea Co. 
 
262 TAXATION OF COEPOEATIONS 
 
 V. Roberts, 145 IST. Y. 375 (1895). Compare above case with 
 Standard Wood Co., infra. 
 
 Preparation of manufactured article so as to fit it for sale 
 does not exempt company from tax. — It seems that a foreign 
 corporation engaged in this state in putting together the differ- 
 ent parts of articles manufactured by it in another state, is not 
 exempt from taxation for the reason that no part of the ar- 
 ticle was manufactured here from the original materials. 
 
 A sale made by sample in the state does not represent capital 
 employed in the state. People ex rel. Seth Thomas Co. v. Wem- 
 ple, 133 K Y. 323 (1892). 
 
 Where company is engaged in manufacturing and also in 
 interstate commerce it is not exempt. — Where a corporation is 
 engaged in manufacturing and other business, the fact that the 
 other business is interstate commerce does not prevent the state 
 from taxing it. If there is no hostile discrimination it is not 
 a violation of the Federal Constitution. People ex rel. Am. 
 Soda F. Co. V. Roberts, 158 K Y. 168 (1899). 
 
 Company engaged in making and selling kiln dried kindling 
 wood exempt. — A foreign corporation using all its capital in 
 the state in making and selling kiln dried kindling wood is 
 wholly engaged in manufacturing in the state and exempt from 
 a tax on franchise or business. People ex rel. Standard Wood 
 Co. V. Roberts, 20 App. Div. 514 (1897). 
 
 Gas and electric companies liable to a tax under section i86 
 are now expressly exempted under section 183 of the Tax Law. 
 
 — But prior to the express exemption these companies were 
 held entitled to exemption from taxes under Chapter 542 of the 
 Laws of 1880, third section, in favor of manufacturing corpora- 
 tions carrying on manufactures within the state. Nassau Oas 
 'Light Co. v. City of Brooklyn & Tanner, Collector, 25 Hun, 
 
EXEMPTIOIT OF MAWUFAOTUEINQ COEPOEATIONS 263 
 
 567, afF'd in 89 IST. Y. 409 (1882) ; People ex rel. Brush El. 
 Co. V. Wemple, 129 N. T. 543 ; People ex rel. Edison Co. v. 
 same, 129 1^. Y. 664 (1892). 
 
 Only that part of capital directly employed in manufacturing 
 will be entitled to exemption. — Unless the business is directly 
 incidental to the manufacturing carried on, it will not receive 
 exemption. Thus, a piano manufacturing company owned 
 about two hundred acres of land, on part of which it built some 
 cottages, and rented them to employees at yearly and monthly 
 rentals. This capital cannot be said to be engaged in manu- 
 facturing, although connected with the land on which the fac- 
 tory is built. Nor can it be said as to the vacant land, which is 
 offered for sale, that it is not employed in business. People ex 
 rel. Stein-way Sons v. Kelsey, 108 App. Div. 138 (1905) ; see 
 also Commonwealth v. Mahoning Boiling Mills, 129 Pa. 360 
 (1889) ; Commonwealth v. Westinghouse Air Brake Co., 151 
 Pa. 276 (1892). ■ 
 
 Summary of decisions in other states on exemption of 
 manufacturing corporations. — The following have been re- 
 garded as manufacturing: 
 
 Publishing, peinting, aitd selxiitg books, eitgeaving, job 
 PEiNTiNG, ETC. Evening Journal Assoc, v. State Board of As- 
 sessors, 47 iN". J. L. 36 (1885) ; Press Printing Co. v. State 
 Board of Assessors, 51 N. J. L. 75 (1888) ; Comm. v. William 
 Man Co., 150 Pa. St. 64 (1894). 
 
 BuiLDIWG OF BEIDGES AITD STErCTUEAL STEEL WOEK. Comm. 
 
 V. Keystone Bridge Co., 156 Pa. St. 500 (1893). 
 
 KicB MILLING. New Orleans v. Ernst, 35 La. Ann. 746 
 (1883). 
 
264 TAXATIOIir OF COEPOEATIONS 
 
 jyjVKiNG OF GAS. Coviugton Gas Light Co. v. Covington, 84 
 Ky. 94 (1886); Consolidated Gas Co. v. Baltimore, 62 Md. 
 588 (1884). 
 
 The following have been held not to be manufacturing : 
 
 Publishing a newspaper. Evening Journal Ass'n v. State 
 Board, 47 N. J. L. 36; Press Printing Co. v. State Board, 51 
 N. J. L. 75. 
 
 Supplying steam powee. Comm. v. Arrott Mills Co., 145 
 Pa. St. 69 (1891). 
 
 Making and selling ice ceeam. New Orleans v. Manes- 
 sier, 32 La. Ann. 1075 (1880). 
 
 Peoducing electeicitt foe lighting. Frederick, etc.. 
 Light Co. v. Frederick City, 84 Md. 599 (1897) ; Comm. v. 
 Northern Electric, etc., Co., 145 Pa. St. 105 (1891) ; Comm. 
 V. Brush Electric, etc., Co., 145 Pa. St. 147 (1891) ; Comm. v. 
 Edison Elec, etc., Co., 170 Pa. St. 231 (1895). 
 
 A BUSINESS CONSISTING OF ASSEMBLING PAETs manufactured 
 by another. Lake v. Guillotte, 48 La. Ann. 870 (1896) ; Brook- 
 lyn Cooperage Co. v. New Orleans, 47 La. Ann. 1314 (1895) ; 
 Chickasaw Cooperage Co. v. Police Jury, 48 La. Ann. 523 
 (1896). 
 
 Shells cleaned and etched by acid^ afterwards ground on 
 an emery board. Hartranft v. Weigman, 121 U. S. 609 (1887). 
 
 Cutting of geass and making it into hay. Frazee v. Mof- 
 fitt, 20 Blatch. 267, 18 Fed. 584 (1882). 
 
CHAPTER VII. 
 Annual Tax on Teanspoktation, Teansmission, Heat, 
 
 LlGHT^ POWEE AND WaTEE COMPANIES BaSED 
 
 ON Geoss Eaeninqs. 
 
 The law imposing an additional franchise tax on transporta- 
 tion and other companies (Chapter 361, Laws of 1881) was 
 amended in 1894 (Chapter 562) by excluding interstate earn- 
 ings. Prior to this amendment there had been a decision on 
 the state's right to tax gross earnings derived from the car- 
 riage of interstate passengers. People ex rel. Dunkirk, etc., 
 Ry. Co. V. Campbell 74 Hun, 210 (1893). This decision of 
 the Supreme Court appears to be in line with Maine v. Grand 
 Trunk By., 142 U. S. 217, in which the Supreme Court held 
 that the tax was on the franchise and not on interstate com- 
 merce. The amendment of the law obviated this question. 
 
 The present law, section 184 Tax Law, reads as follows : 
 
 Additional franchise tax on transportation and transmission 
 corporations and associations. — Every corporation and joint-stock 
 association formed for steam surface railroad, canal, steamboat, ferry, 
 express, navigation, pipe line, transfer, baggage express, telegraph, 
 telephone, palace car or sleeping car purposes, and every other trans- 
 portation corporation not liable to taxation under section one hundred 
 and eighty-five or one hundred and eighty-six of this chapter, shall pay 
 for the privilege of exercising its corporate franchises or carrying on 
 its business in such corporate or organized capacity in this state, an 
 annual excise tax or license fee which shall be equal to five-tenths of 
 one per centum upon its gross earnings within this state, which shall 
 include its gross earnings from its transportation or transmission 
 business originating and terminating within this state, but shall not 
 include earnings derived from business of an interstate character. 
 {Former sec. 184, Taac Law, as amended hy ch. 734, L. 1907.) 
 
 Source: Ch. 361, L. 1881, sees. 6 and 11, as amended by ch. 562, L. 
 1894, without change of substance. 
 
 265 
 
266 TAXATioiT or coepoeations 
 
 Constitutionality of tax on gross receipts of transportation 
 or transmission companies. — It is to be observed that the above 
 tax is a license tax on earnings within the state. In Osborne v. 
 Mobile, 16 Wall. 479 (1872), the United States Supreme 
 Court has upheld the right of a state or municipality to impose 
 a license tax. It must, however, be for the transacting of busi- 
 ness within the state. Such business is intrastate and not in- 
 ter-state commerce. Pacific Express Co. v. Seibert, 142 U. S. 
 339 (1892) ; Postal Telegraph Co. v. Charleston, 153 U. S. 692 
 (1894). A state tax on gross freight receipts has been upheld, 
 although partly derived from interstate business. State Tax on 
 railway gross receipts {Beading B. B. v. Pa.), 15 Wall. 284 
 (1872). 
 
 On the other hand it has been held very recently by the ITew 
 York Court of Appeals that a corporation organized under the 
 General Railroad Law of New York, engaged in the transpor- 
 tation of grain from ports outside of the state to ports in the 
 state, and vice versa, owning a grain elevator, warehouse and 
 short railroad track used in its business, cannot be taxed on its 
 gross receipts derived from the storage and handling of inter- 
 state trade, because under section 184 of the Tax Law it is in 
 no event to "include earnings derived from business of an inter- 
 state character." People ex rel. C. T. B. Co. v. Miller, 178 K 
 Y. 194 (1904), reversing 84 App. Div. 174, CuUen, Vann and 
 Martin, JJ., dissenting. 
 
 United States mail carriers not taxable if they carry inter- 
 state mail. — Gross earnings of a railroad company derived from 
 carrying United States mail are not taxable where the mail 
 carried includes not only domestic but also interstate and for- 
 eign letters and packages, and it is impossible to ascertain the 
 proportion of mail which originates and terminates in the state. 
 People ex rel. N. Y. Cent. & Hud. Bi/v. B. B. v. Morgan, 168 
 K Y. 1 (1901). 
 
TAX ON TEANSPOETATION, HEATj LIGHT^ cfeC. COMPANIES 267 
 
 Meaning of "gross earnings" in this section. — The term 
 "gross earnings from its transportation or transmission busi- 
 ness" covers all receipts of a corporation specified in section 
 184 growing out of employment of its capital, whether em- 
 ployed in the transportation or transmission business or other- 
 wise. People ex rel. N. Y. Cent. & Hud. B. B. v. Boherts, 32 
 App. Div. 113 (1898). 
 
 Section 185 of the present Tax Law, imposing a franchise 
 tax on elevated railroads or surface roads not operated by steam, 
 reads as follows: 
 
 Franchise tax on elevated railroads or surface railroads not 
 operated by steam. — Every corporation, joint-stock company or asso- 
 ciation owning or operating any elevated railroad or surface railroad 
 not operated by steam shall pay to the state for the privilege ol 
 exercising its corporate franchise or carrying on its business in such 
 corporate or organized capacity within this state, an annual tax which 
 shall be one per centum upon its gross earnings from all sources within 
 this state, and three per centum upon the amount of dividends declared 
 or paid in excess of four per centum upon the actual amount of paid- 
 up capital employed by such corporation, joint-stock company or asso- 
 ciation. Any such railroad corporation whose property is leased to 
 another railroad corporation shall only be required under this section 
 to pay a tax of three per centum upon the dividends declared and 
 paid in excess of four per centum upon the amount of its capital stock. 
 (Former sec. 185, Tax Law, as amended by ch. 474, L. 1906.) 
 
 Corporations operating elevated railroads or surface railroads 
 not operated by steam, which' formerly paid a tax on capital 
 stock as well as on gross earnings are exempted from the pay- 
 ment of the former tax by section 183, Tax Law. 
 
 Under section 35 of the so-called Rapid Transit Act (Chapter 
 616, Laws of 1900), a corporation operating a subway and 
 leased elevated railroad is exempt from taxation on its rolling 
 stock and equipment but not on its real estate used in connection 
 with the road. It was held in People ex rel. Interborough 
 Bapid Transit Company v. Williams, 200 K Y. 93 (1910), 
 
268 TAXATION OF COEPOEATIONS 
 
 that while this exemption relieved the company from taxation 
 on the interest acquired and the property used in carrying out 
 the contracts for the equipment and operation of the subway 
 road, it did not extend to a tax under section 185 of the Tax 
 Law on the gross earnings derived from the operation of the 
 elevated road although it did exempt it from the tax on gross 
 earnings derived from the subway operated by it. The words 
 in section 185 that the annual tax shall be one per centum on its 
 gross earnings "from all sources within this State" was not con- 
 strued in this case as broad enough to cover a tax on the earn- 
 ings from the subway road as well as from the elevated road. 
 It would seenij under the decision in this case and within sec- 
 tions 182 and 184 of the Tax Law, that a franchise tax would 
 be payable by the company on the operation of its subway roads. 
 
 Franchise tax on water works companies, gas companies, electric 
 or steam heating, lighting and power companies. — Every corpora- 
 tion, joint-stock company or association formed for supplying water 
 or gas, or for electric or steam heating, lighting or power purposes, 
 shall pay to the state for the privilege of exercising its corporate 
 franchises or carrying on its business in such corporate or organized 
 capacity in this state, an annual tax which shall be five-tenths of one 
 per centum upon its gross earnings from all sources within this state, 
 and three per centum upon the amount of dividends declared or paid 
 in excess of four per centum upon the actual amount of paid-up capi- 
 tal employed by such corporation, joint-stock company or association. 
 The term "gross earnings" as used in this section means all receipts 
 from the employment of capital without any deduction. (Present and 
 former sec. 186, Taw Law, as amended hy ch. 734, L. 1907.) 
 
 These companies which formerly paid a tax on capital stock 
 under Chapter 542, Laws of 1880, are exempted from paying a 
 tax on capital stock under section 183, Tax Law. 
 
 The amendment of 1907 to section 186 defined the term 
 "gross earnings" and provided for taxing "gross earnings from 
 all sources," adding the words that it meant "all receipts from 
 the employment of capital without any deduction." In People 
 
TAX ON TEANSPOETATION^ HEAT^ LIGHT, &C. COMPANIES 269 
 
 ex rel. Westchester L. Co. v. Oaus, 199 E". Y. 147, the court 
 refused to place an interpretation on this amendment that 
 would permit any deduction for the cost of raw material con- 
 verted into gas and electric current for the replacement of capi- 
 tal, which the relator in that case held was not an employment 
 of capital. 
 
 The amendment of 1907 to section 186 probably grew out 
 of the decision in People ex rel. BrooJclyn Union Oas Co. v. 
 Morgan, 114 App. Div. 266 (1906), which held that the value 
 of certain investments in raw materials, such as coal and oil 
 used in making gas by a gas company, should be deducted before 
 computing the tax; that, otherwise, the tax would be on gross 
 receipts and not on gross earnings. The present statute obvi- 
 ates the necessity of any such distinction. 
 
CHAPTER VIII. 
 
 Annual Tax on Insurance Companies, Based on Gross 
 
 Premiums. 
 
 Premiums received on business done in the state defined. — 
 
 The tax is computed on the basis of premiums received on 
 business done at any time in the state and is for the privilege 
 enjoyed and not on the property in the state in the case of a 
 foreign fire insurance company. People ex rel. Conn. Mutual 
 Life Ins. Co. v. Kelsey, 116 App. Div. 97 (1906). 
 
 Franchise tax on insurance corporations. — An annual state tax 
 for the privilege of exercising corporate franchises or for carrying on 
 business in their corporate or organized capacity within this state 
 equal to one per centum on the gross amount of premiums received 
 during the preceding calendar year for business done at any time in 
 this state, which gross amount of premiums shall include all premiums 
 received during such preceding calendar year on all policies, certifi- 
 cates, renewals, policies subsequently canceled, insurance and reinsur- 
 ance during such preceding calendar year, and all premiums that are 
 received during such preceding calendar year on all policies, certifi- 
 cates, renewals, policies subsequently canceled, insurance and reinsur- 
 ance executed, issued or delivered in all years prior to such preceding 
 calendar year, whether such premiums were in the form of money, 
 notes, credits, or any other substitute for money, shall be paid an- 
 nually into the treasury of the state, on or before the first day of June 
 by the following corporations: 
 
 1. Every domestic insurance corporation, incorporated, organized or 
 formed under, by, or pursuant to a general or special law; 
 
 2. Every insurance corporation, incorporated, organized or formed 
 Tinder, by, or pursuant to the laws of any other state of the United 
 States, and doing business in this state, except a corporation doing a 
 fire insurance business or a marine insurance business; 
 
 3. Every insurance corporation, incorporated, organized or formed 
 under, by, or pursuant to the laws of any state without the United 
 States, or of any foreign country, except such a corporation doing 
 
 270 
 
ANNUAL TAX ON INSUEANCE COMPANIES 271 
 
 a life, health or casualty insurance business, and doing business in this 
 state; but the tax on gross premiums of a corporation so incorporated, 
 organized or formed and doing a fire or marine insurance business 
 within the state shall be equal to five-tenths of one per centum. This 
 section does not apply to a fraternal beneficiary society, order or as- 
 sociation, a corporation for the insurance of domestic animals, a town 
 or county co-operative insurance corporation, nor to any corporation 
 subject to the supervision of or required by or in pursuance of law 
 to report to the superintendent of banks; but this section does apply 
 to an individual, or partnership, or association of underwriters known 
 as Lloyds in so far as corporations doing the same kind of insurance 
 business are subject to its provisions. The taxes imposed by this sec- 
 tion shall be in addition to all other fees, licenses or taxes imposed by 
 this or any other law, except that in assessing taxes under the recipro- 
 cal provisions of section thirty-four of the insurance law, credit shall 
 be allowed for any taxes paid under this section. The term "insurance 
 corporations" as used in this article shall include a. corporation, asso- 
 ciation, joint-stock company or association, person, society, aggrega- 
 tion or partnership by whatever name known doing an insurance busi- 
 ness in this state. {Present and former sec. 187, Tax Lata, as amended 
 iy ch. 494, L, 1897, ch. 118, L. 1901, and oh. 94, L. 1905.) 
 
 Source: Sec. 5, ch. 361, L. 1881, as amended by ch. 425, L. 1895; 
 sec. 1, ch. 679, L. 1886, as amended by ch. 418, L. 1895. 
 
 No deductions for the two per cent, annual tax payable to 
 superintendent of insurance. — Under subdivision 2, section 
 187, as amended by Chapter 118, Laws of 1901, the tax im- 
 posed is in addition to all other fees, licenses and taxes, and a 
 foreign marine insurance company cannot deduct the annual 
 tax of two per cent, payable to the superintendent of insurance 
 under section 34, Insurance Law. People v. Thames & Mersey 
 Marine Ins. Co., 176 IST. Y. 531 (1903). Section 34 reads as 
 follows : 
 
 Taxation of foreign corporations.— "The capital of an insurance 
 corporation incorporated under the laws of any state or country out- 
 side of the United States, to the extent employed in the transaction of 
 business in this state, and as determined and certified as prescribed 
 by section twenty-seven of this chapter, shall be subject to taxation the 
 same as the capital of a like domestic insurance corporation, to be 
 levied, assessed and collected, as prescribed by law, at such place in 
 the state as it shall have its principal office. Upon satisfactory proof 
 
272 TAXATION OP COEPOEATIONS 
 
 to the superintendent of insurance that any foreign insurance corpora- 
 tion has neglected or refused to pay any tax levied and assessed under 
 the laws of this state, he shall revoke any certificate of authority 
 granted by him to such corporation to do business in this state, and 
 it shall thereafter be precluded from doing business herein. Every 
 health, or casualty insurance corporation incorporated by or organized 
 under the laws of any government outside of the United States en- 
 gaged in the transaction of the business of health or casualty insurance 
 in this state shall annually on or before the first day of March, pay to 
 the superintendent of insurance a tax of two per centum on all pre- 
 miums received in cash or otherwise by its attorneys or agents in 
 this state during the year ending on the preceding thirty-first day of 
 December, upon which a tax on premiums has not been paid to any 
 other state. Every life insurance corporation incorporated by or or- 
 ganized under the laws of any government outside of the United States 
 engaged in the transaction of the business of life insurance in this 
 state shall annually on or before the first day of March, pay to the 
 superintendent of insurance a tax of one per centum on all premiums 
 received in cash or otherwise by its attorneys or agents in this state 
 during the year ending on the preceding thirty-first day of December, 
 upon which a tax on premiums has not been paid to any other state. 
 If any such corporation shall neglect or refuse to pay such tax, 
 the superintendent shall collect the same out of the interest on the 
 stocks or securities deposited in the insurance department. The agent 
 of every corporation, association or individual not incorporated by the 
 laws of this state to effect insurances against marine risks, shall an- 
 nually, on or before the first day of February, pay to the superinten- 
 dent of insurance a tax of two per centum upon the amount of all 
 premiums upon insurances against marine risks which have been re- 
 ceived by such agent or any person for him or have been agreed to be 
 paid for any such insurance effected or agreed to be effected or pro- 
 cured by him, within this state, for the year ending the thirty-first 
 day of December preceding. In ascertaining the amount of premiums 
 upon which said two per centum tax is to be levied, there shall be 
 deducted from the premiums aforesaid, on account of reinsurances, 
 such portion of the premiums upon said reinsurances as may have been 
 paid to companies that are subject to the payment of the tax hereby 
 provided for." ( Former sec. 34, Ins. Law, as amended hy ch. 725, L. 
 1893, and ch. 708, L. 1904.) 
 
 Amendment of 1905. — Chapter 94 of the Laws of 1905 
 amends section 187 of the Tax Law and materially changes the 
 method of computing the tax on insurance companies. Prior 
 
ANNUAL TAX ON INSUBANCE COMPANIES 273 
 
 to the passage of this law it had been held that a tax of one per 
 cent, imposed under section 187 of the Tax Law, on the gross 
 premiums of domestic insurance companies applied only to first 
 year premiums on new policies and not to renewal policies. Peo- 
 ple ex rel. Provident S. L. A. Society v. Miller, 179 N. Y. 227 
 (1904) ; reversing 88 App. Div. 218, Vann and Bartlett, JJ., 
 dissenting. By the amendment of 1905 a tax is now imposed 
 not only on premiums collected on new policies biit also on the 
 gross amount of premiums received during the preceding cal- 
 endar year on all policies, all renewal premiums, insurance and 
 re-insurance executed, issued and delivered in all years prior 
 to such preceding calendar year. See also People ex rel. Conn. 
 Mutual Life Ins. Co. v. Kelsey, 116 App. Div. 97 (1906). 
 
 A somewhat different question was raised in People ex rel. 
 Continental Insurance Go. v. Miller, 177 K Y. 515 (1904), 
 in which the court held that the premiums refunded to policy 
 holders of domestic fire insurance companies are not to be taxed 
 under section 187, since no "business is done" after the can- 
 cellation of the policy. 
 
CHAPTEE IX. 
 
 Annual Franchise Tax on Teust Companies, Savings 
 Banks and Foeeign Bankees. 
 
 Relieved from all other taxes. — Trust companies were in- 
 tended to be relieved by section 188 (former sec. 187a), Tax 
 Law, from taxation on personal property from all other pur- 
 poses from the date of the passage of the act, March 21, 1901. 
 Binghamton Trust Co. v. Binghamton, 12 App. Div. 341 
 (1902). 
 
 Franchise tax on trust companies.— Every trust company, incor- 
 porated, organized or formed undej, by or pursuant to a law of this 
 state, and any company authorized to do a trust company's business 
 solely or in connection with any other business, under a general or 
 special law of this state, shall pay to the state annually for the privi- 
 lege of exercising its corporate franchise or carrying on its business 
 in such corporate or organized capacity, an annual tax which shall 
 be equal to one per centum on the amount of its capital stock, surplus 
 and undivided profits. (Sec. 188, former sec. 187a, Tax Law, added hy 
 ch. 132, L. 1901, and amended by ch. 535, L. 1901.) 
 
 Apportionment of tax. — If the trust company has not been 
 doing business during the entire fiscal year, the tax must be ap- 
 portioned accordingly. People ex rel. Mutual Trust Co. v. Mil- 
 ler, 177 ]Sr. Y. 51 (1903) ; see People ex rel. Bklyn B. T. Co. v. 
 Morgan, 57 App. Div. 335 ; People ex rel. Fort George B. Co. 
 V. Miller, 90 App. Div. 588 (1904) ; People ex rel. Wall & 
 Hanover B. Co. v. Miller, 98 App. Div. 584 (1904). 
 
 Franchise tax on savings banks. — Every savings bank incorpo- 
 rated, organized or formed under, by or pursuant to a law of this 
 state, shall pay to the state annually for the privilege of exercising 
 its corporate franchises or carrying on its business in such corporate 
 or organized capacity, an annual tax which shall be equal to one per 
 centum on the par value of its surplus and undivided earnings. 
 (Sec. 189, Tax Law, formerly sec. 187b, added hy ch. 117, L. 1901.) 
 
 274 
 
.ANNUAL TAX ON TRUST COMPANIES, BANKS^ ETC. 2Y5 
 
 Purchase of state bonds; credit to be given. — Every corporation, 
 company or association required by section one hundred and eighty- 
 seven, one hundred and eighty-eight or one hundred and eighty-nine 
 of this chapter, to pay to the state an annual tax equal to a percentage 
 of its gross premiums, capital stock, surplus, undivided profits or un- 
 divided earnings, or one or more, for the privilege of exercising its 
 corporate franchise or carrying on its business in such corporate or 
 organized capacity, which shall own any of the bonds of the state of 
 New York, shall have credited to it annually to apply upon or in lieu 
 of the payment of such tax an amount equal to one and one-half per 
 centum of the par value of all such bonds of the state, bearing inter- 
 est at a rate not exceeding three per centum per annum, and an 
 amount equal to one-half of one per centum of the par value of all 
 such bonds of the state, bearing interest at a rate exceeding three per 
 centum per annum but not exceeding four per centum per annum, 
 owned by such corporation, company or association, and registered in 
 its name or registered in the name of a public department, a public 
 ofScer or officers of this state, or of any state, or of the United States, 
 in trust for such corporation, company or association, on the thirtieth 
 day of June prior to the date when such tax shall become due and 
 payable; provided, however, that there shall in so case be credited to 
 any such corporation, company or association an amount in excess 
 of the amount due to the state from such corporation, company or 
 association for taxes payable to the state under this chapter for the 
 fiscal year for which such credit is given; and further provided that 
 any such credit so allowed under this section shall not bear interest. 
 {Section 190 of the Tax Law, as amended hy ch. 357 of the Laws of 
 1913.) 
 
 Source: Former See. 187c, Tax Law, as added by ch. 550, L. 1907, 
 and am'd by eh. 228, L. 1908. 
 
 An additional one-half per centum on the par value of the 
 bonds was granted by the amendment of 1913. 
 
 Bonds, etc., forming surplus not to be valued above par. — 
 
 Bonds and securities in which surplus may be invested are to 
 be assessed at market value, if below par, and at face value if 
 above par. People ex rel. Bank for Savings v. Miller, 177 K". 
 Y. 461 (1904). 
 
 Tax upon foreign bankers. — Every foreign banker doing business 
 in this state, shall annually pay to the treasurer a tax of five per 
 
276 TAXATION OF COEPOEATIONS 
 
 centum on the amount of interest or compensation of any kind earned 
 and collected by him on money loaned, used or employed in this state 
 by such banker. 
 
 The term, doing a banking business, as used in this section means 
 doing such business, as a corporation may be created to do under 
 article three of the banking law, or doing any business which a corpo- 
 ration is authorized by such article to do. The term, foreign banker 
 doing a banking business in this state, as used in this section in- 
 cludes : 
 
 1. Every foreign corporation doing a banking business in this state, 
 except a national bank. 
 
 2. Every unincorporated company, partnership or association, of 
 two or more individuals, organized under or pursuant to the laws of 
 another state or country, doing a banking business in this state. < 
 
 3. Every other unincorporated company, partnership or association, 
 of two or more individuals, doing a banking business in this state, if 
 the members thereof, owning more than a majority interest therein, 
 or entitled to more than one-half of the profits thereof, or who would, 
 if it were dissolved, be entitled to more than one-half of the net assets 
 thereof, are not residents of this state. 
 
 4. Every non-resident of this state, doing a banking business in this 
 state, in his own name and right only. {Section 191, former sec. 188, 
 TacB Law, as amended ly ch. 500, L. 1900.) 
 
CHAPTEE X. 
 
 Kepoets to be Filed with Compteollee — Statement of 
 Tax and Payment Theeeof. 
 
 Section 192 of the Tax Law provides for the making of 
 reports by the various classes of corporations hereinbefore re- 
 ferred to, liable to taxation under Article IX of the Tax Law. 
 It reads as follows: 
 
 Reports of corporations.— Corporations liable to pay a tax under 
 this article shall report as follows: 
 
 1. CoEPOEiATiONS PAYING FRANCHISE TAX. — Exery Corporation, asso- 
 ciation or joint stock company liable to pay a tax under section one 
 hundred and eighty-two of this chapter shall, on or before November 
 fifteenth in each year, make a written report to the comptroller of its 
 condition at the close of its business on October thirty-first preceding, 
 stating the amount of its authorized capital stock, the amount of 
 stock paid in, and date and rate per centum of each dividend declared 
 by it during the year ending with such day, the entire amount of the 
 capital of such corporation, and the capital employed by it in this 
 state during such year. 
 
 2. Teanspoktation and transmission corporations. — Every trans- 
 portation or transmission corporation, joint stock company or associa- 
 tion liable to pay an additional tax under section one hundred and 
 eighty-four of this chapter, shall also, on or before August first in 
 each year, make a written report to the comptroller of its condition at 
 the close of its business on June thirtieth preceding, stating the 
 amount of its gross earnings from all sources and the amount of its 
 gross earnings from its transportation or transmission business origi- 
 nating and terminating within this state. 
 
 3. Emivated and surface railroad corporations. — Every corpora- 
 tion, joint stock company or association liable to pay a tax under 
 section one hundred and eighty-five of this chapter, shall, on or before 
 August first of each year, make a written report to the comptroller of 
 its condition at the close of its business on June thirtieth preceding, 
 stating the amount of its gross earnings from business done in this 
 state, the amount of dividends of every nature declared or paid during 
 
 277 
 
278 TAXATION OF COEPOEATIONS 
 
 the year ending June thirtieth, the authorized capital of the company 
 and the amount of capital stock actually issued and outstanding. 
 
 4. WATEB works, GAS, ELECTRIC, STEAM HEATING, LIGHTING AND 
 
 POWER CORPOKATIONS. — Every corporation, joint stock company or as- 
 sociation liable to pay a tax under section one hundred and eighty-six 
 of this chapter, shall, on or before December first of each year, make 
 a. written report to the comptroller of its condition at the close of its 
 business on October thirty-first preceding, stating the amount of its 
 gross earnings from business done in this state, the amount of divi- 
 dends of every nature declared or paid during the year ending with 
 October thirty-first, the authorized capital of the company and the 
 amount of capital stock actually issued and outstanding. 
 
 5. Insurance corporations. — Every insurance corporation liable to 
 pay a tax under section one hundred and eighty-seven of this chapter, 
 shall, on or before March first in each year, make a written report to 
 the comptroller of its condition at the close of its business on De- 
 cember thirty-first preceding, stating the gross amount of all premiums 
 referred to in section one hundred and eighty-seven of this chapter, 
 received during the preceding calendar year on business done thereby 
 in this state during the year ending with such day, and at all times 
 prior thereto, whether the premiums were in money or in the form of 
 notes, credits or other substitutes for money. {Suid. 5, amended ty 
 ch. 118, L. 1901, and ch. 94, L. 1905.) 
 
 6. Foreign bankers. — Every foreign banker liable to pay a tax un- 
 der section one hundred and eighty-eight of this chapter shall, on or 
 before February first in each year, make a written report to the comp- 
 troller of the condition of his business on December thirty-first pre- 
 ceding, stating the amount of tax for which he is liable under this 
 article, and giving in detail the facts required by the last preceding 
 section for the purpose of ascertaining and computing the same. 
 
 7. Trust companies. — Every company liable to pay a tax under 
 section one hundred and eighty-eight of this chapter shall on or before 
 August first in each year, make a written report to the comptroller 
 of its condition at the close of business on June 30th, preceding, sepa- 
 rately stating the amount of its capital stock, the amount of its sur- 
 plus, and the amount of its undivided profits, and containing such 
 other data, information or matter as the comptroller may require. 
 {Added hy oh. 132, L. 1901, and re-enacted hy ch. 172, L. 1902.) 
 
 8. Savings banks. — Every savings bank liable to pay a tax xmier 
 section one hundred and eighty-nine of this chapter, shall on or before 
 August first in each year make a written report to the comptroller of 
 
EEPOETS TO BE FILED WITH COMPTKOLLEK 279 
 
 its condition, at the close of business on June thirtieth preceding, 
 stating the par value of its surplus, and undivided earnings and con- 
 taining such other data, information or matter as the comptroller may 
 require. (Former sec. 189, Tax Law, added hy ch. 117, L. 1901.) 
 
 Source: Ch. 361 of L. 1881, sec. 1; ch. 361, L. 1881, sec. 5, as 
 amended by ch. 425, L. 1895; ch. 361, L. 1881, sec. 7; ch. 409, L. 1882, 
 sec. 322, as amended by ch. 196, L. 1894; ch. 679, L. 1886, see. 2. 
 Subds. 7 and 8 of the above section are new. 
 
 The time when taxes are payable by the various classes of 
 corporations required to make reports under the various provi- 
 sions of the foregoing section, is fixed by section 194 of the Tax 
 Law (infra). 
 
 Prospective character of section 192. — When a corporation 
 organized in February, 1880, made a report under section 192 
 (formerly 189) in ISTovember, 1880, and paid a tax in January, 
 1881, such report and payment were proper, even though the 
 corporation had been in existence one year. This construction 
 does not give the act a retroactive effect, as the tax was for the 
 prospective fiscal expenditures for the year commencing Oc- 
 tober 30, 1880. People v. Spring Valley Hydraulic Gold Co., 
 92 K Y. 383 (1883). 
 
 The above act is prospective in character. The tax imposed 
 is not for the past but for the future engagements of the fran- 
 chises. People V. Albany Ins. Co., 92 K Y. 460 (1883). 
 
 Further requirements as to reports of corporations. — Every re- 
 port required by this article shall have annexed thereto the affidavit 
 of the president, vice-president, secretary or treasurer of the corpo- 
 ration, association or joint stock company or of the person or one of 
 the persons, or the members of the partnership making the same, to 
 the eflFect that the statements contained therein are true. Such reports 
 shall contain any other data, information or matter which the comp- 
 troller may require to be included therein, and he may prescribe the 
 form in which such reports shall be made and the form of oath thereto. 
 When so prescribed such form shall be used in making the report. 
 The comptroller may require at any time a further or supplemental 
 
280 TAXATION OF COEPOEATIONS 
 
 report under this article, which shall contain information and data 
 upon such matters as the comptroller may specify. (Sec. 194, former 
 sec. 191, Tace Law.) 
 
 Source: See source to sec. 192, Tax Law, supra; same references. 
 
 Powers of comptroller to examine into affairs of corporation.— 
 
 In case any report required by any of the preceding sections of this 
 article shall be unsatisfactory to the comptroller, or if any such re- 
 port is not made as herein required, the comptroller is authorized to 
 make an estimate of the dividends paid by such corporation and the 
 value of the capital stock employed by it, from any such report or 
 from any other data, and to order and state an account according to 
 the estimate and value so made by him for the taxes, percentage and 
 interest due the state from such corporation, association, joint stock 
 company, person or partnership. The comptroller shall also have 
 power to examine or cause to be examined in ease of a failure to re- 
 port or in case the report is unsatisfactory to him, the books and rec- 
 ords of any such corporation, joint stock association, company, foreign 
 banker, person or partnership, and may hear testimony and take proofs 
 material for his information, either personally or he may appoint a 
 commissioner by a written appointment under his hand and official 
 seal for that purpose. Every commissioner so appointed shall be au- 
 thorized to make such examination and take such testimony and hear 
 such proofs and report the proofs and testimony so taken and the 
 result of his examination so made and the facts found by him to the 
 comptroller. The comptroller shall, therefrom, or from any other data 
 which shall be satisfactory to him, order and state an account for the 
 tax due the state, together with the expenses of such examination and 
 the taking of such testimony and proofs. Such expenses shall be fixed 
 and adjusted by the comptroller. [Sec. 195, former sec. 192, Tax Law.) 
 
 Source: L. 1880, ch. 542, sec. 1, as amended by L. 1881, oh. 361 and 
 sees. 11, 12, 13, as added by L. 1882, ch. 151, and amended by L. 1885, 
 ch. 501, and L. 1894, ch. 562; L. 1882, ch. 409, sees. 322, 323, as 
 amended by L. 1895, eh. 196. 
 
 Comptroller not bound by corporation's report; burden on 
 relator. — The comptroller is not bound by the report of the offi- 
 cers of a corporation as to the value of the stock, but may act 
 as an assessor, and fix the value of the capital stock employed 
 within the state of 'New York, according to information ob- 
 tained or on his judf^ent, and his decision v/ill pot b" nis- 
 
EEPOETS TO BE FILED WITH COMPTKOLLEE 281 
 
 turbed unless clearly shown to be erroneous. People ex rel. Am. 
 Axe & Tool Co. v. Roberts, 82 Hun, 313 (1894). 
 
 Evidence of comptroller's dissatisfaction with treasurer's 
 appraisement. — The fact that the comptroller makes a new ap- 
 praisement, and rejects that made by the treasurer of a corpora- 
 tion, is sufficient evidence of dissatisfaction with the company's 
 appraisement. People ex rel. Metropolitan 8. Co. v. Kelsey, 
 101 App. Div. 248 (1905). 
 
 Notice of statement of tax; interest. — Upon auditing and stating 
 every accovint for taxes or other charges under this article, the comp- 
 troller shall forthwith send notice thereof in writing to the person, 
 partnership, company, association or corporation against whom the 
 same is made, which notice may be mailed to the post-office address 
 of such person, partnership, association, company or corporation. All 
 accounts so audited and stated shall bear interest upon the total 
 amount found due thereon to the state, for taxes, percentage, interest 
 and other charges, from the expiration of thirty days after sending 
 such notice until payment thereof shall be made. (Sec. 196, former 
 sec. 193, Tax Law.) 
 
 Source: L. 1880, ch. 542, sees. 15, 16, as added by ch. 501, L. 1885, 
 without change of substance. 
 
 Payment of tax and penalty for failure. — A tax imposed by sec- 
 tion one hundred and eighty-two or one hundred and eighty-six of this 
 chapter, shall be due and payable into the state treasury on or before 
 the fifteenth day of January in each year. A tax imposed by section 
 one hundred and eighty-four of this chapter on a transportation or 
 transmission corporation, or by section one hundred and eighty-five, 
 on elevated railroads or surface railroads not operated by steam shall 
 be due and payable into the state treasury on or before the first day 
 of August in each year. A tax imposed by section one hundred and 
 eighty-seven of this chapter on an insurance corporation, shall be due 
 and payable into the state treasury on or before the first day of June 
 in each year. A tax imposed by section oi^e hundred and eighty-eight 
 or one hundred and eighty-nine shall be due and payable into the state 
 treasury on or before the first day of September in each year. A tax 
 imposed by section one hundred and ninety-one of this chapter on a for- 
 eign banker shall be due and payable into the state treasury on or be- 
 
282 TAXATioisr of coepoeations 
 
 fore February first in each year. If such tax in any ease is not paid 
 ■within thirty days after the same becomes due, or if the report of any 
 such corporation is not made within the time required by this article, 
 the corporation, association, joint stock company, person or partner- 
 ship, liable to pay the tax, shall pay into the state treasury in addi- 
 tion to the amount of such tax, a sum equal to five per centum thereof, 
 and one per centum additional for each month the tax remains unpaid, 
 which sum shall be added to the tax and paid or collected therewith. 
 Every corporation, association, joint stock company, person or part- 
 nership failing to make the annual report required by this article, 
 or failing to make any special report required by the comptroller, 
 within any reasonable time to be specified by him, shall forfeit to the 
 people of the state the sum of one hundred dollars for every such 
 failure, and the additional sum of ten dollars for each day that such 
 failure continues. Such tax shall be a lien upon and bind all the real 
 and personal property of the corporation, joint stock company or as- 
 sociation liable to pay the same from the time when it is payable 
 until the same is paid in full. {Sec. 197, former sec. 194, Tax Law, 
 as amended in 1901, chs. 118, 132 and 558.) 
 
 Source: L. 1881, ch. 361, sees. 4, 5, 6, 7; L. 1882, ch. 409, sec. 322, 
 as amended by L. 1895, ch. 196; L. 1886, ch. 679, sec. 1, as amended 
 by L. 1895, ch. 418. 
 
 Settlement by comptroller of tax after January 15th. — 
 
 The comptroller may settle an account for a tax imposed by 
 section 182, Tax Law, after the 15th day of January in the 
 year in which the tax becomes due. People ex rel. F. A. Stokes 
 Go. V. Roberts, 90 Hun, 533 (1895). 
 
 Lien of tax on real and personal property. — The precise 
 time at which the lien attaches does not appear to be fixed by 
 the statute. Section 197 of the Tax Law provides that the tax 
 is due and payable on or before the various dates mentioned 
 therein. It also appears that such tax may be settled after the 
 dates mentioned {People ex rel. Stolces Co. v. Roberts, supra). 
 It is not unreasonable to suppose that it runs from the time men- 
 tioned in section 196, viz., from the day the tax is audited and 
 stated, and notice thereof sent to the corporation or person 
 chargeable therewith. This is on the theory applied in the local 
 
EEPORTS TO BE FILED WITPI COMPTEOLLEE 283 
 
 taxation of real and personal property, when a tax is presumed 
 to be due at the time it is fixed and extended on the tax rolls. 
 Lathers v. Eeogh, 109 IST. Y. 583 (1888) ; Burr v. Palmer, 53 
 App. Div. 358 (1900). 
 
 Priority in payment of state tax from insolvent estate. — 
 
 State taxes are entitled to a priority in payment out of the 
 funds of an insolvent corporation by a receiver appointed in 
 proceedings to foreclose a mortgage on the company's property. 
 Central Trust Co. v. N. Y. C. & E. B. B. Co., 110 IST. Y. 250 
 (1888). In a recent case where the property of an insolvent 
 corporation was operated by the receiver pendente lite, and 
 franchise taxes were levied during the time of such operation, 
 it was held that the plaintiff who bought the property at a fore- 
 closure sale "subject to all taxes which might be levied thereon 
 at the time of the sale," had taken the property subject to such 
 lien, and that the state's taxes were paramount to all prior en- 
 cumbrances. N. Y. Terminal Co. v. Gaus, 204 IST. Y. 512 
 (1912). 
 
 See also Part I, Local Taxation, at end of Chapter XVI, for 
 references on this subject. 
 
CHAPTEK XI. 
 
 Remedies^ Kevisiow and Read justmbnt of Tax. Ceetioeabi. 
 
 Written application to be filed within one year. — The 
 
 amendment of 1907 to the Tax Law of 1896 evidently assumes 
 that written application for revision must be made, for it re- 
 quires it to be filed. The former statute only provided that an 
 "application" be made, leaving the precise character thereof in 
 doubt. The application must be filed within one year from the 
 time the account is stated. 
 
 The present provisions of the Tax Law in relation to revision 
 by the comptroller read as follows : 
 
 Revision and readjustment of accounts by comptroller. — If an 
 application be filed with the comptroller by the party against whom the 
 account is stated or by the attorney-general within one year from the 
 time any such account shall have been audited and stated, the comp- 
 troller may at any time, upon notice thereof sent to the person, part- 
 nership, company, association or corporation against whom it is 
 stated, revise and readjust such account, and if it shall be made to 
 appear upon any such application by evidence submitted to him or. 
 otherwise, that any such account included taxes or other charges 
 which could not have been lawfully demanded, or that payment has 
 been legally* made or exacted of any such account, he shall resettle 
 the same according to law and the facts, and charge or credit, as the 
 case may require, the difference, if any, resulting from such revision 
 or resettlement upon the accounts for taxes of or against any such 
 person, partnership, company, association or corporation. Such credit, 
 whether allowed before or after the passage of this chapter, may be, 
 by the person, partnership, company, association or corporation in 
 whose favor it is allowed, assigned to a person, partnership, com- 
 pany, association or corporation liable to pay taxes under article 
 nine of this chapter and the assignee of the whole or any part of 
 such credit on filing with the comptroller such assignment shall there- 
 upon be entitled to credit on the books of the comptroller for the 
 amount thereof on the current account for taxes of such assignee in 
 
 * So in the original. 
 
 284 
 
BEMEDIES EEVISIOW OF TAX. CEETIOEAEI 285 
 
 the same way and with the same effect as though the credit had 
 originally been allowed in favor of such assignee. The comptroller 
 shall forthwith send written notice of his determination upon such 
 application to the applicant, and to the attorney-general, which no- 
 tice may be sent by mail to his post-office address. (Sec. 198, former 
 sec. 195, Taw Law, as amended hy ch. 642, L. 1903, oh. 734, L. W07, 
 taking effect August 14, 1907.) 
 
 Source: L. 1880, ch. 542, sec. 19, as added by L. 1889, ch. 463. 
 
 Prior to amendment of 1903 corporation could not offset a 
 claim against the state on a readjustment. — When on a read- 
 justment of a franchise tax imposed upon the Panama Kailroad 
 Co., that company having been credited with a certain sum 
 assigns a part of that credit to the Western Union Co., the re- 
 lator, which attempted to offset that part against the state's 
 claim for taxes assessed against it, it was held that the corpora- 
 tion was not at liberty to offset such assigned claim, against a 
 claim which the state had against it. People ex rel. Western 
 Union Tel. Co. v. Roberts, 30 App. Div. 78 (1898) ; aff'd 156 
 K. Y. 693. 
 
 Failure to verify petition for resettlement is no ground for 
 assuming facts therein stated are insufficient on certiorari. — 
 
 When the comptroller has granted an application for a resettle- 
 ment of a tax on a petition properly signed, but not verified, the 
 court, on certiorari, cannot assume that in this respect there 
 was not sufficient proof before the comptroller. People v. Camp- 
 bell & Roberts, 88 Hun, 545 (1895). 
 
 On rehearing burden on corporation. — ^It is for the corpora- 
 tion on application for a rehearing to establish the fact that the 
 conclusion of the comptroller was erroneous. TJpon such ap- 
 plication for a rehearing the corporation should make an in- 
 ventory of all the real and personal property and money, if any, 
 owned by it within the state and furnish satisfactory proof 
 that it owned no property therein except as set out in the in- 
 
286 TAXATION OF COEPOEATIOH^S 
 
 ventory; whatever real or personal property it has within the 
 state is presumptively part of its capital stock and liable to tax- 
 ation. People ex rel. Am. Axe & Ttiol Co. v. Boberts^ 82 Hun, 
 313 (1894). 
 
 Comptroller cannot increase original assessment; meaning 
 of charge and credit. — On application for a revision if a cor- 
 poration fails to show grounds for a readjustment, the comp- 
 troller cannot increase the amount of the tax-as originally fixed. 
 The phrase "charge or credit" evidently has reference to the 
 state of account between the state and party taxed. A tax, if 
 illegal and already paid, is to be. credited ; if the tax is unpaid 
 and diminished, it is to be charged. People ex rel. Eppens Co. 
 V. Boherts, 51 App. Div. 153 (1900). 
 
 Revision despite voluntary payment. — Application may be 
 properly made for revision of a tax imposed upon and paid by 
 a corporation exempted from any taxation under the act, even 
 if the tax was voluntarily paid. People ex rel. Edison Elec. III. 
 Co. of N. Y. V. Wemple, 141 K Y. 471 (1894). 
 
 When comptroller's determination binding. — The determina- 
 tion of an assessing ofiicer that a corporation is exempt as a 
 manufacturing corporation is not binding on his successor upon 
 application to secure an exemption from taxation for a subse- 
 quent year. People ex rel. N. Eng. Dressed Meat & "Wool Co. 
 V. Boherts, 155 IST. Y. 408 (1898). But the comptroller cannot, 
 of his own motion, change the amount of a license fee fixed by 
 him or his predecessor. The same is in the nature of a judicial 
 decision. People ex rel. Spencerian Pen Co. v. Kelsey, 105 
 App. Div. 133 (1905). 
 
 After a report has been made by a foreign corporation, the 
 value of the capital stock employed in the state will not be 
 changed, on a re-hearing, where it is claimed that the debts 
 
EEMEDIES EEVISIOIT OF TAX. CEETIOEAEI 28^ 
 
 exceed the assets, when it is not shown why the whole indebted- 
 ness was not stated in the report and how the debt arose. People 
 ex rel. Int. Cont. Co. v. Roberts, 27 App. Div. 400, aff'd 158 
 ]Sr. Y. 666. 
 
 Corporation not obliged to present further testimony. — 
 On an application for a revision of the tax under section 198 
 (formerly sec. 195) of the Tax Law, the petitioner is not obliged 
 to present further testimony or offer new witnesses for exami- 
 nation. The word "rehearing" does not appear in this section, 
 and the corporation may rely on the evidence and accounts al- 
 ready presented. People ex rel. Studehaker Co. v. Knight, 66 
 App. Div. 150 (1901). 
 
 CERTIORARI 
 
 Section 199 of the Tax Law, providing for the review of the 
 comptroller's determination, reads as follows: 
 
 Review of determination of comptroller by certiorari. — The de- 
 termination of the comptroller upon any application made to him by 
 any person, partnership, company, association or corporation for a 
 revision and resettlement of any account as prescribed in this ar- 
 ticle, may be reviewed both upon the law and the facts, upon certiorari 
 by the Supreme Court at the instance of any person, partnership, 
 company, association or corporation aflfected thereby, and in the name 
 and on behalf of the people of the state. For the purpose of such 
 review the comptroller shall return, on such certiorari the accounts 
 and all the evidence before him on such application, and all the 
 papers and proofs upon the original statement of such account and 
 , all proceedings thereon. If the original or resettled accounts shall 
 be found erroneous or illegal, either in point of law or of fact, by 
 the Supreme Court, upon any suoh review, the accounts reviewed shall 
 then be corrected and restated, and from any determination of the 
 Supreme Court, upon any such review, an appeal to the Court of 
 Appeals may be taken by either party. {Former sec. 196, Tax Law of 
 1896.) 
 
 Source: Ch. 542, L. 1880, as amended by ch. 463, L. 1889. 
 
288 TAXATION OF COEPOEATIONS 
 
 Section 200 provides: 
 
 Regulations as to such writ of certiorari.— No certiorari to re- 
 view any audit and statement of an account or any determination by 
 the comptroller under this article, shall be granted unless notice of ap- 
 plication therefor is made within thirty days after the service of the 
 notice of such determination. Eight days' notice shall be given to the 
 comptroller of the application for such writ. The full amount of 
 the taxes, percentage, interest and other charges, audited and stated 
 in such account, must be deposited with the state treasurer before 
 making the application and an undertaking! filed with the comptroller 
 in such amount and with such sureties as a justice of the Supreme 
 Court shall approve to the effect that if such writ is dismissed or the 
 determination of the comptroller affirmed, the applicant for the writ 
 will pay all costs and charges which may accrue against him, or it, 
 in the prosecution of the writ, including coats of all appeals. (Former 
 sec. 197, Tao) Law of 1896.) 
 
 Source: Ch. 542, L. 1880, sec. 17, as added by ch. 501, L. 1885. 
 
 Code provisions applicable. — The right to the writ being ex- 
 pressly conferred by statute (section 199, Tax Law) its is- 
 suance is provided by section 2120 of the Code. It can only 
 be issued out of the Supreme Court {Code, section 2123). The 
 application for the writ must be made by, or in behalf of, the 
 corporation aggrieved by the determination to be reviewed; 
 must be foimded upon an aflSdavit, or a verified petition, which 
 may be accompanied by other written proof ; and must show a 
 proper case for the issuance thereof. It can be granted only at a 
 term of the Appellate Division of the Supreme Court or at 
 Special Term {Code, section 2127). If granted at Special 
 Term, it is invariably granted in the case of a corporation in 
 the judicial district where the principal office of the corporation 
 is located. Notice of eight days of the application for the writ 
 must be given by section 200 of the Tax Law and copies of the 
 papers upon which the application is to be made, served there- 
 with. {Code, section 2128.) The writ must be directed to the 
 State Comptroller {Code, section 2129). It must be served, 
 except where different directions, respecting the mode of service 
 
EEMEDIES EEVISION OF TAX. CEETIOKAEI 289 
 
 thereof, are given by the court granting it, upon the State Comp- 
 troller, in the same manner as a summons in an action brought 
 in the Supreme Court. (Code, section 2130, subd. 1.) The writ 
 must be made returnable, within twenty days after the service 
 thereof, at the office of the Clerk of Albany County, wherein 
 the determination to be reviewed was made (Code, section 
 2132). 
 
 After the writ has been issued, the time to make a return 
 thereto may be enlarged, or any other order may be made, or 
 proceeding taken in the cause, as a similar proceeding may be 
 taken in an action brought in the Supreme Court and triable in 
 the county where the writ is returnable {Code, section 2133). 
 The clerk with whom the writ is filed and the person upon whom 
 the writ is served must make and annex to the writ or to the 
 copy served, a return, with a transcript annexed and certified 
 by him, of the record or proceedings, and a statement of the 
 other matter, specified in and required by the writ. The return 
 must be filed in the office of the Clerk of Albany County, where 
 the writ is returnable {Code, section 2134). If the return is 
 defective the court may direct a further return {Code, section 
 2135). The writ may be issued to, and a return may be made 
 by an officer, whose term of office has expired {Code, section 
 2136). The cause must be heard at a term of the Appellate Di- 
 vision of the Supreme Court, held within the judicial depart- 
 ment, embracing the county, where the writ is returnable. 
 Either party may notice it for hearing, at any time after the 
 return is complete {Code, section 2138). It must be heard upon 
 the writ and return, and the papers upon which it was granted 
 {Code, section 2138), except where the officer, whose duty it is 
 to make the return, dies, absconds, removes from the state, or 
 becomes insane, after the writ is issued, and before making a 
 return, or after making an insufficient return; and it appears 
 that there is no other officer or person from whom a sufficient 
 return can be procured by means of a new writ ; then the court 
 
290 TAXATION OF COEPOHATIONS 
 
 may, in. its discretion, permit aflBdavits or other written proofs 
 relating to the matters not sufficiently returned, to be produced, 
 and may hear the cause accordingly. The court may also, in its 
 discretion, permit either party to produce affidavits or other 
 "written proofs relating to any alleged error of fact, or any other 
 question of fact, which is essential to the jurisdiction of the 
 officer, to make the determination to be reviewed where the facts, 
 in relation thereto, are not sufficiently stated in the return, and 
 the court is satisfied that they cannot be made to appear, by 
 means of an order for a further return (Code, section 2139). 
 The final orders upon the hearing may annul or confirm, wholly 
 or partly, or may modify, the determination reviewed {Code, 
 section 2141). Such final order must be entered in the office 
 of the clerk where the writ was returnable. But before it can 
 be enforced, an enrollment thereof must be filed. For that pur- 
 pose, the clerk must attach together and file in his office, the 
 papers upon which the cause was heard ; a certified copy of the 
 final order ; and a certified copy of each order, which in any way 
 involves the merits or necessarily affects the final order {Code, 
 section 2144). 
 
 General Provisions 
 
 In certiorari proceedings generally, other than to review an 
 assessment of real or personal property (and this would apply 
 to a certiorari to review the determination of the state comp- 
 troller), it is only the hearing of the merits which is to be had 
 at the General Term. All incidental motions should be heard 
 at Special Term. {People ex rel. McNeary v. MacLean, 64 
 Hun, 206 (1892), criticised in People ex rel. Joline v. Willcox, 
 129 App. Div. 267 (1908). But a motion made under the 
 Code, section 1348, to quash a writ of certiorari may be heard 
 by the Appellate Division, and section 2138 does not limit the 
 jurisdiction of that branch of the court to the hearing on the 
 issues. People ex rel. Joline v. Willcox, supra, citing Matter of 
 
EEMEDIES REVISION OF TAX. CEETIOEAEI 291 
 
 Tilyou, 57 App. Div. 101 ; criticising People ex rel. McNeary 
 V. MacLean, 64 Hun, 205 and People ex rel. Miller v. Peek, 73 
 App. Div. 89. In reviewing a decision of the comptroller, the 
 court is not governed by the same rules as are applicable on an 
 appeal from a judgment entered in an ordinary action of law. 
 People V. Campbell, 88 Hun, 544 (1895). 
 
 The Relator.— Under the statute (Tax Law, section 199), 
 "any person, partnership, company, association or corporation 
 affected" by the determination of the comptroller is given the 
 right to review such determination where application has been 
 made for revision or resettlement of any account for taxes under 
 Article IX of the Tax Law. 
 
 Time limitation for making application for writ. — Within 
 thirty days after service of the notice of the determination of 
 the comptroller, the application for the writ must be made and 
 the comptroller must receive eight days' notice of such applica- 
 tion for the writ (Tax Law, sec. 200). This provision is to be 
 read together with section 2128 of the Code of Civil Procedure, 
 which provides that with the notice must be served copies of the 
 papers upon which the application is to be made. That section 
 of the Code further provides that where notice is given, the 
 person served may produce affidavits or other written proofs, 
 upon the merits, in opposition to the application. 
 
 The objection that the application for the certiorari was not 
 made within thirty days after service upon relator of the notice 
 of settlement, as required by the statute, cannot be raised for 
 the first time on appeal. People ex rel. H. & H. Co. v. Camp- 
 hell, 139 K Y. 68 (1893). 
 
 Prior to the Tax Law of 1896 it was held in People ex rel. 
 American Contracting Co. v. Wemple, 60 Hun, 225 (1891) ; 
 followed. People ex rel. Brush El. Mfg. Co. v. Wemple, 129 
 N. Y. 543, 549, that the thirty days' limit of time, prescribed 
 
292 TAXATION OF COEPOEATIONS 
 
 by Section 17 of Chapter 501, Laws of 1885, for the applica- 
 tion for a writ of certiorari, did not apply to the issuing of such 
 writ under Section 20 of Chapter 463, Laws of 1889, but it 
 would now seem that under the language of Section 200 of the 
 Tax Law, the thirty days' limit of time applies to "any de- 
 termination by the comptroller under this article" (Art. IX, 
 Tax Law). In the case of People ex rel. Brush Electric Mfg. 
 Co. V. Wemple (supra), the corporation claimed it was not law- 
 fully subject to any tax or required to make a report and the 
 court held the time limitation applied simply to cases where re- 
 ports had been made. As the statute (Sec. 200) now reads, the 
 time limit applies to a review of "any audit and statement of an 
 account or any determination by the comptroller," and this 
 would seem to cover a decision as to the taxable status of a cor- 
 poration. 
 
 When the application to the comptroller for readjustment 
 has been signed but not verified, the court on the certiorari pro- 
 ceeding cannot assume in this respect that there was not suffi- 
 cient proof before the comptroller. People v. Campbell & Rob- 
 erts, 88 Hun, 545. 
 
 Application for revision as prerequisite to the writ. — The 
 
 Tax Law (Sec. 199) provides that the determination upon any 
 application made to the comptroller for a revision and resettle- 
 ment of any account may be reviewed and this language clearly 
 makes the application for revision and resettlement a prerequi- 
 site because it is only the determination upon any application 
 for revision and resettlement that may be reviewed. 
 
 Unless the corporation aggrieved first makes application for a 
 revision or resettlement under section 199 of the Tax Law, the 
 writ of certiorari cannot be sustained. People ex rel. Edison 
 Co. V. Wemple, 11 Supp. 246. 
 
 The statute (Sec. 198, Tax Law) contemplates but one re- 
 vision by the comptroller and after it has been made his power 
 
EEMEDIES EEVISIOIT OF TAX. CEETIOEAEI 293 
 
 is spent and his refusal to make a second revision cannot be 
 Previewed by certiorari. People ex rel. Am. Surety Co. v. Camp- 
 bell, 64 Hun, 417 (1892), cited in People ex rel. Edison Co. v. 
 Wemple, 69 Hun, 367-369 (1893). Where the comptroller de- 
 nies a revision or readjustment upon an application therefor, 
 certiorari is the proper remedy. People ex rel. Edison Co. v. 
 Wemple, 61 Hun, 53 (1891). 
 
 Petition. — Where the relator signed the petition and was 
 named in the affidavit of verification, it is sufficient, although 
 he did not sign the verification. People v. Campbell, 88 Hun, 
 544. 
 
 The Writ when the Comptroller's term has expired. — In 
 
 such event, the writ is properly directed to his successor, and the 
 predecessor is not a necessary party. Matter of Tiffany & Co., 
 80 Hun, 486 (1894). 
 
 Containing unauthorized directions. — When the -writ con- 
 tains a direction to the comptroller to return the grounds of his 
 refusal to revise a tax, such provision may be stricken out on 
 motion as unauthorized under the statute. People ex rel. Realty 
 Co. V. Miller, 92 App. Div. 116 (1904). 
 
 Return. — Where the return states that the principal business 
 of the corporation was the owning of, and the licensing of par- 
 ties to use, various patents relating to electricity ; that its prin- 
 cipal income was derived from royalties upon its patents ; that 
 its capital was largely represented by its ownership of bonds 
 and stocks in other companies, and further, that the relator fur- 
 nished but little, if any, light or ran or operated wire to any 
 extent; it was held that the return did not deny the relator's 
 statement that it manufactured and furnished electricity to its 
 customers. People ex rel. Edison Company v. Campbell, 88 
 
294 TAXATION OF COKPOEATIONS 
 
 Hun, 527 (1895). The return of the comptroller is conclusive 
 as to the facts. People ex rel. Edison Co. v. Campbell, 88 Hun, 
 530 (1895) ; reversed on other grounds in 148 K Y. 759. 
 The return of the comptroller should state the facts upon which 
 he bases his determination and should show the whole case, so 
 that the court may determine whether the action of the comp- 
 troller was erroneous or illegal and if so, that the court may 
 make the proper determination. People ex rel. Staten Island B. 
 R. Co. V. Roberts, 4 App. Div. 334 (1896). 
 
 Where allegations in the petition are denied hy the return and 
 no evidence is given in support of such allegations so denied, 
 they will not be considered. People ex rel. Hubert Apartment 
 Ass'n V. Kelsey, 110 App. Div. 617 (1906) ; citing on this 
 point, People ex rel. Lester v. Eno, 176 'E. Y. 513 ; aff'd 184 
 N. Y. 573. 
 
 The statute nowhere authorizes or requires the comptroller 
 to return, in obedience to the writ, the grounds of his refusal 
 to revise or readjust a franchise tax imposed upon a corporation. 
 If the writ contains such a provision it may be stricken out on 
 motion as unauthorized. People ex rel. N. Y. Realty Co. v. 
 Miller, 92 App. Div. 116. 
 
 It seems that the return of the comptroller to a certiorari 
 should set forth the items of his appraisal, instead of simply 
 giving the total, and making the evidence a part of the return. 
 People ex rel. Union Pacific Tea Co. v. Roberts, 145 N. Y. 
 375. 
 
 Further return. — A further return by the comptroller cannot 
 be had when his return contains all the evidence and proceed- 
 ings before him, including his decision. People ex rel. Wiebusch 
 & E. Co. V. Roberts, 18 Misc. 530 (1896) ; reversed on other 
 grounds, 19 App. Div. 574. 
 
 The court, under section 2135 of the Code, empowering it 
 to direct a "further return" to a writ of certiorari may order 
 
EEMEDIES EEVISION OF TAX. CEETIOEAEI 295 
 
 concededly irrelevant matter to be stricken out. People ex rel. 
 Joline V. Willcox, 134 App. Div. 563. 
 
 Burden of proof.— Unless it clearly and conclusively appears 
 that the valuation was erroneous, the decision of the comptroller 
 is conclusive and will not be set aside. People ex rel. Boehling's 
 Sons' Co. V. Wemple, 138 IST. Y. 582 (1893) ; see, also, People 
 ex rel. Am. Contracting Co. v. Wemple, 60 Hun, 225 ; citing Peo- 
 ple ex rel. Osgood v. Tax Comm'rs, 99 N. Y. 154 (1885) ; Peo- 
 ple ex rel. West F. I. Co. v. Davenport, 91 IST. Y. 574 (1883) ; 
 People ex rel. Dann v. Williams, 36 N". Y. 441 (1867) ; People 
 ex rel. Central Park, etc., B. B. Co. v. Tax Comm'rs, 21 ^. Y. 
 St. Eep. 358 ; People ex rel. P. B. B. Co. v. Tax Comm'rs, 104 
 ]Sr. Y. 240 (1887); affirmed 129 K Y. 558; People ex rel. 
 BJclyn El. B. B. Co. v. Boherts, 90 Hun, 537 ; People ex rel. 
 Am. Axe & Tool Co. v. Boherts, 82 Hun, 313; People ex rel. 
 Edison El. Co. v. Campbell, 88 Hun, 530; affirmed on this 
 point in 148 N". Y. 759 ; People ex rel. Stohes v. Boherts, 90 
 Hun, 533 ; People ex rel. Western Co. v. Campbell, 145 IST. Y. 
 587 ; People ex rel. Seth Thomas Clock Co. v. Wemple, 133 
 ]Sr. Y. 323. 
 
 The burden rests upon the relator to show error or mistake 
 in reviewing the determination of the comptroller. People ex 
 rel. Bklyn El. B. B. Co. v. Boberts, 90 Hun, 537 (1895) ; Peo- 
 ple ex rel. Western Elec. Co. v. Campbell, 80 Hun, 466 (1894) ; 
 People ex rel. A. C. & D. Co. v. Wemple, 129 IST. Y. 558 
 (1892) ; People ex rel. Osgood et al. v. Comm'rs, 99 K Y. 154 
 (1885) ; People ex rel. Am. Axe & Tool Co. v. Boherts, 82 
 Hun, 314 (1894) ; People ex rel. Boehling's Sons' Co. v. Wem- 
 ple, 138 K Y. 582 (1893); People ex rel. Oramercy Co. v. 
 Boherts, 91 Hun, 146 (1895). 
 
 The determination and appeal therefrom. — When the Appel- 
 late Division reverses a determination of the comptroller, not 
 
296 TAXATION OF COEPOEATIONS 
 
 aS' to the amount of the corporation's property held within the 
 state, but as to the taxable character of a part of it, a question 
 of law is presented, reviewable by the Court of Appeals. People 
 ex rel. Commercial CaUe Co. v. Morgan, 118 N. Y. 433 
 (1904) ; reversing 86 App. Div. 577. 
 
 In reviewing the decision of the comptroller, the Appellate 
 Division is not governed by the same rules as are applicable 
 on an appeal from a judgment entered in an ordinary action 
 of law. People v. Campbell, 88 Hun, 544 (1895). 
 
 It is the duty of the comptroller upon an application for re- 
 vision and readjustment to make his determination upon the 
 evidence taken at the original hearing and to send written no- 
 tice of such determination to the corporation, as required by 
 section 196, notwithstanding the corporation refuses to produce 
 additional evidence where the comptroller declines to make a 
 revision and readjustment unless further examination is had. 
 People ex rel. Btudehaher v. Knight, 66 App. Div. 150 (1901). 
 
 Under the provision of section 199, that "the comptroller 
 shall return on such certiorari, the accounts and all the evidence 
 before him on such application," if the relator, instead of pro- 
 ducing witnesses, furnishes affidavits which are received without 
 objection by the comptroller and considered by him as evidence, 
 the objection cannot be raised on appeal that such evidence was 
 not competent. People ex rel. Harlan & H. Co. v. Campbell, 
 139 K Y. 68 (1893). 
 
 Where the determination of an assessment against a foreign" 
 corporation is reversed, the Appellate Division will not under- 
 take to modify the same, but will remand the case to the comp- 
 troller for further proceedings. People ex rel. Nat. E. & 8. Co. 
 V. Miller, 112 App. Div. 880 (1906). 
 
 When remitted to comptroller for re-assessment. — On ap- 
 peal to the Appellate Division, if the comptroller has adopted 
 an erroneous method of appraisement, the matter should be re- 
 
EEMEDIES EE VISION OP TAX. CEKTIOEAEI 297 
 
 mitted to him for reassessment and not corrected by the court, 
 as testimony may be presented which might change the result. 
 People ex rel. Nat'l. Enameling Co. v. Miller, supra. 
 
 Statute of limitations. — The statute of limitations does not 
 apply to proceedings to review the comptroller's determination 
 under Chapter 542, Laws of 1880. People ex rel. Edison Elec. 
 Light Co. v. Campbell, 88 Hun, 527 (1895). 
 
 Office of comptroller is continuous. — The office of the state 
 comptroller is continuous, and a writ of certiorari is properly 
 directed to the comptroller to review acts of a predecessor. In 
 re Application of People to review Decision of Comptroller in 
 Matter of Tax against Tiffany & Co., 80 Hun, 486 (1894). 
 
 Costs. — Section 2143 of the Code of Civil Procedure pro- 
 vides that costs not exceeding fifty dollars and disbursements 
 may be awarded by the final order, in favor or against either 
 party, in the discretion of the court. 
 
 The provisions with respect to costs contained in section 294 
 of the Tax Law are not applicable to certiorari proceedings to 
 review the determination of the comptroller, but apply only in 
 cases under the special statutory writ of section 290 of the Tax 
 Law. And vice versa section 2143 of the Code does not apply 
 to such eases. People ex rel. Niagara Palls Co. v. Bussell, 57 
 Hun, 53 (1890). 
 
 Certiorari appeal. — In a certiorari proceeding to review the 
 determination of a state comptroller, as to the amount of the 
 capital stock of a corporation liable for the franchise tax, the 
 Court of Appeals, after an affirmance by the Appellate Division 
 of the comptroller's determination, will refuse to go into the 
 question as to whether certain certificates issued by the corpora- 
 tion are in fact certificates of preferred stock or liabilities. 
 
298 TAXATION OF COEPOEATIONS 
 
 Where the question is a debatable one, as it was in this case, it 
 would seem that the corporation is estopped by its declaration 
 in the articles of incorporation, which alleges the issuance of 
 preferred "debenture stock," from asserting to the contrary that 
 it is a liability in the certiorari proceeding. People ex rel. Cohn 
 & Co. V. Miller, 180 N. Y. 16; affirming 94 App. Div. 564 
 (1904). 
 
 Refund of tax, when declared illegal on certiorari : interest. 
 — There is no provision by which the comptroller may refund 
 a deposit under this section of a tax declared illegal on cer- 
 tiorari. Recourse must therefore be had to the Legislature. 
 In re Waterman, Co, v. Oilman, 33 Misc. 569 (1901). It seems 
 that interest should be allowed by the state on a refund. People 
 ex rel. Knicherbocher Trust Co. v. Kelsey, 114 App. Div. 319 
 (1906) ; Matter of O'Berry, 179 K Y. 285. 
 
CHAPTEE XII. 
 
 Collection of State Tax on Coepobations ; Limitation; 
 
 Exemption. 
 
 THE EXISTING LAW 
 
 Warrant for the collection of taxes. — After the expiration of 
 thirty days from the sending by the comptroller of a notice of a 
 statement of an account as provided in this article, unless the amount 
 of such account shall have been paid or deposited with the state treas- 
 urer, if an appeal or other proceedings have been taken to review the 
 same, and the undertaking given as provided in this article, the 
 comptroller may issue a warrant under his hand and official seal, 
 directed to the sheriff of any county of the state, commanding him 
 to levy upon and sell the real and personal property of the person, 
 partnership, company, association or corporation against which such 
 account is stated, found within his county for the payment of the 
 amount thereof with interest thereon and costs of executing the war- 
 rant, and to return such warrant to the comptroller and pay to the 
 state treasurer the money collected by virtue thereof, by a time to be 
 therein specified, not less than sixty days from the date of the war- 
 rant. Such warrant shall be a lien upon and shall bind the real and 
 personal property of the person, partnership, company, association or 
 corporation against which it is issued, from the time an actual levy 
 shall be made by virtue thereof. The sheriff to whom any such war- 
 rant shall be directed shall proceed upon the same in all respects, 
 with like effect, and in the same manner as prescribed by law in 
 respect to executions issued against property upon judgments of a 
 court of record, and shall be entitled to the same fees for his services 
 in executing the warrant, to be collected in the same manner. (Sec. 
 201, former sec. 198, Tax Law.) 
 
 Source: L. 1885, eh. 501; added as sec. 18 of ch. 542 of the Laws 
 of 1880; L. 1882, ch. 409, sec. 322, as amended by L. 1894, ch. 196. 
 
 Information of delinquents. — It shall be the duty of any person 
 having knowledge of the evasion of taxation under this article by any 
 corporation, association, joint stock company, partnership or person 
 liable to taxation thereunder, or any omission on their part to make 
 the reports required by this article, to make a written report thereof, 
 to the comptroller of the state, with such information as may be in 
 
 299 
 
300 TAXATION OF COEPOKATIONS 
 
 his possession as may lead to the recovery of any taxes due the state 
 therefrom. If, in his opinion, the interests of the state require it, the 
 comptroller may employ such person to assist in the collection and 
 preparation of evidence and in the prosecution and trial of actions 
 for such taxes, and so much of the same, not exceeding ten per cen- 
 tum thereof, as may be collected from any such delinquent corporation, 
 association, company, partnership or person, by reason of such report 
 and such services, as shall have been agreed upon between such person 
 and the comptroller or attorney-general as a compensation therefor, 
 shall be paid to such person, and nothing shall be paid to such person 
 for such report or services unless there shall be a recovery of taxes 
 by reason thereof. (8eo. 202, former sec. 199, Taai Law.) 
 
 Source: Ch. 266, L. 1886, without change of substance. 
 
 Action for recovery of taxes; forfeiture of charter of delinquent 
 corporation. — An action may be brought by the attorney-general, at 
 the instance of the comptroller, in the name of the state, to recover 
 the amount of any account audited and stated by the comptroller un- 
 der the provisions of this article. If any such account shall remain 
 unpaid at the expiration of one year after notice of the statement 
 thereof has been sent as required by this article, and the comptroller 
 is satisfied that the failure to pay the same is intentional, he shall so 
 report to the attorney-general, who shall immediately bring an action, 
 in the name of the people of the state, for the forfeiture of the fran- 
 chise of any corporation, joint stock company or association failing 
 to make such payment, and if it is found that such failure was in- 
 tentional, judgment shall be rendered in such action for the forfeiture 
 of its franchise and for its dissolution, and thereafter such franchise 
 shall be annulled. (See. 203, former sec. 200, Tax Law.) 
 
 Source: Ch. 542, L. 1880, sec. 2, as amended by eh. 361, L. 1881; 
 ch. 409, L. 1882, sec. 322, as amended by ch. 196, L. 1894; ch. 679, 
 sec. 3, L. 1886. 
 
 Prior to 1899 six years' statute of limitations applied. — 
 
 Prior to Chapter 737, Laws of 1899, infra, the six years' statute 
 of limitations applied to an action for the collection of a fran- 
 chise tax under this section. People ex rel. N. Y. Loan & Im- 
 provement Co. V. Roberts, 157 N. Y. 70 (1898). 
 
 Note. — Since the above decision, the law has been amended by the 
 addition of section 207 of Tax Law, infra. 
 
STATE TAXATION. 301 
 
 Limitation of time. — The provisions of the Code of Civil Pro- 
 cedure, relative to the limitation of time of enforcing a civil remedy, 
 shall not apply to any proceeding or action taken to levy, appraise, 
 assess, determine or enforce the collection of any tax or penalty pre- 
 scribed by this article, and this section shall be construed as having 
 been in effect as of date of the original enactment of the corporation 
 tax law. {Sec. 207, former sec. 282, added hy ch. 737, L. 1899.) 
 
 The article (IX) above referred to, relates to the corporation tax 
 covered by pt. Ill of this book. 
 
 Reports to be made by the secretary of state. — The secretary of 
 state shall transmit on the first day of each month, to the comptroller, 
 a report of the stock corporations whose certificates of incorporation 
 are filed, or of the foreign stock corporations to whom a. certificate 
 of authority has been issued to do business in this state, during the 
 preceding month. Such report shall state the name of the corpora- 
 tion, its place of business, the amount of its capital stock, its purposes 
 or objects, the names and places of residence 'of its directors, and, 
 if a foreign corporation, its place of business within the state. The 
 comptroller may prescribe the forms and furnish the blanks for such 
 reports. The secretary of state shall make like reports to the comp- 
 troller whenever required by him relating to any such corporations, 
 whose certificates have been filed, or to whom a certificate of authority 
 has been issued prior to the time when this article takes effect, and 
 during any period of time specified by the comptroller in his request 
 for such report. {Sec. 204, former sec. 201, Tax Law.) 
 
 Source: (In place of ch. 166, L. 1881.) 
 
 Exemption from other state taxation. — The personal property of 
 every corporation, company, association or partnership, taxable under 
 this article, other than for an organization tax, shall be exempt from 
 assessment and taxation upon its personal property for state pur- 
 poses, if all taxes due and payable under this article have been paid 
 thereby. The personal property of every corporation taxable under 
 section 188 of this article, other than for an organization tax, and 
 as provided in the banking law, shall be exempt from assessment and 
 taxation for all other purposes. The personal property of a private 
 or individual banker, actually employed in his business as such 
 banker, shall be exempt from taxation for state purposes, if such pri- 
 vate or individual banker shall have paid all taxes due and payable 
 under this article. Such corporation and private or individual banker 
 shall in no other respect be relieved from assessment and taxation by 
 reason of the provisions of this article. The owner and holder of stock 
 
302 TAXATION OF COEPOKATIONS. 
 
 in an incorporated trust company liable to taxation under the pro- 
 visions of this chapter shall not be taxed as an individual for such 
 stock. 
 
 Personal property exempted from taxation by this section shall not 
 include shares of stock of banks and banking associations taxable un- 
 der the provisions of section twenty-four of this chapter. (/Sec. 205, 
 former sec 202, Taw Law, as amended hy ch. 132, L. 1901, inadver- 
 tently repealed and re-enacted ly ch. 172, L. 1902; eh. 121, L. 1907; 
 ch. 739, L. 1907.) 
 
 Source: Ch. 542, sec. 8, L. 1880, as amended by ch. 361, L. 1881; 
 ch. 679, sec. 4, L. 1886, as amended by ch. 218, L. 1891. 
 
 No exemption from local tax. — Taxes imposed by Chapter 
 542, Laws of 1880, are only for state purposes. Corporations 
 are not relieved thereby from county or municipal taxes. People 
 ex rel. Eastern Transp. Line v. Commissioners of Taxes, 26 
 Hun, 446 (1882). 
 
 Personal property of insurance company consisting of bank 
 stock exempted. — The exemption includes bank stock of fire 
 and marine insurance companies. Aetna Ins, Co. v. Mayor, 153 
 K Y. 331 (1897). 
 
PART IV. 
 
 FORMS. 
 
 I. FORMS FOR LOCAL TAXATION. 
 
 [The forms in remedial procedure used in this part of the book are 
 merely precedents and not absolute and stereotyped guides for all oc- 
 casions, and they should be varied to suit the circumstances of each 
 case and the current practice. The forms of reports to be filed are 
 taken from those in use in the various state and city departments at 
 the time of the publication of this book, and, as these vary from time 
 to time, it would be better to procure those in current use, when 
 required.] 
 
 PETITION FOR WEIT OF CERTIORAEI. 
 
 NEW YORK SUPREME COURT, 
 County op New York. 
 
 The people of the State of New York ex rel. 
 
 the Company, 
 
 Relator, / 
 against 
 
 Commissioners of Taxes and Assessments,! 
 constituting the Board of Taxes and As- 
 sessments in the City of New York, 
 
 Respondents. 
 
 To the Supreme Court of the State of New York: 
 
 The petition of the Company, respectfully 
 
 shows : 
 
 I. That your petitioner is and at all the times hereinafter mentioned 
 was a corporation created by and under the laws of the State of (New 
 
 303 
 
304: TAXATION OF COEPOEATIOITS. 
 
 York, and that its principal office or place for transacting its financial 
 business is and at all times hereinafter mentioned was in the borough 
 
 of in the city of New York.)* 
 
 n. That at all the times hereinafter mentioned the above-named 
 were and now are Commis- 
 sioners of Taxes and Assessments in the city of New York, constitut- 
 ing the Board of Taxes and Assessments of said city, and that the 
 said was the president of said board. 
 
 III. That between the first day of April, 191 , and the first 
 day of October, 191 , the said Board of Taxes and Assessments 
 (and its predecessor ),f by a deputy tax commissioner of the city of 
 New York, acting under its direction, assessed the petitioner for the 
 year 191 on the valuation of its personal property (assessed as capi- 
 tal stock and surplus),:]: subject to assessment in said city, in the sum 
 
 of $ , and that said assessment was entered opposite 
 
 the name of your petitioner in books kept in the offices of the said 
 board, called the "Annual Record of Assessed Valuations of Beal and 
 Personal Estate of Corporations," forming part of "the Annual Eec- 
 ord of the Assessed Valuation of Real and Personal Estate of the 
 Borough of " 
 
 IV. That said Board of Taxes and Assessments between the first 
 day of October, 191 , and the first day of December, 191 , adver- 
 tised in one or more papers published in the city of New York notice 
 that the books of Annual Record of Assessed Valuation of Real and 
 Personal Estate were open for examination and correction of the 
 valuations of real and personal estate by persons considering them- 
 selves aggrieved. « 
 
 V. That subsequent to the first day of October, 191 , and be- 
 fore the said first day of December, 191 , viz., on the 
 
 day of , your petitioner, considering itself ag- 
 grieved by the valuation of its personal property (assessed as capital 
 stock and surplus):]: made written application to said Board of Taxes 
 and Assessments, pursuant to law, to have the same corrected. 
 
 *In the case of a foreign corporation, give the home or principal 
 office of the corporation, and also its New York office, if any. 
 
 f Where there has been any change in the board during the taxing 
 period, this allegation is appropriate. 
 
 :t:ror foreign corporations insert "capital invested in business in the 
 State of New York." 
 
FORMS. 305 
 
 VI. That your petitioner, on the day of 
 
 delivered to the Board of Taxes and Assessments, pursuant to law, on 
 a printed form or blank provided by said board, a duly verified state- 
 ment, showing the condition of the petitioner for the purposes of as- 
 sessment upon its personal property (capital stock and surplus) on the 
 first day of October, 191 , a copy of which statement is hereto an- 
 nexed marked "A" and made part hereof. 
 
 (In case of examination before the board the following para- 
 graph is to be inserted:) 
 
 VII. That thereafter, and on or about the day of 
 
 , your petitioner, in response to a notice from 
 
 said board, appeared before it at its office in the borough of Manhat- 
 tan, for examination by one of its officers (or other witness) having 
 full knowledge of the facts, and your petitioner then and there sub- 
 mitted to full examination under oath before the said board; that a 
 copy of said examination is hereto annexed marked "B" and made 
 part hereof. 
 
 (In case there is no examination the following paragraph is to 
 be inserted:) 
 VIT. That your petitioner was not examined by said Board of Taxes 
 and Assessments, nor was it notified to appear before said Board of 
 Taxes and Assessments for examination. 
 
 VIII. That as your petitioner is informed and believes no evidence 
 or information whatever other than the aforesaid verified statement 
 (and examination) was presented to or considered by said Board of 
 Taxes and Assessments in making their determination. That said 
 evidence is entirely uncontradicted; that no notice was ever given to 
 your petitioner by said board that any further evidence was required 
 or desired by it, although the petitioner was ready and willing at all 
 times to submit to any further examination by said board or to pro- 
 duce any further documentary or other evidence which it might desire ; 
 that said statements are absolutely complete, accurate, correct and 
 true in every respect. 
 
 (If no reduction is granted insert the following paragraph:) 
 
 IX. That thereafter the Board of Taxes and Assessments refused 
 to correct (or cancel) the said assessment, but decided and determined 
 
 the same at the sum of $ , and have included 
 
 and entered the assessment at that sum against your petitioner, op- 
 posite its name, upon its personal estate (capital stock and surplus) 
 on the assessment rolls of resident personal estate of corporations 
 and associations of the borough of . '. , in the city of 
 
306 TAXATION OF COEPOEATIONS. 
 
 New York, for the year 19 , prepared by said board and delivered 
 to the Board of Aldermen of the city of New York, as herein set 
 forth ; that your petitioner is not advised of the process or manner by 
 which said board arrived at this assessment. 
 
 (If a reduction is granted insert the following paragraph:) 
 
 IX. That your petitioner further states that on or before the 
 
 day of , as your petitioner is informed and be- 
 lieves, the said Board of Taxes and Assessments reduced the amount 
 of said assessment on the personal property (capital stock and surplus) 
 
 of your petitioner from the said valuation of $ to 
 
 the sum of $ , and included and entered the said 
 
 assessment at $ against your petitioner .op- 
 posite its namcj in the assessment roll of resident personal estate of 
 
 corporations and associations of the borough of , 
 
 in the city of New York, for the year 191 , prepared by said board and 
 delivered to the Board of Aldermen of the city of New York, as herein 
 set forth. 
 
 X, That thereafter, and since the first day of December, 191 , the 
 Board of Taxes and Assessments caused to be prepared from said An- 
 nual Record and Assessment Roll of the Real and Personal Estate in 
 said borough, containing, among others, the name of your petitioner 
 and the alleged valuation of its personal property (capital stock and 
 surplus) ; that said Board of Taxes and Assessments delivered said roll 
 on which said assessment was entered to the Board of Aldermen of 
 the city of New York, as required by law, on the first day of March, 
 191 , and public notice thereof was given as required by law. That 
 in and by said assessment, as so finally completed and verified, the 
 name of your petitioner and the valuation of its personal property 
 (capital stock and surplus) were entered, and the said Board of Taxes 
 and Assessments have assessed the personal property under the desig- 
 nation of (capital stock and surplus) at the valuation of $ 
 
 (If the tax roll has been completed and delivered to the re- 
 ceiver of taxes when certiorari proceedings are instituted insert 
 the following paragraph :) 
 XL That said Board of Aldermen caused to be estimated and set 
 down in said assessment roll opposite the sum set down as the valua- 
 tion of the personal property (capital stock and surplus) of your 
 
 petitioner, the same being $ , a sum to be as a ta'x 
 
 thereon, to wit, $ , and that when corrected 
 
 and completed, according to law, they caused the said assessment roll, 
 or a fair copy thereof, to be delivered to the receiver of taxes of the 
 
FORMS. 307 
 
 city of New York on or before March 28, 191 , with the warrant 
 annexed signed by the president of the Board of Aldermen and coun- 
 tersigned by the City Clerk, directing him to collect from the several 
 persons therein named, including your petitioner, the several sums 
 mentioned in the last column of said roll opposite their respective 
 names. 
 
 XII. That the assessment upon the personal property (capital stock 
 and surplus) of your petitioner for the purposes of taxation for the 
 year 191 , is illegal and is erroneous by reason of over-valuation, and 
 your petitioner sets forth the following grounds of illegality, error and 
 over-valuation as the same are set forth in this petition and the ex- 
 hibits hereto annexed. 
 
 (Here set forth the grounds of illegality, if any; or in case of 
 over-valuation, give the reasons, as follows:) 
 That on the first Monday of October, 191 , the actual value of the 
 total gross assets of every kind owned and held by your jjetitioner 
 
 amounted to $ , and was made up as follows ; * * * 
 
 From this sum should be deducted the following sums which are not 
 lawfully assessable as part of its personal prox)erty (capital stock and 
 Surplus) in the city of New Tork. * * * 
 
 XIII. Tour petitioner, therefore, on the first Monday of October, 
 191 , had personal property (capital stock and surplus) amounting to 
 
 only $ subject to assessment for the purposes of 
 
 taxation in the city of New Tork, and the decision and determination 
 of the Board of Taxes and Assessments in said city in assessing the 
 
 petitioner thereon in the sum of $ , as above stated, 
 
 was and is illegal by reason of the particulars and grounds specified 
 and given in this petition, and the same was and is erroneous by 
 reason of over-valuation, inasmuch as the petitioner had on the first 
 day of October no personal property (capital stock and surplus) [or 
 
 personal property amounting to only $ ] subject 
 
 to taxation in said city. 
 
 XIV. That your petitioner is or will be injured by such illegal and 
 erroneous assessment, and that the various officers charged with the 
 completion of the tax rolls and the collection of the taxes in the city 
 of New Tork have already proceeded to perform such duties con- 
 nected with such roUs and the collection of said taxes, as required by 
 law, and unless said assessment be reviewed according to law and 
 cancelled (or corrected) the petitioner will be compelled to pay taxes 
 thereon at the rate at which taxes may be payable notwithstanding 
 that on the first day of October, 191 , it had and now has no as- 
 
308 TAXATION OF COEPOBATIONS. 
 
 sessable or taxable property (capital stock and surplus) [or personal 
 property (capital stock and surplus), amounting to only $ 
 
 ]• 
 
 XV. That no previous application has been made in the premises 
 for the allowance and issue of a writ of certiorari. 
 
 Wherefore, the petitioner prays that a writ of certiorari may be 
 issued and allowed by this Honorable Court directed to the said Com- 
 missioners of Taxes and Assessments for the city of New York, con- 
 stituting the Board of Taxes and Assessments therein, commanding 
 them to certify and return to this court all and singular their pro- 
 ceedings, decisions and action in the premises, with the reasons there- 
 for, and the evidence considered by them and the dates respectively, 
 and all and singular the said assessment* and the documents and 
 papers before them relating thereto touching or concerning the valu- 
 ation or assessment of the personal property or capital stock of your 
 petitioner for the year 191 , or in anywise in respect thereto, and all 
 and singular their decisions and actions thereon, and the statements 
 and protests, record and papers before them touching or concerning 
 the same, and that the said decision and action of said board may be 
 reviewed and corrected on their merits, and that the same may be 
 reversed (or altogether held for nothing) and that the aforesaid errors 
 may be corrected according to law (or said assessment may be stricken 
 from the assessment rolls), and that the petitioner may have such 
 other or further relief in the premises as may be just. 
 
 And your petitioner will ever pray, etc.. 
 
 Dated 
 
 The Company. 
 
 Per 
 
 Attorney for Petitioner. 
 
 *Sworn or certified copies of the assessment roll are sufficient on 
 return. In re Winegard, 78 Hun, 58. 
 
FOBMS. 309 
 
 OEDEE FOE WEIT. 
 
 At a Special Term, Part II, of the Supreme Court of the 
 State of New York, held in and for the City and County 
 of New York, at the County Court House, in the City of 
 
 New York, on the day of 
 
 191 . 
 
 Present — Hon. , Justice. 
 
 (Title.) 
 
 Upon reading and filing the petition of Company, 
 
 duly verified the day of , 191 , and 
 
 it appearing therefrom that there are proper grounds for the granting 
 
 of a writ of certiorari as therein prayed for, addressed to 
 
 , Commissioners of Taxes and Assessments, constituting the 
 
 Board of Taxes and Assessments of the city of New York, to review 
 the assessment of the personal property (capital stock and surplus 
 profits) of the said petitioner made for the purpose of taxation for the 
 year 191 , and to review and correct on the merits the decision and 
 action of the said board with reference thereto ; 
 
 Now, upon motion of , attorneys for the 
 
 petitioner, it is 
 
 Ordered, that the prayer of said petition be granted, and that a writ 
 
 of certiorari issue, under the seal of this court, to , 
 
 Commissioners of Taxes and Assessments, constituting the Board of 
 Taxes and Assessments of the city of New York, commanding them 
 to return and certify to this court : 
 
 (1) All and singular the proceedings had by said board relating to 
 eaid valuation and assessment, with the respective dates thereof. 
 
 (2) All and singular the pai)ers, affidavits and evidence submitted 
 by said petitioner, and filed with said board, and any examination, un- 
 der oath or otherwise, of said petitioner, or of any officer thereof, or 
 any witness offered by it for examination. 
 
 (3) Any other evidence or information, if any, before the said 
 board, or considered by them in valuing the capital stock and prop- 
 erty of said petitioner, or in making said assessment, or if there were 
 no such other evidence or information, a statement of that fact. 
 
 (4) A statement of the method by which said board made said as- 
 sessment, and of the grounds thereof, and of the basis or principles 
 upon which they arrived at said valuation. 
 
 (5) Any and all docimients, records and papers, if any such there 
 
310 TAXATION OF COKPOEATIONS. 
 
 be, not embraced in the above specifications, relating to, touching or 
 concerning the said assessment and the valuation therefor and a state- 
 ment of any other matters material to said valuation and assessment. 
 
 Enter, 
 
 J. S. C. 
 
 WKIT OF CEETIOEAEI. 
 
 The People of the State of New York : 
 To , President, and Commis- 
 sioners of Taxes and Assessments of the city of "New York, 
 constituting the Board of Taxes and Assessments in the city 
 of New York, greeting : 
 
 Whereas, v^e have been informed by the petition of 
 
 Company, verified the day of 191 , 
 
 that it is a corporation duly created and existing by and under the 
 
 laws of the State of ; that on the first day of 
 
 October, 191 , its name, the valuation of its personal property (or 
 capital stock or surplus profits) were entered in the books«called "The 
 Ancnual Record of the Assessed Valuation of Eeal and Personal Es- 
 tate" in said city and county for said year ; in which said books were 
 also entered the valuations of other real and personal estate; that 
 application was thereafter and before December 1, 191 , duly made to 
 the Board of Taxes and Assessments of the city and county of New 
 York to correct the said valuation of the personal estate of said pe- 
 titioner and cancel the same; that such application was refused and 
 denied, and that said board has prepared assessment rolls of the real 
 and xjersonal property in said city, containing, among other things, 
 the name of said petitioner and the valuation of its real estate and 
 personal property (or capital stock and surplus profits). 
 
 That such assessment rolls were, on the first day of March, 191 , 
 and not before, completed and verified and delivered to the Board of 
 Aldermen of the city of New York, and that on or about the first day 
 of March, 191 , public notice was first given by publishing (or other- 
 wise) a notice, dated on that day, that said rolls had been completed 
 and delivered to said Board of Aldermen, and would remain with the 
 clerk of the said Board of Aldermen, for public inspection, for fifteen 
 days after the date of the said notice. 
 
 That the valuation of the personal property (or capital stock and 
 
FORMS. 311 
 
 surplus profits) of said petitioner for the purposes of taxation, en- 
 tered on said assessment rolls, was tlie sum of $ , 
 
 and said petitioner was assessed for the purposes of taxation, as to its 
 personal estate, at said sum of $ 
 
 That the said valuation and assessment of the petitioner, as to its 
 personal property (or capital stock and surplus profits), was and is 
 
 illegal and erroneous by reason of 
 
 and that said petitioner will be injured thereby. 
 
 And we being willing, for certain causes, to be certified of the pro- 
 ceedings, decisions and actions had by and before said board in the 
 matter of the valuation and assessment for taxation for the year 191 
 of the personal property (or capital stock and surplus profits) of the 
 said petitioner, by them lately made ; 
 
 Do hereby command you that you certify and return, under your 
 hands, to the Special Term of our Supreme Court of the State of New 
 York, at the County Court House in the city of New York, on the 
 
 first Monday of , 191 , at the opening of the court 
 
 on that day, together with this writ, the following matters and facts : 
 
 (1) All and singular the proceedings had by said board relating to 
 said valuation and assessment, with the respective dates thereof. 
 
 (2) All and singular the papers, affidavits and evidence submitted by 
 said petitioner, and filed with said board, and any examination, under 
 oath or otherwise, of said petitioner, or of any officer thereof, or any 
 witness offered by it for examination. 
 
 (3) Any other evidence or information, if any, before said board, 
 or considered by them in valuing the capital stock and property of 
 said i)etitioner, or in making said assessment, or if there were no such 
 other evidence or information, a statement of that fact. 
 
 (4) A statement of the method by which said board made said as- 
 sessment, and of the grounds thereof, and of the basis or principles 
 upon which it arrived at said valuation. 
 
 (5) Any and all documents, records and papers, if any such there 
 be, not embraced in the above specifications, relating to, touching or 
 concerning the said assessment and the valuation therefor, and a state- 
 ment of any other matters material to said valuation and assessment. 
 
 And that you serve a copy of such return upon the attorneys for 
 said relator on or before said date. 
 
 To the end that the proceedings, decisions and actions had by said 
 board in the matter of said valuation and assessment of the personal 
 property (or capital stock and surplus profits) of said petitioner may 
 be reviewed and corrected on the merits, by our said court, and that 
 
312 TAXATION OF COEPORATIONS. 
 
 ■we may further cause to be done thereupon what of right shall be fit 
 to be done. 
 
 Witness, the Honorable presiding justice 
 
 of the said Supreme Court for the First Department, at the 
 
 County Court House in the city of New York, on the 
 
 day of , 191 . 
 
 By the Court, 
 
 (Seal.) Clerk. 
 
 Attorney for the Eelator. 
 
 Office and P. O. address, , New York City. 
 
 The foregoing writ is allowed this day 
 
 of , 191 . 
 
 J. S. C. 
 
 EETUEN TO WEIT— EESIDENT COEPOEATION. 
 SUPEEME COUET, COUNTY OF 
 
 The People of the State of New York, on 
 
 the relation of 
 
 Eelator, I 
 against ) Taxes of 191 . 
 as Commissioners of Taxes and As- 
 sessments of the City of New York, 
 
 Defendants, 
 
 To the Supreme Court of the State of New York: 
 
 " s» , Commissioners of Taxes and 
 
 Assessments of the City of respectfully return 
 
 to the writ of certiorari hereto prefixed and issued out of this Court 
 on the day of 191 , as follows : 
 
 We are the Commissioners of Taxes and Assessments of the City 
 of 
 
 Between the of , in the year 191 , and the 
 
 of , 191 , the Deputy Tax Commissioners 
 
FORMS. 313 
 
 of the City of , under the direction of our 
 
 predecessors in office, assessed all the taxable property in the several 
 districts of said city that were assigned to them respectively for that 
 purpose and furnished to us, under oath, a detailed statement of all 
 such property, showing that said deputies have personally examined 
 each and every house, building, lot, pier or other assessable property, 
 giving the street, lot, ward, town and map number of such real estate, 
 embraced within said districts, together with the name of the owner 
 or occupant if known; also, in their judgment, the sum for which 
 such property under ordinary circumstances would sell, with such 
 other information in detail, relative to personal property or otherwise, 
 as we from time to time required; and the assessed valuations so 
 
 made of all such property within the city of were 
 
 duly entered in detail in books provided for that purpose and kept in 
 the several offices established by the Department of Taxes and As- 
 sessments in the several boroughs of said city, called "The Annual 
 Eecord of Assessed Valuation of Real and Personal Estate." 
 
 The Deputy Tax Commissioner assigned to that duty, under our 
 direction, between said times duly assessed the personal property 
 (capital stock and surplus profits) of the relator for the year 191 , at 
 
 the sum of $ and duly entered such assessment in the 
 
 "Annual Record of Assessed Valuation of the Real and Personal Es- 
 tate of Corporations." 
 
 That said books were kept open in our office, for examination and 
 
 correction, from the of , 191 , until the 
 
 of , 191 , and previous to and during 
 
 the time said books were ox)en for inspection the fact was duly ad- 
 vertised according to law. During the time said books were open to 
 public inspection, as above stated, the said relator submitted to us, 
 and filed in our office, a statement in writing, of which a copy marked 
 
 "Exhibit " is hereto attached and made part of this return. 
 
 Thereupon we examined into the statement made by the relator, and 
 
 after due consideration fixed the assessment at the sum of 
 
 , which we believed to be just, and which we decided 
 
 to be the sum for which said relator was lawfully assessable for the 
 year 191 , and thereupon said assessment theretofore entered in said 
 books of annual record was reduced in accordance with our decision. 
 A copy of said assessment as appears upon said books of annual 
 
 record, marked "Exhibit " is hereto annexed and made a part 
 
 of this return. 
 
 Thereafter we caused to be duly prepared from said books of annual 
 
314 TAXATION' OF COEPOEATIONS. 
 
 record, assessment rolls for each of the several boroughs of the said 
 city, and annexed to each of said rolls our certificate that the same 
 was correct, in accordance with the entries in said books of record, 
 
 and on the of , 191 , the rolls thus certified 
 
 were delivered by us to the '. at 
 
 in the borough of in said city. 
 
 We further return that the method by which we made the said 
 assessment for the purpose of taxation for the year 191 , was as 
 follows : 
 
 The statement filed with us by the relator, "Exhibit . . . ." showed 
 
 that the gross assets of the relator amounted to the sum of $ 
 
 yet the composition of these assets was not stated. 
 
 In answer to the question as to the value of the personal property, 
 
 relator merely stated that it had office fixtures of the value of $ , 
 
 and that of its total gross assets it possessed merchandise of the value 
 
 of $ The said statement also averred that it had no real 
 
 estate. 
 
 Although the blank furnished the relator by us upon which "Ex- 
 hibit " was made, asked that the relator set forth its indebted- 
 ness in detail, the statement made merely contained the information 
 that there were bills and accounts payable of $ The state- 
 ment made by the relator "Exhibit " was not sworn to or filed 
 
 in our oflSce until the day of , 191 , only 
 
 business days before the tax books closed under the pro- 
 visions of the charter, and under the press of business at that time, 
 we were unable to verify the statements made by the relator or ascer- 
 tain the details with regard to its assets and liabilities. 
 
 The statement did not disclose what portion of such accounts had 
 been incurred in the purchase of imported merchandise in the original 
 packages, and as we were informed that the relator's business con- 
 sisted in a large part of buying and selling such imported merchan- 
 dise, the statement appeared to us utterly unsatisfactory. 
 
 For all of these reasons we were led to disbelieve the statement of 
 relator and fixed the assessment upon the personal property (capital 
 stock and surplus) of the relator for the year 191 in the following 
 manner : 
 
 Taking the amount of the gross assets of the relator as disclosed in 
 
 said statement at $ , we deducted the entire amount of its 
 
 debts, leaving the sum of $ as the sum for which we 
 
 deemed the relator assessable upon its personal property, capital stock 
 and surplus profits for the year 191 . By deducting the entire amount 
 
FOKMS. 315 
 
 of its indebtedness we deemed the relator to have suffered no material 
 injuries. We were unable to ascertain whether any of such accounts 
 payable were incurred in the purchase of imported merchandise in 
 the original packages which are non-taxable by us, or whether the 
 relator had borrowed money to pay for such imported merchandise 
 in the original packages, or what portion of the bills and accounts 
 payable were directly or indirectly incurred in the purchase of such 
 imported merchandise in the original packages, but we assumed that 
 of such indebtedness at least the sum of $ was so in- 
 curred directly or indirectly, and therefore did not deduct the amount 
 of such imported merchandise owned by relator as disclosed by such 
 statement to be of the value of $ 
 
 We accordingly deemed the sum of $ to be the sum 
 
 for which the relator was lawfully and justly assessable upon its per- 
 sonal property, capital stock and surplus profits (for the year 191 ) 
 
 and reduced the original assessment of $ imposed upon 
 
 the relator by the Deputy Tax Commissioner assigned to that duty 
 to such sum of $ 
 
 With regard to the statements contained in said writ, and the pe- 
 tition upon which the same was granted, to the effect that said as- 
 sessment was erroneous by reason of over-valuation, or is unequal in 
 that it was made at a higher proportionate valuation than other real 
 or personal property on the same rolls, or that the said assessment, 
 upon any of the grounds specified in said petition, is illegal, erroneous 
 or void, we certify and return, upon information and belief, that each 
 and every of such statements is untrue. 
 
 In Witness Whereof, we have hereunto subscribed our names, this 
 day of ,191 . 
 
 Commissioners of Taxes and Assessments. 
 
 County of ss : 
 
 , being severally duly sworn, 
 
 say, and each for himself says, that the foregoing return is true to 
 his knowledge, except as to the matters therein stated to be alleged 
 on information and belief, and as to those matters he believes it to be 
 true. 
 
 Sworn to before me this 
 
 day of , 191 . 
 
 Notary Public, 
 County. 
 
316 TAXATION OF COBPOEATIONS. 
 
 EETUEN TO WRIT— FOREIGN COEPOEATION 
 SUPREME COURT, COUNTY OE 
 
 The People of the State of New York, on 
 
 the relation of 
 
 Relator, I 
 against ) Taxes of 191 
 as Commissioners of Taxes and As- 
 sessments of the City of New York, 
 
 Defendants. 
 
 To the Supreme Court of the State of New York : 
 
 We, , Commissioners of Taxes and 
 
 Assessments of the city of , respectfully return 
 
 to the writ of certiorari hereto prefixed and issued out of this court 
 on the day of , 191 , as follows : 
 
 We are Commissioners of Taxes and Assessments of the city of 
 
 Between the of , in the year 191 , and 
 
 the of , 191 , the Deputy Tax Commis- 
 sioners of the city of , under our direction assessed all 
 
 the taxable property in the several districts of said city that were 
 assigned to them respectively for that purpose, and furnished to us, 
 under oath, a detailed statement of all such property, showing that 
 such deputies have personally examined each and every house, build- 
 ing, lot, pier or other assessable property, giving the street, lot, ward, 
 town and map number of such real estate embraced within said dis- 
 tricts, together with the name of the owner or occupant, if known; 
 also, in their judgment, the sum for which such property under ordi- 
 nary circumstances would sell, with such other information in de- 
 tail, relative to personal property or otherwise, as we from time to time 
 required; and the assessed valuations so made of all such property 
 within the City of. New York were duly entered in detail in books 
 provided for that purpose, and kept in the several offices established 
 by the Department of Taxes and Assessments in the several boroughs 
 of said city, called "The Annual Record of Assessed Valuation of 
 Real and Personal Estate." 
 
FORMS. 317 
 
 The Deputy Tax Commissioner assigned to that duty, under our 
 direction, between said times duly assessed the capital of the relator 
 invested in busiaess in this State for the year 191 , at the sum of 
 
 $ , and duly entered such assessment in the "Annual 
 
 Record of the Assessed Valuations of Eeal and Personal Estate of 
 Corporations." 
 
 The said books were kept open in our office for examination and 
 
 correction, from the of , 191 , until the 
 
 day of , 191 , and previous to and during 
 
 the time said books were open for inspection the fact was duly ad- 
 vertised according to law. During the time said books were open to 
 public inspection, as above stated, the said relator, submitted to us, 
 and filed in our office, a statement in writing, of which a copy marked 
 "Exhibit A" is hereto attached and made part of this return. There- 
 upon we examined into the statement made by the relator, and after 
 
 due consideration, fixed the assessment at the sum of $ , 
 
 which we believed to be just and which we decided to be the sum for 
 which said relator was lawfully assessable for the year 191 , and 
 thereupon said assessment theretofore entered in said books of annual 
 record was reduced in accordance with our decision. 
 
 Thereafter, we caused to be duly prepared from said books of an- 
 nual record, assessment rolls for each of the several boroughs of the 
 said city, and annexed to each of said rolls our certificate that the 
 same was correct, in accordance with the entries in said books of rec- 
 ord, and on the of , 191 , the rolls thus. 
 
 certified were delivered by us to the Board of Aldermen of the city 
 
 of , at the in the borough 
 
 of , in said city. 
 
 We further return that the method by which we made the said 
 assessment for the purpose of taxation for the year 191 , was as, 
 follows : 
 
 On the statement submitted to us ("Schedule A") it appeared that 
 
 the relator was a corporation organized under the laws of the 
 
 , that it had procured a certificate au- 
 thorizing it to do business in this State, that the business of the 
 corporation proposed to be carried on within this State, stated in ita 
 application under the provisions of Chapter 687 of the Laws of 1892,, 
 
 was , that the place within the State 
 
 named in said application as its principal place of business was. 
 
 , that the company transacted 
 
 business within this State at , in the city 
 
318 TAXATION OF COEPOEATIONS. 
 
 of , borough of , and thai 
 
 the company was assessed by the State Comptroller f or $ 
 
 It further appeared that the relator kept a wareroom and offices 
 
 in the borough of , to which it sends its products 
 
 from in unbroken original packages to be sold ; 
 
 that on all these goods it paid duties to the United States, that the 
 proceeds of the goods were at once remitted to the main office in 
 
 , after reserving the necessary amount for paying 
 
 the expenses of the business conducted in the city of , 
 
 that the value of the goods on hand as shown in the statement was 
 about the average amount of the goods usually kept here for sale, 
 that the greater part of the cash on hand and in bank was in process 
 of transmission to the main office, that the bank account was to a 
 very large extent kept to cover the payment of duties on the goods 
 shipped here for sale, and that the entire amount of bills receivable 
 resulted from the sales of imported goods in unbroken original pack- 
 ages, as did the cash on hand and in bank. 
 The amount receivable on notes and open accounts was 
 
 stated to be $ 
 
 The value of goods, wares and merchandise in this State.$ 
 The value of safes, fixtures and furniture in this State.$ 
 
 Cash on hand and in bank $ 
 
 Cost price of imported goods on hand in unbroken origi- 
 nal packages $ 
 
 Amount of bills and accounts payable incurred for items 
 included in the sales and assets enumerated $ 
 
 It was admitted that the amount invested in business in this State 
 was $ , which was the value of relator's safes, fix- 
 tures and furniture in this State. 
 
 From all this evidence we determined that the relator had on the 
 first day of October, 191 , established and was conducting a perma- 
 nent and continuous business in this State. 
 
 We further determined that the amount receivable on notes and 
 open accounts, and the cash on hand and in bank, constituted capital 
 of the relator invested in its business in this State, and that such 
 items were properly assessable by us. We accordingly fixed the as- 
 sessment against the relator for the year 191 , for capital invested 
 
 in business in this State at the sum of $ , which 
 
 amount was approximately the aggregate value of the amount re- 
 ceivable on notes and open accounts, the safes, fixtures and furniture 
 
FOBMS. 319 
 
 in this State, and the cash on hand and in bank, less the amount of 
 bills and accounts payable, incurred for the items included in the 
 sales and assets enumerated in said statement. 
 
 Referring to the petition herein and answering the allegations 
 therein contained, on information and belief, we deny that the said 
 assessment is erroneous by reason of over-valuation, or that the relator 
 is or will be injured by said assessment, or that said assessment is 
 illegal for any reason whatsoever, or that the amount of said bills 
 receivable and cash on hand and in bank, $ , was in- 
 cluded among the assets of the relator in this State, contrary to law 
 or to the provisions of the Constitution of the United States or that 
 
 on the day of , 191 , the relator had no 
 
 capital invested in its business in this State, except the sum of 
 
 $ , or that the said sum of $ should 
 
 have been the assessed valuation of relator's capital invested in busi- 
 ness in this State. 
 
 With regard to the statements contained in said writ, and the pe- 
 tition upon which the same was granted, to the effect that said assess- 
 ment was erroneous by reason of over-valuation, or is unequal in that 
 it was made at a higher proportionate valuation than other real or 
 personal property on the same rolls, or that the said assessment, upon 
 any of the grounds specified in said petition, is illegal, erroneous or 
 void, we certify and return, upon information and belief, that each 
 and every of such statements is untrue. 
 
 In Witness Whereof, we have hereunto subscribed our names, this 
 day of ,191 . 
 
 Commissioners of Taxes and Assessments. 
 
 County of , ss : 
 
 , being severally duly sworn, say, and each 
 
 for himself says, that the foregoing return is true to his knowledge, 
 except as to the matters therein stated to be alleged on information 
 and belief, and as to those matters he believes it to be true. 
 Sworn to before me this 
 
 day of , 191 . 
 
 Notary Public (No. ) 
 County. 
 
320 TAXATION OF COEPOEATIONS. 
 
 FINAL OEDEE EEDUCING ASSESSMENT OF THE CAPITAL 
 STOCK AND SUEPLUS OF A COEPOEATION. 
 
 At a Special Term of the Supreme Court of the State of 
 New York, etc. 
 
 (Title.) 
 
 The Commissioners of Taxes and Assessments of the city of New 
 York, constituting the Board of Taxes and Assessments, having as- 
 sessed for the year 191 , the capital stock and surplus profits of the 
 
 Company, the relator herein, at the sum of 
 
 $ and the said relator having duly petitioned 
 
 this court for a review of said assessment, and a writ of certiorari 
 having been duly issued thereunder to the said Commissioners of 
 Taxes and Assessments, pursuant to an order of this court. 
 
 Now, upon reading the petition of said relator, verified the 
 
 day of , the order thereon entered in the office of the 
 
 clerk of this court on the day of , direct- 
 ing the issuance of said writ of certiorari to said Commissioners of 
 Taxes and Assessments, the writ of certiorari issued pursuant to the 
 
 direction of said order on the day of 
 
 and directed to said commissioners, the return made by said commis- 
 sioners to said writ, verified 
 
 And this cause having duly come on to be heard at a Special Term, 
 Part VI, of this court, held at the County Court House in the coimty 
 
 of New York, and after hearing , Esq., 
 
 of counsel for the relator, in favor of said application, and 
 
 , Esq., for the respondent, opposed, and 
 
 the issue of fact having been duly tried, and it satisfactorily appear- 
 ing to the court from the foregoing papers on file and from the evi- 
 dence produced on said trial that the value of the capital stock of the 
 
 relator during the year 191 , was not more than $ .' , 
 
 and that, therefore, the assessment of $ imposed on the 
 
 relator's capital stock and surplus was erroneous by reason of over- 
 valuation. 
 
 Now, upon reading and filing said papers, and on motion of 
 
 , Esq., counsel for the relator. 
 
 It is ordered and adjudged, that the assessment of $ 
 
 for the year 191 , on the capital stock and surplus of the 
 
 Company, the relator herein, is erroneous and 
 
 that it be, and the same is hereby corrected and reduced by the sum 
 
FOBMS. 321 
 
 of $ , to wit, to the sum of $ , and 
 
 that the said assessment against the said relator be fixed at the sum 
 of $ for the year 191 . 
 
 It is further ordered, that any and all tax or taxes levied or as- 
 sessed against said Company, based on said 
 
 erroneous or illegal assessment of the capital stock and surplus profits 
 
 for the year 191 , at the sum of $ , be wholly 
 
 vacated and set aside and stricken from the rolls, and that the tax 
 
 or taxes to be levied or assessed against said 
 
 Company for the year 191 , upon its capital stock and surplus profits, 
 be based upon said corrected and reduced amount of $ 
 
 And it is further ordered and adjudged, that the comptroller of 
 the city of New York and the receiver of taxes of said city forthwith 
 make and do every act or acts for the complete carrying out of the 
 provisions of this order. 
 
 (Provision as to costs.) 
 
 COMPLAINT IN ACTION TO COLLECT LOCAL TAX IN AE- 
 
 EEAES FEOM: a DOMESTIC COEPOEATION IN THE 
 
 CITY OF NEW YOKE. 
 
 NEW YOEK SUPEEME COUET— County of New York. 
 
 The City of New York, 
 
 Plaintifi,^ 
 against 
 
 Defendant. 
 
 The plaintifi complains of the defendant, and shows to the court as 
 follows : 
 
 I. That the plaintiff herein was at all the times hereinafter men- 
 tioned and now is a domestic municipal corporation. 
 
 II. On information and belief that the defendant was at all the 
 times hereinafter mentioned and now is a domestic corporation, having 
 its principal office or place for transacting its financial concerns in the 
 borough of in the city of New York. 
 
 m. On information and belief that a deputy tax commissioner 
 
322 TAXATION OF COEPORATIONS. 
 
 under the direction of the Board of Taxes and Assessments, duly as- 
 sessed the defendant upon its capital stock and surplus as personal 
 property in the sum of $ , for the purpose of tax- 
 ation for the year 191 , as a resident of said city of New York, doing 
 
 business in the borough of That said assessment 
 
 was duly entered upon "The Annual Eecord of Assessed Valuation 
 of Eeal and Personal Estate of Corporations," in duplicate, in the 
 ofiBce of the said borough where the same was assessed, and in the main 
 office of the Department of Taxes and Assessments in the borough of 
 Manhattan. 
 
 IV. On information and belief that said Annual Record was kept 
 open for examination and correction from the first Monday of October 
 until the first day of December, 191 , in said year and the fact was 
 duly advertised according to law. 
 
 V. On information and belief that said Board of Taxes and Assess- 
 ments, beginning with the first day of December, 191 , in said year 
 caused to be prepared from said Annual E«cord an assessment roll for 
 said borough; that said Board of Taxes and Assessments duly deliv- 
 ered the assessment roll upon which the said assessment was entered, 
 to the Board of Aldermen of the city of New York, on the first Mon- 
 day of March, 191 . 
 
 That the said Board of Aldermen estimated and set down opposite 
 the sum set down as the valuation of the capital stock and surplus 
 
 of the defendant the sum of $ to be paid by the 
 
 defendant as a tax thereon. That the said Board of Aldermen cor- 
 rected and finally completed said assessment roll, and when so com- 
 pleted caused said assessment roll, or a fair copy thereof, to be duly 
 delivered to the receiver of taxes with the proper warrants annexed, 
 signed by the president of the Board of Aldermen, and countersigned 
 by the city clerk, directing and requiring the receiver of taxes to col- 
 lect from the several persons named in the said assessment roll the 
 several sums mentioned in the last column of the said roll opposite 
 to their respective names. 
 
 VI. That said receiver of taxes, immediately after he had received 
 the said assessment roll, gave due public notice by publication as re- 
 quired by law, that said assessment rolls had been delivered to the 
 receiver of taxes, and that all taxes were then due and payable at his 
 oflflce in said borough, on the first day of May, 191 . 
 
 VII. That on the fifteenth day of January succeeding the year in 
 which said tax was imposed, said tax remained and still remains un- 
 paid and in arrears. 
 
FORMS. 323 
 
 Wherefore, the plaintiff demands judgment against the defendant 
 
 for the sum of $ with interest at the rate of seven 
 
 per cent, per annum from the first day of May, 191 , besides the costs 
 of this action. 
 
 Corporation Counsel, 
 
 Attorney for Plaintiff. 
 (Verification by Receiver of Taxes.) 
 
 FORM OF ANSWER SETTING UP RESIDENCE IN AN- 
 OTHER COUNTT, IN ACTION BROUGHT TO COLLECT 
 TAX FROM CORPORATION IN THE CITY OF 
 NEW YORK. 
 
 (Title.) 
 
 The defendant, answering the complaint herein: 
 
 I. Admits the allegations in paragraph I of the complaint. 
 
 II. Denies that the defendant is or was at any time a domestic cor- 
 poration having its principal office in the borough of , 
 
 city of New York. 
 
 III. On information and belief denies each and every other allega- 
 tion in said complaint contained. 
 
 IV. As a separate defense to said complaint alleges that this de- 
 fendant is and was at all the times hereinafter mentioned in the com- 
 plaint herein a domestic corporation having its principal office or place 
 for transacting its financial concerns in the city of Buffalo, county of 
 Erie, and was, therefore, not taxable for the year 191 , in the borough 
 of , in the city of New York. 
 
 Wherefore, defendant demands judgment, etc. 
 
324 , TAXATlOli OF COEPOEATIOITS. 
 
 ANOTHER FOEM OF ANSWER, SETTING UP INABILITY 
 TO PAT THE TAX, ETC. 
 
 (Title.) 
 
 The defendant answering the complaint herein, 
 
 I. Admits the several allegations in said complaint contained. 
 
 II. This defendant, while admitting the allegations of the com- 
 plaint, alleges that it is unable for want of property (or other reason) 
 to pay the tax, as will appear from the following facts : (Here allege 
 the facts showing the inability or other reason to pay the tax.) 
 
 Wherefore, defendant demands judgment that the court exercise 
 the discretion reposed in it by the statute in such case made and pro- 
 vided by dismissing the complaint without costs or on payment of 
 such part of the tax as may be just or on payment of costs. 
 
 STATEMENT OR REPORT OE DOMESTIC CORPORATION 
 
 TO BE FILED WITH THE BOARD OF TAXES AND 
 
 ASSESSMENTS OF NEW YORK CITT. 
 
 The , a corporation 
 
 organized under the laws of the State of New York, claiming to be 
 aggrieved by the assessed valuation of its property for the year 1914, 
 makes application by the undersigned, one of the officers of the said 
 corporation, to have the same revised and corrected. 
 Dated October 1, 1913. 
 
 ASSETS 
 
 All assets mast be schednled, whether located in the State of New York, or elsewhere, inclad- 
 ing deposits in banks and debts due from non-residents. 
 
 1. Real estate $ 
 
 2. Machinery and plant other than real estate $ 
 
 3. Goods, wares and merchandise $ 
 
 4. All other tangible personal property. (This does 
 
 not include mortgages or credits) $....- 
 
 5. Cash on hand and on deposit $ 
 
 6. Debts due from solvent debtors. (This includes 
 
 bonds and all credits, also "secured debts") $ 
 
 7. Shares of stock of other corporations $ 
 
 8. Value at which patent rights, copyrights, trade- 
 marks, goodwill and franchises were taken in payment 
 
 for capital stock $ 
 
 9. The aggregate of the above assets $ 
 
FORMS. 325 
 
 DEDUCTIONS 
 
 Except the iteme numbered 13, 15, 17 and 18, the value of every Item to be deducted must be 
 the sum at which it is included in tlie above statement of assets. 
 
 U. S. Bonds, N. T. State and Mu- 
 nicipal Bonds $ 
 
 N. Y. Mortgages recorded on or 
 10. Property 1 after July 1, 1906, and mortgages on 
 exempt I which a registration tax has been 
 by I paid since May 13, 1907, also "se- 
 
 law, \ cured debts." (This includes only 
 
 which i mortgages and "secured debts" 
 
 includes / owned by the corporation) $ 
 
 Goods imported by above corpo- 
 ration from foreign countries on 
 hand in unbroken original packages. $ 
 
 11. Value at which patent rights, copyrights, trade- 
 marks, goodwill and franchises were taken in payment 
 
 for capital stock $ 
 
 12. So much of the surplus, if any, as shall, not ex- 
 ceed ten per centum of the par value of the shares of 
 
 stock issued " $ 
 
 13. Shares of stock of other corporations actually 
 owned by the above corporation which are taxable upon 
 
 their capital stock $ 
 
 14. Tangible personal property having a permanent 
 situs outside of this State, specifying its nature and 
 location. (This does not include bonds, notes, evi- 
 dences of debt of any kind, currency, deposits in banks, 
 bills receivable, or any other intangible property) .... 
 
 15. The assessed value of the corporation's real estate 
 in this State, including its special franchises. Give 
 Section or Ward and Lot Numbers if in The City of 
 New York 
 
 16. Eeal estate outside of this State, specifying its 
 location 
 
 lY. Indebtedness secured by the corporation's bond 
 and mortgage on real property to which corporation 
 now holds title 
 
326 
 
 TAXA.TIO]Sr OF COEPOEATIONS. 
 
 18. All other indebtedness of thei 
 corporation not contracted or incurred I 
 in the purchase of non-taxable prop- i Bonds not secured 
 erty or securities, or for the purpose! by mortgage of 
 of evading taxation. (The amount ] real estate, 
 owing for goods imported by above < Notes, 
 corporation from foreign countries on J Open Accounts, $. 
 hand in unbroken original packages j 
 and the capital stock of the corpora- 
 tion must not be included.) Itemize 1 
 as follows: 
 
 19. The aggregate of the items set down in answer to 
 questions 10 to 18 inclusive 
 
 Additional Information Eequired 
 
 a. Total par value of capital stock issued $ 
 
 b. Eate of last dividend Date 
 
 c. Amount of surplus, if any, as shown 
 
 by the books $ 
 
 d. Amount of indebtedness for above im- 
 
 ported goods ; this amount is not in- 
 cluded in No. 18 but is in addition 
 
 thereto $ 
 
 Gross assets as shown by answer to question 9 $ 
 
 Aggregate of deductions from gross assets as shown 
 
 by answer to question 19 $ 
 
 Subtract the deductions from the above assets $ 
 
 Add "secured debts" upon which no registration tax 
 
 has been paid $ 
 
 The result is the capital stock liable to taxation $ 
 
 The principal office or the place of transacting the Financial Busi- 
 ness of the said corporation is situated in the Borough of Manhattan, 
 in The City of New York, at No Street. 
 
 THE CITY OP NEW YORK,) 
 COUNTY OP NEW YORK, I 
 
 I, the 
 
 of the said corporation, being duly sworn, do 
 hereby certify that the foregoing is in all respects 
 a just and true statement of the property and 
 
FOEMS. 327 
 
 debts of the corporation on the first day of Oc- 
 tober, 1913. 
 
 Sworn to before me this ^ 
 
 day of 1913. j 
 
 STATEMENT OR EEPOKT OF FOREiaN GOEPORATION 
 
 TO BE FILED WITH BOAED OF TAXES AND 
 
 ASSESSMENTS OF NEW YOEK CITY. 
 
 The a corporation 
 
 organized under the laws of the State of 
 
 claiming to be aggrieved by the assessed valuation of its personal 
 property for the year 1914 makes application to have the same re- 
 vised and corrected. 
 
 Dated October 1, 1913. 
 
 STATEMENT FOR PURPOSE OF REVISION: 
 
 The company has an office at 
 
 in The City of New York, Borough of Manhattan. 
 
 The business of the corporation proposed to be carried on within 
 the State, stated in its application under the provisions of The Gten- 
 eral Corporation Law, was 
 
 ASSETS IN THE STATE OF NEW YORK 
 
 1. Machinery and plant other than real estate $ 
 
 2. Goods, wares and merchandise $ 
 
 3. All other tangible personal property. (This does 
 
 not include mortgages or credits) $ 
 
 4. Cash on hand and on deposit $ 
 
 5. Debts due from solvent debtors, wherever located, 
 
 on account of goods sold or business transacted in New York State. 
 
 (This includes bonds and all credits, also "secured 
 
 debts.") $ 
 
 6. All other intangible personal property exclusive of 
 patent rights, copyrights, trade-marks, goodwill and 
 franchises $ 
 
 Y. The aggregate of the above assets $ 
 
 DEDUCTIONS 
 
 Except items Nob. 10 and 11, no item can be deducted unless included in the assets, and the 
 Talue of every item to be dedacted, except Nos. 10 and 11, must be the sum at which it is included 
 in the above statement of gross assets. 
 
328 TAXATION OF COEPOEATIONS. 
 
 8. [ U. S. Bonds 
 
 N. Y. State and Municipal 
 
 Bonds 
 
 N. T. Mortgages recorded on or 
 after July 1, 1906, and mort- 
 gages on which a registration tax 
 Property exempt | has been paid since May 13, 1907. 
 by law, which / (This includes only mortgages 
 includes ] owned by the corporation, also "se- 
 cured debts") 
 
 Goods imported by above corpo- 
 ration from foreign countries on 
 hand in unbroken original packages 
 Any other property exempt by 
 \ law, specifying its nature 
 
 9. Shares of stock in other corporations, actually 
 owned by the above corporation, which are taxable upon 
 their capital stock 
 
 10. The aggregate indebtedness of the corporation 
 incurred for items included in the above enumerated 
 assets and not contracted or incurred in the purchase 
 of non-taxable property or securities or for the pur- 
 pose of evading taxation. (The amount owing for 
 goods imported by above corporation from foreign coun- 
 tries on hand in unbroken original packages must not 
 be included.) 
 
 11. Debts incurred for the purchase of real estate in 
 the State of New York. State the location and value 
 of such real estate ( 
 
 '.'.'.'.'.'.'.'.'.'. ) 
 
 12. The aggregate of the above deductions 
 
 a. Amount of capital for which company 
 
 is organized ' $ 
 
 Gross assets in the State of New York exclusive of 
 real estate, copyrights, patent rights, trade-marks, good- 
 will and franchises as shown by answer to question 
 No. 7 
 
 Aggregate of deductions from gross assets as shown 
 by answer to question No. 12 
 
 Subtract the deductions from the above assets 
 
FOEMS. 329 
 
 Add "Secured Debts" upon which no registration tax 
 has been paid $ 
 
 THE RESULT IS CAPITAL INVESTED IN BUSINESS LIABLE 
 TO TAXATION $ 
 
 The company is assessed by the State Comptroller 
 fori 
 
 THE CITY OF NEW YORK,) 
 COUNTY OF NEW YORK, I 
 
 I, the of 
 
 the said corporation, being duly sworn, do hereby certify that 
 the foregoing is in all respects a just and true statement of 
 the property invested in business in the State of New Tork 
 and of the debts of the corporation arising out of such busi- 
 ness on the first day of October, 1913. 
 
 Sworn to before me this \ 
 
 day of 1913.5 
 
 II. FORMS FOR SPECIAL FRANCHISE TAX. 
 
 PETITION FOR WEIT— SPECIAL EEANCHISE TAX. 
 
 NEW TOEK STJPEEME COURT— ALBANY COUNTY, 
 
 People, ex rel 
 
 Company, 
 
 Relator, I 
 against 
 State Board of Tax Commissioners, 
 
 Defendant. 
 
 To the Supreme Court of the State of New York : 
 
 The petition of the Company, respectfully 
 
 shows to this court: 
 
 EiRST : That your petitioner is a domestic corporation, engaged in 
 the business of supplying (water for fire, sanitary and other public 
 
330 TAXATION OF CORPORATIONS. 
 
 uses, and for domestic purposes) in the borough of , 
 
 county of , city and state of New York, and has cer- 
 tain property subject to assessment for special franchise. That on 
 or about the day of , 191 , notice was re- 
 ceived from the said Board of Tax Commissioners that the property 
 of your petitioner, situated as aforesaid, had been assessed for the pur- 
 pose of special franchise, in the sum of $ , and that a hear- 
 ing on such assessment would be had by the said State Board of Tax 
 
 Commissioners at Albany, on the day of , 
 
 191 . That your petitioner made application in writing to the said 
 
 State Board of Tax Commissioners, on the said day of 
 
 , 191 , for a reduction of said assessments, and did file 
 
 with the said State Board of Tax Commissioners, an affidavit fuUy 
 setting forth all the facts. That said State Board took the matter 
 under advisement, and did thereafter notify your petitioner that it 
 had fixed the assessment for special franchise tax upon the property 
 of your petitioner as aforesaid, in the sum of $ 
 
 Second: Tour petitioner further alleges that said assessment of 
 
 $ is erroneous, by reason of over- valuation in the 
 
 sum, as your petitioner verily believes, of at least $ , 
 
 and in support of such allegation your petitioner alleges (that the net 
 revenues of your petitioner in the year 191 , deducting merely the 
 expenses of oi)erating, maintenance and fixed charges were the sum of 
 
 $ , and that the present value of the tangible property 
 
 owned by your petitioner, which is assessable as a part of the special 
 
 franchise, is approximately $ and your petitioner is 
 
 or wiU be injured thereby.) 
 
 Third: Your petitioner further alleges that not alone is said as- 
 sessment erroneous by reason of over-valuation, but that the same is 
 unequal in that it will appear from the last annual report of the 
 State Board of Tax Commissioners, that other property in the county 
 
 of is assessed at per cent, of its real 
 
 value, and that the defendant, in fixing the assessed valuation of the 
 property of your petitioner, for the purposes of special franchise tax, 
 
 did determine the said sum of $ to be the full value 
 
 thereof, which is therefore per cent, higher than the as- 
 sessment made on other property on the same roU in the said county 
 of , and your petitioner is or will be injured thereby. 
 
 Fourth: That no previous application has been made for a Writ 
 of Certiorari in this matter. 
 
 Wheeefore, your petitioner prays that a Writ of Certiorari may 
 
POKMS. 331 
 
 be issued and allowed by this Honorable Court, directed to the State 
 Board of Tax Commissioners, demanding it to certify and return 
 to this court all the records of said proceedings of said State Board of 
 Tax Commissioners in the above mentioned proceedings, with all 
 things appertaining thereto, to the end that said action and determi- 
 nation of said State Board of Tax Commissioners may be reviewed 
 and corrected on the merits by this Honorable Court, and that your 
 X)etitioner may have such other and further relief in the premises 
 as to the court may seem just and proper. 
 
 Dated, New York, ,191 . 
 
 Company. 
 
 By 
 
 (President) . 
 
 Attorney for petitioner. 
 Office and Post Office Address. 
 
 State of New York, 
 County of 
 
 being duly sworn, says : That he is the 
 
 (President) of the above named petitioner ; that he has read the fore- 
 going petition and knows the contents thereof; and that the same is 
 true of his own knowledge, except as to the matters therein alleged to 
 be stated upon information and belief, and as to those matters he be- 
 lieves it to be true; that the reason this verification is made by de- 
 ponent is that the petitioner is a corporation and that your deponent 
 is the (President) thereof. 
 
 Sworn to before me this 
 
 day of , 191 . 
 
332 TAXATION OF COEPOEATIONS. 
 
 OEDEE ALLOWINa WEIT.— SPECIAL FEANOHISE TAX. 
 NEW TOEK SUPEEME COUET, ALBANY COUNTY. 
 
 People, ex rel 
 
 Company, 
 
 Eelator, ' 
 against 
 State Board of Tax Commissioners, 
 
 Defendant. 
 
 On reading and filing the petition of the 
 
 Company, verified the day of , 1913, and 
 
 on motion of , attorney for the petitioner, it is 
 
 Ordered, that a Writ of Certiorari as prayed for in the petition, be 
 issued out of and under the seal of this court, directed to the State 
 Board of Tax Commissioners. That said writ be returnable at a 
 Special Term of the Supreme Court, to be held at the Court House, 
 
 in the City of Albany, on the day of , 191 , 
 
 at the opening of court on that day, or as soon thereafter as counsel 
 can be heard. 
 
 Enter in Albany County. 
 
 Justice of the Supreme Court. 
 Granted: The day of , 191 . 
 
 Clerk. 
 
 WEIT OF CEETIOEAEL— SPECIAL FEANCHISE TAX. 
 
 The People op the State op New York, on the Eelation op 
 THE Company, 
 
 To the State Board of Tax Commissioners, Greeting: 
 
 Whereas, we have been informed by the petition of the 
 
 Company, verified on the day of 
 
 , 191 , that certain proceedings were had before you in re- 
 
FORMS. 333 
 
 lation to the assessment for purposes of special franchise tax of cer- 
 tain property belonging to the petitioner in the borough of , 
 
 County of , and City and State of New York, and that 
 
 you did fix the assessment of said property at the sum of $ , 
 
 and said petitioner, claiming that the said assessment is erroneous, 
 by reason of, over-valuation and unequal, in that said assessment is 
 made at a higher proportionate valuation than the assessment of other 
 property on the same roll, and we being willing that justice be done 
 in the premises, 
 
 Now, THEREFORE, we Command that you do certify and return those 
 proceedings with all things appertaining thereto to a Special Term 
 of our Supreme Court, to be held at the Court House, in the city 
 
 of Albany, on the day of , 191 , at the 
 
 opening of the court on that day, or as soon thereafter as counsel 
 can be heard, to the end that our Supreme Court may review and 
 correct on the merits said decision and action of you, the said State 
 Board of Tax Commissioners, and that the same may be reviewed 
 and corrected according to law as to the court may seem just and 
 proper, and have you then there this writ. 
 
 Witness : Hon one of the Justices of said 
 
 Supreme Court, at the County Court House, in the Borough of 
 
 , City and State of New York, on the 
 
 day of ,191 . 
 
 By the Court, 
 
 Clerk. 
 
 Attorney for Petitioner, 
 Office and Post Office Address, 
 
 The within writ allowed this day of 
 
 191 . 
 
 Justice of the Supreme Court of the 
 State of New York. 
 
334 TAXATION OF COEPOEATIONS. 
 
 EETUEN TO WRIT IN SPECIAL FRANCHISE ASSESSMENT. 
 SUPREME COURT, COUNTY. 
 
 The People of the State of New York on 
 
 the Relation of 
 
 Company 
 
 against 
 
 ( ) ( ) 
 
 ( ), together con- 1 
 
 stituting the State Board of Tax Com- 
 missioners. 
 
 To the Supreme Court of the State of New York: 
 
 ( ) (••■• ) 
 
 ( ), constituting the State Board of Tax 
 
 Commissioners, of the State of New York, respectfully return to the 
 
 writ of certiorari issued out of this court on the day of 
 
 , 191 , as follows : 
 
 I. This return, except in so far as it is otherwise stated, or where 
 the matters herein returned are matters of record, or statements of 
 fact as such, is made upon information and belief. 
 
 II. All of the proceedings required by statute for the purpose of 
 making and certifying the valuation aforesaid were had before said 
 Board, and done and performed in compliance with the statute in 
 such case made and provided, namely, the provisions of Chapter 712 
 of the Laws of 1899, and the amendment thereto. 
 
 III. The State Board of Tax Commissioners was and is authorized 
 by law to make the valuation and assessment complained of, and in 
 the manner and form as made by it and the statute under which the 
 said valuations were made is in accordance with the Constitution and 
 valid and binding upon the relator, and all of the acts done and per- 
 formed by said State Board of Tax Commissioners, as set forth in 
 the i)etition herein, were in accordance with law and valid under the 
 Constitution and Laws of the State of New York, and of the United 
 States. 
 
FORMS. 335 
 
 IV. Tour respondents further return that at the time of fixing 
 the valuation of the special franchise of the relator herein, they had 
 before them the report and supplemental reports of the relator here- 
 tofore filed with the Board according to law and in accordance with 
 the request of the Board; also the complaint referred to in the peti- 
 tion herein. 
 
 Copies of the same are not hereto annexed on account of their 
 voluminous character, but the same are hereby made a part of this, 
 return as if set out at length and may be considered on any trial or 
 appeal herein as if attached to this return and may be used in whole 
 or in part by either party to this proceeding. The same are on file 
 with the State Board of Tax Commissioners and presumably dupli- 
 cates thereof in the office of the relator or its attorney herein. 
 
 V. A notice in writing was duly given to the relator that the said 
 State Board of Tax Commissioners would meet at its office in the 
 
 City of Albany on the day of , 191 , to 
 
 hear and determine any complaint concerning said assessment. At 
 the time fixed in said notion or to which the matter was adjourned, the 
 relator appeared and filed certain papers and was heard by counsel. 
 Copies of said pai)ers being hereto attached as aforesaid. 
 
 VI. That the petitioner is in no wise aggrieved by the action of the 
 State Board of Tax Commissioners in the premises and that the sum 
 fixed by it as the valuation of its special franchises in the borougk 
 of , city of , is neither erroneous nor il- 
 legal, nor is the same an over-valuation of such special franchise in 
 said borough. 
 
 That the rights, permission and franchises set out in the petition 
 of the relator constitute a special franchise as the same is defined by 
 the Tax Law, upon which the relator is subject to a special franchise 
 tax, and do not constitute separate and distinct special franchises so 
 that the valuation is required to be fixed separate and apart from 
 each other. 
 
 VII. That your respondents have not knowledge or information 
 sufficient to form a belief as to the exact percentage in proportionate 
 valuation of the assessment by the local authorities of the said bor- 
 ough of other real property in said borough for the year 191 , and 
 
 that your respondents have decided the sum of $ to be 
 
 the full and true value of the special franchises of the relator in the 
 
336 TAXATION OF COEPOEATIOBTS. 
 
 said borough and valued the same for assessment at that sum, and 
 your respondents deny that relator has been assessed at a higher pro- 
 portionate valuation than the assessment of other special franchises 
 assessed by them. 
 
 Vm. Tour respondents further allege and return that at and 
 previous to the time of making such assessment, they had before 
 them certain facts and information other than those communicated 
 to them on behalf of the relator. That at and previous to the time 
 ■when the assessment and valuation of the special franchise of the 
 relator was made by your respondents, they had made inquiry, ex- 
 amination and investigation as to the value of the special franchises 
 of the relator in said borough. That such inquiry, examination and 
 investigation was made by and on behalf of this Board through its 
 agents and employees, who had obtained knowledge and information 
 and formed opinion as to the value of the special franchise of the 
 relator assessed and in connection therewith of the value of the prop- 
 erty of the relator, real and personal, in said borough, it being im- 
 practicable by reason of the large number of special franchises as- 
 sessed by your respondents for them to make personal examination 
 of the property of this relator; and from such inquiry, examination 
 and investigation, together with the papers and documents produced 
 before it, it decided the value of the special franchise of the relator 
 
 to be the full sum of $ and it fixed the value of such 
 
 special franchise for the purpose of assessment at the said sum of 
 
 $ , which your respondents believe to be a just and 
 
 true valuation and which they decided to be the sum at which the 
 said special franchise of the relator was properly assessable for the 
 year 191 , after hearing the relator and after consideration of the 
 matters presented by it as grounds for reduction. 
 
 IX. That your respondents allege and return that the petitioner 
 was allowed in all respects the hearing provided for and contemplated 
 by Section 44 of Article 2 of the Tax Law and alleges that the said 
 relator had a full and fair hearing by its counsel orally and sub- 
 mitted and presented to the Board all documents and papers desired 
 to be submitted by it. 
 
 X. That the facts pertinent and material, to show the value of the 
 property assessed on the roll which were considered by your respon- 
 dents and the grounds for the valuation of such special franchise 
 
POEMS. 337 
 
 by them, included the- value of the real estate of such corporation 
 situate in the streets, highways and public places in said borough, 
 aside from and irrespective of the use and right to use such streets, 
 highways and public places together with the value of the use and the 
 right to use said streets, highways and public places of said borough 
 by the relator, as such value has been fixed and determined upon the 
 evidence, papers and documents before said Board; which papers and 
 documents give among other things the cost of the property, the in- 
 come therefrom and other facts going to show the value thereof; and 
 from examination, investigation and inquiry made by and on behalf 
 of the said Board as to the value of said property. That in so as- 
 sessing such special franchise and in arriving at the valuation 
 thereof, your respondents have not included in such assessment and 
 valuation any property except as is situate in, above, upon or run- 
 ning through the public streets or public places of said borough, in- 
 cluding the franchises, rights, authority or permission to construct, 
 operate and maintain its foundations, roadbed, substructures and 
 superstructures, with their appliances in, above, upon, or through said 
 streets and public places; nor have they included the value of the 
 right to be or the franchise to be a corporation; nor have they in- 
 cluded the value of the good will of the business carried on by it; 
 nor have they included. the value of any property other than that de- 
 fined as a special franchise by subdivision 3 of section 2 of the Tax 
 Law. That such assessment as made of such special franchises in- 
 cludes the value of the tangible and intangible property in said 
 streets, and has been arrived at upon consideration of all the facts 
 and circumstances affecting the value of said property, including 
 the use or right to use said streets and public places, which your 
 respondents have been able to ascertain. 
 
 XL That at the time the assessment complained of herein was 
 made and at the present time the relator herein was and is operating 
 
 railroad in the street and public highway 
 
 known as Avenue, in the borough of 
 
 city of That such use and operation constitutes 
 
 and is a special franchise as defined in subdivision 3, section 2 of the 
 Tax Law as a special franchise, and this relator is and was at all of 
 times aforesaid subject to taxation on the same and that the assess- 
 ment thereof by these respondents was and is legal. 
 
 XII. Your respondents further return that they do not admit any 
 
338 TAXATION OF COEPOEATIOWS. 
 
 of the allegations in the petition except so far as the same are shown 
 to be true by this return and the papers thereto annexed and referred 
 to and forming a part thereof, and deny each and every allegation 
 to the ejffect that the relator is not properly and legally assessed at the 
 fair value of its sjjecial franchise. 
 
 In witness whereof^ the undersigned. Chairman of the State 
 
 Board of Tax Commissioners, has hereunto set his hand this 
 
 day of , 191 . 
 
 Chairman. 
 STATE OP NEW TOEK, 
 County of , ss. : 
 
 , being duly sworn, deposes and 
 
 says: That he is Chairman of the State Board of Tax Commis- 
 sioners; that he has read the foregoing return and knows the con- 
 tents thereof; that the same is true to the knowledge of deponent, 
 except as to those matters therein alleged to be stated on information 
 and belief, and as to those matters he believes it to be true. 
 Subscribed and sworn to before me 
 
 this day of , 191 . 
 
 Notary Public, 
 County. 
 
FOBMS. 339 
 
 III. FORMS FOR STATE TAXATION 
 APPLICATION FOE EE-SETTLEMENT OF STATE TAX. 
 
 In the Matter 
 of 
 
 The Application of the 
 
 Company for a Eevision and Eeadjust- 
 ment of the Account Heretofore Audited/ 
 and Stated by the Comptroller of the | 
 State of New York for Taxes under Sec- 
 tion (182) of the Tas Law. 
 
 To the Hon , Comptroller of the 
 
 State of New York: 
 
 The application of the Company 
 
 respectfully shows : 
 
 I. That it is a corporation, duly organized and 
 
 existing under the laws of the State of , and 
 
 that during the year ending October 31, 191 , it was engaged in the 
 
 business in the State of New York, and that (no) 
 
 part of its capital was employed within the State of New York. 
 
 II. That on or before the 15th day of November, 191 , it duly made 
 a written report to the comptroller of the State of New York, as re- 
 quired by section 192 of the Tax Law, such report being in the form 
 prescribed by said comptroller; and that said report showed the con- 
 dition of said company at the close of its business on October 31, 
 191 , and that in said report was stated the amoimt of its authorized 
 capital stock, the amount of stock paid in, the entire amount of the 
 capital of the corporation, and the capital employed by it in the State 
 during the year ending October 31, 191 (the date and rate per cent, 
 of each dividend declared during the year ending October 31, 191 , 
 
 which dividends amounted respectively to per cent., and 
 
 per cent.) (or if no dividends were declared, that no 
 
 dividends were declared during the year ending October 31, 191 ). 
 
 HI. That such report showed : 
 
 (Here show details of the report, including the authorized 
 capital stock, the capital employed within and without the State, 
 the rate of dividends, etc.) 
 
340 TAXATION OF COEPOEATIONS. 
 
 rV. That subsequent to the said fifteenth day of Noyember, 191 , 
 the comptroller audited and stated an account for taxes to be paid 
 by, and sent notice thereof to the said company. 
 
 V. That the said account so audited and stated imposed a tax of 
 
 $ , purported to be a tax of one and one-half mills on 
 
 an assessment of $ 
 
 VI. That such tax and such assessment was illegal and erroneous 
 and cannot be lawfully demanded, and the said tax is wholly without 
 warrant or authority of either fact or law. 
 
 Wherefore, the said company makes this application and prays 
 that the said account so audited and stated be revised and readjusted, 
 and that the said account be resettled by striking therefrom or by 
 
 crediting to the ambirnt of said company $ , and 
 
 that said company have such other and further relief as may be 
 proper. 
 
 Company. 
 
 By 
 
 President (or other officer). 
 
 Attorney. 
 
 Office and P. O. address 
 
 (Verification should be annexed to the application.) 
 
FOKMS. 341 
 
 NOTICE OF APPLICATION POE WKIT OF CEKTIOEAEI. 
 SUPEEME COUET— County. 
 
 The People of the State of New York 
 
 ex rel Company, j 
 
 against 
 
 , Comptroller | 
 
 of the State of New York. 
 
 Sir: 
 
 Please take notice, that upon the petition of the 
 
 Company, verified , and on the undertaking 
 
 for costs herein filed with the comptroller of the State of New York, 
 copies of which are hereto annexed, the undersigned will move this 
 court, at Special Term thereof, to be held at the County Court House, 
 
 city of Albany, on the day of , at 
 
 o'clock A. M., or as soon thereafter as counsel can be heard, for an 
 order for a writ of certiorari and also for a writ of certiorari to be 
 directed to you to review the determination of the comptroller of the 
 
 State of New York, dated , a copy of which is hereto 
 
 annexed, and to be returnable according to law, and for such other 
 and further relief as may be just. 
 
 Dated 
 
 Yours, etc.. 
 
 Attys. for Petitioner. 
 To 
 
 Comptroller of the State of New York. 
 
 PETITION FOE WEIT OF CEETIOEAEI. 
 
 (Same title as in previous form.) 
 To the Supreme Court of the State of New York : 
 
 The petition of Company respectfully 
 
 shows : 
 
342 TAXATION OF COEPOEATIONS. 
 
 I. The defendant is a corporation, organized 
 
 under the laws of the State of , having its 
 
 principal office at .' . . (if the petitioner is a foreign 
 
 corporation add "and also having an office at 
 
 within the State of New York") for the purpose of , 
 
 and actually engaged in the business of 
 
 II. The defendant, , is and has been 
 
 since the comptroller of the State of New 
 
 York. 
 
 III. That on or before November 15, 191 , this petitioner duly 
 made a written report to the comptroller of the State of New York, 
 
 as required by subdivision , section 192 of the Tax Law, being 
 
 Chapter 60 of the Consolidated Laws. A copy of said report is hereto 
 annexed, marked "A," and made part hereof. 
 
 IV. That said report shows the condition of the petitioner on Oc- 
 tober 31st preceding, which was as follows : 
 
 (Here state the material facts embodied in such report, show- 
 ing the amount of its capital stock employed within the State, 
 if any, etc.) 
 
 V. That subsequent to the said 15th day of November, 191 , the 
 comptroller audited and stated an account of taxes to be paid by this 
 petitioner, under section 182 of the Tax Law, and sent a notice thereof 
 to your petitioner, a copy of which is hereto annexed, marked "B," 
 and made part hereof. 
 
 VI. That on or about the day of , 191 , 
 
 and within one year from the time that said account of the comp- 
 troller had been audited and stated and notice thereof sent to your 
 petitioner, it applied to the State comptroller to revise and readjust 
 said account and to have said account resettled. That said applica- 
 tion was made by written petition duly verified on or about the 
 
 day of , a copy of which is hereto annexed, 
 
 marked "C," and made part hereof. 
 
 Vn. That on such petition a rehearing was granted to your pe- 
 titioner by said comptroller on the day of 
 
 at the office of the State comptroller, in the city of Albany. On such 
 
POEMS. 343 
 
 rehearing your petitioner appeared by one of its officers (or other 
 
 witness) and by its counsel , before the 
 
 Hon , comptroller, represented by 
 
 , attorney-general, and answered such questions as were 
 
 put to him by the comptroller and attorney-general, and gave testi- 
 mony in support of said application. 
 
 That your petitioner is advised and believes from the evidence and 
 proofs then and there given that $ (or that no por- 
 tion) of the capital stock of your petitioner was employed within the 
 State for the year ending October 31st, 191 , and that your petitioner 
 is not taxable in said State upon its franchise or business (for more 
 than $ ). 
 
 VIII. That thereafter and on the day of , 
 
 191 , the said comptroller made his determination and sent written 
 notice thereof to the applicant, a copy of which determination is hereto 
 annexed, marked "D," and made part hereof. That in and by said 
 determination said comptroller refused to revise or readjust said tax 
 (except to the amount of $ ). 
 
 IX. Tour petitioner further shows that the said appraisal of the 
 capital stock employed within the State by your petitioner (wholly 
 and entirely) is illegal and erroneous (to the amount of $ ). 
 
 X. Tour petitioner is advised and believes that the said determina- 
 tion of the comptroller may be reviewed by this court by writ of 
 certiorari and relief granted to your petitioner as provided by section 
 199 of the Tax Law. 
 
 XL Tour petitioner, pursuant to the statute in such case made and 
 provided, duly deposited with the State treasurer of the State of New 
 Tork $ , being the full amount of the taxes, per- 
 centages, interest and other charges stated in said account, and duly 
 filed an undertaking with the State comptroller in an amount and 
 with sureties approved by a justice of the Supreme Court of the 
 State of New Tork to the efFect that if the said writ of certiorari is 
 dismissed and said determination is confirmed this petitioner will pay 
 any and all charges and costs which may accrue against it in the 
 prosecution of the writ, including the cost of all appeals; a copy of 
 this undertaking is hereto annexed, marked "E," and made part 
 hereof. 
 
344 TAXATION OF COEPOBATIONS. 
 
 XII. That thirty days have not elapsed since the comptroller served 
 notice on your petitioner of his said determination, upon the applica- 
 tion of your petitioner for revision and readjustment of the said ac- 
 count stated against it. 
 
 XIII. That your petitioner is aggrieved by the said determination 
 of the comptroller. That no previous application has been made for 
 the writ to any court or judge. 
 
 Wherefore, your petitioner, desiring to review both on law and 
 the facts, said determination of said comptroller upon such applica- 
 tion made to him by your petitioner for a revision and resettlement 
 of 'the said account, as hereinbefore set forth, prays that a writ of 
 
 certiorari may issue out of this court, directed to 
 
 comptroller of the State of New York, commanding him to certify 
 and return to this court at the office of the clerk of Albany County, 
 all and singular the evidences before him on such application and all 
 the papers and proofs upon the original statement of such account, 
 and all proceedings thereon, and all his decisions and actions in the 
 premises, with all the evidence, documents, reports, records and papers 
 relating thereto in his possession or under his control, submitted to 
 or considered by him, concerning said account and the grounds of his 
 refusal to revise and readjust the same, to the end that his said de- 
 termination and decision may be reviewed and the said original and 
 resettled account corrected and restated, and that this jietitioner have 
 such other and further relief as may be proper. 
 
 Dated 
 
 Company. 
 
 President (or other officer). 
 
 Attorneys for Petitioner. 
 
POEMS. 345 
 
 OKDEE FOR WRIT OR CERTIORARI. 
 
 At a Specifil Term of the Supreme Court, held in and for 
 
 the county of , at the County Court 
 
 House, in the city of on the 
 
 day of ,191 . 
 
 Present — Hon , Justice. 
 
 (Same title as in previous form.) 
 
 Upon reading and filing the petition of 
 
 Company, verified and the exhibits thereto 
 
 attached, and upon the undertaking heretofore filed as required by 
 law, and upon the notice of this application duly served on the comp- 
 troller of the State of New York, and with proof of due service 
 thereof with copy of the petition and exhibits annexed, 
 
 Now, after hearing , counsel for the pe- 
 titioner, in favor of the motion, and ( , deputy 
 
 attorney-general, for the State comptroller) (or no one appearing) 
 
 in opposition thereto, and on motion of , attorney 
 
 for the petitioner, it is 
 
 Ordered, that a writ of certiorari, as prayed for in said petition, 
 be issued, directed to the comptroller of the State of New York, to 
 review the decision and determination of the said comptroller men- 
 tioned and described in the petition, and the questions involving the 
 merits therein mentioned, both upon the law and the facts, which 
 writ shall be returnable within twenty days after the service thereof 
 upon said comptroller, at the office of the clerk of Albany County. 
 Enter, 
 
 Justice. 
 
 (Endorsed:) Sir: You will please take notice that an order of 
 which the within is a copy, was this day duly entered in the office 
 of the clerk of this court, at his office in the county of 
 
 Dated, , 191 . 
 
 Yours, etc.. 
 
 Attorney for Relator. 
 To Hon 
 
 State Comptroller, Albany, N. Y. 
 
346 TAXATION" OF COEPOEATIONS. 
 
 WEIT OF CERTIORAKI. 
 
 (Same title as in previous form.) 
 
 Whereas, we have been informed by the verified petition of 
 
 Company, dated and verified the 
 
 day of 191 , that certain proceedings have been had 
 
 before the comptroller of the State of New York, upon the application 
 
 of the said Company to revise and readjust 
 
 an account theretofore audited and stated by the said comptroller of 
 
 the State of New York for taxes to be paid by the said 
 
 Company, xmder section 182 of the Tax Law, the petition upon which 
 
 the said application was made being verified , 191 , 
 
 and a hearing upon such application having been had on the 
 
 day of , 191 , and the said comptroller having 
 
 thereafter made his determination and sent written notice 
 of his determination upon such application to the applicant, the pe- 
 titioner herein, denying the application and declining to make any 
 
 revision or readjustment of the said account, and the said 
 
 Company having now made application to this court for a 
 
 writ of certiorari to review the said decision and determination of the 
 said comptroller; 
 
 And we being willing for certain purposes to be certified of such 
 proceedings, if any such were had, do hereby command and strictly 
 
 enjoin , as comptroller of the State of 
 
 New York, that he certify and return all and singular the evidence 
 before him on such application, and all the papers and proofs upon 
 the original statement of such account and all proceedings thereon, 
 and all his decisions and actions in the premises, with all the evi- 
 dence, documents, reports, records and papers relating thereto in his 
 possession or under his control, submitted to or considered by him, 
 concerning the said account and the grounds of his refusal to revise 
 and readjust the same, as prayed for in the petition, within twenty 
 days after the service upon him of this writ, at the office of the 
 clerk of Albany County, under his proper hand, pursuant to the 
 provisions of the Tax Law and the provisions of Title II of Chapter 
 16 of the Code of Civil Procedure, so that our Supreme Court may 
 further cause to be done thereon what of right and according to law 
 ought to be done, and let the defendant have then and there this 
 writ. 
 
FOBMS. 347 
 
 Witness, the Hon , Justice of our Hon- 
 orable Court, at the Court House in the city of 
 
 this day of , 191 . 
 
 (Seal.) Clerk. 
 
 Attorney for Relator. 
 
 The above writ is hereby allowed this day 
 
 of , 191 . 
 
 Justice Supreme Court. 
 
 UNDERTAKING FOR COSTS. 
 
 (Same title as in previous form.) 
 
 Whereas, the above-named Company, 
 
 heretofore applied to the comptroller of the State of New York to 
 revise and readjust the account heretofore audited and stated by the 
 
 said comptroller, imposing a tax against the said 
 
 Company for the year , under (see. 182) of the Tax 
 
 Law, and the said comptroller having denied said application; and 
 
 Whereas, said Company, feeling ag- 
 grieved thereby, is about to apply to the Supreme Court of the State 
 of New York for a writ of certiorari, under the Tax Law, Chapter 
 60, of the Consolidated Laws, to review the action of the said comp- 
 troller. 
 
 Now, THEREFORE, the Surety Company, 
 
 a corporation duly organized under the laws of the State of 
 
 to execute surety bonds, having an office at 
 
 city of , does hereby undertake that 
 
 if the said writ of certiorari, which may be granted upon the applica- 
 tion of the said Company to review the said 
 
 determination, be dismissed, or the determination of the said comp- 
 troller be confirmed, the said Company will 
 
 pay all costs and charges which may accrue against it in the prose- 
 cution of the said writ, including the costs of all appeals, not ex- 
 ceeding the sum of five hundred dollars. 
 
 Dated, etc., 
 
 Surety Company. 
 
 By President. 
 
348 TAXATION OF COEPOEATIONS. 
 
 Form of ackno-wledgment by officer of surety company in usual 
 form for taking corporate acknowledgments. 
 
 (The above bond may also be given by two individuals, each 
 qualifying for twice the amount of the bond, with affidavit and 
 acknowledgment annexed in each case.) 
 
 COMPTROLLEE'S EETUEN TO THE WEIT OF CEETIO- 
 
 EAEI. 
 
 SUPEEME OOUET, ALBANY COUNTY. 
 
 The People of the State of New York, ex 
 
 rel 
 
 Company, 
 
 against 
 
 , as Comp- 
 troller of the State of New York. 
 
 The return of , comptroller of the State of 
 
 New York, to the writ of certiorari directed to 
 
 , as comptroller of the State of New York, issued 
 
 out of this court , 191 , directed, a copy of which 
 
 is hereto annexed, respectfully shows to this court: 
 
 By virtue of and in obedience to the said writ of certiorari, I, 
 
 , as comptroller of the State of New 
 
 York, do hereby certify and return to the Supreme Court all and 
 singular the evidence before said comptroller on such application, all 
 the papers and proofs upon the original statement of such account 
 and all the proceedings therein, documents, reports, records and 
 papers relating thereto in my possession or under my control, sub- 
 mitted to or considered by said comptroller concerning the said ac- 
 count as prayed for in the petition herein, to wit : 
 
 The report of the gross earnings in the State of New York of the 
 Company for the year 191 ; 
 
FORMS. J4y 
 
 The bill of the comptroller to the relator on its earnings for the 
 year 191 ; 
 
 The petition of relator for a revision, dated , 191 j 
 
 Notice to the comptroller of the payment of the tax as fixed under 
 protest by the president of said company, dated , 191 ; 
 
 The determination of the comptroller, dated , 
 
 191 ; 
 
 Petition and notice of motion for an order for writ of certiorari, 
 dated , 191 , and writ ; 
 
 Order allowing the writ of certiorari, dated , 
 
 191 , and writ also dated 191 , together with 
 
 notice of entry in the office of the clerk of Albany Oonnty on the day 
 
 of , 191 , all other papers used on the hearing or 
 
 considered by the comptroller in this proceeding and undertaking on 
 appeal heretofore filed. 
 
 In witness whereof, I have hereunto set my hand and seal this 
 day of ,191 . 
 
 (L. S.) Comptroller of the State of New York. 
 
 AFFIDAVIT FOE EXEMPTION FEOM THE PAYMENT OF 
 
 THE ANNUAL FRANCHISE TAX UNDEE SECTION 
 
 183 OF THE TAX LAW. 
 
 STATE OF NEW YOEK, 
 County of , ss. ; 
 
 Personally appeared before me this day of 
 
 , 191 , , who being duly sworn, 
 
 deposes and says : That he is the president of the 
 
 Company; that the above-named company was organized on the 
 day of , under chapter of the Laws 
 
350 TAXATIOlSr OP COEPOEATIONS. 
 
 of , for the purpose of engaging in, and it is now 
 
 engaged in, the manufacturing of 
 
 That the business of said company is exclusively manufacturing 
 within the State of New York and the sale of products so manu- 
 factured, and that said company does not cause to be manufactured 
 within or without the State of New York any article sold by it as the 
 company's own product, or that the said company does not engage in 
 the business of selling articles that are not its own manufacture; 
 that said company does not lease to other companies the right to 
 manufacture goods sold by it, and that its present factory location 
 
 is at No , city of , State of 
 
 New York, and that the location of the main business office of the 
 
 company is at , in the State of New York; 
 
 that at least forty per cent, of the company's entire capital, viz., 
 
 per cent., is actually employed in manufacturing 
 
 in the State of New York. 
 
 (Signature.) 
 
 Sworn to before me, this 
 
 day of 191 . 
 
 EEPORT BY DOMESTIC OE FOREIGN OORPOEATION 
 UNDER SECTION 182 TAX LAW. 
 
 (May also be used for License Eee under § 181 Tax Law.) 
 Each statement must be full and explicit. 
 
 To the Comptroller of the State of New York: 
 
 As of the 
 
 Oompaity 
 
 I make the following report of such Company for the year ending 
 October 31, 191 , pursuant to the provisions of Section 182, Chapter 
 60, Consolidated Laws: 
 (1) The last preceding report made by this Company to the comp- 
 troller of the State of New York under the provisions of the 
 above acts was for the year ending October 31, 191 . 
 
FORMS. 351 
 
 (2) Organized , 191 , under the laws 
 
 of 
 
 (3) This Company began business in the State of New York on 
 
 , 191 . 
 
 (4) Authorized capital stock of Company $ 
 
 (5) Number of shares of stock authorized: 
 
 Common 
 
 Preferred 
 
 (6) Number of shares of stock issued: 
 
 Common 
 
 Preferred 
 
 (7) Par value of each share: 
 
 Common $ 
 
 Preferred $ 
 
 (8) Amoimt paid into treasury of company on each share : 
 
 Common $ 
 
 Preferred $ 
 
 (9) Amount of capital stock issued for cash or prop- 
 
 erty, except as in (10) $ 
 
 (10) Amount of capital stock issued for good will, copy- 
 
 rights, brands, patents, trademarks, formulae, 
 services, etc., other than cash or property as 
 in (9) $ 
 
 (11) Amount of common stock on which dividends were 
 
 declared $ 
 
 (12) Amount and date of each dividend on common 
 
 stock 
 
 (13) Rate per cent, per annum of dividends on com- 
 
 mon stock 
 
 (14) Amoimt of preferred stock on which dividends 
 
 were declared $ 
 
 (15) Amount and date of each dividend on preferred 
 
 stock 
 
 (16) Bate per cent, per annum of dividends on pre- 
 
 ferred stock 
 
 (17) Nature of business in State of New York and how 
 
 transacted 
 
352 TAXATION OF COEPOEATIOlSrS. 
 
 (18) (a) Place, street and number where such business 
 
 was conducted 
 
 (b) Where will mail reach the company 
 
 (19) Average value of stock in trade carried in the State 
 
 of New York during the year ending October 
 31, 191 $. 
 
 (20) Average monthly bank balance employed in the 
 
 State of New York during the year ending Oc- 
 tober 31, 191 $. 
 
 (21) Average value of bills and accounts receivable in 
 
 State of New York during the year ending Oc- 
 tober 31, 191 $. 
 
 (22) Average value of shares of stocks of other corpo- 
 
 rations doing business in the State of New York 
 and owned by this company during the year 
 ending October 31, 191 $. 
 
 (23) Average value of bonds, loans on call and other 
 
 financial securities in the State of New York 
 during the year ending October 31, 191 $ 
 
 (24) Average value of all personal property other than 
 
 heretofore mentioned, in New York, during the 
 year ending October 31, 191 $. 
 
 (25) Gross value of real estate located in the State of 
 
 New York and owned by this company during 
 the year ending October 31, 191 , and where 
 situated $. 
 
 (26) Total of assets above enumerated located in 
 
 State of New York during the year ending 
 October 31, 191 
 
 (27) Average value of stock in trade carried outside 
 
 the State of New York during the year ending 
 October 31, 191 
 
 (28) Average monthly bank balance employed outside 
 
 the State of New York during the year ending 
 October 31, 191 
 
 (29) Average value of bills and accounts receivable out- 
 
 side the State of New York during the year 
 ending October 31, 191 
 
 (30) Average value of shares of stock of other corpora- 
 
FOKMS. 353 
 
 tions owned by this corporation, where such cor- 
 porations are doing business wholly without the 
 State of New York $ 
 
 (31) Average value of all bonds, loans on call and other 
 
 financial securities outside the State of New 
 
 York during the year ending October 31, 191 . . .$ 
 
 (32) Average value of personal property, other than 
 
 heretofore mentioned, outside New York during 
 
 the year ending October 31, 191 $ 
 
 (33) Gross value of real estate located outside the State 
 
 of New York, and owned by this company, dur- 
 ing the year ending October 31, 191 , and where 
 situated $ 
 
 (34) Total of assets located outside the State of 
 
 New York during the year ending October 
 
 31, 191 $ 
 
 (35) AVEKAGE LIABILITIES: 
 
 Bonds not secured by mortgage, average. ... $ 
 
 Mortgages, average $ 
 
 Bills payable, average $ 
 
 Accounts payable, average $ 
 
 Other liabilities, excluding capital stock, 
 
 average $ 
 
 Total average liabilities $ 
 
 (36) Highest bona fide price at which stock sold during 
 
 year ending October 31, 191 : 
 
 Preferred $ 
 
 Common $ 
 
 (37) Lowest bona fide price at which stock sold during 
 
 year ending October 31, 191 : 
 
 Preferred $ 
 
 Common $ 
 
 (38) Percentage of capital stock of the company employed in the 
 
 State of New York during the year ending October 31, 191 
 in manufacturing and in the sale of the product of such 
 manufacture 
 
 (39) Are your goods manufactured for you by others? 
 
 (40) Do you operate a factory? 
 
354 TAXATION OF COKPOBATIONS. 
 
 EEMAEKS. 
 
 Officers' names : , President ; 
 
 , Secretary; , Vice- 
 President ; , Treasurer. 
 
 The undersigned, being the ; of the above 
 
 Company, estimates and appraises* the capital stock of said Com- 
 pany as follows: 
 
 shares at dollars 
 
 cents per share, amounting in the whole to 
 
 dollars. 
 
 In Witness Whereof, I have set my hand this 
 day of , 191 . 
 
 (Official Title.) 
 
 STATE OF NEW TOEK, 
 County of 
 
 On this day of A. D. 191 , personally 
 
 appeared before me, a Notary Public in and for the County of 
 
 , , of the above named Com- 
 pany, who, being duly sworn according to law, did depose and say that 
 the foregoing report is just, true and correct and that it includes all 
 dividends of any description declared by said Company during the 
 year ending October 31, 191 , and that he has, according to his best 
 knowledge and belief, appraised the Capital Stock of the Company 
 as provided by statute, at not less than the average price at which it 
 
 *Corporations paying six per cent, or more on their entire capital 
 stock need not appraise their capital stock; all others must appraise. 
 
FOBMS. 355 
 
 sold and not less than the difference between its assets and liabilities, 
 exclusive of capital stock. 
 Sworn to before me the day and 
 year aforesaid. 
 
 Notary Public. 
 
 EEPORT TO BE MADE FOE ADDITIONAL FRANCHISE 
 TAX BY TKANSPORTATION AND TRANSMISSION 
 CORPORATIONS TAXABLE UNDER SEC- 
 TION 184 TAX LAW. 
 
 Report of the Gross Earnings in the State of New York of the 
 
 Company, for the year ending June 
 
 30, 191 , made in accordance with the requirements of Section 192 
 of the Tax Law. 
 
 Office of the Company. 
 
 191 . 
 
 1. Gross Earnings derived from all sources during the 
 
 above period $ 
 
 2. For Tolls and Transportation $ 
 
 3. For Telegraph and Telephone business $ 
 
 4. For Express business $ 
 
 Taxable gross receipts $ 
 
 This report includes the gross earnings received from lines of road 
 
 leased by Company, and for which said 
 
 Company is liable to the State for the tax on gross earnings. 
 
 5. Names of Companies leased : 
 
356 TAXATION OF COEPOEATIONS. 
 
 STATE or NEW YORK, ) 
 
 County of { 
 
 On this day of A. D. 191 , personally- 
 appeared before me, a Notary Public in and for the County of 
 
 , Treasurer of the Com- 
 pany, who being duly sworn according to law, did depose and say 
 that the foregoing report is true and correct. 
 
 Treasurer. 
 Sworn to and subscribed before me, the 
 day and year aforesaid. 
 
 Notary Public, 
 (L. S.) 
 
 EEPOET BY ELEVATED EAILEOADS OE SUEFACE EAIL- 
 
 EOADS NOT OPEEATED BY STEAM, TAXABLE 
 
 UNDEE SECTION 185 TAX LAW. 
 
 Eeport of the gross earnings in the State of New York of the 
 
 Company, for the year ending 
 
 June 30, 191 , made in accordance with the requirements of Section 
 192 of the Tax Law. 
 
 Office of the Company, 
 
 191 
 
 1. Organized under the laws of the State of 
 
 2. Date of Organization of the Company 
 
 3. Total authorized Capital of Company $ 
 
 4. Whole number of shares of stock authorized 
 
 5. Number of shares of stock issued 
 
 6. Par value of each share $ 
 
 7. Amount paid into the Treasury of the Company on 
 
 each share $ 
 
 8. Amount of Capital paid in $ 
 
 9. Amount of capital upon which dividends were de- 
 
 clared $ 
 
 10. Date of each dividend declared 
 
roEMs 357 
 
 11. Amount of each dividend declared 
 
 12. Kate per cent, per annum of dividends 
 
 13. Gross Earnings derived from all sources during the 
 
 above period $ 
 
 This report includes the gross earnings received from lines of road 
 
 leased by Company, and for which said 
 
 company is liable to the State for the tax on gross earnings. 
 
 Names of companies leased 
 
 Treasurer. 
 
 STATE OF NEW TOEK, 
 County of 
 
 On this day of A. D. 191 , per- 
 sonally appeared before me a Notary Public in and for the County 
 
 of , Treasurer of the above-named Com^- 
 
 pany, who being duly sworn according to law, did depose and say, 
 that the foregoing report is just, true and correct according as the 
 accounts stand in the books of the Company, and that it includes all 
 dividends whether cash, stock, script or of any other character or 
 description, declared by said Company during the year ending June 
 30, 191 . 
 
 Treasurer. 
 Sworn to and subscribed before me, the 
 day and year aforesaid. 
 
 Notary Public. 
 
 EEPOET BY WATEE WOEKS, GAS, ELECTEIC OE STEAM 
 HEATING, LIGHTING OE POWEE COMPANIES, 
 TAXABLE ITNDEE SECTION 186 TAX LAW. 
 Eeport of the Gross Earnings in the State of New York of the 
 
 Company, for the year ending October 
 
 31, 191 , made in accordance with the requirements of Section 186, 
 Chapter 60 of the Consolidated Laws. 
 Office of the Company, 
 
 191 
 
358 TAXATIOIT OF COEPOEATIOlirS. 
 
 1. Organized under the laws of the State of 
 
 2. Date of organization of the Company 
 
 3. Total authorized Capital of Company $ 
 
 4. Whole number of shares of stock authorized 
 
 5. Number of shares of stock issued 
 
 6. Par value of each share $ 
 
 7. Amount paid into the Treasury of the Company on 
 
 each share $ 
 
 8. Amount of Capital paid in $ 
 
 9. Amount of Capital upon which dividends were de- 
 
 clared $ 
 
 10. Date of each dividend declared 
 
 11. Amount of each dividend declared $ 
 
 12. Rate per cent, per annum of dividends 
 
 13. Gross Earnings derived from all sources during the 
 
 above period $ 
 
 This report includes the gross earnings received from property or 
 
 plants leased by Company, and for which 
 
 said Company is liable to the State for the tax on gross earnings. 
 
 Names of companies leased 
 
 Treasurer. 
 
 STATE OF NEW TOEK, 
 County of 
 
 On this day of A. D. 191 , person- 
 ally appeared before me a Notary Public in and for the County of 
 
 Treasurer of the above-named Company, 
 
 who being duly sworn according to law, did depose and say, that the 
 foregoing report is just, true and correct according as the accounts 
 stand in the books of the Company, and that it includes all dividends 
 whether cash, stock, script or of any other character or description, 
 declared by said Company during the year ending on the 31st day of 
 October, A. D. 191 . 
 
 Treasurer. 
 Sworn to and subscribed before me, the 
 day and year aforesaid. 
 
 Notary Public. 
 
FOEMS 359 
 
 EEPOET OF INSUEANCE COMPANY TAXABLE UNDER 
 SECTION 187 TAX LAW. 
 
 Report of Gross Premiums of the *. . . 
 
 Lisurance Company, for the year ending December 31, 191 , made 
 in accordance with the requirements of Chapter 908, Laws of 1896, 
 as amended by Chapter 118, Laws of 1901, as amended by Chapter 
 94, Laws of 1905. 
 
 Office of the Insurance Company, 
 
 191 
 
 When organized and under the laws of what State? 
 
 Gross amount of premiums received during preceding calendar 
 year for business done in New York State, whether received in money 
 or in the form of notes, credits, or any other substitutes for money, 
 and without deduction for rebate.* 
 
 STATE OF NEW YORK, ) Secretary. 
 
 ' L ss.: 
 
 County op f 
 
 On this day of A. D. 191 , person- 
 ally appeared before me, a Notary Public in and for the County of 
 
 Secretary of the 
 
 Insurance Company, who being duly sworn according to law, did 
 depose and say that the foregoing report is true and correct. 
 
 Secretary. 
 Sworn to and subscribed before me, the 
 day and year aforesaid. 
 
 Notary Public. 
 
 REPORT BY TRUST COMPANY TAXABLE UNDER SEC- 
 TION 188 TAX LAW. 
 
 Report of the 
 
 for the year ending the 30th day of June, A. D. 191 , made pursuant 
 to Section 192 of the Tax Law. 
 
 191 . 
 
 *The term "gross premiums," as used in Article JX of the Tax 
 Law, includes, in addition to all other premiums, such premiums as 
 are collected from policies subsequently cancelled and from reinsur- 
 ance. 
 
360 TAXATION OF COKPOEATIOWS. 
 
 To the Comptroller of the State of New Yorh: 
 
 Agreeable to law, as Treasurer of the 
 
 I make the following report : 
 
 At the close of the business of this 
 
 on June 30th, 191 , the amount of its capital was. .. . 
 the amount of its surplus was .... 
 the amount of its undivided profits 
 
 was 
 
 on Jan. 1st, 191 , the amount of its capital was. .. . 
 the amount of its surplus was. .. . 
 the amount of its undivided profits 
 
 was 
 
 on June 30th, 191 , the amount of its capital was .... 
 the amount of its surplus was .... 
 the amount of its undivided profits 
 
 STATE OF NEW YORK, 
 County of , 3S. : 
 
 On this day of A. D. 191 , person- 
 ally appeared before me, a notary public in and for the County of 
 
 Treasurer 
 
 of the above-named 
 
 who being duly sworn according to law, did depose and say, that the 
 foregoing report is just, true and correct, according as the accounts 
 
 stand in the books of the for 
 
 the year ending on the 30th day of June, A. D. 191 . 
 
 Sworn to and subscribed before me, the 
 day and year aforesaid. 
 
 Notary Public. 
 L. s. 
 
FOEMS 361 
 
 EEPOET BY SAVINGS BANK, TAXABLE UNDER SECTION 
 
 189 TAX LAW. 
 
 Report of the 
 
 for the year ending the 30th day of June, A. D. 191 , made pursuant 
 to provisions of Sec. 192 of the Tax Law. 
 
 191 . 
 
 To the Comptroller of the State of New Yorlc : 
 
 Agreeable to law, as Treasurer of the 
 
 I make the following report of its 
 
 condition at the close of its business on June 30, 191 . 
 
 1. Bonds and mortgages at face $ 
 
 2. Stock and bond investments at par* $ 
 
 3. Real estate including banking house and lot at real 
 
 value for banking purposes $ 
 
 4. Cash on hand and on deposit $ 
 
 5. Total of collectible interest and interest accrued but 
 
 not due $ 
 
 6. Other assets $ 
 
 7. Total assets $ 
 
 8. Amount due depositors, including interest payable. . $ 
 
 9. Amount of surplus and undivided earnings $ 
 
 STATE OF NEW YORK, 
 
 County of , ss. : 
 
 On this day of , A. D. 191 , person- 
 ally appeared before me, a notary public in and for the County of 
 
 , Treasurer of the above named 
 
 , who being duly sworn ac- 
 cording to law, did depose and say, that the foregoing report is just, 
 true and correct, for the year ending on the 30th day of June, A. D. 
 191 . 
 
 Sworn to and subscribed before me, 
 the day and year aforesaid. 
 
 Notary Public. 
 L. s. 
 
 *NoTE. — ^Market value should be given when stocks and bonds are 
 selling below par. 
 

 
 
 Total 
 
 Int. 
 
 When 
 
 Market 
 
 Market 
 
 Bate. 
 
 Due. 
 
 Price. 
 
 $ 
 
 Value. 
 
 * 
 
 * 
 
 * * 
 Total, 
 
 « 
 
 362 TAXATION or coepoeations. 
 
 Stocks and Bonds Owned by the 
 
 June 30, 191 , worth less than their face value. 
 
 Face 
 
 Value. Name. 
 
 $ 
 
 * » * 
 
 Total, 
 
 EEPOBT BY FOEEIGN BANKER OB FOEEIGN COEPORA- 
 
 TION DOING A BANKING BUSINESS AND TAXABLE 
 
 UNDER SECTION 191 TAX LAW. 
 
 Verified Statement of 
 
 This Statement is a return of the full amount of interest or com- 
 pensation of any kind earned and collected by 
 
 on money loaned, used or employed in New York State by the afore- 
 said 
 
 during the year preceding the thirty-first day of December, 191 , 
 pursuant to the provisions of Chapter 500 of the Laws of 1900, re- 
 lating to Tax upon Foreign Bankers. 
 
 STATE OF NEW YORK, 
 County of , ss. : 
 
 being duly sworn, 
 
 says that he is of the above 
 
 named ; that he has 
 
 read the foregoing return and knows the contents thereof, that such 
 return is a true statement, to his own knowledge of all interest and 
 compensation of every nature received by 
 
 during the year ending December 31, 191 . 
 
 Subscribed and sworn to before me this, 
 day of ,191 . 
 
APPENDIX 
 
 FEDEEAL TAXATION. 
 
 The Federal Income Tax Affecting Coepoeations 
 I. Introduction. 
 
 The 1909 United States Tariff Act, officially entitled "An 
 Act to Provide Kevenue, equalize duties and encourage indus- 
 tries of the United States, and for other purposes," which 
 became a law August 5th, 1909, provided for an annual tax 
 upon the carrying on or doing business by corporations, joint 
 stock companies or associations, including insurance companies. 
 This legislation, known as the Federal Corporation Tax, was 
 upheld by the Supreme Court in Flint v. Stone Tracy & Co., 
 et al, 220 U. S. 107. 
 
 The rate of this special excise tax was one per cent, upon 
 the entire net income over and above five thousand dollars, 
 received from all sources during the year, exclusive of amounts 
 received as dividends upon stock of other corporations, joint 
 stock companies or associations, or insurance companies, subject 
 to the same tax. In the case of corporations organized under 
 the laws of a foreign country, the tax was limited to the net 
 income received from business transacted and capital invested 
 within the United States, its territories, Alaska and the District 
 of Columbia, in like manner as domestic corporations. 
 
 The act of 1913 adds several new features affecting corpora- 
 tion, which were not present in the act of 1909. The exemption 
 of $5,000 is taken away and they are now taxed at the rate 
 of one per cent upon their entire net incomes, certain deductions, 
 however, being allowed. They are required, under the pro- 
 visions more particularly relating to the income tax, to make 
 
 363 
 
364 INCOME TAX LAW OF 1913 
 
 returns not only with respect to themselves, but also with regard 
 to payments of interest and dividends made by them to others. 
 Dividends received from stock holdings in other corporations 
 must be included in reporting gross income and no deduction 
 for such amounts is allowable. 
 
 For the purpose of showing the changes made by the Act 
 of 1913, a comparative table is provided, disclosing the essential 
 features of the old and new acts. 
 
 For convenience, the subject matter is arranged as follows: 
 
 First. — The text of the Act of 1913, followed by the pro- 
 visions of the income tax sections of the Tariff Act with respect 
 to the duties of corporations in relation to incomes paid by them 
 to others. 
 
 Second. — A comparative table of the essential features of the 
 Corporation Tax provisions of the Acts of 1909 and 1913. 
 
 Third. — A digest of decisions under the Act of 1909. 
 
 Fourth. — The Treasury Regulations issued under the present 
 Act. 
 
 THE FEDEEAL INCOME TAX OF 191& 
 
 SECTIONS OF THE INCOME TAX AFFECTINQ CORPORATIONS. 
 
 Tax of 1 per cent, imposed on entire Net Income of Corporations. 
 Exemptions. — 
 
 G (a) That the normal tax hereinbefore imposed (one per centum 
 per annum) upon individuals likewise shall be levied, assessed, and 
 paid annually upon the entire net income arising or accruing from 
 aU sources during the preceding calendar year to every corporation, 
 joint-stock company or association, and every insurance company, 
 organized in the United States, no matter hovsr created or organized, 
 not including partnerships; but if organized, authorized, or existing 
 under the laws of any foreign country, then upon the amount of 
 net income accruing from business transacted and capital invested 
 within the United States during such year : 
 
 Provided, however, That nothing in this section shall apply 
 to labor, agricultural, or horticultural organizations, or to mu- 
 tual savings banks not having a capital stock represented by 
 shares, or to fraternal beneficiary societies, orders, or asso- 
 
APPENDIX 365 
 
 ciations operating under the lodge system or for the exclusive 
 henefit of the members of a fraternity itself operating under 
 the lodge system, and providing for the payment of life, sick, acci- 
 dent, and other benefits to the members of such societies, orders, or 
 associations and dependents of such members, nor to domestic build- 
 ing and loan associations, nor to cemetery companies, organized and 
 operated exclusively for the mutual benefit of their members, nor 
 to any corporation or association organized and operated exclusively 
 for religious, charitable, scientific, or educational purposes, no part 
 of the net income of which inures to the benefit of any private stock- 
 holder or individual, nor to business leagues, nor to chambers of 
 commerce or boards of trade, not organized for profit or no part 
 of the net income of which inures to the benefit of the private stock- 
 holder or individual; nor to any civic league or organization not 
 organized for profit, but operated exclusively for the promotion of 
 social weKare ; Provided further, That there shall not be taxed under 
 this section any income, derived from any public utility or from 
 the exercise of any essential govermental function accruing to any 
 State, Territory, or the District of. Columbia, or any political sub- 
 division of a State, Territory, or the District of Columbia, nor any 
 income accruing to the government of the Philippine Islands or 
 Porto Rico, or of any political subdivision of the Philippine Islands 
 or Porto Rico; Provided, That whenever any State, Territory, or 
 the District of Columbia, or a political subdivision of a State or 
 Territory has, prior to the passage of this act, entered in good faith 
 into a contract with any person or corporation, the object and purpose 
 of which is to acquire, construct, operate or maintain a public utility, 
 no tax shall be levied under the provisions of this act upon the income 
 derived from the operation of such public utility, so far as the pay- 
 ment thereof will impose a loss or burden upon such State, Territory, 
 or the District of Columbia, or a political subdivision of a State 
 or Territory; tut this provision is not intended to confer upon such 
 person or corporation any financial gain or exemption or to relieve 
 such person or corporation from the payment of a tax as provided 
 for in this section upon the part or portion of the said income to 
 which such person or corporation shall be entitled under such contract. 
 
 Net Income how ascertained. Deductions. — 
 
 (b) Such net income shall be ascertained by deducting from 
 the gross amount of the income of such corporation, joint-stock com- 
 
366 INCOME TAX LAW OF 1913 
 
 pany or association, or insurance company, received within the year 
 from all sources, (first) all the ordinary and necessary expenses paid 
 within the year in the maintenance and operation of its business 
 and properties, including rentals or other payments required to be 
 made as a condition to the continued use or possession of property; 
 (second) all losses actually sustained within the year and not com- 
 pensated by insurance or otherwise, including a reasonable allowance 
 for depreciation by use, wear and tear of property, if any; and in 
 the case of mines a reasonable allowance for depletion of ores and all 
 other natural deposits, not to exceed 5 per centum of* the gross value 
 at the mine of the output for the year for which the computation 
 is made; and in case of insurance companies the net addition, if 
 any, required by law to be made within the year to reserve funds 
 and the sums other than dividends paid within the year on policy 
 and annuity contracts : Provided, That mutual fire insurance com- 
 panies requiring their members to make premium deposits to provide 
 for losses and expenses shall not return as income any portion of the 
 premium deposits returned to their policyholders, but shall return 
 as taxable income all income received by them from all other sources 
 plus such portions of the premium deposits as are retained by 
 the companies for purposes other than the payment of losses and 
 expenses and reinsurance reserves : Provided further. That mutual 
 marine insurance companies shall include in their return of gross 
 income gross premiums collected and received by them less amounts 
 paid for reinsurance, but shall be entitled to include in deductions 
 from gross income amounts repaid to policyholders on account of 
 premiums previously paid by them and interest paid upon such 
 amounts between the ascertainment thereof and the payment thereof 
 and life insurance companies shall not include as income in any 
 year such portion of any actual premium received from any individual 
 policyholder as shall have been paid back or credited to such in- 
 dividual policyholder, or treated as an abatement of premium of such 
 individual policyholder, within such year; (third) the amount of 
 interest accrued and paid within the year on its indebtedness to an 
 amount of such indebtedness not exceeding one-half of the sum of 
 its interest bearing indebtedness and its paid-up capital stock out- 
 standing at the close of the year, or if no capital stock, the amount 
 of interest paid within the year on an amount of its indebtedness 
 not exceeding the amount of capital employed in the business at the 
 close of the year: Provided, That in case of indebtedness wholly 
 
APPENDIX 367 
 
 • 
 
 secured by collateral the subject of sale in ordinary business of such 
 corporation, joint-stock company, or association, the total interest 
 secured and paid by such company, corporation, or association within 
 the year on any such indebtedness may be deducted as a part of 
 its expenses of doing business: Provided further. That in the case 
 of hands or other indebtedness, which have been issued with a guar- 
 anty that the interest payable thereon shall be free from taxation, 
 no deduction for the payment of the tax herein imposed shall ba 
 allowed; and in the case of a hanJc, hanJcing association, loan, or 
 trust company, interest paid within the year on deposits or on moneys 
 received for investment and secured by interest-bearing certificates, 
 of indebtedness issued by such bank, banking association, loan or 
 trust company; (fourth) all sums paid by it within the year for 
 taxes imposed under the authority of the United States or of any 
 State or Territory thereof, or imposed by the Government of any 
 foreign country: Provided, That in the case of a corporation, joint- 
 stock company or association, or insurance company, organized, auth- 
 orized, or existing under the laws of any foreign country, such net 
 income shall be ascertained by deducting from the gross amount of 
 its income accrued within the year from business transacted and 
 capital invested within the United States, (first) all the ordinary 
 and necessary expenses actually paid within the year out of earnings 
 in the maintenance and operation of its business and property within 
 the United States, including rentals or other payments required to 
 be made as a condition to the continued use or possession of property ; 
 (second) all losses actually sustained within the year in business 
 conducted by it vsdthin the United States, and not compensated by 
 insurance or otherwise, including a reasonable allowance for deprecia- 
 tion by use, wear and tear of property, if any, and in the ease of mines- 
 a reasonable allowance for depletion of ores and all other natural de- 
 posits, not to exceed 5 per centum of the gross value at the mine of the 
 output for the year for which the computation is made ; and in case of 
 insurance companies the net addition, if any, required by law to be 
 made within the year to reserve funds and the sums other than divi- 
 dends paid within the year on policy and annuity contracts : Provided' 
 further. That mutual fire insurance companies requiring their mem- 
 bers to make premium deposits to provide for losses and expenses shall 
 not return as income any portion of the premium deposits returned to 
 their policyholders, but shall return as taxable income all income 
 received by them from all other sources plus such portions of the 
 
368 INCOME TAX LAW OF 1913 
 
 « 
 
 premium deposits as are retained by the companies for purposes other 
 than the payment of losses and expenses and reinsurance reserves: 
 Provided further. That mutual marin,e insurance companies shall 
 include in their return of gross income gross premiums collected 
 and received by them less amounts paid for reinsurance, but shall 
 be entitled to include in deductions from gross income amounts repaid 
 to policyholders on account of premiums previously paid by them, 
 and interest paid upon such amounts between the ascertainment 
 thereof and the payment thereof and life insurance companies shall 
 not include as income in any year such portion of any actual premium 
 received from any individual policyholder as shall have been paid 
 back or credited to such individual policyholder, or treated as an 
 abatement of premium of such individual policyholder within such 
 year; {third) the amount of interest accrued and paid within the 
 year on its indebtedness to an amount of such indebtedness not 
 exceeding the proportion of one-half of the sum of its interest bearing 
 indebtedness and its paid-up capital stock outstanding at the close 
 of the year, or if no capital stock, the capital employed in the business 
 at the close of the year which the gross amount of its income for 
 the year from business transacted and capital invested within the 
 United States bears to the gross amount of its income derived from 
 all sources within and without the United States: Provided, That 
 in the case of hands or other indebtedness which have been issued 
 with a guarantee that the interest payable thereon shall be free from 
 taxation, no deduction for the payment of the tax herein imposed 
 shall be allowed; (fourth) all sums paid hy it within the year for 
 taxes imposed under the authority of the United States or of any 
 State or Territory thereof or the District of Columbia. In the case 
 of assessment insurance companies, whether domestic or foreign, the 
 actual deposit of sums with State or Territorial officers, pursuant 
 to law, as additions to guarantee or reserve funds shall be treated 
 as being payments required by law to reserve funds. 
 
 Time within which Tax is to be ascertained. Returns by Corpora- 
 tions. Contents. — 
 
 (c) The tax herein imposed shall be computed upon its entire 
 net income accrued within each preceding calendar year ending De- 
 cember thirty-first: Provided, however. That for the years ending 
 Deceraber thirty-first, nineteen hundred and thirteen, said tax shall 
 be imposed upon its entire net income accrued within that portion 
 
APPENDIX 369 
 
 of said year from March first to December thirty-first, both dates 
 inclusive, to be ascertained by taking five-sixths of its entire net 
 income for said calendar year : Provided further. That any cor- 
 poration, joint-stock company or association, or insurance company 
 subject to this tax may designate the last day of any month in the 
 year as the day of the closing of its fiscal year and shall be entitled 
 to have the tax payable by it computed upon the basis of the net 
 income ascertained as herein provided for the year ending on the 
 day so designated in the year preceding the date of assessment instead 
 of upon the basis of the net income for the calendar year preceding 
 the date of assessment; and it shall give notice of the day it has 
 thus designated as the closing of its fiscal year to the collector of 
 the district in which its principal business office is located at any 
 time not less than thirty days prior to the date upon which its annual 
 return shall be filed. All corporations, joint-stock companies or asso- 
 ciations and insurance companies subject to the tax herein imposed, 
 computing taxes upon the income of the calendar year, shall, on 
 or before the first day of March, nineteen hundred and fourteen, 
 and the first day of March in each year thereafter, and all corpora- 
 tions, joint-stock companies or associations, and insurance companies, 
 computing taxes upon the income of a fiscal year which it may desig- 
 nate in the manner hereinbefore provided, shall render a like return 
 within sixty days after the close of its said fiscal year, and within 
 sixty days after the close of its fiscal year in each year thereafter, 
 or in the case of a corporation, joint-stock company or association, 
 or insurance company, organized or existing under the laws of a 
 foreign country, in the place where its principal business is located 
 within the United States, in such form as the Commissioner of In- 
 ternal Revenue, with the approval of the Secretary of the Treasury, 
 shall prescribe, shall render a true and accurate return under oath 
 or affirmation of its president, vice-president, or other principal officer, 
 and its treasurer or assistant treasurer, to the collector of internal 
 revenue for the district in which it has its principal place of business, 
 setting forth (first) the total amount of its paid-up capital stock 
 outstanding, or if no capital stock, its capital employed in business, 
 at the close of the year; (second) the total amount of its bonded 
 and other indebtedness at the close of the year; (third) the gross 
 amount of its income, received during such year from all sources, 
 and if organized under the laws of a foreign country the gross amount 
 of its income received within the year from business transacted and 
 
370 INCOME TAX LAW OF 1913 
 
 capital invested within the United States; (fourth) the total amount 
 of all its ordinary and necessary expenses paid out of earnings in 
 the maintenance and operation of the business and properties of such 
 corporation, joint-stock company or association, or insurance com- 
 pany within the year, stating separately all rentals or other payments 
 required to be made as a condition to the continued use or possession 
 of property, and if organized under the laws of a foreign country 
 the amount so paid in the maintenance and operation of its business 
 within the United States ; (fifth) the total amount of all losses actually 
 sustained during the year and not compensated by insurance or other- 
 wise, stating separately any amounts allowed for depreciation of 
 property, and in case of insurance companies the net addition, if 
 any, required by law to be made within the year to reserve funds 
 and the sums other than dividends paid within the year on policy 
 and annuity contracts : Provided further. That mutual fire insurance 
 companies requiring their members to make premium deposits to 
 provide for losses and expenses shall not return as income any portion 
 of the premium deposits returned to their policyholders, but shall 
 return as taxable income all income received by them from all other 
 sources plus such portions of the premium deposits as are retained 
 by the companies for purposes other than the payment of losses and 
 expenses and reinsurance reserves: Provided further. That mutual 
 marine insurance companies shall include in their return of gross 
 income gross premiums collected and received by them less amounts 
 paid for reinsurance, but shall be entitled to include in deductions 
 from gross income amounts repaid to policyholders on account of 
 premiums previously paid by them, and interest paid upon such 
 amounts between the ascertainment thereof and the payment thereof, 
 and life insurance companies shall not include as income in any 
 year such portion of any actual premium received from any individual 
 policyholder as shall have been paid back or credited to such in- 
 dividual policyholder, or treated as an abatement of premium of such 
 individual policyholder, within such year; and in case of a corpora- 
 tion, joint-stoch company or association, or insurance company, or- 
 ganized under the laws of a foreign country, all losses actually sus- 
 tained by it during the year in business conducted by it within the 
 United States, not compensated by insurance or otherwise, stating 
 separately any amounts allowed for depreciation of property, and in 
 case of insurance companies the net addition, if any, required by law 
 to be made within the year to reserve funds and the sums other than 
 
APPENDIX 371 
 
 dividends paid within the year on policy and annuity contracts: 
 Provided further. That mutual fire insurance companies requiring 
 their members to make premium deposits to provide for losses and 
 expenses shall not return as income any portion of the premium 
 deposits returned to their policyholders, but shall return as taxable 
 income aU income received by them from all other sources plus such 
 portions of the premium deposits as are retained by the companies 
 for purposes other than the pa3rment of losses and expenses and re- 
 insurance reserves : Provided further. That m,utual marine insurance 
 companies 'shaW include in their return of gross income gross pre- 
 miums collected and received by them less amounts paid for reinsur- 
 ance, but shall be entitled to include in deductions from gross income 
 amounts repaid to policyholders on account of premiums previously 
 paid by them and interest paid upon such amounts betv^een the 
 ascertainment thereof and the payment thereof and life insurance com- 
 panies shall not include as income in any year such portion of any 
 actual premium received from any individual policyholder as shall 
 have been paid back or credited to such individual policyholder, 
 or treated as an abatement of premium of such individual policy- 
 holder, within such year; (sixth) the amount of interest accrued 
 and paid within the year on its bonded or other indebtedness not 
 exceeding one-half of the sum of its interest bearing indebtedness 
 and its paid-up capital stock, outstanding at the close of the year, 
 or if no capital stock, the amount of interest paid within the year 
 on an amount of indebtedness not exceeding the amount of capital 
 employed in the business at the close of the year, and in the case 
 of a bank, banking association, or trust company, stating separately 
 all interest paid by it within the year on deposits; or in case of a 
 corporation, joint-stock company or association, or insurance com- 
 pany, organized under the laws of a foreign country, interest so paid 
 on its bonded or' other indebtedness to an amount of such bonded 
 or other indebtedness not exceeding the proportion of its paid-up cap- 
 ital stock outstanding at the close of the year, or if no capital stock, 
 the amount of capital employed in the business at the close of the 
 year, which the gross amount of its income for the year from the 
 business transacted and capital invested vidthin the United States 
 bears to the gross amount of its income derived from all sources 
 ' within and without the United States ; (seventh) the amount paid 
 by it within the year for taxes imposed under the authority of the 
 United States and separately the amount so paid by it for taxes im- 
 
372 INCOME TAX XAW OF 1913 
 
 posed by the Government of any foreign country; (eighth) thd net 
 income of such corporation, joint-stock company or association, or 
 insurance company, after making the deductions in this subsection 
 authorized. 
 
 All such returns shall as received be transmitted forthwith by the 
 collector to the Commissioner of Internal Revenue. 
 
 When Assessments made and Tax payable. Notification. Penalty for 
 Delay in Payment. — 
 
 All assessments shall be made and the several corporations, joint- 
 stock companies or associations, and insurance companies shall be 
 notified of the amount for vchich they are respectively liable on or 
 before the first day of June of each successive year, and said assess- 
 ment shall be paid on or before the thirtieth day of June : Provided, 
 That every corporation, joint-stock company or association, and insur- 
 ance company, computing taxes upon the income of the fiscal year 
 which it may designate in the manner hereinbefore provided, shall 
 pay the taxes due under its assessment within one hundred and twenty 
 days after the date upon which it is required to file its list or return 
 of income for assessment; except in cases of refusal or neglect to 
 make such return, and in cases of false or fraudulent returns, in 
 which cases the Commissioner of Internal Revenue shall, upon the 
 discovery thereof, at any time within three years after said return 
 is due, make a return upon information obtained as provided for in 
 this section or by existing law, and the assessment made by the 
 Commissioner of Internal Revenue thereon shall be paid by such 
 corporation, joint-stock company or association, or insurance com- 
 pany immediately upon notification of the amount of such assess- 
 ment; and to any sum or sums due and unpaid after the thirtieth 
 day of June in any year, or after one hundred and twenty days from 
 the date on which the return of income is required to be made by 
 the taxpayer, and after ten days' notice and demand thereof by the 
 collector, there shall be added the sum of 5 per centum on the amount 
 of tax unpaid and interest at the rate of 1 per centum per month 
 upon said tax from the time the same becomes due. 
 
 Returns to be filed. Inspection thereof. Penalty for refusal or 
 neglect or for false or fraudulent return. — 
 
 (d) When the assessment shall be made, as provided in this section, 
 the returns, together with any corrections thereof which may have 
 been made by the commissioner, shall be filed in the office of the 
 
APPENDIX 3Y3 
 
 Commissioner of Internal Eevenue and shall constitute public records 
 and be open to inspection as such : Provided, That any and all such 
 returns shall be open to inspiection only upon the order of the Presi- 
 dent, under rules and regulations to be prescribed by the Secretary 
 of the Treasury and approved by the President: Provided further. 
 That the proper officers of any State imposing a general income tax 
 may, upon the request of the governor thereof, have access to said 
 returns or to an abstract thereof, shovcing the name and income of 
 each such corporation, joint-stock company, association or insurance 
 company, at such times and in such manner as the Secretary of the 
 Treasury may prescribe. 
 
 If any of the corporations, joint-stock companies or associations, 
 or insurance companies aforesaid, shall refuse or neglect to make a 
 return at the time or times hereinbefore specified in each year, or 
 shall render a false or fraudulent return, such corporation, joint-stock 
 company or association, or insurance company shall be liable to a 
 I)enalty of not exceeding $10,000. 
 
 Words "State" and "United States" defined.— 
 
 H. That the word "State" or "United States" v?hen used in this 
 section shall be construed to include any Territory, Alaska, the Dis- 
 trict of Columbia, Porto Eico, and the Philippine Islands, when 
 such construction is necessary to carry out its provisions. 
 
 I. That sections thirty-one hundred and sixty seven, thirty-one 
 hundred and seventy-two, thirty-one hundred and seventy-three, and 
 thirty-one hundred and seventy-six of the Revised Statutes of the 
 United States as amended are hereby amended so as to read as 
 follows : 
 
 Penalty for disclosure of Contents of Return. — 
 
 "Sec. 3167. It shall be unlawful for any collector, deputy collector, 
 agent, clerk, or other officer or employee of the United States to 
 divulge or to make known in any manner whatever not provided 
 by law to any person the operations, style of work, or apparatus of 
 any manufacturer or producer visited by him in the discharge of 
 his official duties, or the amount or source of income, profits, losses, 
 expenditures, or any particular thereof, set forth or disclosed in any 
 income return by any person or corporation, or to permit any income 
 return or copy thereof or any book containing any abstract or par- 
 ticulars thereof to be seen or examined by any person except as pro- 
 vided by law; and it shall be unlawful for any person to print or 
 
374 INCOME TAX LAW OI" 1913 
 
 publish in any manner -whatever not provided by law any income 
 return or any part thereof or the amount or source of income, profits, 
 losses, or expenditures appearing in any income return; and any 
 offense against the foregoing provision shall be a misdemeanor and be 
 punished by a fine not exceeding $1,000 or by imprisonment not ex- 
 ceeding one year, or both, at the discretion of the court; and if the 
 offender be an officer or employee of the United States he shall be 
 dismissed from office and be incapable thereafter of holding any 
 office under the Government. 
 
 Collector to make Inquiry and list persons. — 
 
 "See. 31Y2. Every collector shall, from time to time, cause his 
 deputies to proceed through every part of his district and inquire 
 after and concerning all persons therein vs^ho are liable to pay any 
 internal-revenue tax, and all persons owning or having the care and 
 management of any objects liable to pay any tax, and to make a 
 list of such i)ersons and enumerate said objects. 
 
 Duty of Corporation, etc., to make Annual List or Return. — 
 
 "Sec. 3173. It shall be the duty of any person, partnership, firm, 
 association, or corporation, made liable to any duty, special tax, or 
 other tax imposed by law, when not otherwise provided for, in case 
 of a special tax, on or before the thirty-first day of July in each year, 
 in case of income tax on or before the first day of March in each 
 year, and in other cases before the day on which the taxes accrue, 
 to make a list or return, verified by oath or affirmation, to the collector 
 or a deputy collector of the district where located, of the articles or 
 objects, including the amount of annual income charged with a duty 
 or tax, the quantity of goods, wares, and merchandise made or sold 
 and charged with a tax, the several rates and aggregate amount, 
 according to the forms and regulations to be prescribed by the Com- 
 missioner of Internal Revenue, with the approval of the Secretary 
 of the Treasury, for which such person, partnership, firm, association, 
 or corporation is liable : Provided, That if any person liable to pay 
 any duty or tax, or owning, possessing, or having the care or manage- 
 ment of property, goods, wares, and merchandise, articles or objects 
 liable to pay any duty, tax, or license, shall fail to make and exhibit 
 a list or return required by law, but shall consent to disclose the 
 particulars of any and all the property, goods, wares, and merchandise, 
 articles, and objects liable to pay any duty or tax, or any business 
 or occupation liable to pay any tax as aforesaid, then, and in that 
 
APPENDIX 375 
 
 case, it shall be the duty of the collector or deputy collector to make 
 such list or return, which, being distinctly read, consented to, and 
 signed and verified by oath or affirmation by the person so owning, 
 possessing, or having the care and management as aforesaid, may 
 be received as the list of such person: Provided further. That in 
 case no annual list or return has been rendered by such person to 
 the collector or deputy collector as required by law, and the person 
 shall be absent from his or her residence or place of business at the 
 time the collector or a deputy collector shall call for the annual list 
 or return, it shall be the duty of such collector or deputy collector 
 to leave at such place of residence or business, with some one of 
 suitable age and discretion, if such be present, otherwise to deposit 
 in the nearest post office, a note or memorandum addressed to such 
 person, requiring him or her to render to such collector or deputy 
 collector the list or return required by law within ten days from the 
 date of such note or memorandum, verified by oath or affirmation. 
 And if any person, on heing notified or required as aforesaid, shall 
 refuse or neglect to render such list or return within the time 
 required as aforesaid, or whenever any person who is required to 
 deliver a monthly or other return of objects subject to tax fails to 
 do so at the time required, or delivers any return which, in the 
 opinion of the collector, is false or fraudulent, or contains any under- 
 valuation or understatement, it shall be lawful for the collector to 
 summon such person, or any other person having possession, custody, 
 or care of books of account containing entries relating to the business 
 of such person, or any other person he may deem proper, to appear 
 before him and produce such books, at a time and place named in 
 the summons, and to give testimony or answer interrogatories, under 
 oath, respecting any objects liable to tax or the returns thereof. The 
 collector may summon any person residing or found within the State 
 in which his district lies; and when the person intended to be sum- 
 moned does not reside and can not be found within such State, 
 he may enter any collection district where such person may be found 
 and there make the examination herein authorized. And to this end 
 he may there exercise all the authority which he might lawfully 
 exercise in the district for which he was coromissioned. 
 
 In case of neglect or refusal. Collector to make return; Penalty. — 
 "Sec. 3176. When any person, corporation, company, or associa- 
 tion refuses or neglects to render any return or list required by law. 
 
376 INCOME TAX LAW OF 1913 
 
 or renders a false or fraudulent return or list, the collector or any 
 deputy collector shall make, according to the best information which 
 he can obtain, including that derived from the evidence elicited by 
 the examination of the collector, and on his own view and informa- 
 tion, such list or return, according to the form prescribed, of the 
 income, property, and objects liable to tax owned or possessed or under 
 the care or management of such person or corporation, company or 
 association, and the Commissioner of Internal Revenue shall assess 
 all taxes not paid by stamps, including the amount, if any, due for 
 special tax, income or other tax, and in case of any return of a false 
 or fraudulent list or valuation intentionally he shall add 100 per 
 centum to such tax; 'and in case of a refusal or neglect, except in 
 cases of sickness or absence, to make a list or return, or to verify 
 the same as aforesaid, he shall add 50 per centum- to such tax. In 
 case of neglect occasioned by sickness or absence as aforesaid the 
 collector may allow such further time for making and delivering 
 such list or return as he may deem necessary, not exceeding thirty 
 days. The amount so added to the tax shall be collected at the same 
 time and in the same manner as the tax unless the neglect or falsity 
 is discovered after the tax has been paid, in which case the amount 
 so added shall be collected in the same manner as the tax; and the 
 list or return so made and subscribed by such collector or deputy 
 collector shall be held prima facie good and sufficient for all legal 
 purposes." 
 
 Keceipts for taxes by Collector. — 
 
 J. That it shall be the duty of every collector of internal revenue, 
 to whom any payment of any taxes other than the tax represented 
 by an adhesive stamp or other engraved stamp is made under the 
 provisions of this section to give to the person making such payment 
 a full written or printed receipt, expressing the amount paid and 
 the particular account for which such payment was made ; and when- 
 ever such payment is made such collector shall, if required, give a 
 separate receipt for each tax paid by any debtor, on account of pay- 
 ments made to or to be made by him to separate creditors in such 
 form that such debtor can conveniently produce the same separately 
 to his several creditors in satisfaction of their respective demands 
 to the amounts specified in such receipts; and such receipts shall 
 be sufficient evidence in favor of such debtor to justify him in with- 
 holding the amount therein expressed from his next payment to his 
 
APPENDIX 377 
 
 creditor; but such creditors may, upon giving to his debtor a full 
 written receipt, acknowledging the payment to him of whatever sum 
 may be actually paid, and accepting the amount of tax paid as afore- 
 said (specifying the same) as a further satisfaction of the debt to 
 that amount, require the surrender to him of such collector's receipt. 
 
 Jurisdiction of District Courts to compel attendance, produce books, 
 etc. — 
 
 K. That jurisdiction is hereby conferred upon the district courts 
 of the United States for the district within which any person sum- 
 moned under this section to appear to testify or to produce books 
 shall reside, to compel such attendance, production of books, and 
 testimony by appropriate process. 
 
 Administrative Provisions Applicable. — 
 
 L. That all administrative, special, and general provisions of law, 
 including the laws in relation to the assessment, remission, collection, 
 and refund of internal-revenue taxes not heretofore specifically re- 
 pealed and not inconsistent with the provisions of this section, are 
 hereby extended and made applicable to all the provisions of this 
 section and to the tax herein imposed. 
 
 Provisions apply to Porto Rico and Philippines. — 
 
 M. That the provisions of this section shall extend to Porto Eico 
 and the Philippine Islands : Provided, That the administration of 
 the law and the collection of the taxes imposed in Porto Eico and the 
 Philippine Islands shall be by the appropriate internal-revenue officers 
 of those governments, and all revenues collected in Porto Eico and 
 the Philippine Islands thereunder shall accrue intact to the general 
 governments, thereof, respectively: And provided further. That the 
 jurisdiction in this section conferred upon the district courts of, the 
 United States shall, so far as the Philippine Islands are concerned, 
 be vested in the courts of the first instance of said islands: And 
 provided further. That nothing in this section shall he held to exclude 
 from the computation of the net income the comi)ensation paid any 
 official by the governments of the District of Columbia, Porto Eico, 
 • and the Philippine Islands or the political subdivisions thereof. 
 
378 INCOME TAX LAW OF 1913 
 
 SECTION V. 
 ******* 
 
 Accruing Taxes on corporations under Act of 1909 for the year 1912 
 to remain in effect. — 
 
 Provided further, That all excise taxes upon corporations imposed 
 by section thirty-eight, that have accrued or have been imposed for 
 the year ending December thirty-first, nineteen hundred and twelve, 
 shall be returned, assessed, and collected in the same manner, and 
 under the same provisions, liens, and penalties as if section thirty- 
 eight continued in full force and effect: And provided further, 
 That a special excise tax with respect to the carrying on or doing 
 of business, equivalent to 1 per centum upon their entire net income, 
 shall be levied, assessed, and collected upon corporations, joint stock 
 companies or associations, and insurance companies, of the character 
 described in section thirty-eight of the Act of August fifth, nineteen 
 hundred and nine, for the period from January first to February 
 twenty-eighth, nineteen hundred and thirteen, both dates inclusive, 
 which said tax shall be computed upon one sixth of the entire net 
 income of said corporations, joint stock companies or associations, 
 and insurance companies, for said year, said net income to be ascer- 
 tained in accordance with the provisions of subsection G of section 
 two of this Act: Provided further. That the provisions of said sec- 
 tion thirty-eight of the Act of August fifth, nineteen hundred and 
 nine, relative to the collection of the tax therein imposed shall remain 
 in force for the collection of the excise tax herein provided, but for 
 the year nineteen hundred and thirteen it shall not be necessary ■ 
 to make more than one return and assessment for all the taxes im- 
 posed herein upon said corporations, joint stock companies or asso- 
 ciations, and insurance companies, either by way of income or excise, 
 which return and assessment shall be made at the times and in the 
 manner provided in this Act ; but the repeal of existing laws or modi- 
 fications thereof embraced in this Act shall not affect any act done, 
 or any right accruing or accrued, or any suit or proceeding had or 
 commenced in any civil case before the said repeal or modification; 
 but all rights and liabilities under said laws shall continue and may 
 be enforced in the same manner as if said repeal or modifications 
 had not been made. Any offenses committed and all penalties or 
 forfeitures or liabilities incurred prior to the passage of this Act 
 under any statute embraced in or changed, modified, or repealed by 
 
APPENDIX 379 
 
 this Act may be prosecuted or punished in the same manner and 
 •with the same effect as if this Act had not been passed. 
 ******* 
 
 TJ. That unless otherwise herein specially provided, this Act shall 
 take effect on the day following its passage. 
 
 PEOVISIONS OF THE INCOME TAX LAW AFEECTING 
 
 COEPOEATIONS OTHER THAN THE COR- 
 
 PORATION TAX PROVISIONS. 
 
 Annual Gains over $3,000. — Returns thereof. — Deduction of Tax.— 
 
 , . . Also all persons, firms, companies, copartnerships, corporations, 
 joint-stock companies or associations, and insurance companies, except 
 as hereinafter provided, in whatever capacity acting, having the con- 
 trol, receipt, disposal, or payment of fixed or determinable annual or 
 periodical gains, profits, and income of another person subject to tax, 
 shall in behalf of such person deduct and withhold from the payment 
 an amount equivalent to the normal income tax upon the same and 
 make and render a return, as aforesaid, hut separate and distinct, of 
 the portion of the income of each person from which the normal tax 
 has been thus withheld, and containing also the name and address of 
 such person or stating that the name and address or the address, as 
 the case may he, are unknown: Provided, that the provision requiring 
 the normal tax of individuals to be withheld at the source of the 
 income shall not be construed to require any of such tax to he with- 
 held prior to the first day of November, nineteen hundred and thir- 
 teen : Provided further, That in either case above mentioned no return 
 of income not exceeding $3,000 shall be required: . . . 
 
 No return to be made of Dividends from capital stock. — 
 
 . . . That persons liable for the normal income tax only, on their 
 own account or in behalf of another, shall not he required to make re- 
 turn of the income derived from dividends on the capital stock or 
 from the net earnings of corporations, joint-stock companies or asso- 
 ciations, and insurance companies taxable upon their net income as 
 hereinafter provided. Any person for whom return has been made 
 and the tax paid, or to be paid as aforesaid, shall not he required to 
 make a return unless such person has other net income, but only one 
 deduction of $3,000 shall be made in the case of any such person. 
 The collector or deputy collector shall require every list to be verified 
 by the oath or affirmation of the party rendering it. . . . 
 
380 INCOME TAX LAW OF 1913 
 
 Withholding of tax by lessees, mortgagors, trustees, etc. — 
 
 . . . All persons, firms, copartnerships, companies, corporations, 
 joint-stock companies or associations, and insurance companies, in 
 whatever capacity acting, including lessees or mortgagors of real or 
 personal property, trustees acting in any trust capacity, executors, ad- 
 m,inistrators, agents, receivers, conservators, employers, and all officers 
 and employees of the United States having the control, receipt, cus- 
 tody, disposal, or payment of interest, rent, salaries, wages, premiums, 
 annuities, compensation, remuneration, emoluments, or other fixed 
 or determinable annual gains, profits, and income of another person, 
 exceeding $3,000 for any taxable year, other than dividends on capital 
 stoch, or from the net earnings of corporations and joint-stock com- 
 panies or associations subject to like tax, who are required to make 
 and render a return in behalf of another, as provided herein, to the 
 collector of his, her, or its district, are hereby authorized and required 
 to deduct and withhold from such annual gains, profits, and income 
 such sum as will be sufficient to pay the normal tax imposed thereon 
 by this section, and shall pay to the officer of the United States Gov- 
 ernment authorized to receive the same; and they are each hereby 
 made personally liable for such tax. In all cases where the 
 income tax of a person is withheld and deducted and paid or to be 
 paid at the source, as aforesaid, such person shall not receive the 
 benefit of the deduction and exemption allowed in paragraph G of 
 this section except by an application for refund of the tax unless 
 he shall, not less than thirty days prior to the day on which the 
 return of his income is due, file with the person who is required to 
 withhold and pay tax for him, a signed notice in writing claiming 
 the benefit of such exemption and thereupon no tax shall be with- 
 held upon the amount of such exemption: . . . 
 
 Withholding of tax at the source from Interest on Bonds and from 
 Coupons, etc. — 
 
 . . . That the amount of the normal tax hereinbefore imposed shall 
 be deducted and withheld from fixed and determinable annual gains, 
 profits, and income derived from interest upon bonds, and mortgages, 
 or deeds of trust, or other similar obligations of corporations, joint- 
 stock companies, or associations, and insurance companies, whether 
 payable annually or at shorter or longer periods, although such inter- 
 est does not amount to $3,000, subject to the provisions of this section 
 requiring the tax to be withheld at the source and deducted from 
 
APPENDIX 381 
 
 annual income and paid to the Government; and likewise the amount 
 of such tax shall he deducted and withheld from coupons, checks, 
 or hills of exchange for or in payment of interest upon honds of 
 foreign countries and upon foreign mortgages or like ohligations (not 
 payable in the United States), and also from coupons, checks or 
 hills of exchange for or in payment of any dividends upon the stock 
 or interest upon the ohligations of foreign corporations, associations, 
 and insurance companies engaged in business in foreign countries,' 
 and the tax in each case shall he withheld and deducted for and in 
 hehalf of any person subject to the tax hereinbefore imposed, although 
 such interest, dividends, or other compensation does not exceed $3,000, 
 hy any hanker or person who shall sell or otherwise realize coupons, 
 checks or hills of exchange drawn or made in payment of any such 
 interest or dividends (not payable in the United States), and any 
 person who shall obtain payment (not in the United States), in hehalf 
 of another of such dividends and interest hy means of coupons, checks, 
 or hills of exchange, and also any dealer in such coupons who shall 
 purchase the same for any such dividends or interest (not payable in 
 the United States), otherwise than from a banker or another dealer in 
 such coupons; hut in each case the benefit of the exemption and the 
 deduction allowable under this section may he had hy complying with 
 the foregoing provisions of this paragraph. . . . 
 
 Return for Minor, incompetent, etc. — 
 
 . . . That if such person is a minor or an insane person, or is 
 absent from the United States, or is unable owing to serious illness 
 to make the return and application above provided for, the return 
 and application may he made for him or her hy the person required 
 to withhold and pay the tax, he making oath under the penalties of 
 this Act that he has sufficient knowledge of the affairs and property 
 of his beneficiary to enable him to make a full and complete return 
 for him or her, and that the return and application made by him 
 are full and complete. . . . 
 
 Deductions where return is made by another.— 
 
 . . . Nor shall any person under the foregoing conditions he al- 
 lowed the benefit of any deduction provided for in subsection B of this 
 section unless he shall not less than thirty days prior to the day on 
 which the return of his income is due, either file with the person who 
 is required to withhold and pay tax for him a true and correct return 
 
382 INCOME TAX LAW OF 1913 
 
 of his annual gains, profits, and income from all other sources, and 
 also, the deductions ashed for, and the showing thus made shall then 
 become a pari of the return to he made in his behalf by the person re- 
 quired to withhold and pay the tax, or likewise make application for 
 deductions to the collector of the district in which return is made or 
 to be made for him: . . . 
 
 Normal tax deducted at source only applies to individuals. — 
 
 . . . The provisions of this section relating to the deduction and 
 payment of the tax at the source of income shall only apply to the 
 normal tax hereinbefore imposed upon individuals. . . . 
 
 Fiduciaries — 
 
 . . . Guardians, trustees, executors, administrators, agents, re- 
 ceivers, conservators, and all persons, corporations or associations 
 acting in any fiduciary capacity, shall make and render a return 
 of the net income of the person for whom they act, subject to this 
 tax, coming into their custody or control and management, and be 
 subject to all the provisions of this section which apply to individuals: 
 Provided, That a return made by one of two or more joint guardians 
 trustees, executors, administrators, agents, receivers and conservators, 
 or other persons acting in a fiduciary capacity, filed in the district 
 where such persons reside, or in the district where the will or other 
 instruments under which he acts is recorded, under such regulations 
 as the Secretary of the Treasury may prescribe, shall be a sufficient 
 compliance with the requirements of this paragraph: . . . 
 
 Collectors of foreign payments to be licensed. — 
 
 . . . All persons, firms, or corporations undertaking as a matter 
 of business or for profit the collection of foreign payments of such 
 interest or dividends by means of coupons, checks, or bills of exchange 
 shall obtain a license from the Commissioner of Internal Revenue, 
 and shall be subject to such regulations enabling the Oovernment to 
 ascertain and verify the due withholding and payment of the income 
 tax required to be withheld and paid as the Commissioner of Internal 
 Revenue; with the approval of the Secretary of the Treasury, shall 
 prescribe; and any person who shall knowingly undertake to collect 
 such payment as aforesaid without having obtained a license there- 
 for, or without complying with such regulations, shall he deemed 
 guilty of a misdeameanor and for each offense be fined in a sum not 
 
APPENDIX 383 
 
 exceeding $5,000 or imprisoned for a term not exceeding one year, 
 or hoth, in the discretion of the court. . . . 
 
 Accumulations of surplus. — 
 
 . . . For the purpose of this additional tax the taxable income of 
 any individual shall embrace the share to which he would be entitled 
 of the gains and profits, if divided or distributed, whether divided or 
 distributed or not, of all corporations, joint-stoch companies or asso- 
 ciations however created or organized, formed or fraudulently availed 
 of for the purpose of preventing the imposition of such tax through 
 the medium of permitting such gains and profits to accumulate in- 
 stead of being divided or distributed; and the fact that any such cor- 
 poration, joint-stock company, or association, is a mere holding com- 
 pany, or that the gains and profits are permitted to accumulate be- 
 yond the reasonable needs of the business shall be prima facie evi- 
 dence of a fraudulent purpose to escape such tax; but the fact that 
 the gains and profits are in any case permitted to accumulate and be- 
 come surplus shall not be construed as evident of a purpose to escape 
 the said tax in such case unless the Secretary of the Treasury shall 
 certify that in his opinion such accumulation is unreasonable for the 
 purposes of the business. When requested by the Commissioner of 
 Internal Revenue, or any district collector of internal revenue, such 
 corporation, joint-stoch company, or association shall forward to him 
 a correct statement of such profits and the names of the individuals 
 who would be entitled to the same if distributed. . . . 
 
 Penalty for failure to make, or for fraudulent, return. — 
 
 . . . That if any person, corporation, joint-stoch company, associa- 
 tion, or insurance company liable to make the return or pay the tax 
 aforesaid shall refuse or neglect to make a return at the time or times 
 hereinbefore specified in each year, such person shall be liable to a 
 penalty of not less than $20 nor more than $1,000. Any person or any 
 officer of any corporation required by law to make, render, sign, or 
 verify any return who makes any false or fraudulent return or state- 
 ment with intent to defeat or evade the assessment required by this 
 section to be made shall be guilty of a misdemeanor, and shall be 
 fined not exceeding $2,000 or be imprisoned not exceeding one year, 
 or both, at the discretion of the court, with the costs of prosecution. 
 
n COMPARATIVE TABLE OF PEOYISIONS OF 
 ACTS OF 1909 AND 1913. 
 
 EATE OF TAX. 
 1909 1913 
 
 One percent per annum upon en- One percent per annum upon en- 
 tire net income over and above tire net income. 
 $5,000 from all sources exclusive 
 of dividends of corporations sub- 
 ject to tax. 
 
 CORPORATIONS AFFECTED. 
 Every corporation, joint-stock com- Every corporation, joint-stock com- 
 
 pany, association or insurance com- 
 pany organized for profit and hav- 
 ing a capital stock represented by 
 shares, under the laws of the 
 United States or any state or terri- 
 tory, including Alaska and District 
 of Columbia, and engaged in busi- 
 ness in any state or territory 
 of the United States, including 
 Alaska and Dist. of Columbia. 
 
 If organized under lavps of a 
 foreign country, the tax is com- 
 puted upon net income over $5,000 
 received from business transacted 
 and capital invested in U. S., its 
 (territories, including Dist. of Co- 
 lumbia and Alaska, exclusive of 
 dividends from corporations sub- 
 ject to the tax. 
 
 CORPORATIONS 
 Labor, agricultural or horticultural 
 organizations ; fraternal, benefi- 
 ciary societies, orders or associa- 
 tions operating under the lodge 
 system for mutual benefit of 
 
 384 
 
 pany, association and insurance 
 company organized in the U. S., 
 no matter how organized or cre- 
 ated. 
 
 If organized and existing under 
 laws of a foreign country, then tax 
 is computed upon net income ac- 
 cruing from business transacted 
 and capital invested within United 
 States. 
 
 Note: Income accruing to any 
 political division or sub-division of 
 the nation or any state is not tax- 
 able hereunder. 
 
 NOT AFFECTED. 
 Labor, agricultural and horticul- 
 tural organizations, mutual savings 
 banks having no shares, fraternal 
 beneficiary societies, orders or as- 
 sociations operating under lodge 
 
APPENDIX 
 
 385 
 
 members; domestic, building and 
 loan associations for mutual bene- 
 fit of members ; corporations or as- 
 sociations for religious, cbaritable 
 or educational purposes, exclusive- 
 ly, and not benefiting any stock- 
 holder or individual. 
 
 system, domestic building and loan 
 associations, cemetery companies, 
 organized for mutual benefit to 
 members, corporations or associa- 
 tions organized and operated ex- 
 clusively for religious, scientific, 
 educational and charitable pur- 
 poses, not benefiting any stock- 
 holder or individual; business 
 leagues, chambers, of commerce, 
 boards of trade not benefiting any 
 stockholder or organized for prof- 
 its ; any civic league not organized 
 for profit. 
 
 ASOEETAINMENT OF NET INCOME. 
 (Domestic Corporations.) 
 
 1909 
 Net income ascertained by deduct- 
 ing from gross amount of entire 
 income the following items: 
 (a) all ordinary and necessary ex- 
 penses actually paid in main- 
 tenance and operation includ- 
 ing rentals and franchise 
 payments. 
 ('b) all losses, not compensated by 
 insurance or otherwise, actual- 
 ly sustained, including allow- 
 ance for depreciation. 
 
 (Insurance companies may 
 deduct payments other than 
 dividends annuity contracts 
 and reserve fund additions.) 
 
 (b) 
 
 1913 
 Net income ascertained by deduct- 
 ing from gross amount of entire 
 income the following items: 
 (a) all ordinary and necessary ex- 
 penses paid within the year in 
 maintenance, and operation, 
 including rentals and fran- 
 chise payments, 
 all losses sustained within the 
 year not compensated by insur- 
 ance or otherwise and a rea- 
 sonable allowance for deprecia- 
 tion. 
 
 companies allowance for 
 depreciation of ore not exceeding 
 5% of gross value of output at 
 mine. 
 
 Insurance companies may deduct 
 net addition required by law to 
 reserve funds and sums other than 
 dividends paid on policies. 
 Mutual Fire Insurance Companies 
 
386 
 
 INCOME TAX LAW OF 1913 
 
 (c) Interest actually paid on all 
 indebtedness to an amount of 
 such indebtedness not exceed- 
 ing the paid-up capital stock, 
 and in case of banking insti- 
 tutions, all interest paid on 
 deposits. 
 
 (d) All sums paid for any taxes. 
 
 need not return premiums restored 
 to policy holders, but must return 
 income from all other sources and 
 deposits retained for payment of 
 expenses other than losses and re- 
 serves. 
 
 Mutual Marine Insurance Gom- 
 panies shall return gross premiums 
 collected, less amounts paid for re- 
 insurance and premiums and in- 
 terest restored to policy holders. 
 Life Insurance Companies shall 
 not include any portion of pre- 
 miums returned or credited to a 
 policyholder. 
 
 (c) Interest accrued and paid on 
 bonded or other indebtedness 
 not exceeding J of sum of its 
 interest bearing indebtedness, 
 and its paid-up capital stock, 
 outstanding at close of year, 
 and if no capital stock, the 
 amount of interest paid within 
 the year on indebtedness not 
 exceeding the capital employed 
 within the year. Where the 
 indebtedness is wholly secured 
 by collateral subject to sale in 
 ordinary business by such cor- 
 poration, the total interest 
 paid may be deducted as an 
 expense of doing business. 
 Where bonds are issued free 
 from taxation, no deduction 
 for taxes paid shall be allowed. 
 
 Banking institutions may 
 deduct interest paid on de- 
 posits or interest bearing cer- 
 tificates of indebtedness. 
 
 (d) all sums paid anywhere for 
 taxes. 
 
APPENDIX 
 
 387 
 
 (e) All amounts of dividends from 
 corporations subject to the cor- 
 poration tax. 
 Assessment insurance companies; 
 actual deposit of sums with state 
 or territorial officers pursuant to 
 law as additions to guarantee or 
 reserve funds shall be treated as 
 payments required by law to re- 
 serve funds. 
 
 Assessment insurance companies, 
 actual deposit of sums with state 
 or territorial oiBcers pursuant to 
 law as additions to guarantee or 
 reserve funds shall be treated as 
 payments required by law to reserve 
 funds. 
 
 ASCEETAINMENT OF NET INCOME. 
 (Corporations Under Laws of Foreign. Countries.) 
 
 1909 
 Net income ascertained by deduct- 
 ing from gross amount of income 
 foreign business transacted in the 
 United States and territories, in- 
 cluding Alaska and D. C. the fol- 
 lowing items: 
 
 (a) All ordinary and necessary ex- 
 penses actually paid in main- 
 tenance and operation of bus- 
 iness and property within the 
 U. S. and its territories, etc., 
 including rentals and franchise 
 payments. 
 
 (b) All losses actually sustaiaed 
 in its business in U. S., its 
 territories, etc., not compen- 
 sated by insurance or other- 
 wise, including allowance for 
 depreciation. 
 
 (Insurance companies may deduct 
 payments other than dividends, an- 
 nuity contracts and reserve fund 
 additions.) 
 
 1913 
 Net income shall be ascertained by 
 deducting from the gross income 
 accrued within the year from busi- 
 ness transacted and capital invested 
 in the U. S. the following items : 
 
 (a) All ordinary and necessary ex- 
 penses paid- within the year in 
 maintenance and operation of 
 its business within the U. S., 
 including rentals and fran- 
 chise payments. 
 
 (b) All losses sustained within the 
 year in business conducted 
 within the U. S. and not com- 
 jiensated by insurance or other- 
 wise and a reasonable allow- 
 ance for depreciation. 
 
 Mining companies. Same as do- 
 mestic corporations. 
 Insurance companies. Same as do- 
 mestic corporations. 
 Mutual Fire Insurance Companies. 
 Same as domestic corporations. 
 Mutual Marine Insurance 
 
388 
 
 INCOME TAX LAW OF 1913 
 
 (c) Interest actually paid on all 
 indebtedness to an amount not 
 exceeding the proportion of its 
 paid-up capital stock outstand- 
 ing whicli the gross amount of 
 income from business in the 
 U. S., its territories, etc., bears 
 to its gross income from all 
 countries. 
 
 (d) All sums paid for any taxes. 
 
 (e) All amounts of dividends from 
 corporations subject to the cor- 
 poration tax. 
 
 Assessment insurance companies. 
 
 Same as domestic corporation. 
 
 Companies. Same as domestic cor- 
 porations. 
 
 Life Insurance companies. Same 
 as domestic corporations. 
 
 (c) Interest accrued and paid 
 within the year on its indebtedness 
 to an amount not exceeding the 
 proportion of 1-2 its bonded indebt- 
 edness and its paid-up capital stock 
 outstanding at close of year which 
 the gross amount of income from 
 business done and capital invested 
 in the U. S. bears to the gross 
 amount of its capital within and 
 without the TJ. S. Where bonds 
 are issued free from taxation, no 
 deduction for taxes paid shall be 
 allowed. 
 
 (d) All sums paid for taxes im- 
 posed by the TJ. S., District of Co- 
 lumbia or any territory. 
 
 Assessment insurance companies. 
 Same as domestic corporation. 
 
 TAXING TEAR. 
 
 1909 
 $5,000 shall be deducted from the 
 net income of corporations ascer- 
 tained as provided ; to be computed 
 for the year ending Dec. 31st. 
 
 1913 
 
 Computed on entire net income 
 accrued within the preceding calen- 
 dar year, ending Dec. 31st, save in 
 1913, the tax is computed on the 
 accrued income from March 1st to 
 December 31st, by taking 5-6 of 
 the entire net income for the cal- 
 endar year. Corporation may desig- 
 nate the last day of any calendar 
 month as the day of closing its 
 fiscal year and may have its income 
 
APPENDIX 
 
 389 
 
 computed for such fiscal year. No- 
 tice to be given collector thirty 
 days prior to filing annual return. 
 
 EETHRN. 
 
 To be filed on or before March 1, 
 under oath of its president, vice- 
 president or other principal officer, 
 and its treasurer or assistant treas- 
 urer, with the collector of Internal 
 Eevenue in the district in which 
 the principal office of the corpora- 
 tion, domestic or foreign, is lo- 
 cated, in the form prescribed show- 
 ing: 
 
 1. The total amount of the paid- 
 up stock outstanding at the close 
 of the year. 
 
 2. The total amount of the bonded 
 or other indebtedness at the close 
 of the year. 
 
 3. The gross income received from 
 all sources during the year, and if 
 a foreign company, the gross busi- 
 ness transacted and capital invested 
 in the U. S. territories, Alaska and 
 D. 0., also the amount received as 
 dividends from any corporation 
 subject to the corporation tax. 
 
 4. Total of all ordinary and neces- 
 sary expenses paid out of earnings 
 in the maintenance and operation 
 of business and properties stating 
 separately : 
 
 (a) All charges such as rentals and 
 franchise payments required to 
 
 To be filed on or before March 1, 
 1914, and March 1st thereafter or 
 within sixty days after the close 
 of a duly designated fiscal year. 
 Under oath of its president, vice- 
 president, or other principal officers, 
 and its treasurer or assistant treas- 
 urer, with the collector of Internal 
 Eevenue in the district in which 
 the principal office of the corpora- 
 tion, domestic or foreign, is lo- 
 cated, in the form prescribed show- 
 ing: 
 
 1. The total amount of the paid- 
 up stock, or if no stock, of capital 
 employed in the business at the 
 close of the year. 
 
 2. The total amount of the bonded 
 or other indebtedness at the close 
 of the year. 
 
 3. The gross income received 
 from all sources during the year, 
 and if a foreign corporation, the 
 gross amount of income received 
 from business transacted and cap- 
 ital invested in the United States. 
 
 4. Total of all ordinary and neces- 
 sary expenses paid out of earnings 
 in the maintenance and operation 
 of business and properties stating 
 separately : 
 
 (a) All rentals or other payments 
 required to be made as a 
 
390 
 
 IWCOME TAX LAW OF 1913 
 
 be made as a condition of the 
 continued use and possession, 
 of its property, and if a for- 
 eign corporation, the amount 
 so paid in the operation of its 
 business in the U. S., its terri- 
 tories, Alaska and District of 
 Columbia. 
 5. The total amount of all losses 
 actually sustained within the year 
 and not compensated by insurance 
 or otherwise, stating separately: 
 (a) Any amounts allowed for de- 
 preciation of property. 
 
 1909 
 Insurance Companies. Sums other 
 than dividends paid within the 
 year on contracts; net addition re- 
 quired by law to reserve funds. 
 
 condition of the continued use 
 and possession of its property, 
 and if a foreign corporation, 
 the amount so paid in the 
 operation of its business in 
 the United States. 
 
 5. The total amount of all losses 
 sustained within the year and not 
 compensated by insurance or other- 
 wise, stating separately: 
 (a) Any amounts allowed for de- 
 preciation of property. 
 
 1913 
 Insurance Companies. Net addi- 
 tion required by law to be made 
 within year to reserve funds and 
 sums other than dividends paid on 
 policies. 
 
 Mutual Insurance Companies shall 
 not return as income any part of 
 premium deposits restored to pol- 
 icy holders but shall return all in- 
 come received from other sources 
 plus premium deposits retained for 
 purposes other than payment of 
 losses, expenses and reinsurance 
 reserves. 
 
 Mutual Marine Insurance Com- 
 panies shall return gross premiums 
 collected less amount paid for re- 
 insurance, but shall deduct from 
 gross income amounts restored to 
 policy-holders on account of pre- 
 miums previously paid and interest 
 paid thereon. 
 
 Life Insurance Companies shall 
 not include any portion of 
 
APPENDIX 
 
 391 
 
 Foreign Company, all losses actual- 
 ly sustained during the year in 
 business conducted in tlie United 
 States or its territories, Alaska or 
 the District of Columbia, not com- 
 pensated by insurance or otherwise, 
 stating separately: 
 (a) Any amounts allowed for the 
 depreciation of property. 
 
 Insurance Companies, same as do- 
 mestic corporations. 
 
 6. The amount of interest actual- 
 ly paid within the year on its 
 bonded or other indebtedness to an 
 amount not exceeding the paid-up 
 capital stock of such corporation 
 outstanding at the close of the 
 year. 
 
 Foreign Company, interest paid on 
 its bonded or other indebtedness to 
 an amount not exceeding the 
 
 premiums returned or credited to 
 a policyholder. 
 
 Foreign Company, all losses actual- 
 ly sustained during the year in 
 business conducted in the United 
 States not compensated by insur- 
 ance or otherwise, stating separate- 
 
 ly: 
 
 (a) Any amounts allowed for de- 
 preciation of property. 
 
 Insurance Companies, same as do- 
 mestic corporations. 
 Mutual Fire Insurance Companies. 
 Same as domestic corporations. 
 Mutual Marine Insurance Com- 
 panies. Same as domestic corpora- 
 tions. 
 
 Life Insurance Companies. Same 
 as domestic corporations. 
 6. The amount of interest accrued 
 and paid within the year on its 
 bonded or other indebtedness not 
 exceeding 1-2 the sum of its bonded 
 indebtedness, and the capital stock 
 outstanding at the close of the year, 
 if no capital stock, the amount of 
 interest paid within the year on an 
 amount of indebtedness not exceed- 
 ing the amount of capital em- 
 ployed in the business at the close 
 of the year. 
 
 Bank, Banking Association, Trust 
 Company, stating separately all in- 
 terest paid by it within the year 
 on deposits. 
 
 Foreign Company, interest so paid 
 on its bonded or other indebtedness 
 to an amount not exceeding the 
 
392 
 
 IlSrCOME TAX LAW OF 1913 
 
 proportion of its paid-up capital 
 stock outstanding at the close of 
 the year, which the gross amount 
 of its income for the year from 
 business transacted and capital in- 
 vested in the U. S. and any of its 
 territories, Alaska and D. C, bears 
 to the gross amount of its income 
 derived from all sources within and 
 without the U. S. 
 
 7. The amount paid within the 
 year for taxes imposed. 
 
 (a) by the U. S. or any state or 
 territory. 
 
 (b) separately by any foreign coun- 
 try as a condition of carrying 
 on business. 
 
 8. The net income after making 
 the authorized deductions. 
 
 All returns to be sent forthwith 
 to the Commissioner of Internal 
 
 proportion of its paid-up capital 
 stock outstanding at the close of 
 the year, which the gross amount 
 of its income for the year from 
 business transacted and capital in- 
 vested within the U. S. bears to the 
 gross amount of its income derived 
 from all sources within and with- 
 out the U. S. 
 
 Y. The amount paid within the 
 year for taxes imposed. 
 
 (a) under authority of the U. S. 
 
 (b) separately by the government 
 of any foreign country. 
 
 8. The net income after making 
 the authorized deductions. 
 
 All returns to be sent forthwith 
 to the Commissioner of Internal 
 
 EEMEDY FOR INCOERECT RETURN OR FAILURE 
 TO MAKE RETURN. 
 
 Whenever the commissioner of in- 
 ternal revenue shall have the evi- 
 dence or the report of a collector 
 of internal, revenue that a return 
 is incorrect or that a corporation 
 has failed to make a return, he 
 may require further information 
 with reference to 
 
 (a) capital. 
 
 (b) income. 
 
 (c) losses. 
 
 (d) expenditures. 
 
 To ascertain the correctness of or 
 to make a return, the commissioner 
 of internal revnue may examine 
 
 In case of refusal or neglect to 
 render a return, the collector or 
 deputy may make a return accord- 
 ing to the best evidence he can 
 obtain including his inspections. 
 (Sec. 3176 U. S. Revised Statutes 
 as amended.) 
 
APPENDIX 
 
 393 
 
 any books or papers necessary or 
 any officer or employee of a com- 
 pany, and is to be aided by the 
 United States courts for this pur- 
 pose. 
 
 Upon information acquired, he 
 may amend any return. 
 
 All proceedings subject to the 
 approval of the secretary of the 
 Treasury. 
 
 Return to be retained by com- 
 missioner of internal revenue. 
 
 Assessments to be made by com- 
 missioner of internal revenue. 
 
 If a return is made with fraudu- 
 lent intent, he shall add 100% to 
 the tax. 
 
 In case of refusal or neglect to 
 make or verify a return, except in 
 cases of sickness or absence, he 
 shall add 50% to the tax. 
 
 In case of sickness or absence, 
 the collector may allow 30 days 
 additional time in which to make 
 a return. 
 
 (Sec. 3176 U. S. Eevised Statutes 
 as amended.) 
 
 The amount so added shall be 
 collected at the same time and in. 
 the same manner as the tax, un- 
 less discovered after the tax has 
 been paid, in which case the 
 amount so added shall be collected 
 in the same manner as the tax. 
 (Sec. 31Y6 U. S. Eevised Statutes 
 as amended.) 
 
 ASSESSMENT AND PAYMENT OF TAX. 
 1909 1913 
 
 All assessments shall be made and All assessments shall be made and 
 corporation subject thereto notified corporations subject thereto noti- 
 
 In case of sickness or absence of 
 officer required to make return or 
 for other reason, the collector may 
 allow 30 days additional time with- 
 in which to make return. 
 
 The amount of the penalty shall 
 be added to the tax unless discov- 
 ered after the corporation has paid 
 the tax when it shall be paid im- 
 mediately upon notice by the col- 
 lector. 
 
394 
 
 INCOME TAX LAW OF 1913 
 
 of the amount for which they are 
 liable on or before June 1st of each 
 successive year. 
 
 Assessment shall be paid on or be- 
 fore June 30th. 
 
 Except in cases of refusal or 
 neglect to make a return and in 
 case of false or fraudulent re- 
 turns, when, upon discovery, the 
 commissioner of internal revenue, 
 at any time within three years 
 after the return is due, shall make 
 a return upon the information dis- 
 covered as provided for and the 
 assessment thereon shall be paid 
 immediately upon notification of 
 its amount. 
 
 To any sums due and unpaid 
 after June 30th for 10 days after 
 notice and demand by the collector, 
 there shall be added 5% and inter- 
 est at the rate of 1% a month upon 
 the tax from the time when it be- 
 came due. 
 
 When the assessment is made as 
 provided, the returns and correc- 
 tions shall be filed in the office of 
 the commissioner of internal rev- 
 enue, and shall be public records, 
 open to inspection. 
 
 fied, of the amount for which they 
 are liable on or before June 1st 
 of each successive year. 
 Assessment shall be paid on or be- 
 fore Jime 30th, except corporations 
 computing the tax upon a duly 
 designated fiscal year, shall pay 
 within 120 days after it is required 
 to file its return. 
 Except in case of refusal or neg- 
 lect to make a return and in case 
 of false or fraudulent return when 
 upon discovery, the commissioner 
 of internal revenue at any time 
 within three years after the return 
 is due, shall make, upon informa- 
 tion obtained, a return as provided 
 for in the section or by existing 
 law, and the assessment thereon 
 shall be paid immediately upon no- 
 tification of the amount. 
 
 To any sums due and unpaid 
 after June 30th, or after 120 days 
 from the date when the return is 
 required and after ten days no- 
 tice and demand by the collector 
 there shall be added 5% on the 
 amount of tax unpaid and interest 
 at the rate of 1% a month from the 
 time when it became due. 
 When the assessment is made as 
 provided the returns and correc- 
 tions shall be filed in the office of 
 the commissioner of internal rev- 
 enue, and shall be public record 
 and open to inspection, 
 but only upon order of the pres- 
 ident under regulations pre- 
 scribed by the secretary of the 
 Treasury and approved by the 
 president. 
 
APPENDIX 
 
 395 
 
 If any corporation shall refuse or 
 neglect to make a return at the 
 times required or shall render a 
 false and fraudulent return, it shall 
 be liable to a penalty of not less 
 than $1,000, and not more than 
 $10,000. 
 
 Officers of a state imposing a 
 general income tax upon request 
 of the governor may have access 
 to returns or an abstract showing 
 the name and income of each cor- 
 poration at such times and in such 
 manner aa the secretary of the 
 treasury shall prescribe. 
 
 If any corporation shall refuse 
 or neglect to make a return at the 
 times required or shall render a 
 false or fraudulent return, it shall 
 be liable to a penalty of not exceed- 
 ing $10,000. 
 
 The word State or United States 
 shall be construed to include any 
 territory, Alaska, the Dist. of Col., 
 Porto Eico and the Philippine Isl- 
 ands when such construction is 
 necessary to carry out the pro- 
 visions of the act. 
 
 PEOTEOTION 
 1909 
 It shall be unlawful for any United 
 States officer or employee to give 
 any information obtained from re- 
 ports, documents or examinations 
 in any manner not provided for by 
 law, except upon special direction 
 of the president. 
 
 Violation is a dismeanor. Pun- 
 ishment, fine not exceeding $1,000, 
 imprisonment for one year, or both. 
 
 OF KETUEISr. 
 
 1913 
 It shall be unlawful for any United 
 States officer or employee to give 
 to any person in any manner not 
 provided by law the operations, 
 style of work, or apparatus of any 
 manufacturer or producer visited 
 by him in the discharge of his duty, 
 or the amount or sources of in- 
 come, profits, losses, expenditures, 
 or any particular thereof, set forth 
 or disclosed in any income return, 
 or to permit any book containing 
 a return or abstract thereof to be 
 seen or examined by any person 
 except as provided by law, and it 
 
396 
 
 INCOME TAX LAW OF 1913 
 
 An y person authorized by law to 
 make a return who makes a false 
 of fraudulent return shall be guilty 
 of a misdemeanor. 
 Penalty, a fine not exceeding 
 $1,000, imprisonment not exceed- 
 ing one year, or both, at the dis- 
 cretion of the court with costs 
 of prosecution. 
 
 All laws relating to the collec- 
 tion, remission, or refund of taxes, 
 so far as applicable, are extended 
 to the corporation tax. 
 
 Jurisdiction is conferred upon 
 the circuit or district courts in 
 which any person summoned to 
 produce books or to testify resides, 
 to compel such attendance and 
 production of books and testimony 
 by appropriate process. 
 
 shall be unlawful to print or pub- 
 lish in any manner not provided by 
 law any return or part thereof or 
 the amount or source of income, 
 profits, losses or expenditures ap- 
 pearing. 
 
 Violation. Misdemeanor. 
 Penalty, fine not exceeding $1,000, 
 or imprisonment for one year, or 
 both, dismissal of a government of- 
 ficer or employee from office and 
 disqualification from subsequently 
 holding office. 
 
 All administrative, special, and 
 general provisions of law, includ- 
 ing the laws in relation to the as- 
 sessment, remission, collection and 
 refund of internal revenue taxes 
 not heretofore specifically repealed 
 and not inconsistent, are hereby ex- 
 tended and made applicable to all 
 the provisions of this section. 
 
 Jurisdiction is conferred upon 
 district courts of residence of wit- 
 ness to compel production of books 
 dnd attendance of witness. 
 
 The provisions of the act extend 
 to Porto Eico and the Philippine 
 Islands. 
 
APPEKDIX 39f 
 
 DIGEST OF FEDERAL CORPORATION TAX DE- 
 CISIONS UNDER THE ACT OF 1909 
 
 Under the 1913 act it is immaterial whether a corporation is 
 or is not engaged in business. Any corporation having an in- 
 come and not exempt under the statute, is taxable, hence cases 
 turning upon this point are deprived of their force by the pres- 
 ent statute. The cases holding such corporations not taxable 
 under the Act of 1909, are, therefore, no longer applicable. 
 Neither are the cases applicable holding taxes on real estate and 
 on the income from real estate direct taxes. The sixteenth 
 amendment to the Constitution ratified in 1913, provided as 
 follows : 
 
 "The Congress shall have power to lay and collect taxes on in- 
 comes, from whatever source derived, without apportionment 
 among the several states, and without regard to any census or 
 enumeration." 
 
 Prior to the ratification of the sixteenth amendment. Article 
 1, Section 9 provided : "l^o capitation or other direct tax shall 
 be laid, unless in proportion to the census or enumeration here- 
 inbefore directed to be taken" and under the Income Tax Law 
 of 1909, it was held that taxes on real estate being direct taxes, 
 taxes on rents or income thereof were also direct taxes. Emery ^ 
 etc. Go. V. U. S. 198 Fed. 242. 
 
 The ratification of the sixteenth amendment to the Constitu- 
 tion of the United States has now disposed of this question. 
 
 CORPORATIONS ENGAGED IN BUSINESS AND SUB- 
 JECT TO THE TAX UNDER THE ACT OF 1909 
 
 Corporations engaged in leasing property, collecting rents, 
 managing ofiSce buildings, making investments of profits or 
 leasing ore lands and collecting royalties, managing wharves, 
 dividing profits, and in some cases investing the surplus, are 
 
398 INCOME TAX LAW OF 1913 
 
 engaged in business within the meaning of the Corporation Tax 
 Law. Flint v. Stone Tracy Co., 202 U. S. 107. 
 
 A corporation owning and leasing taxicabs and collecting 
 rents therefrom is engaged in business within the meaning of 
 the Corporation Tax Law. Flint v. Stone Tracy Co., 220 U. 
 S. 107. 
 
 Public-service corporations, such as street railway companies 
 created under state laws, are subject to the Corporation Tax 
 Law. Flint v. Stone Tracy Co., 220 U. S. 107. 
 
 Corporations acting as trustees, guardians, etc., under the 
 authority of the laws or courts of a state, are not the agents 
 of the state government in such a sense as to be exempt from 
 the imposition under the Corporation Tax Law. Flint v. Stone 
 Tracy Co., 220 U. S. 107. 
 
 Exemptions under the Act of 1909. — 
 
 Receivers appointed by the court and administering corporate 
 property for the benefit of creditors are not liable for the cor- 
 poration tax. Fenn. Steel Co. v. N. Y. City Ey. Co., 193 Fed. 
 286. See also U. S. v. Whitridge, Receiver, LT. S. Sup. Ct., 
 Oct. Term, 1913. It is to be noted in connection with the two 
 last-named cases that the present Income Tax Law is levied on 
 corporations deriving an income, whether engaged in business 
 or not. 
 
 Associations held to be exempt as mutual associations. — 
 
 A building and loan association organized solely for the 
 purpose of making loans to its members, who were entitled to 
 a vote by virtue of membership and not by reason of holding 
 stock is an association for the mutual benefit of its members, 
 although the returns to the members might be unequal, the word 
 "mutual" not being anonymous with equal, as such it is exempt 
 from the corporation tax under Sec. 38. Parkview B. & L. 
 Assn. V. Herold, 203 Fed. 876 ; Dist. C. N. J. 
 
APPENDIX 399 
 
 Associations held not to be exempt as mutual associations. — 
 A building and loan association which loaned funds to non- 
 members, issued guaranteed interest paying stock, etc., is not 
 a building and loan association organized exclusively for the 
 benefit of its members and entitled to exemption from the cor- 
 poration tax. Pacific B. & L. Assn. v. Harison, 201 Fed. 1011, 
 Wash. 
 
 Return — penalty for failure to make it. — 
 
 A corporation engaged in business during a calendar year 
 cannot evade the corporation tax by dissolving before the time 
 when it is required to make a return. 
 
 Where under a state statute dissolved corporations are 
 authorized to continue as such for the purpose of winding up 
 their affairs, their officers should make a return. IJ. 8. v. Gen. 
 Inspection, etc., 192 Fed. 223. 
 
 All corporations of the kind specified in the corporation tax 
 act are required to file annual returns even though their net 
 profits are insufficient to render them liable to the tax. 
 
 TJ. 8. V. Military Construction Co., 204 Fed. 153. 
 
 U. 8. V. Acorn Roofing Co., 204 Fed. 157, D.C.E.D. N. Y. 
 
 The corporation tax act prescribes that any corporation fail- 
 ing to make a return or presenting a false and fraudulent one 
 shall be subject to a penalty of not less than $1,000, nor more 
 than $10,000. Where a civil action was brought before a jury 
 to recover the penalty, held that the jury must fix the amount 
 of the penalty not less than the minimum, the only remedy 
 of the corporation being appeal or an application to the com- 
 missioner of internal revenue or the secretary of the Treasury 
 for a compromise, a motion to set aside the verdict must accord- 
 ingly be denied. 
 
 V. 8. V. Acorn Roofing Co., 204 Fed. 157. 
 
400 INCOME TAX LAW OF 1913 
 
 Net income — what is not. — 
 
 So called "Dividends" paid annually to policy-holders by 
 a mutual life insurance company, doing business on the level 
 premium plan, which arise from the excess of premiums col- 
 lected during previous years over actual requirements are not 
 taxable as part of the company's "net income .... received 
 by it ... . during such year" having been once taxed as a 
 part of the net income of the year when received. A doubt in 
 interpretation should be construed against the tax. Herold v. 
 Mutual Benefit Life Ins. Co., 201 Fed. 918. 
 
 Matters of Procedure. — 
 
 An affirmative judgment may not be given upon a counter- 
 claim in excess of the tax demanded by the government. U. 8. 
 V. Nippissing Mines Co., N. Y. L. J., Sept. 12, 13. 
 
 Under the corporation tax law, a suit to recover taxes claimed 
 to have been improperly assessed may be brought directly against 
 the United States. Emery, etc. Co. v. U. 8. 198 Fed. 242. 
 
 The notice of assessment required by subdivision 5 of the 
 corporation tax act may be given by mail and a notice sent by 
 a collector of internal revenue in a franked envelope, bearing 
 a return card which notice was not returned addressed to the 
 corporation at its principal place of business is presumptively 
 received, and the burden rests on the corporation to prove to 
 the contrary to avoid the penalty for non-payment within the 
 time required. 
 
 U. 8. V. General Inspection Loading Co., 204 Fed. 657. 
 
REGULATIONS 
 
 Regulations concerning the tax imposed by Section 2, Act of Octoher 
 13, 1913, on net income of Individuals, Corporations, Joint-stocTc 
 Companies, Associations, and Insurance Companies. 
 
 Treasury Department. 
 Office of Commissioner of Internal Revenue, 
 
 Washington, D. C, January 5, 1914. 
 
 PREFACE 
 
 The accompanying regulations embrace the various administrative 
 features of the law (sec. 2, act of Oct. 3, 1913) imposing a tax on 
 incomes. They contain instructions relative to the preparation of 
 returns, etc., and are designed to assist both the taxpayer and the 
 officers charged with its enforcement in complying with the require- 
 ments of this law. 
 
 Liberal construction of the law has been given that those charged 
 with withholding the tax at the source may not do so unnecessarily. 
 Withholding agents may forward evidences of non-liability to pay- 
 ment, when such evidences are received by them, to collector for the 
 district in lieu of the tax. This will relieve them of the necessity of 
 withholding such tax. 
 
 The regulations are arranged according to general subjects, as 
 follows : 
 
 Part 1. Individual income returns and collections. 
 
 [Omitted here because not applicable to corporations.'^ 
 
 Part 2. Collections at the source. 
 
 A. Bonds, mortgages, deeds of trust, etc. 
 
 B. Bonds, mortgages, deeds of trust, etc., by first bank or col- 
 
 lection agency where certificates of owners are not filed. 
 
 C. Bonds, mortgages, dividends, etc., of foreign corporations. 
 
 D. Salaries, wages, rent, etc. 
 
 E. Fiduciaries. 
 
 Part 3. Relative to corporations, joint stock companies or associa- 
 tions, and insurance companies. 
 
 401 
 
402 INCOME TAX EEGULATIONS 
 
 Part 4. Assessment and collection. 
 
 All forms of certificates herein provided shall be 8 inches wide and 
 SVs inches from top to bottom, and printed on paper of substantial 
 weight and texture. 
 
 PART 1 
 
 Individual Income Returns and Collections 
 l_Omitted here hecause not applicable to corporations.'] 
 
 PART 2 
 
 Collections at the Source 
 Collections at source applies only to the normal tax on individuals. 
 Art. 29. The deductions and payment of the tax at the source of 
 income applies only to the normal tax imposed upon individuals and 
 shall not be construed to require any of such tax to be withheld prior 
 to the 1st day of November, 1913. 
 
 Persons, firms, etc., required to withhold tax. 
 Art. 30. Paragraph E of section 2 of the act provides that — 
 All persons, firms, copartnerships, companies, corporations, joint- 
 stoch companies or associations, and insurance companies, in what- 
 ever capacity acting, including lessees or mortgagors of real or 
 personal property, trustees acting in any trust capacity, executors, 
 administrators, agents, receivers, conservators, employers, and all 
 officers and employees of the United States having the control, receipt, 
 custody, disposal, or payment of interest, rent, salaries, wages, premi- 
 ums, annuities, compensation, remuneration, emoluments, or other 
 fixed or determinable annual gains, profits, and income of another per- 
 son, exceeding $3,000 for any taxable year, other than dividends on 
 capital stock, or from the net earnings of corporations and joint-sioch 
 companies or associations subject to like tax, who are required to 
 make and render a return in behalf of another, as provided herein, to 
 the collector of his, her, or its district, are hereby authorized and 
 required to deduct and withhold from such annual gains, profits, and 
 income such sum as will he sufficient to pay the normal tax imposed 
 thereon by this section, and shall pay to the officer of the United 
 States Government authorized to receive the same; and they are each 
 hereby made personally liable for such tax. 
 
APPENDIX 403 
 
 Withholding agents. 
 
 Art. 31. All persons, firms, etc., mentioned in the above-quoted 
 paragraph are referred to in these regulations as "debtors" or "with- 
 holding agents," and the word "source" is to apply to the place where 
 the income originated and is payable. 
 
 Income as to which tax is to be withheld. 
 
 Art. 32. The income from which the normal tax of 1 per cent is 
 to be withheld by withholding agents includes all items of income 
 exceeding in the aggregate $3,000 and payable to any one person dur- 
 ing the year, except: 
 
 (a) Dividends on capital stock or from the net earnings of cor- 
 porations and joint-stock companies or associations and insurance 
 companies subject to like tax. 
 
 Special fees and annual retainers. 
 
 (b) Income of an individual which is not fixed or certain and not 
 payable at stated periods, or is indefinite or irregular as to amount or 
 time of accrual, shall not be withheld at the source, but shall he listed 
 in the annual return of the individual, and the tax shall be paid 
 thereon by him. 
 
 Incomes derived from the following professions and vocations come 
 under this head: Agents compensated on the commission basis, 
 lawyers, doctors, authors, inventors, and other professional persons 
 whose income is irregular and indefinite. 
 
 Such persons shall make personal return of all their income, pro- 
 vided their total net income from all sources is $3,000 or over. For 
 example: When a lawyer receives a retainer of $5,000 as a special 
 fee, a deduction therefrom shall not be made by the payer ; but when 
 a lawyer receives a retainer of $5,000 per annum, and the exemption 
 claimed is $3,000, $2,000 of such income would be taxed and the tax 
 retained at the source ; or if his exemption claimed should be $4,000, 
 $1,000 of such income would be taxed and the tax thereon withheld 
 at the source. 
 
 Exemptions under paragraph C. 
 
 (c) Items listed in article 5, which are wholly exempt from tax. 
 
 Art. 33 (a) In all cases where the income tax of a person is with- 
 held and deducted and paid or to be paid at the source, such person 
 shall not receive the benefit of the deduction and exemption allowed 
 in paragraph C (see arts. 9 and 10) except by an application to the 
 collector for refund of the tax unless he shall, not less than SO days 
 
404: INCOME TAX REGULATIONS 
 
 prior to the day on which the return of his income is due, file with 
 the person who is required to withhold and pay tax for him, a cer- 
 tificate claiming the benefit of such exemption, and thereupon no tax 
 shall be withheld upon the amount of such exemption. If any person 
 for the purpose of obtaining any allowance or reduction by virtue 
 of a claim for such exemption, either for himself or for any other 
 person, knowingly makes any false statement or false or fraudulent 
 representation, he shall be liable to a penalty of $300. 
 
 Deductions under paragraph B. 
 
 (b) Nor shall any person under the foregoing conditions be allowed 
 the benefit of any deduction provided for in subsection B (see art. 6, 
 1 to 6) unless he shall, not less than 30 days prior to the day on which 
 the return of his income is due, either file with the person who is 
 required to withhold and pay tax for him a true and correct return 
 (on Form 1008) of his annual gains, profits, and income from all 
 other sources, and also the deductions asked for, and the showing thus 
 made shall then become a part of the return to be made in his behalf 
 by the person required to withhold and pay the tax and the debtor or 
 withholding agent will only withhold the tax on the payments made 
 in excess of the deductions claimed on said form. Or such person 
 may likewise make application for deductions to the collector of the 
 district in which return is made or to be made for him. 
 
 Certificate ' filed on behalf of minors or insane persons. 
 
 If such person is a minor or an insane person, or is absent from 
 the United States, or is unable owing to serious illness to make the 
 return and application above provided for, the return and application 
 may be made for him or her by the person required to withhold and 
 pay the tax, he making oath on certificate (Form 1009) under the 
 penalties of this act that he has sufiicient knowledge of the affairs and 
 property of his beneficiary to enable him to make a full and complete 
 return for him or her, and that the return and application made by 
 him are full and complete. 
 
 Claims for refund or abatement. 
 
 (c) When, however, claims for exemption and deductions as above 
 described are not filed within the prescribed time, the tax collected in 
 excess can be remitted only on presentation of a claim for refund 
 under the provisions of section 3220, Revised Statutes, said claims to 
 be made either by the withholding agent against whom the assess- 
 
APPENDIX 405 
 
 ment was made, or by the person on account of whom such taxes were 
 withheld. 
 
 Claims for abatement of taxes erroneously assessed, or which are 
 excessive in amount, may, prior to collection thereof, be filed under 
 the provisions of said section 3220, Eevised Statutes, either by the 
 withholding agent against whom the assessment was made, or by the 
 persons on account of whom such taxes were withheld. 
 
 In the monthly list returns as now prescribed a space is provided 
 to show the amount of taxes which the withholding agent may remit 
 to the collector when such returns are filed. The withholding agents 
 will not, however, forward to the collector amounts withheld by him 
 until notices of assessment are received from the collector. 
 
 Claims for exemption and deductions may be filed with the with- 
 holding agent and claims for deductions may be filed with the col- 
 lector, not later than SO days prior to March 1. 
 
 Withholding agents to be furnished statement of deductions claimed 
 through collector. 
 
 In cases where claims for deductions are filed with the collector 
 within the time prescribed, the collector will immediately furnish the 
 withholding agent (whose name and address must be shown on Form 
 1008) with a statement of the amount of deductions claimed, and said 
 withholding agent shall not withhold and pay the normal tax to the 
 extent of the deductions claimed as per said list. 
 
 Withholding agents should not file their annual returns until after 
 the expiration of the time allowed persons to file claims for exemp- 
 tions and deductions and if claims for deductions are filed with the 
 collector in the required time, yet not in sufficient time to have the 
 adjustment made by the withholding agent, the collector will make 
 the adjustment on the withholding agent's return and in reporting 
 such withholding agent for assessment will make allowance for the 
 amount of such deductions claimed. Notice of such adjustment, how- 
 ever, must be furnished the withholding agent. 
 
 Tax withheld to be paid to collector of district. 
 
 Art. 34. The normal tax of 1 per cent shall be deducted and with- 
 held at the source, and payment made to the collector of internal 
 revenue as provided in the law, by the debtor, or his, her, or its duly 
 appointed agent authorized to make such deduction and payment. 
 
 No other person, firm, or organization, in whatever capacity acting, 
 having the receipt, custody, or disposal of any income, as herein 
 provided, shall be required to again deduct and withhold the normal 
 
406 INCOME TAX EEGULATIONS 
 
 tax of 1 per cent thereon, provided that any such person, firm, or 
 organization other than the debtor who has withheld said tax, shall 
 file with the collector of internal revenue for his, her, or its district, 
 a certificate (Form 1006) showing from whom and in what amount 
 the tax has been so withheld. 
 
 Returns to be made to collector of internal revenue. 
 
 Art. 35. Withholding agents who are required to make monthly 
 returns will, on or before the 20th day of each month, file with the 
 collector for their respective districts such returns for the preceding 
 month, accompanied by all certificates relating thereto, and there shall 
 also accompany said returns all certificates claiming exemptions and 
 deductions which are not required to be listed thereon; and on or 
 before the 1st day of March in each year said withholding agents 
 shall likewise file their annual returns for the preceding calendar year. 
 Annual returns (Forms 1041 and 1042) must be accompanied by all 
 certificates claiming exemptions and deductions relating thereto. 
 
 Art. 36. For regulations as to assessment and collection of taxes 
 from withholding agents, see article 25 and "Assessments and col- 
 lections," Part 4. 
 
 Income derived from interest upon honds and mortgages or deeds of 
 trust or other similar obligations of corporations, etc. 
 
 Tax on income derived from interest on bonds, etc., to be deducted. 
 
 Art. 37. Under the law a tax of 1 per cent, designated as the 
 normal tax, shall be deducted at "the source," beginning November 1, 
 1913, from all income accruing and payable to any person subject to 
 such tax which may be derived from interest upon bonds and mort- 
 gages, or deeds of trust, or other similar obligations, including equip- 
 ment trust agreements and receivers' certificates of corporations, 
 joint-stock companies or associations, and insurance companies, 
 although such interest does not amount to $3,000. 
 
 Interest on State and Government obligations exempt. 
 
 Income derived from the interest upon the obligations of a State, 
 county, city, or any other political subdivision thereof, and upon the 
 obligations of the United States or its possessions, is not subject to the 
 income tax, and certificates of ownership in connection with coupons 
 or registered interest orders for such interest will not be required. 
 
APPENDIX 407 
 
 Term "debtor" to apply to all corporations, etc. 
 
 Art. 38. The term "debtor," as hereinafter used, shall apply to all 
 corporations, joint-stock companies or associations, and insurance 
 companies; and such "debtor" may appoint withholding and paying 
 agents to act for it in matters jjertaining to the collection of this 
 tax, upon filing with the collector of internal revenue for the district 
 a proper notice of the appointment of such agent or agents. Where 
 such withholding agent is so authorized by the debtor corporation, he 
 may file with the collector of his district the required returns and 
 accompanying certificates (arts. 50 and 51), in which case the assess- 
 ment of the tax withheld by him will be made in that district. Unless 
 such authority is given, such reports, etc., will be furnished by the 
 debtor corporation to the collector of its district (i. e., the district in 
 which its principal financial or business office is located), where, in 
 such case, assessment will be made. 
 
 Tax to be deducted and withheld by debtor corporation. 
 
 Art. 39. For the purpose of collecting the tax on all coupons and 
 registered interest originating or payable in the United States, the 
 source shall be the debtor (or its withholding and paying agent in 
 the United States), who shall deduct the tax when same is to be 
 withheld, and no other bank, trust company, banking firm, or indi- 
 vidual taking coupons or interest orders for collection, or otherwise, 
 shall withhold the tax thereon, where such coupons or orders for 
 registered interest are accompanied by certificates of ownership signed 
 by the owners of the bonds upon which the interest matured. These 
 certificates shall be made on the prescribed forms and shall be made 
 out by each owner of bonds for the coupons or interest orders for 
 each separate issue of bonds or obligations of each debtor. (See 
 Arts. 43 and 46.) 
 
 Substitute certificates, when permitted. 
 
 Art. 40. Eesponsible banks, bankers, and collecting agents receiv- 
 ing coupons for collection with the aforesaid certificates of ownership 
 attached, may present the coupons with the attached certificates to 
 the debtor or withholding agent for collection, or such certificates 
 may be detached and forwarded direct to the Commissioner of In- 
 ternal Eevenue, provided such bank, banker, or collecting agent shall 
 substitute for such certificates its own certificate, and shall keep a 
 complete record of each transaction, showing — 
 
 1. Serial number of item received. 
 
408 INCOME TAX EEGTJLATIONS 
 
 2. Date received. 
 
 3. Name and address of person from whom received. 
 
 4. Name of debtor corporation. 
 
 5. Class of bonds from wbich coupons were cut. 
 
 6. Face amount of coupons. 
 
 7. Exemptions from tax claimed by owner under paragraph 0. 
 For the purpose of identification, such substitute certificates should 
 
 be numbered consecutively, and corresponding numbers given the 
 original certificates of ownership. 
 
 The permission here granted will extend to responsible banks, bank- 
 ers, and collecting agents in foreign countries, through whom col- 
 lection of such interest coupons is made. 
 
 The various substitute certificates hereby authorized will correspond 
 with the form numbers of the ownership certificates detached by the 
 collecting agent, except that the substitute certificates' form numbers 
 will be followed by the letter "a." 
 
 Normal tax to be deducted before payment of interest; claims for 
 exemptions, etc. 
 
 Art. 41. A debtor whose bonds may be registered, both as to prin- 
 cipal and interest, shall deduct the normal tax of 1 per cent from the 
 accruing interest on all bonds before sending out checks for said 
 interest to registered owners or before paying such interest upon 
 interest orders signed by the registered holders of said bonds unless 
 there shall be filed with said debtor or its fiscal agent (not later than 
 30 days prior to March 1), through whom said interest is customarily 
 paid, the proper certificates claiming exemption from liability for said 
 tax as herein provided, executed — 
 
 By a citizen or resident of the United States, the bona fide owner 
 of the registered obligations, who may claim exemption under para- 
 graph C, section 2, of the income tax law, or 
 
 By corporations, joint-stock companies, associations, or insurance 
 companies organized in the United States, or organizations, associa- 
 tions, fraternities, etc., which are either taxable or exempt from 
 taxation, as provided in paragraph G, subdivision (a), of the act, or 
 
 By a bona fide resident and citizen of a foreign country, claiming 
 exemption as such. 
 
 Certificates of ownership to specify bonds and amount of interest due. 
 
 Art. 42. If the owners of the bonds are individuals who are citizens 
 
 or residents of the United States, the aforesaid certificates shall ac- 
 
APPENDIX 409 
 
 company the coupons, or, with respect to the interest on registered 
 bonds, shall be filed with payer of said interest, and such certificates 
 shall describe the bonds and show the amount of coupons attached 
 or the amount of interest due such owners on registered bonds and 
 the name and address of the owners, and if registered in names other 
 than the owners such names with addresses shall also be given. Such 
 certificates shall also show whether the claimants do or do not then 
 claim exemption from taxation at the source, under paragraph C, 
 articles 9 and 10 ($3,000, and under certain conditions $4,000), as to 
 the income represented by such coupons or interest. The certificates 
 will be prepared on Porm 1000 and must show the amount, if any, of 
 exemption claimed, the total amount of exemption to which the 
 claimant is entitled and must be signed by the claimants, who shall 
 use their ordinary business signatures. The certificates shall also 
 show the post-office and street address of the claimants, the internal- 
 revenue district, and the date when signed. 
 
 Certificates may be signed by duly authorized agents, etc. 
 
 Akt. 43. Duly authorized agents may sign such certificates for the 
 persons for whom they act, and withholding agents, banks, or others, 
 with whom such certificates are filed, if satisfied as to the identity 
 and responsibility of the persons so signing, shall stamp or write on 
 the face of each such certificate "Satisfied as to identity and respon- 
 sibility of agent," giving name and address of person thus certifying. 
 Certificates so verified may be accepted by all other persons, firms, or 
 organizations to whom presented, without question as to authority of 
 such agent. If the person, firm, or organization first receiving such 
 certificate is not satisfied as to the agent's identity and responsibility, 
 then, in that event, the agent shall furnish evidence of his authority 
 to so act, which will be retained by the person, firm, or organization 
 receiving it, and the certificate of ownership shall be indorsed as 
 above provided. 
 
 Tax to be deducted before payment of interest. 
 
 Art. 44. Whenever interest coupons, accompanied by a certificate 
 of an individual who is a citizen or resident of the United States, are 
 presented to a debtor or its withholding agent for payment, or when- 
 ever interest is payable to such individual on a bond registered as to 
 both principal and interest, the debtor or its withholding agents shall 
 deduct and withhold the amount of the normal tax, except to the 
 
410 INCOME TAX EEGULATIONS 
 
 extent that exemption is claimed in tlie certificate of ownership 
 (Form 1000). 
 
 Where the interest to be paid is registered, the same form of cer- 
 tificate shall be used where exemptions are claimed, and it shall be 
 filed with the debtor at least five days before the due date of such 
 interest. 
 
 Tax on interest payable to certain corporations, etc., not to be deducted. 
 
 Art. 45. If the owners of the bonds are corporations, joint-stock 
 companies, associations, or insurance companies organized in the 
 United States, no matter how created or organized, or organizations, 
 associations, fraternities, etc., which are either taxable or exempt from 
 taxation as provided in paragraph G, subdivision (a) of the act, the 
 debtor is not required to withhold or deduct the tax upon income 
 derived from interest on such bonds, provided coupons or orders for 
 interest from such bonds shall be accompanied by a certificate of the 
 owners thereof certifying to such ownership, which certificates shall 
 be filed with the debtor when such coupons or interest orders are pre- 
 sented for payment. 
 
 Certificates of corporations claiming exemption. 
 
 Such certificate will be made on Form 1001, and must be signed in 
 the name of the organization (stating its place of business) by the 
 president, secretary, or some other principal officer of the said cor- 
 poration or organization duly authorized to sign same, and must be 
 properly dated. 
 
 Certificates! of nonresident aliens. 
 
 Art. 46. Coupons, or orders for registered interest, payable in the 
 United States, representing the interest on bonds owned by nonresi- 
 dent aliens, must be accompanied by the prescribed certificate (Form 
 1004), but this certificate may be signed either by the ovmer or, in 
 behalf of the owner, by a reputable bank or bankers or other respon- 
 sible collecting agency, certifying to the ownership of the bonds and 
 giving the name and address of the bona fide nonresident and alien 
 owners, and when such certificate is thus attached the normal tax 
 of 1 per cent on such coupons or interest orders need not be withheld 
 at the source by the debtor or collecting agency. Unless such proof 
 of foreign ownership is furnished, the normal tax of 1 per cent should 
 be deducted. 
 
 Foreign organizations engaged in business within the United States 
 are subject to the normal tax of 1 i)er cent per annum upon the 
 
APPENDIX 411 
 
 amount of net income accruing from business transacted and capital 
 invested within the United States; but said organizations shall be 
 exempt from having any part of their income withheld by a debtor or 
 withholding agent, and claim for such exemption will be made on 
 Porm 1018. 
 
 Certificates filed by partnership, showing interest of individual in part- 
 nership profits, etc. 
 
 Art. 47. Inasmuch as individual members of a partnership are 
 liable for income tax upon their respective interest in the net earn- 
 ings of such partnership, the partnership may file with the withhold- 
 ing agent a notice signed in the name of the partnership, by a member 
 thereof, claiming a deduction of a specific amount on account of the 
 legitimate expense incurred in conducting the business of said part- 
 nership; and upon receipt of said notice said withholding agent shall 
 not withhold, and shall not be held liable for, the normal tax on the 
 amount of income equal to the amount of deduction claimed in said 
 notice ; but in no event shall the total of the amounts claimed, as pro- 
 vided herein, be in excess of the total amount of the actual legitimate 
 annual expenses incurred by said partnership in the conduct of its 
 business. Application for such deduction shall be made on Form 1011. 
 
 Foreign partnerships, certificate of ownership may be filed by. 
 
 Art. 48. Foreign partnerships or firms, all the members of which 
 are both citizens, or subjects, and residents of a foreign country, which 
 are the owners of bonds and mortgages or deeds of trust or other 
 similar obligations, including equipment trust agreements, receivers' 
 certificates, and stocks of corporations, joint-stock companies or as- 
 sociations and insurance companies, organized or doing business in 
 the United States, may file with the debtor or withholding agent, with 
 their coupons or orders for registered interest, or orders for other 
 income derived from property or investments in the United States, a 
 certificate and notice of ownership (Form 1016) setting forth the 
 above facts; and the debtor or withholding agent shall not withhold 
 any part of said income. 
 
 Foreign partnership, composed of nonresident foreigners and citizens 
 of United States. 
 Art. 49. Where a foreign partnership or firm is composed of both 
 nonresident foreigners and citizens of the United States, or foreigners 
 residing in the United States or its possessions, the certificate of 
 ownership shall show this fact, and the name and legal address of 
 
412 INCOME TAX EEGULATIONS 
 
 each member of said partnership who is a citizen of the United States, 
 or who is a foreigner residing in the United States or its possessions, 
 shall be given on the back of said certificate, and no part of said in- 
 come shall be withheld. The said certificate and notice of ownership 
 in either case above provided shall be on Form 1014. 
 
 Monthly list return. 
 
 Art. 50. Withholding agents are required to file in duplicate a 
 monthly list return (Form 1012) giving a list of all coupon or interest 
 payments made on which the normal tax of 1 per cent was deducted 
 and withheld from interest payments made upon bonds or other simi- 
 lar obligations, and shall show the name and address in full of the 
 owners of the bonds, amount of the income, amount of exemption 
 claimed, amount of income on which withholding agent is liable for 
 tax, and the amount of tax withheld. 
 
 Forms 1012a, 1012b, and 1012c are to be used where Form 1012 
 does not afford sufficient space in which to enter all items. 
 
 Form 1012d, when necessary to be used, shall be made in duplicate 
 and shall be a summary of the monthly list return. Form 1012, as 
 made in detail by the withholding agent, and the said summary and 
 lists thereto attached when properly filled in and the summary signed 
 and sworn to shall constitute the complete monthly list return of the 
 withholding agent making same as fully as if each list attached to 
 the summary was signed and sworn to separately. 
 
 An annual list return (Form 1013) in duplicate is also required to 
 be made by debtors or withholding agents of the normal tax of 1 per 
 cent withheld from interest payments made upon bonds or other 
 similar obligations, and it shall be filed on or before March 1 of 
 each calendar year. 
 
 Monthly list to constitute a part of the annual list return. 
 
 Aet. 51. The monthly list return in the form as required herein 
 shall constitute a part of the annual list return to be made by debtors 
 or withholding agents, and the debtor or withholding agent will not 
 be required, in making an annual list return of the tax withheld from 
 income derived from interest upon bonds and mortgages or deeds of 
 trust, or other similar obligations of corporations, joint-stock com- 
 panies, or associations and insurance companies, to again make an 
 itemized list of the amount of tax withheld from each person, but will 
 give in the annual list return the totals of the monthly list return for 
 each month of the year for which annual list return is made. 
 
APPENDIX 413 
 
 All substitute certificates of collecting agents, authorized by regu- 
 lations, that are received by debtors or withliolding agents will be 
 considered the same as certificates of owners, and in entering same 
 in , making monthly list returns debtors or withholding agents will 
 enter the name and address of the collecting agent and the number 
 of the substitute certificate issued in lieu of the original certificate 
 containing the name and address of the owner of the bonds. Until 
 the further ruling on this subject by this department no list return is 
 required to be made of certificates of ownership accompanying cou- 
 pons or registered interest orders filed with a debtor or withholding 
 agent when the owners of the honds are not subject to having the 
 normal tax withheld at the source, but all such certificates of owner- 
 ship shall be forwarded by the debtor or withholding agent to the 
 collector of internal revenue for the district, on or before the 20th 
 day of the month succeeding that in which said certificates of owner- 
 ship were received. 
 
 B 
 
 Income derived from interest upon honds, m,ortgages, etc., paid iy 
 first hank or collecting agency when certificates of owners are 
 not filed. 
 Interest coupons or orders, not accompanied by certificate. 
 
 Art. 52. Where the coupons or interest orders are not acompanied 
 by certificates as heretofore prescribed, the first bank, trust company, 
 banking firm, or individual, or collecting agency receiving the coupons 
 or interest orders for collection, or otherwise, shall deduct and with- 
 hold the tax and shall attach to such coupons or interest orders its 
 own certificate (Form 1002), giving the name and address of the 
 owner of, or the person presenting such coupons or interest orders if 
 the owner is not known, with a description of the coupons or interest 
 orders; also setting forth the fact that they are withholding the tax 
 upon them; whereupon the debtor shall not again withhold the tax 
 on said coupons or interest orders, but in lieu thereof shall deliver to 
 the Collector of Internal Revenue the certificate of such bank, trust 
 company, etc., which is withholding such tax money. 
 
 Identity of persons presenting interest coupons to be established. 
 
 Any corporation, collecting agency, or person first receiving from 
 the owner any interest coupons or orders for the collection of regis- 
 tered interest should require the persons tendering such coupons or 
 orders for registered interest to satisfactorily establish their identity. 
 
414 INCOME TAX EEGULATIOlirS 
 
 Monthly and annual list returns. 
 
 Art. 53. Withholding agents receiving coupons or interest orders 
 not accompanied by certificates of owners are required to file monthly 
 and annual list returns in duplicate. 
 
 The required monthly list return (Form 1044) shall give a list of 
 all coupon or interest payments made on which the normal tax of 
 1 i)er cent was deducted and withheld and shall show the name and 
 address in full of the owner of, or the person presenting such coupons 
 or interest orders, if the owner is not known, amount of the income 
 subject to tax and the amount of tax withheld. 
 
 An annual list return (Form 1044a) is also required to be made by 
 such withholding agents, showing the amount of tax withheld during 
 the preceding year on income of this character. This return must be 
 filed on or before the 1st day of March of each calendar year. 
 
 The monthly list returns in the form as required herein shall con- 
 stitute a part of the annual list return to be made, and. the withhold- 
 ing agent will not be required, in making an annual list return of the 
 tax thus withheld, to again make an itemized list of the amount of 
 tax withheld from each person, but will give in the annual list return 
 the totals of the monthly list returns for the year for which annual 
 list return is made. 
 
 
 
 Income derived from coupons, checks or hills of exchange on foreign 
 bonds, mortgages, dividends, etc. 
 
 Collection of coupons, checks, bills of exchange, etc. License. 
 
 Art. 54. All persons, firms, or corporations undertaking for accom- 
 modation or profit (this includes handling either by way of purchase 
 or collection) the collection of coupons, checks, bills of exchange, etc., 
 for or in payment of interest upon bonds issued in foreign countries, 
 and upon foreign mortgages or like obligations, and for any dividends 
 upon stock or interest upon obligations of foreign corporations, asso- 
 ciations, or insurance companies engaged in business in foreign coun- 
 tries, are required by law to obtain a license from the Commissioner 
 of Internal Revenue. 
 
 Application for license to be made to collector of district. Penalty. 
 
 Art. 55. Applications for such license (Form 1017) will be made 
 
 to the collector for the district in which such business is to be carried 
 
 on. Upon the acceptance of such application the collector wiU issue 
 
APPENDIX 415 
 
 to the applicant without cost a license (Form 1010) which will continue 
 in farce until revoked or canceled. Blank forms of such license, bear- 
 ing the facsimile signature of the Commissioner of Internal Eevenue, 
 will be furnished collectors on requisition, who will in all cases coun- 
 tersign the same before issuing it to applicant. Failure to obtain a 
 license or to comply with regulations is punishable by a fine not 
 exceeding $5,000 or imprisonment not exceeding one year, or both, in 
 the discretion of the court. 
 
 Bond may be required in certain cases. 
 
 Art. 56. Where the collector is not sufficiently informed as to the 
 entire responsibility of the applicant, or where in any case he deems 
 it advisable, the Commissioner of Internal Revenue may upon the 
 recommendation of the collector require of the applicant a bond, in 
 duplicate, with satisfactory sureties, in a penal sum at least equal to 
 the estimated amount of tax to b© withheld by such applicant during 
 any one year. A form of bond to be given in such cases will be fur- 
 nished collectors on application for the same. Where licenses are 
 issued without bond, the collector will each year inquire into and 
 satisfy himself of the financial responsibility of the licensee. 
 
 License to be obtained for branch offices. 
 
 Art. 57. When any person, firm, or corporation shall have branch 
 offices and desire to collect foreign interest or dividend income 
 through said branch offices, the application for license or licenses shall 
 be made by the person, firm, or corporation through its principal office 
 for its branch office or offices. Application for licenses in such cases 
 shall be made to the collector of internal revenue for the district in 
 which the home office is located. The names and addresses of the 
 branch offices shall be furnished to the collector in the application of 
 the said principal, and if the requirements of the foregoing regula- 
 tions have been complied with to the satisfaction of the collector, he 
 shall certify this fact to the collector of internal revenue for the 
 district in which the branch office is located, and the collector to whom 
 this certification is made shall issue to such branch office a license, 
 as in the case provided in article 55. 
 
 Normal tax on interest collected to be withheld by agent. 
 
 Art. 58. The licensed person, firm, or corporation first receiving 
 any such foreign items for collection or otherwise, shall withhold 
 therefrom the normal tax of 1 per cent, and will be held responsible 
 therefor. Such licensee shall indorse or stamp on each such coupon. 
 
416 INCOME TAX EEGTTLATIONS 
 
 check, or bill of exchange, when practicable, the words "Income tax 
 withheld by" (giving his or their name, address, and date), which shall 
 be sufficient evidence to relieve subsequent holders or purchasers from 
 the duty of also withholding the income tax. 
 
 If the size or nature of such coupons, checks, etc., makes it im- 
 practicable to make said indorsement thereon, a statement identifying 
 the item on which tax is withheld and bearing said indorsement may 
 be attached thereto with the same effect as if the indorsement was 
 made directly thereon. 
 
 Licensee to furnish collector of district with list of taxes deducted, etc. 
 
 Art. 59. Such licensee shall obtain the names and addresses of 
 the i)ersons from whom such items are received and shall prepare a 
 list of same in duplicate (on Form 1043) and file it with, the collector 
 of internal revenue for his district not later than the 20th day of the 
 month next succeeding the month in which such items were paid. 
 The list shall be dated, and shall contain the names and addresses of 
 the taxable persons, the character and amount of income, amount of 
 exemption claimed, amount of income on which withholding agent is 
 liable for tax, and the amount of tax withheld. In addition to the 
 m.onthly lists the licensee will, on or before the 1st day of March in 
 each year, file with the collector in duplicate a return (Form 1043a), 
 showing the amount of income paid and the amount of tax withheld 
 by him during the preceding year and such other information as the 
 form prescribes. 
 
 The monthly list return in the form as required herein shall con- 
 stitute a part of the annual list return to be made by the licensee as 
 withholding agent, and he will not be required, in making an annual 
 list return of the tax withheld from income described in article 54, 
 to again make an itemized list of the amount of tax withheld from 
 each person, but will give in the annual list return the totals of the 
 monthly list return for each month of the year for which annual list 
 return is made. 
 
 Claims for exemption under paragraph C may be filed. 
 
 Art. 60. In the event such coupons, checks, or bills of exchange 
 above mentioned are presented for collection by an individual claim- 
 ing the benefit of the exemptions allowable under paragraph (arts. 
 9 and 10), such individual shall be permitted to avail himself of the 
 exemption claimed, upon signing on the form heretofore prescribed 
 for coupons payable in the United States, and no tax shall be de- 
 
APPENDIX 417 
 
 ducted for the amount of the exemption so claimed ; or if such items 
 are presented by corporations, joint-stock companies, or associations 
 and insurance companies, organized in the United States, the form 
 of certificate heretofore prescribed for such organizations shall be 
 used, and in such instances no tax shall be deducted. 
 
 Certificates of exemption to be forwarded with monthly list returns to 
 collector. 
 
 Aet. 61. In both instances the licensee first receiving such items 
 shall retain such certificates for delivery with the lists aforesaid, and 
 with respect to said coupons, checks, or bills of exchange, said licensee 
 shall attach thereto (identifying the items) or indorse or stamp 
 thereon the words "Income tax exemp~tion claimed through" (giving 
 name and address of licensee), which shall be sufficient evidence to 
 relieve subsequent holders or purchasers from the duty of also with- 
 holding the tax thereon. 
 
 The provisions for collection of the tax on foreign obligations herein 
 set forth includes the interest upon all foreign bonds, even though the 
 coupons may, at the option of the holder, be payable in the United 
 States as well as in some foreign country. 
 
 Licensee to keep records. 
 
 Art. 62. All persons licensed shall keep their records in such man- 
 ner as to show from whom every such item has been received, and 
 such records shall be open at all times to the inspection of internal- 
 revenue officers. 
 
 D 
 
 Income derived from wages, rent, interest, or other fixed and determin- 
 able gains, profits, and income. 
 
 Wages, salaries, rents, etc. 
 
 Art. 63. The above title includes aU income derived from salaries, 
 wages, rents, royalties, interest, taxable annuities, emoluments, or 
 other fixed and determinable annual gains, profits, and income of 
 another person. ("Income derived from interest upon bonds and mort- 
 gages, or deeds of trust, or other similar obligations of corporations, 
 etc.," and "Income derived from coupons, checks, or bills of exchange 
 on foreign bonds, mortgages, dividends, etc.," which have been cov- 
 ered by regulations under such titles, are not to be included here.) 
 
418 INCOME TAX REGULATIONS 
 
 Withholding agents to deduct and pay tax. 
 
 Aet. 64. Copartnerships, companies, corporations, joint-stock com- 
 panies or associations, insurance companies, in whatever capacity 
 acting, including lessees, mortgagors of real or personal property, 
 trustees acting in any trust capacity, executors, administrators, agents, 
 receivers, conservators, employers and all officers and employees of 
 the United States, hereinafter referred to as "debtors" or withholding 
 agents, having the control, receipt, custody, disposal, or payment of 
 income as described in article 63, shall deduct and withhold from 
 such annual gains, profit, and income, when the same shall have 
 reached an aggregate amount in excess of $3,000, such sum as wiU be 
 sufficient to pay the normal tax of 1 per cent imposed by law, and 
 shall pay the taxes so withheld to the collector of internal revenue 
 for the- district in which the said withholding agent resides or has 
 his, her, or its principal place of business. 
 
 Tax to be withheld on periodical payments when they aggregate $3,000. 
 Art. 65. A withholding agent who pays monthly, or periodically 
 during the year, interest, rents, salaries, wages, etc., shall not with- 
 hold the said tax until such time as the interest, rents, salaries, wages, 
 etc., shall have reached an aggregate amount in excess of $3,000. 
 When such amount has been reached, such agent shall withhold the 
 tax on the whole $3,000 and any excess thereof, unless the person to 
 whom the income is due files a notice claiming exemption under 
 paragraph C (as provided in art. 33(a)), in which ease the withhold- 
 ing agent shall withhold only the tax on the income in excess of said 
 exemption of $3,000 or $4,000 (as the case may be), and the tax so 
 withheld shall be paid as required by law. 
 
 Deductions under paragraph B may be claimed. 
 
 Art. 66. In case the person to whom the income is due is entitled 
 to any deductions under paragraph B, he may avail himself of such 
 deductions by filing with the withholding agent Form 1008, as pro- 
 vided in article 33(b), in which case the withholding agent will only 
 withhold the tax on such income in excess of the deductions claimed 
 on said form. 
 
 Tax not to be withheld by banks on interest paid on deposits. 
 
 Art. 6Y. Banks, bankers, trust companies, and other banking in- 
 stitutions receiving deposits of money, are not required to withhold 
 at the source the normal income tax of 1 per cent on interest paid, or 
 accrued, or accruing to depositors, whether on open accounts or on 
 
APPENDIX 419 
 
 certificates of deposit; but all such interest, whether paid or accrued 
 and unpaid, must be included in the annual income return of the 
 person entitled to receive such interest, whether on open account or 
 on the certificate of deposit. 
 
 Tax to be withheld on payment of interest notes, or notes given for 
 rent. 
 
 Art. 68. When a note shall have been given in payment of interest, 
 rents, or other income accruing after March 1, 1913, the maker of 
 the note, as the "debtor" and as the "source" where the income origi- 
 nates, is required, in paying such note, to withhold the normal tax of 
 1 per cent on the entire amount of the note, if in excess of $3,000, 
 unless claim for exemption or deductions under article 33(a) or 33(b) 
 is filed, in which case the said tax shall be withheld only on the 
 amount of said note in excess of the exemption or deductions so 
 claimed. 
 Purchasers of interest notes as to which tax has not been withheld. 
 
 If any person who has purchased or discounted any such notes 
 omitted, in acquiring them from previous holder, to make a deduction 
 or allowance for said tax, he can look for relief only to the person 
 from whom the notes were obtained, as the "debtor," the maker of 
 said notes, is required to deduct, withhold, and pay to the collector 
 of internal revenue the amount of the normal tax of 1 per-cent which 
 may be due thereon. 
 Annual list return by withholding agents. 
 
 Art. 69. Withholding agents shall make an annual list return 
 (Form 1042), in duplicate, to the collector of internal revenue for 
 the district in which the withholding agent resides or has his prin- 
 cipal place of business on or before the 1st day of March in each 
 year, showing the names and addresses of persons who have received 
 incomes in excess of $3,000, on which the normal tax of 1 per cent 
 has been deducted and withheld during the preceding year. This 
 return must be accompanied by all forms presented claiming exemp- 
 tions and deductions. 
 
 E 
 Fiduciaries. 
 Guardians, etc., as fiduciary agents, to deduct tax. 
 
 Art. 70. Guardians, trustees, executors, administrators, agents, re- 
 ceivers, conservators, and all persons, corporations, or associations act- 
 
420 INCOME TAX EEGrrLATIOITS 
 
 ing in any fiduciary capacity hereinafter referred to as fiduciary 
 agents, who hold in trust an estate of another person or jwrsons, shall 
 be designated the "source" for the purpose of collecting the income 
 tax, and by filing notice with other debtors or withholding agents said 
 fiduciary shall be exempt from having any income, due to them as 
 such, withheld for any income tax by any other debtor or withholding 
 agent. Other debtors or withholding agents upon receipt of such 
 notice shall not withhold any part of such income from- said fiduciary 
 and will not in such case be held liable for normal tax of 1 per cent 
 due thereon. The form of notice to be filed with the debtor or with- 
 holding agent by fiduciary will be on Form 1015. Where such ex- 
 emption is not claimed, notice thereof on Form 1019 should be filed 
 with the withholding agent. 
 
 Annual return to be made to the collector of the district. 
 
 Art. 71. Fiduciaries shall, on or before March 1 of each year, 
 make and render a return of the income coming into their custody 
 or control and management from each trust or estate when the annual 
 interest of any beneficiary in said trust or estate is in excess of 
 $3,000. This return (Form 1041) must be filed with the collector for 
 the district in which the fiduciary resides or has his principal place 
 of business, and shall contain an itemized statement of the gross in- 
 come and deductions claimed. 
 
 Notice of failure to file return as required shall be served upon the 
 fiduciary. (See art. 18.) 
 
 The entries on the first page of Form 1041 in column headed 
 "Amount of income paid or accrued to beneficiaries" should not in- 
 clude their respective shares of income derived from dividends on 
 the stock or from the net earnings of corporations, joint-stock com- 
 panies, etc., subject to like tax or the income on which the normal 
 tax of 1 per cent has been deducted and withheld at the source by the 
 debtor or the prior withholding agent, as these two items of income 
 are treated as deductions in determining the amount of income sub- 
 ject to tax for which the fiduciary as withholding agent has to account. 
 
 When the share of any beneficiary, therefore, in the amount stated 
 on line 3 of the first page of said return is in excess of $3,000, return 
 must be made. 
 
 Return to include only income accruing from trust, unless otherwise 
 authorized by beneficiary. 
 
 Art. 72. As each such fiduciary acts solely in behalf of the bene- 
 
APPEITDIS 421 
 
 ficiaries of the trust, the annual return required in such cases has 
 reference only to the income accruing and payable through said 
 fiduciary, and not to the income of the beneficiary derived from other 
 sources. If, however, such fiduciary is legally authorized to act for 
 such beneficiary as agent or attorney in fact, he may in such case 
 also make for the beneficiary the personal annual return (Form 1040) 
 required by law. 
 
 Annual return to include list of beneficiaries, showing tax withheld 
 from each. 
 
 Art. 73. The annual return of the fiduciary shall contain a list 
 of the name and full address of each beneficiary and the share of said 
 income to which each* may be entitled. There must also be entered 
 opposite the name of each beneficiary the amount of exemption, if 
 any, claimed by him, the amount of income on which the fiduciary is 
 liable for tax, and the amount of tax withheld, and the said return 
 shall be signed and sworn to by the fiduciary, if an individual, making 
 same, and his full address must be stated. If the fiduciary is an 
 organization, the return shall be signed and sworn to by the presi- 
 dent, secretary, or treasurer of said organization. 
 
 Return to be made of undistributed income accruing during the year. 
 Art. 74. Fiduciaries having control of any portion of an annual 
 income accruing during the year, but not distributed or paid to the 
 beneficiaries during the year, shall, in rendering their annual return 
 (Form 1041), give the name and address of each of said beneficiaries 
 having a distributive interest in said income, and shall furnish all 
 information called for in such returns. The fiduciary shall in all 
 such cases withhold and pay to the collector, as provided by law, the 
 normal tax of 1 per cent upon the distributive interest of each of said 
 beneficiaries when in excess of $3,000, the same as if said income was 
 actually distributed and paid. Exemption under paragraph C, how- 
 ever, may be claimed by the beneficiary or his legal representative by 
 filing his claim for exemption with the fiduciary agent. 
 
 Tax withheld on undivided income not to be again withheld when 
 income is distributed. 
 
 Art. 75. "When the normal tax on undivided annual net income 
 has been so withheld, such tax shall not be again withheld when such 
 portion of the income is actually distributed and paid to said bene- 
 ficiary. 
 
422 INCOME TAX REGULATIONS 
 
 PAET 3 
 
 EELATmO TO THE INCOME TaX IMPOSED BY SECTIONS 2 AND 4 OF THE 
 
 Act op October 3, 1913, on Corporations, Joint-stock Com- 
 panies OR Associations, and Insurance Companies. 
 
 Organizations subject to tax. 
 
 Art. 76. Under the provisions of sections 2 and 4 of the act of 
 October 3, 1913, every corporation, joint-stock company or association, 
 and every insurance company organized in the United States, no mat- 
 ter how created or organized, except those specificially exempted, shall 
 be subject to pay annually an income tax of 1 per centum per annum 
 upon the entire net income arising or accruing from all sources dur- 
 ing the preceding calendar or fiscal, year, as the case may be. Certain 
 exceptions as to taxability will be noted specifically hereinafter. 
 
 Foreign corporations subject to the tax. 
 
 Art. 77. A similar tax shall be. levied, assessed against, and paid 
 annually by corporations, joint-stock companies or associations, and 
 insurance companies organized, authorized, or existing under the laws 
 of any foreign country upon the amount of net income accruing from 
 business transacted and capital invested within the United States dur- 
 ing such year. 
 
 Corporations defined. 
 
 Art. 78. "Corporation" or "corporations," as used in these regula- 
 tions, shall be construed to include all corporations, joint-stock com- 
 panies or associations, and all insurance companies coming within the 
 terms of the law, and such organizations will hereinafter he referred 
 to as "corporations." 
 
 Associations, real estate trusts, etc., subject to tax. 
 
 Art. 79. It is immaterial how such corporations are created or 
 organized. The terms "joint-stock companies" or "associations" shall 
 include associates, real estate trusts, or by whatever name known, 
 which carry on or do business in an organized capacity, whether 
 organized under and pursuant to State laws, trust agreements, declara- 
 tions of trusts, or otherwise, the net income of which, if any, is dis- 
 tributed, or distributable, among the members or share owners on the 
 basis of the capital stock which each holds, or, where there is no 
 capital stock, on the basis of the proportionate share of capital which 
 each has invested in the business or property of the organization, all 
 
APPENDIS 423 
 
 of whicli joint-stock companies or associations shall, in their organ- 
 ized capacity, be subject to the tax imposed by this act. 
 
 Corporations required to make returns. 
 
 Art. 80. Every corporation not speciiically enumerated as exempt 
 shall make the return of annual net income required by law whether 
 or not it may have any income liable to tax, or whether or not it shall 
 be subordinate to or controlled by another corporation. Mutual tele- 
 phone companies, mutual insurance companies, and like organizations, 
 although local in character, and whose income consists largely from 
 assessments, dues, and fees paid by members, do not come within the 
 class of corporations specifically enumerated as exempt. Their status 
 under the law is not dependent upon whether they are or are not 
 organized for profit. Not coming within the statutory exemption, all 
 organizations of this character will be required to make returns of 
 annual net income, and pay any income tax thereby shown to be due. 
 For this purpose the surplus of receipts of the year over expenses 
 will constitute the net income upon which the tax will be assessed. 
 
 A railroad or other corporation which has leased its properties in 
 consideration of a rental equivalent to a certain rate of dividends on 
 its outstanding capital stock and the interest on the bonded indebted- 
 ness, and such rental is paid by the lessee directly to the stock and 
 bond holders, should, nevertheless, make a return of annual net in- 
 come showing the rental so paid as having been received by the cor- 
 poration. 
 
 Interest deduction by corporations operating leased or purchased lines. 
 Art. 81. A railroad company operating leased or purchased lines 
 shall include all receipts derived therefrom, and, if bonded indebted- 
 ness of such lines has been assumed, such operating company may 
 deduct the interest paid thereon to an amount not exceeding one-half 
 of the sum of its interest-bearing indebtedness and its paid-up capital 
 stock outstanding at the close of the year. 
 
 Lessee corporations not to include capital stock or indebtedness of 
 lessor corporations. 
 
 Art. 82. Corporations operating leased lines should not include the 
 capital stock of the lessor corporations in their ovm statement of 
 capital stock outstanding at the close of the year. The indebtedness 
 of such lessor corporations should not be included in the statement of 
 the indebtedness of the lessee unless the lessee has assumed the same. 
 Each leased or subsidiary company will make its own separate return. 
 
424 INCOME TAX EEGULATIONS 
 
 accounting for therein all income which it may have received by way 
 of dividends, rentals, interest, or from any other source. 
 
 Foreign corporations having branch offices in United States to desig- 
 nate principal office. 
 
 Art. 83. A foreign corporation having several branch offices in the 
 United States should designate one of such branches as its principal 
 office and should also designate the proi)er officers to make the required 
 return. 
 
 Corporations organized during year to make returns. 
 
 Art. 84. A corporation organized during the year should render a 
 sworn return on the prescribed form, covering that portion of the year 
 (calendar or fiscal) during which it was engaged in business or had 
 an income accruing to it. 
 
 Corporations going into liquidation. 
 
 Art. 85. Corporations going into liquidation during any tax period 
 may, at the time of such liquidation, prepare a "final return" covering 
 the income received or accrued to them during the fractional part of 
 the year during which they were engaged in business, and immediately 
 file the same with the collector of the district in which the corpora- 
 tions have their principal places of business. 
 
 Limited partnerships. 
 
 Art. 86. Limited partnerships are held to be corporations within 
 the meaning of this act and these regulations, and in their organised 
 capacity are subject to the income tax as corporations. 
 
 Corporations exempt from tax. 
 
 Art. 87. The act specifically enumerates and exempts from its 
 provisions and requirements labor, agricultural, or horticultural or- 
 ganizations, mutual savings banks not having a capital stock repre- 
 sented by shares, fraternal beneficiary societies, orders, or associations 
 operating under the lodge system, or for the exclusive benefit of the 
 members of a fraternity itself operating under the lodge system, and 
 providing for the payment of life, sick, accident, and other benefits to 
 the members of such societies, orders, or associations, and dependents 
 of such members, domestic building and loan associations, cemetery 
 companies organized and operated exclusively for the mutual benefit 
 of their members, any and all corporations or associations organized 
 and operated exclusively for religious, charitable, scientific, or educa- 
 tional purposes, no part of whose net income inures to the benefit of 
 
APPENDIX 425 
 
 any private stockholder or individual, business leagues, chambers of 
 commerce, or boards of trade not organized for profit, no part of the 
 net income of -which inures to the benefit of the private stockholder 
 or individual, and civic leagues or similar organizations not organ- 
 ized for profit, but operated exclusively for the promotion of social 
 welfare. 
 
 Domestic building and loan associations defined. Mutuality essential. 
 
 Domestic building and loan associations are among those enume- 
 rated as exempt from the requirements of the law. A domestic build- 
 ing and loan association is held to be one organized under and pur- 
 suant to the laws of the United States, or of a State, or Territory 
 thereof, or under the laws applicable to Alaska or the District of 
 Columbia. Mutuality in operation and in the distribution of profits 
 and benefits is essential to exemption. Therefore, in order to come 
 within the exempted class such associations must not only be "Domes- 
 tic," as defined, but they must be organized and operated exclusively 
 for the mutual benefit of the members; that is, all the profits and 
 benefits provided for in the articles of association and by-laws must 
 be ratably distributed among all members regardless of the kind of 
 stock held, according to the amount of money they have on deposit. 
 An association issuing different classes of stock upon which different 
 rates of interest or dividends are guaranteed or paid, does not come 
 within the exempted class. 
 
 Corporations must establish their right to exemption. 
 
 Art. 88. All corporations and all beneficiary societies enumerated 
 above shall by aflidavit, or otherwise, at the request of the collector or 
 Commissioner of Internal Eevenue, establish their right to the ex- 
 emption provided, in which case it will not be sufficient to merely 
 declare that they are exempt, but they must show the character and 
 purpose of the organization, the manner of distributing the net in- 
 come, if any, or that none of the net income inures to the benefit of 
 any private stockholder or individual. In the absence of such a show- 
 ing, such organizations may, at any time, be required to make returns 
 of annual net income or disclose their books of account to a revenue 
 officer for examination in order that the status of the company may 
 be determined. 
 
 Society or association subject to exemption defined. 
 
 Art, 89. A society or association "operating under the lodge sys- 
 tem" is considered to be one organized under a charter, with properly 
 
426 INCOME TAX REGULATIONS 
 
 appointed or elected officers, with an adopted ritual or ceremonial, 
 holding meetings at stated intervals, and supported by fees, dues, or 
 assessments. 
 
 Cemetery companies organized for mutual benefit of their members, 
 exempt. 
 Art. 90. Cemetery companies organized and operated exclusively 
 for the mutual benefit of their members are exempt. The provisions 
 of the law clearly indicate that companies which operate cemeteries 
 for profit are liable to the tax. The status of cemetery associations 
 under the law will, therefore, depend upon the character and purpose 
 of the organization and what disposition is made of the income. 
 
 Corporations whose status as to exemption is in doubt must make 
 return. 
 
 Aet. 91. Any corporation, concerning whose status under the law 
 there is any doubt, or which does not clearly come within one or an- 
 other of the classes of those specifically enumerated as exempt, should 
 file a return (in blank if desired) and attach thereto a statement 
 setting out fully the nature and purpose of the organization, the 
 source of its income, and what disposition is made of it, and par- 
 ticularly of any surplus. 
 
 Co-operative dairies not issuing stock and allowing patrons dividends, 
 exempt. 
 
 Art. 92. Cooperative dairies not issuing stock and allowing patrons 
 dividends based on butter fat in milk furnished are not liable. In 
 such case the "dividends" are the purchase price of the raw material 
 furnished. 
 
 When income from public utilities is not taxable. 
 
 Art. 93. The income derived from any public utility or from the 
 exercise of any essential governmental function, which income accrues 
 to any State, Territory, the District of Columbia, or any political sub- 
 division of a State, Territory, or the District of Columbia, and any 
 income accruing to the government of the Philippine Islands, or to 
 Porto Eico, shall not be subject to the tax imposed by this act. In 
 cases wherein any State, Territory, or the District of Columbia, or 
 any political subdivision of a State, or Territory, shall have, prior to 
 the passage of this act, contracted in good faith with any person or 
 corporation to acquire, construct, operate, or maintain a public utility, 
 no income tax pursuant to this act shall be levied upon the income 
 
APPEiq^DIX 427 
 
 derived from the operation of such public utility, so far as the assess- 
 ment and payment of such tax will impose a loss or burden upon such 
 State, Territory, District of Columbia, or political subdivision. But 
 the person or corporation is not relieved from the payment of the 
 tax upon that portion of the income accruing to him, or it, under 
 such contract. 
 
 Partnerships not taxable as corporations. 
 
 Art. 94. Ordinary copartnerships are not, as such, subject to the 
 tax imposed, by this act, but the individual members of any such part- 
 nership are liable for income tax only in their individual capacity on 
 their respective shares of the earnings of such partnership, whether 
 such earnings be distributed or not. 
 
 What constitutes paid-up capital stock. 
 
 Abt. 96. Full amount of stock, as represented by the par value of 
 the shares issued, is to.be regarded as the paid-up capital stock, ex- 
 cept when such stock is assessable on account of deferred payments, or 
 payable in installments, in which case the amount actually paid on 
 such shares will constitute the actual paid-up capital stock of the cor- 
 poration. 
 
 Gross income, how determined. 
 
 Art. 96. The following definitions and rules are given for deter- 
 mining the gross income of various classes of corporations : 
 
 Gross income of banks and other financial institutions. 
 
 Gross income of banks and other financial institutions consists of 
 the total revenue derived from the operation of the business, includ- 
 ing income, gains, or profits from all other sources, as shown by the 
 entries on the books of account, within the calendar or fiscal ysar for 
 which the return is made. 
 
 Gross income of insurance companies. 
 
 Art. 97. Gross income of insurance companies consists of the total 
 revenue derived from the operation of the business, including income, 
 gains, or profits from all other sources, as shown by the entries on the 
 books of account within the calendar or fiscal year for which the 
 return is made, except as modified by the express exemptions of the 
 articles which apply to mutual fire, mutual marine, and life insurance 
 companies. 
 
4:28 INCOME TAX EEGULATIONS 
 
 Gross income of mutual fire insurance companies. 
 
 Art. 98. Mutual fire insurance companies, which require their 
 members to make premium deposits to provide for losses and expenses, 
 shall not return as gross income any portion of the premium deposits 
 returned to their policyholders, but shall return as taxable income all 
 income received by them from all other sources plus such portions of 
 the premium deposits as are retained by the companies for purposes 
 other than the payment of losses and expenses and reinsurance 
 reserves. 
 
 Mutual marine insurance companies. 
 
 Aht. 99. Mutual marine insurance companies may include in their 
 deductions from gross income amounts repaid' to policyholders on 
 account of premiums previously paid by them and interest paid upon 
 such amounts between the ascertainment thereof and the payment 
 thereof, such amounts and interest having been included in gross 
 income. 
 
 Deferred dividends deductible, when. 
 
 Aet. 100. Life insurance companies are authorized to omit from 
 gross income such portion of any actual premium received from any 
 individual policyholder as shall have been paid back or credited to 
 the policyholder or treated as an abatement of his premium. In so 
 far as "deferred dividends" payable at a stated period represent "a 
 portion of any actual premium received," such deferred dividends 
 may be included in the amounts to be omitted from gross income for 
 the year in which they were actually paid back, credited to the policy- 
 holder, or applied as an abatement of premium. In the case of divi- 
 dends credited or apportioned annually to the policyholder, only the 
 aggregate amount so actually credited or apportioned during the 
 premium-paying period, and not any accretions thereto, can be ex- 
 cluded from gross income. In the case of whole-life or five-year dis- 
 tribution policies, deferred dividends may be excluded from gross 
 income to the extent that they are paid back, or credited to the in- 
 sured, or used as an abatement of his annual premiums. 
 
 Gross income of insurance companies, to include what. 
 
 Art. 101. Gross income of insurance companies, as defined above, 
 will include net premium income as reported to the State insurance 
 departments, except the foregoing items specifically exempted in the 
 act, and, in the case of life insurance companies, surrender values 
 applied in any manner, consideration for supplementary contracts in- 
 
APPENDIX 429 
 
 volving and not involving life contingencies, and all otlier income, 
 gains, or profit as shown by the books of account. 
 
 Consideration for supplementary contracts. 
 
 Art. 102. Applied surrender values and consideration for supple- 
 mentary contracts not involving life contingencies included in in- 
 come will, of course, be deducted as payments under policy contracts, 
 but for convenience in verifying the returns, these items should ap- 
 pear in the return in both gross income and deductions. 
 
 Supplementary statement to accompany returns. 
 
 Art. 103. All insurance companies should include and attach to 
 their returns a supplementary statement showing, for life companies, 
 the aggregate of items "of such portion of any actual premium re- 
 ceived from any individual policyholder as shall have been paid back 
 or credited to such individual policyholder, or treated as an abatement 
 of premium of such individual policyholder within such year ;" in the 
 case of mutual fire insurance companies a statement showing "any 
 portion of the premium deposits returned to their policyholders ;'' and 
 in the case of mutual marine companies "amounts repaid to policy- 
 holders on account of premiums previously paid by them, and interest 
 paid upon such amounts between the ascertainment thereof and the 
 payment thereof," which are, or may be, omitted from gross income. 
 (For authorized deductions, on account of losses, etc., see Arts. 113. 
 and 147.) 
 
 Gross income of manufacturing companies. 
 
 Art. 104. Gross income of manufacturing companies shall consist 
 of the total sales of manufactured goods during the year covered by the 
 return, increased or decreased by the gain or loss as shown by the 
 inventories of finished and unfinished products, raw material, etc., at 
 the beginning and end of the year. To this amount should be added 
 the income, gains, or profits from all other sources as shown by the 
 books of account. 
 
 Gross income of mercantile corporations. 
 
 Art. 105. Gross income of mercantile companies shall include the 
 total merchandise sales during the year, increased or decreased by the 
 gain or loss as shown by the inventories of merchandise at the be- 
 ginning and end of the year for which the return is made; to this 
 amount should be added the income, gains, or profits derived from 
 all other sources as shown by the books of account. 
 
430 INCOME TAX KEGULATIONS 
 
 Gross income of miscellaneous companies. 
 
 Art. 106. Gross income of miscellaneous corporations consists of 
 tlie total revenue derived from tlie operation and management of the 
 business and property of the corporation making the return, together 
 with all amounts of income, including the income, gains, or profits 
 from all other sources as shown by the books of account. 
 
 Definition of gross income. 
 
 Art. 107. It will be noted from these definitions that the gross 
 income embraces not only thq operating revenues, but also income, 
 gains, or profits from all other sources, such as rentals, royalties, in- 
 terest, and dividends from stock owned in other corporations, and 
 appreciation in values of assets, if taken up on the books of account 
 as gain; also profits made from the sale of assets, investments, etc. 
 
 Income derived from sale of capital assets. 
 
 Art. 108. For the purpose of determining the income resulting 
 from the sale- of capital assets and the amount to be accounted for as 
 income under this act, there shall be included any and all profit re- 
 sulting from such sal© and which may be apportioned to the period 
 during which the corporation tax law (sec. 38, act of Aug. 5, 1909) 
 was in force and effect, which was not returned as income during that 
 period. 
 
 Ascertaining net income from the sale of capital assets. 
 
 Art. 109. In ascertaining net income derived from the sale of 
 capital assets, if such assets were acquired subsequent to January 1, 
 1909, the difference between the selling price and the buying price 
 shall constitute an item to be added to or subtracted from gross in- 
 come according to whether the selling price was greater or less than 
 the buying price. If the capital assets were acquired prior to Janu- 
 ary 1, 1909, the amount of profit or loss representing the difference 
 between the selling and buying price is to be prorated to determine 
 the proportion of the gain or loss arising subsequent to January 1, 
 1909, and the proportionate part belonging to the years subsequent to 
 January 1, 1909, shall be added to or deducted from the gross income 
 for the year in which the sale was made. 
 
 Profit or loss arising from the sale of such assets. 
 
 Art. 110. Tor the purpose of determining the profit or loss arising 
 from the sale of such assets, there shall be added to the price actually 
 realized from the sale any amount which has heretofore been set aside 
 
APPENDIX 431 
 
 and deducted from gross income by way of depreciation since Janu- 
 ary 1, 1909, which has not been paid out in making good such depre- 
 ciation on the property sold. 
 
 Changes in book value of assets. 
 
 Art. 111. In the case of changes in book values of capital assets 
 resulting from a reappraisal of property, the consequent gains or 
 losses shall be computed for the return in the manner prescribed above 
 in the case of the sale of capital assets. 
 
 Result of annual adjustment of values to be shown in return. 
 
 In cases wherein there is an annual adjustment of book values of 
 securities, real estate and like assets, and the increases and decreases 
 in values, thus indicated, are taken up on the books and reflected in 
 the profit and loss account, such readjusted values will be taken into 
 account in making the return of annual net income and no prorating 
 will be required. If such adjustment had been made annually prior 
 to March 1, 1913, the book value of the assets at that date will be 
 taken as the basis for determining gain or loss resulting from subse- 
 quent sale, maturity, or adjustment. The adjustment referred to will 
 comprehend assets which have increased in value as well as those 
 which have decreased. 
 
 Where corporations are engaged in more than one class of business. 
 Art. 112. Where a corporation is engaged in carrying on more than 
 one class of business, gross income derived from the different classes 
 of business shall be ascertained according to the definitions above, and 
 which are applicable thereto. 
 
 Net income, how ascertained. 
 
 Art. 113. The net income shall be ascertained by deducting from 
 the gross amount of the income of such corporation received within 
 the year from all sources: 
 
 Ordinary and necessary expenses. 
 
 First. All the ordinary and necessary expenses paid within the 
 year in the maintenance and operation of its business and properties, 
 including rentals or other payments required to be made as a con- 
 dition to the continued use or possession of property. 
 
 Loss sustained within the year. Depreciation. 
 
 Second. All losses actually sustained within the year and not com- 
 pensated by insurance or otherwise, including a reasonable allowance 
 
432 INCOME TAX EEGULATIOirS 
 
 for depreciation by use, wear and tear of property, if any, and in the 
 case of mines, a reasonable allowance for depletion of ores and all 
 natural deposits, not to exceed 5 per centum of the gross value at the ' 
 mine of the output for the year for which the computation is made; 
 and in the case of insurance companies, the net addition, if any, re- 
 quired by law to be made within the year to reserve funds, and the 
 sums other than dividends paid within the year on policy and annuity 
 contracts, except as provided in the cases of mutual fire, mutual 
 marine, and life insurance companies. 
 
 Interest accrued and paid vyithin the year. 
 
 Third. The amount of interest accrued and paid within the year on 
 its indebtedness to an amount of such indebtedness not exceeding one- 
 half of the sum of its interest-bearing indebtedness and its paid-up 
 capital stock outstanding at the close of the year, or if no capital 
 stock, on the amount of its indebtedness not exceeding the amount of 
 capital employed in the business at the close of the year: Provided, 
 That in case of indebtedness wholly secured by collateral the subject 
 if sale in ordinary business of such corporation, joint-stock company, 
 or association, the total interest secured and paid by such company, 
 corporation, or association within the year on any such indebtedness 
 may be deducted as a part of its expense of doing business : Provided 
 further. That in the case of bonds or other indebtedness, which have 
 been issued with a guaranty that the interest payable thereon shall be 
 free from taxation, no deduction for the payment of the tax herein 
 imposed shall be allowed ; and in the case of a bank, banking associa- 
 tion, loan, or trust company, interest paid within the year on deposits 
 or on moneys received for investment and secured by interest-bearing 
 certificates of indebtedness issued by such bank, banking association, 
 loan, or trust company. 
 
 Taxes paid virithin the year. 
 
 Fourth. All sums paid within the year for taxes imposed under the 
 authority of the United States, or any State or Territory thereof, or 
 imposed by the government of any foreign country. 
 
 General expenses. 
 
 Art. 114. Expenses of operation and maintenance shall include all 
 expenditures for material, labor, fuel, and other items entering- into 
 the cost of the goods sold or inventoried at the end of the year, and 
 all other expenses incurred in the ox)eration of the business except 
 such as are required by the act to be segregated in the return. 
 
APPENDIX 433 
 
 Cost of buildings on leased grounds. 
 
 Art. 115. The cost of erecting jiermanent buildings on ground 
 leased by a company is a proper deduction as a rental charge, provided 
 such buildings are left on the ground at the expiration of the lease as 
 a part of the rental payment. In such case the cost will be prorated 
 according to the number of years constituting the term of the lease 
 and the annual deduction will be made accordingly. 
 
 Expense, foreign steamship companies. 
 
 Art. 116. General expenses, such as coal, ship stores, etc., of for- 
 eign steamship companies, shall be prorated as provided in the act for 
 interest deductions in the case of foreign corporations. 
 
 Commissions to salesmen paid in stock. 
 
 Aet. 117. Commissions allowed salesmen, paid in stock, may be de- 
 ducted as expense if so charged on books at the actual value of such 
 stock. 
 
 Additions and betterments. 
 
 Art. 118. Amounts expended in additions and betterments which 
 constitute an increase in capital investment are not a proper deduc- 
 tion. 
 
 Compensation based on stockholding not deductible. 
 
 Art. 119. Amounts paid as compensation or additional compensa- 
 tion to officers or employees, which amounts are based upon the stock- 
 holdings of such officers or employees, are held to be dividends, and 
 although paid in lieu of salaries or wages, are not allowable deduc- 
 tions from gross income, for the reason that dividends are not 
 deductible. 
 
 Gifts, pensions, or gratuities not deductible. 
 
 Art. 120. Amounts paid for pensions to retired employees, or to 
 their families, or others dependent upon them, or on account of in- 
 juries received by employees, are proper deductions as "ordinary and 
 necessary expenses" ; gifts or gratuities to employees in the service of 
 a corporation are not properly deductible in ascertaining net income. 
 
 Donations which are deductible. 
 
 Art. 121. Donations made for purposes connected with the opera- 
 tion of the property when limited to charitable institutions, hospitals, 
 or educational institutions, conducted for the benefit of its empolyees, 
 or their dependents, shall be a proper deduction for ordinary and 
 necessary expenses. 
 
434 INCOME TAX REGULATIONS 
 
 Reserves for insurance. 
 
 Art. 122. Funds set aside by a corporation for insuring its own 
 property are not a proper deduction, but any loss actually sustained 
 and charged to such fund may be deducted. 
 
 Materials and supplies. 
 
 Art. 123. In ascertaining expenses proper to be included in the 
 deductions to be made under the item of "Expenses," corporations 
 carrying materials and supplies on hand for use should include in 
 sucTi expenses the charges for materials and supplies only to the 
 amount that the same are actually disbursed and used in operation 
 and maintenance during the year for which the return is made. 
 
 Losses sustained during the year. 
 
 Art. 124. The deduction for losses must be losses actually sustained 
 during the year and not compensated by insurance or otherwise. It 
 must be based upon the difference between the cost value and salvage 
 value of property or assets, including in the latter value such amount, 
 if any, as has, in the current or previous years, been set aside and 
 deducted from gross income by way of depreciation, as elsewhere 
 defined, and has not been paid out in making good such depreciation. 
 
 Bad debts charged off. 
 
 Art. 125.. Bad debts, if so charged off the company's books, during 
 the year, are proper deductions. But such debts, if subsequently col- 
 lected, must be treated as income. 
 
 Reserves not deductible. 
 
 Art. 126. Eeserves to take care of anticipated or probable losses 
 are not a proper deduction from gross income. 
 
 Loss due to removal of buildings. 
 
 Art. 127. Loss due to voluntary removal of buildings, etc., inci- 
 dent to improvements is either a proper charge to the cost of new 
 additions or to depreciation already provided, as the facts may indi- 
 cate, but in no case is it a proper deduction in determining net in- 
 come, except as it may be reflected in the reasonable amount allowable 
 as a deduction for depreciation of the new building. Any loss claimed 
 because of the voluntary removal of a building is presumed to have 
 been covered by previous depreciation charges; otherwise the amount 
 of such loss will constitute a part of the cost of the new building. 
 
APPENDIX 435 
 
 Losses from sale of capital assets. 
 
 Art. 128. All losses claimed arising from sale of capital assets 
 should be arrived at in the manner prescribed in article 109, defining 
 gains arising from sale of capital assets. 
 
 Depreciation defined; how determined. 
 
 Art. 129. The deduction for depreciation should be the estimated 
 amount of the loss, accrued during the year to which the return re- 
 lates, in the value of the property in respect of which such deduction 
 is claimed, that arises from exhaustion, wear and tear, or obsolescence 
 out of the uses to which the property is put, and which loss has not 
 been made good by payments for ordinary maintenance and repairs 
 , deducted under the heading of expenses of maintenance and opera- 
 tion. This estimate should be formed upon the assumed life of the 
 property, its cost, and its use. Expenses paid in any one year in 
 making good exhaustion, wear and tear, or obsolescence in respect of 
 which any deduction for depreciation is claimed must not be included 
 in the deduction for expense of maintenance and operation of the 
 property, but must be made out of accumulated allowances, deducted 
 for depreciation in current and previous years. 
 
 Depreciation deductible, how treated. 
 
 Art. 130. The depreciation allowance, to be deductible, must be, 
 as nearly as possible, the measure of the loss due to wear and tear, 
 exhaustion, and obsolescence, and should be so entered on the books 
 as to constitute a liability against the assets of the company, and 
 must be reflected in the annual balance sheet of the company. The 
 annual allowance deductible on this account should be such an amount 
 as that the aggregate of the annual allowances deducted during the 
 life of the property, with respect to which it is claimed, will not, when 
 the property is worn out, exhausted, or obsolete, exceed its original 
 cost. 
 
 Incidental repairs. 
 
 Art. 131. Incidental repairs which neither add to the value of the 
 property nor appreciably prolong its life, but keep it in an operating 
 condition, may be deducted as expenses. 
 
 Depreciation reserve. 
 
 Art. 132. Depreciation set up on the books and deducted from 
 gross income cannot be used for any purpose other than making good 
 the loss sustained by reason of the wear and tear, exhaustion, or 
 
430 INCOME TAX EEGULATIONS 
 
 obsolescence of the property with respect to which it was claimed. 
 If it develops that an amount has been reserved or deducted in excess 
 of the loss by depreciation, the excess shall be restored to income and 
 so accounted for. 
 
 Diversion of depreciation reserve. 
 
 Aet. 133. If any portion of the depreciation set up is diverted to 
 any purpose other than making good the loss sustained by reason of 
 depreciation, the income account for the year in which such diversion 
 takes place must be correspondingly increased. 
 
 Shrinkage in book values. 
 
 Art. 134. Depreciation in book values of capital assets shall be 
 treated in the return in the manner prescribed in the case of loss from 
 the sale of capital assets (art. 109), but amounts arbitrarily charged 
 off will not be allowed as deductions except so far as they represent 
 an actual shrinkage in values which may be determined to have taken 
 place during the year for which the return is made. 
 
 Amortization of bonds. 
 
 Art. 135. Where a corporation holds bonds which were purchased 
 at a rate above par and said corporation shall proportionately reduce 
 the value of those bonds on its books each year so that the book value 
 shall be the redemption value of the bonds when such bonds become 
 due and payable, the return of annual net income of the corporation 
 holding such bonds may show the depreciation on account of amorti- 
 zation of such bonds. The requirement is, however, that the amount 
 carried to the amortization account each year shall be equitably pro- 
 portioned with respect to the difference between the purchase price 
 and the maturing value and the number of years to elapse until the 
 bonds become due and payable. With respect to bond issues where 
 such bonds are disposed of for a price less than par and are redeem- 
 able at par, it is also held that because of the fact that such bonds 
 must be redeemed at their face value, the loss sustained by reason 
 of their sale for less than their face value may be prorated by the 
 issuing corporation in accordance with the life of the bond. 
 
 Good will. 
 
 Art. 136. "Good will" represents the value attached to a business 
 over and above the value of the physical property, and is such an 
 entirely intangible asset that no claim for depreciation in connection 
 therewith can be allowed. 
 
APPENDIX 437 
 
 Depreciation of patents; how determined. 
 
 Art. 137. An allowance for depreciation of patents wiU be made 
 on the following basis : 
 
 The deduction claimed for exhaustion of the capital assets as repre- 
 sented by patents to be made in the return of annual net income of a 
 corporation for any given year shall be one-seventeenth of the actual 
 cost of such patents reduced to a cash basis. Where the patent has 
 been secured from the Government by a corporation itself, its cost 
 would be represented by the various Government fees, cost of draw- 
 ings, experimental models, attorneys' fees, etc. Where the patent has 
 been purchased by the corporation for a cash consideration, the 
 amount would represent the cost. Where the corporation has pur- 
 chased a patent and made payment therefor in stocks or other securi- 
 ties, the actual value of such stocks or other securities at the time of 
 the purchase will represent the cost of the patent to the corporation. 
 
 Deduction in case of obolescence of patents. 
 
 Art. 138. With respect to the depreciation of patents, one-seven- 
 teenth of the cost is allowable as a proper deduction each year until 
 the cost of the patent has been returned to the corporation. Where 
 the value of a patent has disappeared through obsolescence or any 
 other cause and the fact has been established that the patent is value- 
 less, the unreturned cash investment remaining in the patent may be 
 claimed as a total loss and be deducted from gross income in the 
 return of annual net income for the year during which the facts as to 
 obsolescence or loss shall be established, such unreturned cash value 
 to be fixed in accordance with the proportion that the number of 
 years which the patent still has to run bears to the full patent period 
 of 17 years. 
 
 Depreciation of timber land. 
 
 Art. 139. Corporations owning tracts of timber lands and remov- 
 ing therefrom and selling, or otherwise disposing of the timber will 
 be permitted to deduct from their gross income on account of de- 
 preciation or depletion an amount representing the original cost of 
 such timber, plus any carrying charges that may have been capitalized 
 or not deducted from income. The purpose of the depreciation or 
 depletion deduction is to secure to the corporation, when the timber 
 has been exhausted, an aggregate amount which, plus the salvage 
 value of the land, will equal the capital actually invested in such 
 timber and land. 
 
i38 INCOME TAX EEGULATIONS 
 
 Deductions to cease, when. 
 
 Aht. 140. When an amount sufficient to return this capital has 
 been secured through annual depreciation deductions no further de- 
 duction on this account shall be allowed. For the purpose of increas- 
 ing the deduction on this account no arbitrary increase in values 
 shall be made, unless such increase in value shall be returned as in- 
 come for the year in vehich the increase in value was taken up on the 
 books. 
 
 Depreciation of natural deposits. 
 
 Art. 141. The depreciation of coal, iron, oil, gas, and all other 
 natural deposits must be based upon the actual cost of the properties 
 containing such deposits. In no case shall the annual deduction on 
 this account exceed 5 per cent o£ the gross value at the mine (well, 
 etc.) of the output for the year for which the computation is made. 
 
 Definition of "gross value" at the mine. 
 
 Art. 142. The term "gross value at the mine," as used in para- 
 graphs B and G of section 2 of the act of October 3, 1913, prescribing 
 a limit to the amount which may be deducted in the return of indi- 
 viduals and corporations as depreciation in the case of mines, is held 
 to mean the market value of ore, coal, crude oil, and gas at the mine 
 or well, where such value is established by actual sales at the mine or 
 well ; and in case the market value of the product of the mine or well 
 is established at some place other than at the mine or well, or on the 
 basis of the bullion or metallic value of the ore, then the gross value 
 at the mine is held to be the value of the ore, coal, oil, or gas sold, or 
 of the metal produced, less transportation, reduction, and smelting 
 charges. 
 
 Rate of deduction to be reduced, vrhen. 
 
 If the rate of 5 per cent per annum shall return to the corporation 
 its capital investment prior to the exhaustion of the deposits, the rate 
 on which the annual deduction for depletion of deposits is based must 
 be lowered in accordance with the estimated number of years it will 
 take to exhaust the estimated reserves. 
 
 In ease the reserves shall be in excess of the estimates, no further 
 deduction on account of depletion shall be made where the capital 
 investment has been returned to the corporation. 
 
 Depreciation of plant, etc. 
 Art. 143. In addition to the deduction to measure the loss due to 
 
APPENDIX 439 
 
 depletion, the corporation will be allowed the usual depreciation of its 
 machinery, equipment, etc., such depreciation to be determined on 
 the basis of the cost and estimated life of the property with respect to 
 which the depreciation is claimed. 
 
 Corporations leasing oil or gas. 
 
 Art. 144. Corporations leasing oil or gas territory shall base their 
 depletion deduction upon the cost of the lease, and not upon the esti- 
 mated value, in place, of the oil or gas. 
 
 Corporations operating mines. 
 
 Art. 145. Corporations operating mines (including oil or gas wells) 
 upon a royalty basis only cannot claim depreciation because of the 
 exhaustion of the deposits. 
 
 Unearned increment. 
 
 Art. 146. Unearned increment will not be considered in fixing the 
 value on which depreciation shall be based. 
 
 Deduction of losses, depreciation, payments on policy contracts. 
 
 Art. 147. (a) Under item 5 (a) of the return form, the insurance 
 company may take credit for all losses actually sustained during the 
 year and not compensated by insurance or otherwise, including losses 
 resulting from the sale or maturity of securities or other assets, as 
 well as decreases by adjustment of book values of securities, in so far 
 as such decreases represent actual declines in values which have taken 
 place during the year for which the return is made; also losses from 
 agency balances, or other accounts, charged off as worthless ; losses by 
 defalcation; premium notes voided by lapse, when such notes shall 
 have been included in gross income. This item will not, however, 
 include payments on policy contracts. 
 
 Losses by shrinkage in value of property. 
 
 (6) In this item may be deducted actual losses sustained within 
 the year by reason of the depreciation of property, which shall have 
 'been so entered on the books of the company as to constitute a lia- 
 bility against its assets. An arbitrary depreciation deduction claimed 
 in the return, but not evidenced by book entry, cannot be allowed. 
 
 Policy contracts paid. 
 
 (c) In this item credit will be taken for all death, disability, or 
 other policy claims, including fire, accident, and liability losses, 
 matured endowments, annuities, payments on installment policies. 
 
440 INCOME TAX EEGULATIONS 
 
 surrender values, and all claims actually paid under the terms of 
 policy contracts. Salvage need not be included in gross income if 
 deducted in ascertaining the net amount paid for losses under policy 
 contracts. Reserves covering liabilities for losses incurred, reported, 
 resisted, adjusted or unadjusted but not paid, cannot be deducted 
 from gross income under this or any other item of the return. 
 
 Additions to reserves required by law, how determined. 
 
 (d) The reserve funds of insurance companies to be considered in 
 computing the deductible net addition to reserve funds are held to 
 include only the reinsurance reserve and the reserve for supplementary 
 contracts required by law in the case of life insurance companies, 
 the unearned premium reserves required by law in the case of fire, 
 marine, accident, liability, and other insurance companies, and only 
 such other reserves as are specifically required by the statutes of a 
 State within which the company making the return is doing business. 
 The reserves used in computing the net addition must not include 
 the reserve on any policies the premiums on which have not been ac- 
 counted for in gross income. For the purpose of this deduction, the 
 net addition is the excess of the reserve at the end of the year over 
 that at the beginning of the year and may be based upon the highest 
 authorized reserve required by any State in which the company mak- 
 ing the return does business. 
 
 Assessment company reserves. 
 
 In the case of assessment insurance companies, the actual deposits 
 of sums with the State or Territorial officers pursuant to law, as ad- 
 ditions to guaranty or reserve funds, shall be treated as payments 
 required by law to reserve funds. 
 
 Mutual marine insurance companies will deduct under item 5(e) 
 amounts repaid to policyholders on account of premiums previously 
 paid by them and interest paid upon such amounts between the ascer- 
 tainment thereof and the payment thereof. 
 
 What constitutes allowable interest deduction. 
 
 Art. 148. The amount of interest accrued and paid within the year 
 by a corporation on an amount of bonded or other indebtedness not 
 in excess of one-half of the sum of the interest-bearing indebtedness 
 and the paid-up capital stock outstanding at the close of the year, or, 
 if no capital stock, on the amount of interest-bearing indebtedness not 
 exceeding the amount of capital employed in the business at the close 
 of the year, constitutes an allowable deduction ; that is, the maximum 
 
APPENDIX 441 
 
 principal, upon wHcli interest for the purpose of this deduction, can 
 be computed must not exceed, in the one case, one-half of the sum 
 of the interest-bearing indebtedness and the capital stock outstanding 
 at the close of the year, or, in the other case, must not exceed the 
 amount of capital employed in the business at the close of the year. 
 The interest to be deductible must have been computed on the proper 
 principal at the contract rate and must have been actually paid within 
 the year. 
 
 Interest paid as rental deductible; interest on mortgage in vyhich 
 corporation has equity not deductible. 
 Interest paid pursuant to contract on an indebtedness secured by 
 mortgage on real estate occupied and used by a corporation, in which 
 real estate the corporation has no equity or to which it is not taking 
 title is an allowable deduction from gross income as a rental charge, 
 payment of which is required to be made as a condition to the con- 
 tinued use and possession of the property. If, however, the corpora- 
 tion has an equity in or is purchasing for its own use the real estate 
 upon which such mortgage is a prior lien, the indebtedness will be 
 held to be indebtedness of the corporation within the meaning of the 
 law and the interest paid on such mortgage will be deductible only to 
 the extent that it, with interest on other obligations of the corpora- 
 tion, is within the limit fixed by the act. 
 
 Banks and banking associations. 
 
 Art. 149. In the case of banks and banking associations, loan or 
 trust companies, interest paid within the year on deposits, or on 
 moneys received for investment and secured by interest-bearing cer- 
 tificates of indebtedness issued by such bank, banking association, 
 loan or trust company, may be allowably deducted from the gross 
 income of such corporations. 
 
 Interest paid on indebtedness. 
 
 Art. 150. Interest paid on indebtedness, wholly secured by col- 
 lateral the subject of sale in ordinary business of such corporations, is 
 also deductible to the full amount of such interest paid. This con- 
 templates that the entire interest received on the collateral securing 
 such indebtedness shall be included in the gross income returned. 
 
 Different rates of interest. 
 
 Art. 151. Interest on bonded or other indebtedness bearing differ- 
 ent rates of interest may be deducted from gross income during the 
 
442 INCOME TAX EEGULATIONS 
 
 year, provided the aggregate amount of such indebtedness on which 
 the interest is paid does not exceed the limit prescribed by law, and in 
 case the indebtedness is in excess of the amount on which interest 
 may be legally deducted the indebtedness bearing the highest rate may 
 be &st considered in computing the interest deduction and the bal- 
 ance, if any, will be computed upon the indebtedness bearing the next 
 lower rate actually paid, and so on until interest on the maximum 
 principal allowed has been computed. 
 
 Taxes deductible. 
 
 Art. 152. All sums paid within the year for taxes imposed under 
 the authority of the United States or of any State or Territory 
 thereof, or imposed by the government of any foreign country, are 
 deductible from gross income. 
 
 Taxes not deductible. 
 
 Art. 153. Taxes paid for local benefits are not deductible. Taxes 
 paid by a corporation pursuant to a contract guaranteeing that the 
 interest payable on its bonds or other indebtedness shall be free from 
 taxation are not deductible. 
 
 Tax on capital stock of banks. 
 
 Art. 154. Banks paying taxes assessed against their stockholders 
 because of their ownership of the shares of stock issued by such banks 
 cannot deduct the amount of taxes so paid in making their return for 
 the income tax imposed by this act unless specially authorized to do 
 so by the laws of the State in which they do business. The shares of 
 stock are the property of the stockholders, and such holders are pri- 
 marily liable for the tax. 
 
 Import duties. 
 
 Art. 155. Import duties or taxes are not deductible under the item 
 of taxes paid during the year, but should be included in arriving at 
 the cost of goods under item No. 4 (expenses). 
 
 Reserves for taxes. 
 
 Art. 156. Reserves for taxes cannot be allowed, as the law specifi- 
 cally provides that only such sums as are paid within the year for taxes 
 shall be deducted. 
 Foreign corporations subject to tax; how deductions confined. 
 
 Art. 157. Foreign corporations shall be subject to the normal tax of 
 1 per cent computed upon the net income received by or accruing to 
 
APPENDIX 443 
 
 such corporations from business transacted and capital invested in 
 this country. For the purpose of the tax the net income of such for- 
 eign organizations shall be ascertained by deducting from the gross 
 income arising, received, or accruing from business done and capital 
 invested in this country the deductions enumerated in the act, which 
 deductions shall be limited to expenditures or charges actually in- 
 curred in the maintenance and operation of the business transacted 
 and capital invested in the United States or, as to certain charges, 
 such proportion of the aggregate charges as the gross income from 
 business done and capital invested in the United States bears to the 
 aggregate income within and without the United States. In other 
 words, the deductions from the gross income of a foreign corporation 
 doing business in this country should, as nearly as possible, represent 
 the actual expenses and authorized charges incident to the business 
 done and capital invested in this country and must not comprehend, 
 either directly or indirectly, any expenditures or charges incurred in 
 the transaction of business or the investment of capital without the 
 United States. 
 How deductions shall be evidenced. 
 
 Art. 158. It is immaterial whether the deductions except for taxes 
 and losses are evidenced by actual disbursements in cash, or whether 
 evidenced in such other way as to be properly acknowledged by the 
 corporate officers and so entered on the books of the corporation as 
 to constitute a liability against the assets of the corporation making 
 the return. Deductions for taxes, however, should be the aggregate of 
 the amounts actually paid, as shown on the cash book of the corpora- 
 tion. Deductions for losses should be confined to losses actually sus- 
 tained and charged off during the year and not compensated by in- 
 surance or otherwise. Except as the same may be modified by the 
 provisions of the act, limiting certain deductions and authorizing 
 others, the net income as returned for the purpose of the tax should 
 be the same as that shown by the books or the annual balance sheet. 
 Tax on net income of corporations for the year 1913. 
 
 Art. 159. The tax imposed upon the income of corporations, 
 whether domestic or foreign, shall be computed upon the net income, 
 ascertained in the manner hereinbefore indicated, except that for the 
 year ending December 31, 1913, the income tax will be imposed upon 
 the net income accrued from March 1 to December 31, both dates 
 inclusive, and such amount of net income is ascertained by taking 
 five-sixths of the entire net income for said calendar year. 
 
444 INCOME TAX REGULATIONS 
 
 Special excise tax on corporations. 
 
 Art. 160. The special excise tax on corporations provided for in 
 the act of August 5, 1909, is reaffirmed and made operative and effec- 
 tive as to the period from January 1 to February 28, 1913, both dates 
 inclusive, which said tax shall be computed upon one-sixth of the 
 entire net income of said corporations for said year, and the net in- 
 come shall be ascertained in accordance with the provisions of the 
 income-tax lave. 
 
 Return and assessment. 
 
 For the year 1913 it shall be necessary to make but one return and 
 assessment for all taxes imposed in the income-tax law upon corpora- 
 tions, either by way of income or excise, which return and assess- 
 ment shall be made at the times and in the manner provided in section 
 2 of the act of October 3, 1913. 
 
 No special exemption allowable as a deduction. 
 
 Under the present law, no specific exemption is allowable, as was 
 the case under the corporation-tax law; hence the assessment will be 
 based upon the entire net income of the corporation arising or accru- 
 ing to it from all sources during the entire year for which the return 
 is made. 
 
 Inventories. 
 
 Art. 161. In order that certain classes of corporations may arrive 
 at their correct income, it is necessary that an inventory, or its 
 equivalent, of materials, supplies, and merchandise on hand for use 
 or sale at the close of each calendar year shall be made in order to 
 determine the gross income or to determine the expense of ox)eration. 
 
 Physical inventory. 
 
 A physical inventory is at all times preferred, but where a physical 
 inventory is impossible and an equivalent inventory is equally accu- 
 rate, the latter will be acceptable. 
 
 An equivalent inventory is an inventory of materials, supplies, and 
 merchandise on hand taken from the books of the corporation. 
 
 Corporations, classes of. 
 
 Art. 162. For the purpose of this tax, corporations are divided into 
 five classes, as follows: 
 
 Class A. Financial and commercial, including banks, banking as- 
 sociations, trust companies, guaranty and surety companies, title in- 
 
APPENDIX 445 
 
 surance companies, building associations (if for profit), and insurance 
 companies, not specifically exempt. 
 
 Class B. Public service, such as railroad, steamboat, ferryboat, and 
 stage-line companies; street-railway companies; pipe-line, gas-light, 
 and electric-light companies; express companies, telegraph and tele- 
 phone companies. 
 
 Class C. Industrial and manufacturing, such as mining, oil and 
 gas producing companies, lumber and coke companies; rolling miUs; 
 foundry and machine shops ; sawmills ; flour, woolen, cotton, and other 
 mills; manufacturers of cars, automobiles, elevators, agricultural im- 
 plements, etc. ; manufacturers or refiners of sugar, molasses, sirups, or 
 other products ; ice and refrigerating companies ; slaughterhouse, tan- 
 nery, packing, or canning companies; printing and publishing com- 
 panies, etc. 
 
 Class D. Mercantile, including all dealers (not otherwise classed as 
 producers or manufacturers) in coal, lumber, grain, produce, and all 
 goods, wares, and merchandise. 
 
 Class E. Miscellaneous, such as architects, contractors, hotel, 
 theater, or other companies or associations not otherwise classified. 
 
 Form of return. 
 
 Aht. 163. Under the authority conferred by this act, forms of re- 
 turn have been prescribed, in which the various items specified in the 
 law are to be stated. Blank forms of this return will be forwarded to 
 collectors and should be furnished to every corporation, not expressly 
 exempted, on or before January 1 of each year, in the case of cor- 
 porations making their returns for the calendar year, or on or before 
 the first day of the next fiscal year in the case of corporations making 
 returns for their fiscal year. Failure on the part of any corporation, 
 joint-stock company, association, or insurance company liable to this 
 tax to receive a prescribed blank form will not excuse it from making 
 the return required by law, or relieve it from any penalties for failure 
 to make the return in the prescribed time. Corporations not supplied 
 with the proi)er forms for making the return should make applica- 
 tion therefor to the collector of internal revenue in whose district is 
 located its principal place of business in ample time to have its return 
 prepared, verified, and filed with the collector on or before the last 
 due date as hereinafter defined. Failure in this respect subjects it 
 not only to 50 per cent additional tax, but to the specific penalty 
 imposed for delinquency. Each corporation should carefully prepare 
 its return so as to fully and clearly set forth the data therein called 
 
446 INCOME TAX REGULATIONS 
 
 for. Imperfect or incorrect returns will not be accepted as meeting 
 the requirements of the law. 
 
 Penalties imposed by act. 
 
 Art. 164. To any sum or sums due and unpaid after the date for 
 pajrment stated in the notice and demand issued by the collector 
 there shall be added the sum of 5 per cent of the amount so unpaid, 
 and interest at the rate of 1 per cent per month. To the amount 
 assessable on the basis of the net income there shall be added 50 per 
 cent in case of refusal or neglect of a corporation to make a return 
 or 100 per cent in ease of a false or fraudulent return. For refusal 
 or neglect to make a return within the prescribed time, or for a false 
 or fraudulent return, the corporation so offending shall be liable to a 
 specific penalty not exceeding $10,000. Any person divulging unlaw- 
 fully any information whatever disclosed by a return shall be pun- 
 ished by a fine not exceeding $1,000, or by imprisonment not exceed- 
 ing one year, or both. 
 
 Fraudulent returns. 
 
 Any person or any oflBcer of any corporation required by law to 
 make, render, sign, or verify any return, who makes any false or 
 fraudulent return or statement with intent to defeat or evade the 
 assessment required by section 2, act of October 3, 1913, shall be 
 guilty of a misdemeanor and shall be fined not exceeding $2,000 or 
 be imprisoned not exceeding one year, or both, at the discretion of 
 the court, with the costs of prosecution. 
 
 Fiscal year; how established. 
 
 Art. 165. The Federal income-tax law authorizes corporations, 
 joint-stock companies, etc., under certain conditions to make their 
 returns on the basis of an established "fiscal year" or consecutive 
 12-months period, which may be other than the calendar year. 
 
 Pursuant to this provision the following instructions are issued for 
 the guidance of collectors and other interested parties : 
 
 May designate day for closing of fiscal year. 
 
 Any corporation, joint-stock company, or association, or any insur- 
 ance company subject to the tax imposed by this act may, at its 
 option, have the tax payable by it computed upon the basis of the net 
 income arising or accruing from all sources during its fiscal year, pro- 
 vided that it shall designate the last day of the month selected as the 
 month in which its fiscal year shall close as the day of the closing of 
 
APPENDIX 447 
 
 its fiscal year, and shall, not less than 30 days prior to the date upon 
 which its annual return is to be filed give notice, in -writing, to the 
 collector of internal revenue of the district in which its principal place 
 of business is located, of the day it has -thus designated as the closing 
 of such fiscal year. 
 
 Illustration of fiscal year. 
 
 Aet. 166. In pursuance of this provision, a corporation or like 
 organization subject to this tax may, for example, designate the 30th 
 day of September as the day for the closing of its fiscal year, where- 
 upon its return of annual net income shall be filed with the collector 
 of internal revenue of the district in which its principal place of 
 business is located not later than 60 days after the close of its said 
 proposed fiscal year; that is to say, on or before the 29th day of 
 November next succeeding. 
 
 The date of the closing of the fiscal year having been designated, 
 notice thereof must be given to the collector not less than 30 days 
 prior to the last day of such 60-day period. In the case just instanced 
 the notice must be given not later than October 29. 
 
 If such designation (September 30, 1913) had been made and notice 
 given, as hereinbefore indicated, as to the closing of the fiscal year 
 1913, the corporation would be authorized to make its return and have 
 the tax payable by it computed upon the basis of the net income aris- 
 ing or accruing to it during the period from January 1 to September 
 30, 1913, both dates inclusive. 
 
 Collectors must make a record of the designation of the "fiscal year." 
 
 Art. 167. Collectors of internal revenue receiving notices of the 
 selection and designation of the "fiscal years," as above indicated, will 
 make record of the same, recording, (a) the name of the corporation 
 or like organization, (b) the date when notice was given, (c) the day 
 designated for the closing of the fiscal year, and (d) the date when 
 the return under such designation must be filed, which must be, as 
 above stated, not later than the last day of the 60-day period next 
 following the day designated as the close of the fiscal year. 
 
 Unless notice given within prescribed time, calendar year governs. 
 
 Art. 168. If it shall appear that for the year 1913 the notice was 
 given within the prescribed time — that is, within 30 days of the last 
 day of the 60-day period — the 1913 return may be made as of the fiscal 
 year so established; otherwise it will be made on the basis of the 
 
448 INCOME TAX EEGtJLATIONS 
 
 calendar year until such time as the designation shall be duly made 
 and notice thereof properly given. 
 
 Designation and notice cannot be retroactive. 
 
 Art. 169. The designation and notice cannot be retroactive; that 
 is to say, if a corporation now designates April 30, 1914, as the date 
 of the closing of its fiscal year and gives notice of such designation, 
 it would not be authorized to make a return for the four months 
 ended April 30, 1913, and then for the fiscal year ended April 30, 
 1914, nor would it be authorized to make one return covering the 
 entire 16 months ended April 30, 1914. In the case of such corpora- 
 tion the return for the year must be made for the calendar year ended 
 December 31, 1913, and then, assuming that designation and notice 
 had been properly made and given, it may make a return for the four 
 months ended April 30, 1914, and thereafter the return will be made 
 on the basis of the fiscal year so established. 
 
 Where fiscal year is not properly established, returns must be made 
 for calendar year. 
 Art. 170. In all cases where a fiscal year is not established as 
 above prescribed returns must be made on the basis of the calendar 
 year, in which case such returns must be filed on or before the 1st 
 day of March next succeeding such calendar year. Such returns in 
 either case provided must be verified under oath or afiirmation of its 
 president or other principal officer, and its treasurer or assistant treas- 
 urer; that is to say, by two different persons acting in the official 
 capacity indicated. 
 
 Returns made on basis of fiscal year not so designated cannot be 
 accepted. 
 
 Art. 171. If it shall appear in any case that returns have been 
 made to the collector on the basis of a fiscal year not designated as 
 above indicated, the corporations making such returns will be advised 
 that such returns cannot be accepted, but must be made to cover the 
 business of the calendar year. 
 
 Returns for 1913 must be made on new forms. 
 
 Art. 172. Returns made under this act and pursuant to these in- 
 structions must be made on the new forms prescribed by this depart- 
 ment. 
 
 The forms heretofore in use, under the special excise tax law, cannot 
 be used for making returns for either the fiscal or calendar year 1913. 
 
APPENDIX 449 
 
 Extension not to exceed 30 days. 
 
 Art. 173. An extension of time within which a return may be filed 
 can in no case exceed 30 days from the date on which the return is 
 due and can be granted only upon written application to the collector, 
 and in case of sickness or absence of an officer whose signature to the 
 return is required, such application to be made prior to the expiration 
 of the period for which the extension is desired. 
 
 Returns properly mailed not subject to penalty. 
 
 Art. 174. If a return is made and placed in the United States 
 mails, properly addressed, and postage paid, in ample time, in due 
 course of mails, to reach the office of the collector or deputy collector 
 on or before the last due date, no penalty will be held to attach should 
 the return not be actually received by such officer until subsequent to 
 that date. 
 
 Last due date defined. 
 
 Art. 175. "Last due date," as hereinbefore used, is construed to 
 mean the last day upon which a return is required to be filed in ac- 
 cordance with the provisions of the law, or the last day of the period 
 not exceeding 30 days covered by an extension of time granted by the 
 collector. 
 
 When due date falls on Sunday or legal holiday. 
 
 Art. 176. When the due date as above defined falls on Sunday or 
 on a legal holiday, the last due date will be held to be the day next 
 following such Sunday or legal holiday and the return should be made 
 to the collector not later than such following day, or, if placed in the 
 mails, it should be posted in ample time to reach the collector's office, 
 under ordinary handling of the mails, on or before the date on which 
 the return is thus made due in the office of the collector. 
 
 Assessment and payment of taxes; notice of assessment. 
 
 Art. 177. All assessments against corporations, etc., making re- 
 turns for the calendar year are required to be made' and the several 
 corporations. Joint-stock companies, etc., notified of the amount for 
 which they are liable on or before the 1st of June of each successive 
 year, and said assessments shall be paid on or before the 30th day 
 of June of such year. In the case of corporations making returns for 
 the fiscal year, the assessments shall be made and notice given on or 
 before the expiration of 90 days from the date when the returns were 
 required to be filed, and the taxes assessed against such corporations. 
 
450 INCOME TAX KEGULATIONS 
 
 etc., shall be paid withiii 120 days after the date upon which the re- 
 turns were required to be filed. In case of refusal or neglect by a 
 corporation, etc., to make a return, and in case of false or fraudulent 
 return, the commissioner, upon the discovery thereof within three 
 years after such returns are due, shall make a return upon informa- 
 tion obtained in the manner provided in the act, and the assessment 
 made on the basis of such return shall be paid immediately upon 
 notice and demand given by the collector. 
 
 Failure to pay tax when due. 
 
 Upon failure to pay the tax when due and for 10 days after notice 
 and demand, a penalty of 5 per cent of the amount of the tax unpaid 
 and interest at the rate of 1 per cent per month until paid shall be 
 added to the amount of such tax. 
 
 Returns are public records. 
 
 Art. 178. When the assessments shall have been made, the returns 
 shall be filed in the office of the commissioner and shall constitute 
 public records, subject to inspection upon the order of the President, 
 under rules and regulations prescribed by the Secretary of the Treas- 
 ury and approved by the President. Copies of returns on file in the 
 Commissioner's office are not permitted to be sent to any person, 
 except to the corporation itself or to its duly authorized attorney. 
 Information to States which impose income taxes. 
 
 Art. 179. Upon request of the governor of a State which imposes a 
 general income tax, the proper officers of such State may have access 
 to the returns filed by corporations doing business in such States, or 
 to an abstract thereof showing the name and income of such corpora- 
 tions, etc., at such times and in such manner as the Secretary may 
 prescribe. In no case are the original returns to be removed from 
 the office of the commissioner, except upon order and by direction of 
 the Secretary of the Treasury or the President. 
 Certified copies of returns. 
 
 Art. 180. At the request of the Attorney General, or by direction 
 of the Secretary of the Treasury, certified copies of returns may be 
 made and delivered to the United States district attorneys for their 
 use as evidence in the prosecution or defense of suits in which the 
 collection or legality of the tax assessed on the basis of such returns 
 is involved, or in any suit to which the United States Government 
 and the corporation, etc., making the return are parties and in which 
 suit such certified copies would constitute material evidence. 
 
APPENDIX 451 
 
 Penalty for giving information. 
 
 Art. 181. The disclosure by any collector, deputy collector, agent, 
 clerk, or other oiEcer or employee of the United States to any person 
 of any information whatever contained in or set forth by any return 
 of annual net income made pursuant to this act is, by the act, made a 
 misdemeanor, and is punishable by a fine not exceeding $1,000, or by 
 imprisonment not exceeding one year, or both, at the discretion of the 
 court, and if the offender is an officer or employee of the United States 
 he shall be dismissed and be incapable thereafter of holding any office 
 under the United States Government. 
 
 Bookkeeping. 
 
 Art. 182. No particular system of bookkeeping or accounting v^ill 
 be required by the department. However, the business transacted by 
 corporations must be so recorded that each and every item set forth 
 in the return of annual net income may be readily verified by an 
 examination of the books of account. 
 
 Books of account best guide to income. 
 
 Art. 183. The books of a corporation are assumed to reflect the 
 facts as to its earnings, income, etc. Hence they will be taken as the 
 best guide in determining the net income upon which the tax imposed 
 by this act is calculated. Except as the same may be modified by the 
 provisions of the law, wherein certain deductions are limited, the net 
 income disclosed by the books and verified by the annual balance sheet, 
 or the annual report to stockholders, should be the same as that 
 returned for taxation. 
 Omitted taxes may be assessed. 
 
 Art. 184. In cases wherein corporations have neglected or refused 
 to make returns, and in cases wherein returns made are found, upon 
 investigation or otherwise, to be false or fraudulent, the commis- 
 sioner may, upon discovery thereof, at any time within three years 
 after said return is due, make return upon the information obtained 
 in the manner provided in the act, and the tax so discovered to be 
 due, together with the additional tax prescribed, shall be assessed, and 
 the amount thereof shall be paid immediately upon notice and demand. 
 Corporations subject to normal tax. 
 
 Art. 185. Corporations coming within the terms of this law are 
 subject to the normal tax only; that is, a tax computed at a level rate 
 of 1 per cent of their entire net income regardless of the amount of 
 such net income. 
 
452 INCOME TAX REGULATIONS 
 
 Examination of books. 
 
 Art. 186. For the purpose of verifying any return, made pursuant 
 to this act, the Commissioner of Internal Eevenue may, by any duly 
 authorized revenue agent or deputy collector, cause the books of such 
 corporation to be examined, and if such examination discloses that the 
 corporation is liable to tax in addition to that previously assessed, or 
 assessable, the same shall be assessed and shall be payable immediately 
 upon notice and demand. For the purpose of such examination, the 
 books of corporations shall be open to the examining officer, or shall 
 be produced for this purpose upon summons issued by any properly 
 authorized officer. 
 
 PAET 4 
 
 Assessment and Collection 
 Taxes due to be reported on assessment lists. 
 
 Art. 187. All income taxes found to be due will be reported by 
 collectors on their assessment lists, Form 23-A in the case of corpora- 
 tions, and on Form 23-B in the case of individuals and withholding 
 
 Names to be listed in alphabetical order. 
 
 Art. 188. The names of corporations subject to tax will be listed 
 on Form 23-A, according to their designated class, and in alphabetical 
 order as to each class. Names of individuals subject to tax will be 
 listed on Form 23-B, alphabetically, without reference to class or rate 
 of tax. Following such names there will be listed, alphabetically, the 
 names of all withholding or licensed collecting agents, and the aggre- 
 gate amount of tax withheld by each, as shown by the annual returns 
 rendered by them. An assessment against each person, firm or com- 
 pany, from whose income the tax has been so withheld, will be un- 
 necessary in such cases. 
 
 Assessment against withholding agents deferred until annual reports. 
 
 Art. 189. To avoid, as far as possible, the assessment of taxes as 
 to which claims for exemption or deduction may be filed under article 
 33, collectors will delay reporting for assessment taxes remaining in 
 the hands of withholding agents, until the annual reports of such 
 agents, which must be filed not later than March 1 in each year, are 
 received. 
 
APPENDIX 453 
 
 Returns, when to be made. 
 
 Art. 190. Eeturns of withholding agents (including those of 
 licensed collecting agents) as to interest payments shall be made 
 monthly and returns containing summaries of said monthly returns 
 shall be made annually. (See Part 2, A, B, and C.) Eeturns of 
 individuals (see Part 1), corporations (see Part 3), and withholding 
 agents, withholding tax on wages, salaries, rents, etc. (see Part 2, D), 
 and fiduciaries acting as withholding agents (see Part 2, E) shall be 
 made annually. All monthly returns are required to be made on or 
 before the 20th day of each month for the preceding month. All 
 annual returns are required to be made on or before the 1st day of 
 March in each year, except in the case of corporations which have 
 given due notice of the termination of their fiscal year, in which cases 
 the prescribed return is to be filed within 60 days after the termina- 
 tion of such fiscal year. 
 
 Corporations may include for 1913 income subject to special excise tax. 
 
 Art. 191. Corporations which are subject to the special excise tax 
 on income received during the months of January and February, 
 1913, may, under the provisions of section 4, paragraph S, of the 
 act of October 3, 1913, include such income, as also the income taxable 
 under said act, in one return for the year 1913. In each such case 
 one assessment . only will be made. 
 
 Returns of income to be forwarded with assessment lists; false or 
 fraudulent returns. 
 Art. 192. All returns of income, whether of individuals or cor- 
 porations, should be forwarded with the assessment list rendered. 
 Where in any case the collector has reason to believe that any return 
 rendered is false or fraudulent, he will prepare and retain in his office 
 a copy of such return, and will note on the original and under the 
 head of "Remarks" of his assessment list the words "Investigation 
 pending." He will in all such cases make his investigation in the 
 manner prescribed in section 3173, Revised Statutes, and paragraph 
 D of said act of October 3, 1913; and he will report the results of 
 his investigation to the Commissioner of Internal Revenue, referring 
 to the list, folio, and line on which the assessment was reported. 
 
 Certain returns of withholding agents to be in duplicate. 
 
 Art. 193. Monthly and annual returns of withholding agents (in- 
 cluding those of licensed agents) as to interest payments and the 
 annual returns of withholding agents withholding tax on wages. 
 
454 INCOME TAX REGULATIONS 
 
 salaries, etc., will be made in duplicate, one copy of -which will be 
 retained by the collector in his office and one copy transmitted to the 
 Commissioner of Internal Revenue. Annual returns of withholding 
 agents (including those of licensed agents) as to interest payments, 
 and returns of withholding agents as to wages, salaries, etc., and of 
 fiduciaries will be forwarded by the collector with his list. Form 23-B, 
 on which the tax withheld is reported for assessment. 
 
 Certificates and returns to be forwarded as soon as received. 
 
 Art. 194. All certificates of exemption or deductions, filed by or 
 on behalf of persons subject to tax, will be forwarded by the collector 
 as soon as received; and all such certificates, reports, and returns, be- 
 fore being transmitted to the commissioner, will have stamped thereon 
 the name and number of the district; will be arranged (unfolded) in 
 alphabetical order and, in the case of corporations, according to the 
 designated class to which they belong. Care should be taken to have 
 all such papers, when so arranged, carefully secured by cord or other 
 fastening, so as to insure their receipt in like order. This is especially 
 necessary in view of the large number of like papers which will be 
 forwarded from the various districts. 
 
 Reports to be at once examined by collectors; assessment lists to be 
 forwarded without delay. 
 
 Art. 195. In order that assessment lists may be promptly prepared 
 and forwarded, collectors will see that all reports and returns to be 
 listed are examined as received, and that no delay occurs in this 
 branch of the work. Special diligence in this matter is necessary, as 
 sufficient time must be given for the reexamination of such returns 
 in the commissioner's office before assessment is made. The forward- 
 ing of assessment lists, however, should in no case be delayed, beyond 
 the time allowed, on account of unexamined returns, as such returns 
 can be examined and reported on a subsequent list. As the law 
 limits the time in which these assessments are to be made and notice 
 of assessment given, collectors will assign to this work all available 
 force in their respective offices. 
 
 Notice to be sent to delinquents. 
 
 Art. 196. Where the required returns are not filed within the pre- 
 scribed time, either by individuals or corporations, notice on Form 
 1045, should in each case be sent to the delinquent. (For authorized 
 extension of time, see articles 23 and 173.) 
 
APPENDIX 455 
 
 Notice of assessment. 
 
 Art. 197. When assessment has been made, collectors will, on re- 
 ceipt of their returned lists, at once issue preliminary notices of 
 assessment (Form 647), and where in any case the tax assessed is 
 not paid on or before the 30th day of June, or in case of corporations 
 designating their own fiscal year, within 120 days following the date 
 on which the return should have been filed, notice and demand (Form 
 17) should be at once issued, and unless the tax in such case is paid 
 within 10 days after the service of such notice, general demand for 
 tax, penalty, and interest (Form 21) should at once be issued. Im- 
 mediate notice and demand (Form 17) wiU, however, be served in 
 case of failure to file the required return within the statutory period. 
 
 Notice of assessment to be sent immediately on return of list. 
 
 Art. 198. Pending assessment on returns forwarded to the com- 
 missioner, collectors will have prepared the necessary notices of as- 
 sessment, with properly addressed envelopes, to be used immediately 
 on return of their assessment lists. 
 
 Payments, abatements, and outstanding balances. 
 
 Art. 199. Statements of payment, abatement, and outstanding bal- 
 ances of such assessed taxes will be rendered monthly by collectors 
 on special Form 325. Such statements will be prepared in the same 
 manner as required in the case of assessments on the regular Form 
 23, except that in Statement III the outstanding balances on the 
 various lists will be reported in aggregate only. Items constituting 
 such balances, however, will be carded by collectors, but only as to 
 such as were assessed during the month for which the return is ren- 
 dered, thus avoiding detailed statements each month of outstanding 
 balances previously reported. A separate card (Form 1020) will be 
 used for each such item; and all cards so prepared each month should 
 be arranged alphabetically, and so forwarded by the collector with his 
 report on special Form 325. 
 
 W. H. OSBORN, 
 
 Commissioner of Internal Revenue. 
 Approved : 
 
 W. G. McAdoo, 
 
 Secretary of the Treasury. 
 
INDEX TO FEDERAL INCOME TAX LAW 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 A. Page. 
 
 Accumulated profits, when considered evasive of tax 382 
 
 when considered reasonable surplus 382 
 
 Accumulations of surplus, when to be taxed as income 382 
 
 Administrators to make return 379 
 
 to deduct tax 379 
 
 Agents to make return 379, 381 
 
 Agricultural organizations, exemption of 364 
 
 Ascertainment of persons subject to internal revenue tax 374 
 
 Assessment to be filed in office of Commissioner of Internal Revenue . . 372 
 
 Assessments against corporations, when completed 372 
 
 B. 
 
 Banking associations and trust companies entitled to deduction of in- 
 terests on deposits 367, 371 
 
 Bills of exchange, normal tax to be withheld from 380 
 
 Boards of Trade, exemption of 365 
 
 Bonds, interest on, when deductible 380 
 
 C. 
 
 Cemetery companies, exemption of 365 
 
 Chambers of commerce, exemption of 365 
 
 Checks, normal tax to be withheld from 380 
 
 Civic leagues or associations, exemption of 365 
 
 Collection at the source 378 
 
 Collector, employee, etc., not to disclose information 37.S 
 
 penalty therefor 373 
 
 may make return when corporation fails to do so 375 
 
 penalty in such case 375 
 
 to furnish receipt of payment of tax 376 
 
 Collectors of foreign payments to be licensed 381 
 
 Commissioner of Internal Revenue, assessment to be filed in office of. . 372 
 
 to issue license to collectors of foreign payments 381 
 
 to prescribe form of return 369 
 
 Comparative table of Acts of 1909 and 1913 384 
 
 rate of tax , 384 
 
 corporation affected 384 
 
 corporation not affected 385 
 
 ascertainment of net income 385 
 
 for various domestic corporations 385 
 
 for various foreign corporations 387 
 
 taxing year 388 
 
 456 
 
APPENDIX 457 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Comparative table of Acts of 1909 and 1913 — Continued. Page. 
 
 return 389 
 
 remedy for incorrect return or failure to make return 392 
 
 assessment and payment of tax 394 
 
 protection of return 395 
 
 Corporation tax of 1909 363 
 
 rate of 363 
 
 Coupons, normal tax to be withheld from 380 
 
 D. 
 
 Deduction of interest on deposits by banking associations and trust 
 
 companies 367, 371 
 
 of ordinary and necessary expenses 366 
 
 losses sustained within year 366 
 
 for depreciation 366 
 
 for depletion in mine 366 
 
 reserve fund by insurance companies 366 
 
 premium deposits returned to policyholders 366 
 
 interest on indebtedness 366 
 
 interest on deposits by banking associations and trust com- 
 panies 367, 371 
 
 taxes paid to the United States, State, Territory or foreign gov- 
 ernment 367, 371 
 
 to be ascertained in case of foreign corporation 371 
 
 of reserve fund in ascertaining net income of insurance com- 
 panies 366 
 
 where return is made by another 381 
 
 Definition of the word "State" and "United States" 373 
 
 Depreciation, allowance for, in ascertaining net income 366 
 
 Digest of corporation tax decisions under Act of 1909 397 
 
 corporations engaged in business and subject to tax of 1909 398 
 
 receivers appointed by court not subject to income tax of 1909. . 399 
 
 building loan association under Act of 1909, when exempt 399 
 
 when not exempt 399 
 
 dissolved corporation to make return under Act of 1909 400 
 
 dividends of policyholders under Act of 1909 400 
 
 matter of procedure under Act of 1909 401 
 
 District Courts of United States, jurisdiction of United States in case 
 
 of person summoned to testify or produce books 376 
 
 Dividends, normal tax to be withheld on 379, 380 
 
 Domestic building and loan associations, exemption of 365 
 
 Duty of corporation to make list 374 
 
 collector when person or corporation fails to make list 375 
 
 E. 
 
 Executors to make return 379 
 
 to deduct tax 379 
 
 Exemption of labor organizations 364 
 
 agricultural organizations 364 
 
 horticultural organizations 364 
 
458 INDEX TO FEDERAL INCOME TAX LAW 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Exemptions — Continued. Page. 
 
 mutual savings banks 364 
 
 fraternal societies under lodge system 364 
 
 lodges paying sick, life, accident or other benefits 365 
 
 domestic building and loan associations 365 
 
 of cemetery companies 365 
 
 religious, charitable, scientific or educational associations or cor- 
 porations 365 
 
 chambers of commerce 365 
 
 boards of trade 365 
 
 civic leagues or associations 365 
 
 income derived from public utilities 365 
 
 proceeds of life insurance companies 365 
 
 F. 
 
 Failure to make return, penalty therefor 382 
 
 False or fraudulent return, penalty therefor 372, 373, 382 
 
 Fiduciaries to make return of net income 382 
 
 Fire insurance companies, how return to be made 370 
 
 Foreign corporations, net income, how ascertained 367 
 
 Form of return prescribed by Commissioner of Internal Revenue 369 
 
 Fraternal societies under lodge system, exemption of 364 
 
 Fraudulent return, penalty therefor 382 
 
 H. 
 
 Horticultural organizations, exemption of 364 
 
 I. 
 
 Income derived from public utilities, exemption of 365 
 
 Indebtedness, interest on, to be deducted 366 
 
 Insurance companies, deduction of reserve fund in ascertaining net 
 
 income 366 
 
 Interest on indebtedness to be deducted 366, 371 
 
 deposits by banking associations and trust companies to be de- 
 ducted 367, 371 
 
 J. 
 Jurisdiction of district courts of United States in case of person sum- 
 moned to testify and produce books 376 
 
 L. 
 
 Labor organizations, exemption of 364 
 
 Lessees to deduct tax for rent due to landlord 379 
 
 License to be issued by commissioner of internal revenue to collectors 
 
 of foreign payments 381 
 
 Life insurance companies, how return to be made up 370 
 
 Lodges paying life, sick, accident or other benefits, exemption of ..... . 365 
 
 Losses sustained within the year to be deducted in ascertaining net 
 
 income 366 
 
APPENDIX 459 
 
 Note, — Regulations are indexed by article number; law indexed by page. 
 
 M. Page. 
 
 Mines, allowance for depletion of ores in 366 
 
 Mortgagors to deduct interest due to mortgagee 379 
 
 Mutual fire insurance companies not required to return premium de- 
 posits as income 366, 370 
 
 Mutual marine insurance companies to return gross premiums col- 
 lected less re-insurance 366, 370 
 
 how return to be made 370, 371 
 
 Mutual savings banks, exemption of 364 
 
 N. 
 
 Neglect to make return, penalty therefor 372 
 
 Normal tax under Federal Income Tax Law 364 
 
 P. 
 
 Penalty for disclosing information by collector, deputy-collector, clerk 
 
 or employee 373 
 
 in case of neglect or refusal to make return 372, 373, 382 
 
 for false or fraudulent return 372, 373, 382 
 
 Porto Eico and Philippine Islands, provisions to apply to 376, 377 
 
 Public records, assessment constitutes a 372 
 
 R. 
 
 Eeeeipt to be furnished by collector on payment of tax 375 
 
 Eeceivers to make return 379, 381 
 
 Eefusal or neglect to make return, penalty therefor 372 
 
 Eeligious, charitable, scientific or educational associations or corpora- 
 tions, exemption of 365 
 
 Eeturn, when to be made in ascertaining net income 369 
 
 to be prescribed by Commissioner of Internal Eevenue 369 
 
 how to be made 369, 370 
 
 by insurance companies 370 
 
 by mutual fire insurance companies 370 
 
 by mutual marine insurance companies 370, 371 
 
 by life insurance companies 370 
 
 by case of corporation organized imder laws of foreign 
 
 country 370 
 
 of income by corporations making payments of $3,000 or over to 
 
 others _ 378 
 
 by trustees, executors, administrators, fiduciaries, agents, re- 
 ceivers 379, 381 
 
 S. 
 
 Source. See Regulations. 
 
 "State" defined 3^3 
 
 Surplus when to be taxed as income 382 
 
460 INDEX TO FEDEEAL INCOME TAX LAW 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 T. Page. 
 
 Taxes imposed by United States, State, Territory or foreign govern- 
 ment to be deducted 367, 371 
 
 Time within which net income is to be ascertained 369 
 
 when assessments shall be completed 372 
 
 Trust companies and banking associations entitled to deduction of in- 
 terest paid on deposits 366, 371 
 
 Trustees to make return 379 
 
 deduct tax 379 
 
 U. 
 "United States" defined 373 
 
INDEX TO INCOME TAX REGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 A. 
 
 Abatement : Article. 
 Claim for, of tax, may be filed when, by whom 33o 
 
 Absence : 
 
 From United States, who may make claim for deductions (Form 
 1008) for 33b 
 
 Additions and betterments: 
 
 Constituting increase in capital investment not deductible expense 
 
 of corporation 118 
 
 Adjustment : 
 
 Assessment of tax withheld, withholding agent to be notified 33e 
 
 Administrator : 
 
 Is fiduciary when 70 
 
 Make return of income deceased person, when and what 17 
 
 Affidavit : 
 
 Verifying return of income, before whom made 22 
 
 Agent : 
 
 Authorized, may sign for principal, certificate of ownership of 
 
 bond 43 
 
 Compensated on commission basis, income of, not subject to with- 
 holding at source 32 
 
 Return made by, when 17 
 
 Signing for principal, certificate of ownership of bonds, to furnish 
 
 evidence of authority to act, when 43 
 
 Aliens: 
 
 Nonresident — 
 
 Tax on coupons or registered interest payable in United 
 States to be withheld unless certificate of exemption 
 (Form 1004) filed 46 
 
 Besident — 
 
 Certificate of ownership of bond, when and how to be used, 
 
 and to specify what 42 
 
 Income of, from coupon or registered interest, tax on to be 
 deducted and withheld except to extent exemption 
 claimed 44 
 
 Amortization : 
 
 Depreciation for, corporation allowed, when, how 135 
 
 461 
 
462 IITBEX TO INCOME TAX EEGTTLATIOITS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Annual return: Article. 
 
 Form 1013, to show what, and to be filed on or before March 1 * 
 each year 50 
 
 Of coupons or interest orders not accompanied by certificate of 
 ownership (form of), what to show when filed, totals only of 
 monthly return S3 
 
 Of licensee for collection of foreign items (form of) what to 
 
 show, with whom filed, when 59 
 
 Annuity : 
 
 Taxable, how treated 63 
 
 jNpplication : 
 
 For license 
 
 For collection foreign items 55 
 
 To collect foreign items to be made through principal office to 
 
 collector of district in which located principal office .... 57 
 
 Applied surrender values and consideration: 
 For supplementary contracts — 
 
 To be both added and deducted in return life insurance com- 
 pany 102 
 
 Arrangement and packing: 
 
 Certificates, reports, returns, for forwarding by collector 194 
 
 Assessment : 
 
 Insurance company, reserve of, definition 147d 
 
 Against income withheld at source, where to be made 38 
 
 Against withholding agent 36 
 
 Form and notice of 197 
 
 List rendered, collector to forward 192 
 
 Basis of calendar year or fiscal year, time to be made 177 
 
 Of tax against withholding agent, deferred until agent makes re- 
 turn 189 
 
 Assets, capital: 
 Corporation — 
 
 Change in book value by annual adjustment on books, that 
 
 value to be used in making annual returns, net income. . Ill 
 Change in book value by reappraisal, gain or loss, how com- 
 puted Ill 
 
 Profit or loss on sale of, how determined 110 
 
 Loss from sale of, how ascertained 128 
 
 Sale of corporation, net income from, how determined 109 
 
 Sale of by corporation, income from, how determined 108 
 
 Shrinkage in book value of corporation, how treated 134 
 
 Association : 
 
 Operating under "Lodge system," defined 89 
 
 Authors : 
 
 Earnings of, indefinite or irregular, not subject to withholding 
 
 at source 32 
 
APPEITDIX 463 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 B. 
 
 Bad DEBTS: Article. 
 
 Corporation, deductible, when 125 
 
 Collected, are income 125 
 
 Baiances : 
 
 Outstanding tax, how treated 19ft 
 
 Banks : 
 
 Allowing interest on deposits, not to withhold tax from 6T 
 
 Deductible status of taxes assessed against stockholder, paid by. . 154 
 
 Interest paid on deposits allowable deduction 14ft 
 
 Taking coupons for collection, originated or payable in the United 
 
 States, duty of 3ft 
 
 Beneticiakies : 
 
 Exemption from tax may be claimed by, from fiduciaries 74 
 
 Bond: 
 
 May be required of licensee for collection of foreign items 56 
 
 Bonds, etc.: 
 
 Of corporations, etc. — ■ 
 
 Income from, subject to withholding at source, regardless of 
 
 amount 37 
 
 Bookkeeping : 
 
 Requisites of, for verifying return 182 
 
 Books : 
 
 Of corporation subject to examination, by whom, for what, result. 186 
 
 Book value: 
 
 Capital assets — 
 
 Change in, by reappraisal, gain or loss, how computed Ill 
 
 Shrinkage in, how treated 134 
 
 Building : 
 
 Removal of, corporation, not deductible loss, why 127 
 
 Building and loan association: 
 
 Domestic, defined; what necessary to exempt from tax 87 
 
 C. 
 Calendae teak: 
 
 To govern when notice of corporation fiscal year not given in 
 time 1^* 
 
 Capital assets : 
 
 Book value of corporation, shrinkage in, how treated 134 
 
 Corporation — 
 
 Change in value of, by annual adjustment on books, that 
 
 value used in making return annual net income Ill 
 
464 INDEX TO INCOME TAX EEGTTLATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Capital assets — Continued. 
 
 Article. 
 Change in book value by reappraisal ; gain or loss, how com- 
 puted Ill 
 
 Loss from sale of, how ascertained 128 
 
 Profit or loss on sale of, how determined 110 
 
 Net income from sale of, how determined 109 
 
 Sale of, by corporation, income from, how determined 108 
 
 Capital investment: 
 
 Corporation, increased by additions and betterments, not deduct- 
 ible expense 118 
 
 Cemetery company: 
 
 Taxable status depends on what 90 
 
 Cebtipicate : 
 
 Accompanying foreign items, disposition of, by licensee 01 
 
 Claiming deductions account partnership expense, what and how. 47 
 Claiming exemption and deductions to accompany annual return 
 
 of withholding agents 69 
 
 Claiming exemption — 
 
 As nonresident alien must be filed or tax withheld from pay- 
 ment coupon or registered interest 46 
 
 From tax on registered interest to be filed at least five days 
 
 before due date of interest 44 
 
 Of withholding, by foreign organization. Form 1018 46 
 
 For nonresident alien, may be executed by whom 46 
 
 Exemption or deduction, disposition of 194 
 
 Form of, for foreign partnership composed of nonresident aliens, 
 
 resident aliens, and citizens of United States 49 
 
 Of ownership accompanying coupons or registered orders, duty of 
 
 collecting agency 39 
 
 Of ownership — 
 
 By corporations organized in United States claiming exemp- 
 tion, form of, and how executed 45 
 
 Disposition of, by collecting agent 40 
 
 Of persons not subject to having tax withheld, disposition of, 
 
 by debtors and withholding agent 51 
 
 Not accompanying coupons or interest orders, tax to be with- 
 held by first collecting agent, disposition of certificate. . . 62 
 Of bonds — 
 
 By citizen or resident of United States, when and how to 
 
 be used and to specify what 42 
 
 By corporations organized in United States and certain 
 
 exempt, must be filed to prevent withholding 45 
 
 May be signed by authorized agents _. . 43 
 
 Of corporations, etc., organized or doing business in 
 
 United States, form of, for foreign partnership 48 
 
 Signed by agent, when verified by first withholding agent, 
 
 etc., good in all other hands 43 
 
 Who to make and for what 39 
 
 Size of and paper for p. 401 
 
APPENDIX 465 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Certificate — Continued. Article. 
 
 Substitute by collecting agent, how to be treated by debtors or 
 
 withhoding agent 51 
 
 That of collecting agent substituted when 40 
 
 Certificates, reports, returns: 
 
 Arrangement and packing of, for forwarding by collector 194 
 
 Change in book value: 
 
 Capital assets, corporation, reappraisal, gain or loss, how com- 
 puted Ill 
 
 Citizen : 
 
 Income of, from coupon or registered interest, tax to be withheld 
 
 on except to extent exemption claimed 44 
 
 Of United States, certificate of ownership of bond, when and how 
 
 to be used and to specify what 42 
 
 Claim: 
 
 For exemption — 
 
 By whom, for what, who to file 41 
 
 Paragraph C, in connection with foreign item, allowed to per- 
 son entitled to 60 
 
 What must show and how executed 42 
 
 Insurance company, amount actually paid under policy contract, 
 
 constitute deduction 147c 
 
 Collecting agency: 
 
 First receiving coupons or interest orders not accompanied by 
 certificates of ownership should withhold tax and attach its 
 
 certificate. Form 1002, that tax withheld 52 
 
 Agent — 
 
 In foreign countries to have privilege of substituting certifi- 
 cates for original ownership 40 
 
 Record to be kept by, what 40 
 
 Should require person presenting coupon or interest orders to 
 
 establish identity 52 
 
 Collection : 
 
 Of tax from withholding agent 36 
 
 Collector : 
 
 Advanced preparation notice of assessment by, particulars 198 
 
 Arrangement and packing certificates, reports, returns 194 
 
 Claim for deductions may be filed with, when 33c 
 
 Dispatch of business in offices of 195 
 
 Duty of— 
 
 As to returns withholding agents 193 
 
 In forwarding — 
 
 Return and assessment list and investigation of return. . 192 
 
 Upon receiving notice of fiscal year of corporation 167 
 
 Method of handling and accounting for outstanding tax balances. 199 
 Not satisfied with responsibility, applicant for license to collect 
 
 foreign items, may require bond 56 
 
466 INDEX TO ITTCOME TAX EEGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Collector — Continued. Article. 
 
 Of what district, Form 1008 to be filed 33b 
 
 Order of arrangement, names in list made by 188 
 
 Tax statement rendered monthly, particulars of 199 
 
 Tax withheld to be paid to 34 
 
 To adjust in assessment in case of withholding, when 33e 
 
 To furnish withholding agent with statement of claim for deduc- 
 tions filed with collector 33e 
 
 To report tax due, how, forms for 187 
 
 To send notice of what, from of and time to serve 197 
 
 To send notice to delinquent and file return 196 
 
 To which, application of principal ofiice made for license for 
 branch office, to serve collector in district of branch with 
 
 what 57 
 
 When claim for deductions, paragraph B, to be filed with 33b 
 
 Commissioner of Internal Revenue: 
 
 Facsimile of signature on licenses for collecting foreign items fur- 
 nished collectors 55 
 
 To issue licenses for collection of foreign items through collectors. 54 
 
 Commissions : 
 
 Paid to salesmen in stock of corporation, deductible expense, when. 117 
 
 Compensation : 
 
 Paid to employees of corporation on basis of stockholdings not 
 
 deductible, why 11& 
 
 Consideration for supplementary contracts and applied sue- 
 rendee values: 
 To be both added and deducted in return life insurance companies. 102 
 
 Copies of returns: 
 
 How obtained, for what purpose 178, 180 
 
 Corporation : 
 
 Additions and betterments constituting increase in, capital invest- 
 ment not deductible 118 
 
 AH organized in United States subject to tax (certain exceptions) 76 
 
 Amounts paid employees — 
 
 As compensation on basis of stockholdings not deductible, 
 
 why 119 
 
 For pension or on account injuries, deductible expense 120 
 
 Assessment — 
 
 Insurance company, reserve, definition 147d 
 
 Bad debts deductible, when 125 
 
 Banks, etc. — 
 
 Interest paid on deposits, etc., allowable deduction 149 
 
 Paying taxes assessed against their stockholders, deductible 
 
 status of 154 
 
 Books of, subject to examination, by whom, for what, result 186 
 
APPENDIX 467, 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 COSPOKATION — Continued. Article. 
 
 Cemeteet, taxable status depends on what 90 
 
 Certificates of ownership by claiming exemption, form and how 
 
 executed 45 
 
 Change in book value of capital assets by annual adjustment on 
 
 books, that value to be carried into return Ill 
 
 Change in book value of capital assets by reappraisal, gain or 
 
 loss, how computed Ill 
 
 Classes, enumeration of 162 
 
 Collector to furnish blanks for return of 163 
 
 Commissions to salesmen paid in stock, deductible expense when. 117 
 
 Complete return to be made by or will not be accepted 163 
 
 Contract with, by State, etc., prior to passage income-tax act, 
 
 income from accruing to individual, subject to tax 93 
 
 Contract with, by State, etc., prior to passage income-tax act, 
 
 income from accruing to State, etc., exempt from tax when . . 93 
 
 Cost of buildings on leased ground, deductible as rent, when. ... 115 
 
 Dairies, co-operative, not subject to tax, what 92 
 
 Deductible loss defined 124 
 
 Deduction account Interest on indebtedness limited to what, when. 81 
 Deduction — 
 
 Account materials and supplies on hand, what 123 
 
 For depletion of mines regulation and rate of, limit of 142 
 
 For depreciation of natural deposits, basis and limit of . . . . 141 
 
 For depreciation on patent, what, how determined 137 
 
 For depreciation on timberlands, limit of, excess of, is in- 
 come 140 
 
 For interest paid at different rates, rule of application 151 
 
 For obsolescence of patents, what, how determined 138 
 
 Defined 78 
 
 Depreciation timberland from removal of timber, amount, how de- 
 termined 139 
 
 Depreciation — 
 
 Deductible, amount, how treated 130 
 
 Defined 129 
 
 For amortization allowed, when, how 135 
 
 How determined 129 
 
 Reserve, use of, disposition excess of 132 
 
 Division of depreciation of reserve, correction 133 
 
 Donation for charitable purposes, deductible when 121 
 
 Duties not deductible as tax but item of cost 155 
 
 Engaged in more than one class of business, gross income ascer- 
 tained in accordance with applicable definitions of such in- 
 come H2 
 
 Every, not specifically exempt, required to make return of income. 80 
 
 Evidence requisite for allowance of deductions 158 
 
 Excise and income tax for 1913 in one return 191 
 
 Excise tax on, for what period, how computed 160 
 
 Exempt from tax, what are 87 
 
 Expense of operation and maintenance includes what 114 
 
 Failure to receive blanks will not excuse from making returns, or 
 
 from penalties for such failure 163 
 
 Fiscal year of, how established, what to do 165 
 
 Illustration of and what to do 166 
 
468 INDEX TO INCOME TAX EEGTJLATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 CoBPOEATiON — Continued. 
 
 Foreign— Article. 
 Having more than one branch office in United States to desig- 
 nate principal office and person to make return 83 
 
 Form of return prescribed for 163 
 
 General expense foreign steamship companies, how treated 116 
 
 Gifts or gratuities to employees not deductible 120 
 
 Good will, depreciation not allowed in connection with 136 
 
 Gross income — 
 
 Definition of 96 
 
 General definition 107 
 
 Gross value at the mines, definition of 142 
 
 In addition to deduction for depletion of mines, etc., deduction 
 
 for depreciation of plant, what, basis of 143 
 
 Income — 
 
 From sale of capital assets, how determined 108 
 
 Insurance company — 
 
 "Deductible net addition to reserve," definition; what basis 
 
 of computation of; what not to be included in 147d 
 
 Deduction, claims actually paid under policy contract 147c 
 
 Depreciation loss by shrinkage in property value, what and 
 
 when deductible 147b 
 
 Gross income of, definition of 97, 101 
 
 Losses, deductions for, what 147a 
 
 Reserve to meet losses, how treated 147c 
 
 Salvage, how to be treated in return of 147c 
 
 Interest paid — 
 
 As rental, how treated 148 
 
 By, on mortgage on property in which corporation has equity 
 
 or is purchasing 148 
 
 Deduction, what, when 148 
 
 On debts secured by collateral subject to sale, deductible, 
 
 when, why 150 
 
 On deposits, etc., deductible, when 113 
 
 Inventory, purpose and use of; kinds of 161 
 
 Leased, to make its own return 82 
 
 Leasing oil or gas territory, deductions for depletion, basis of . . . . 144 
 Lessee, property of, assuming indebtedness of lessor, return by 
 
 lessee, what 81 
 
 Lessee, not to include capital stock or debts of lessor in return, 
 
 except 82 
 
 Life Insurance Company — 
 
 Applied surrender values and consideration for supplemen- 
 tary contracts both added and deducted in return 102 
 
 Deductions from gross income, what 100 
 
 Gross income, definition of , 101 
 
 Supplementary statement attached to return of, showing 
 
 what 103 
 
 Liquidation of, make final return of what; filed when and where. 85 
 
 "Lodge system" defined 89 
 
 Loss— 
 
 From removal of buildings, not deductible, why 127 
 
 From sale of capital assets, how ascertained 128 
 
 Securities below par, how treated 135 
 
APPENDIX 469 
 Note.— Regulations are indexed by article number; law indexed by page. 
 
 COBPOBATION — Continued. Article. 
 
 Manufacturing company, gross income, definition 104 
 
 Mercantile company, gross income, definition ' ' " " 105 
 
 Miscellaneous, gross income, definition 106 
 
 Mutual companies making return, definition of net income. . . . . '. . 80 
 
 Mutual fire insurance company — 
 
 Gross income, definition 98 
 
 Supplementary statement attached to return, showing, what. 103 
 
 Mutual marine insurance company — 
 
 Deductions from gross income, what 99 
 
 Supplementary statement attached to return of, showing 
 
 what 103 
 
 Will deduct, what 147d 
 
 Net income — 
 
 Engaged in more than one class business, how ascertained. . 113 
 
 For 1913, how ascertained 159 
 
 Of, should be what 158 
 
 Of, which is distributable to owners thereof; subject to tax. . 79 
 
 From sale of capital assets, how determined 109 
 
 No specific exemption from tax 160 
 
 Notice — 
 
 Of fiscal year, not retroactive 169 
 
 Not receiving blank for making return, should make application 
 
 for, to whom, when 163 
 
 Only one return and assessment for 1913 160 
 
 Operating mines, oil or gas wells, on royalty basis, not allowed, 
 
 deduction for depletion of deposits 145 
 
 Organized — 
 
 During the year, to make return of what 84 
 
 Elsewhere than in United States, subject to tax on what. ... 77 
 In United States and certain exempt, interest on bonds pay- 
 able to, tax not to be withheld if certificate of owner- 
 ship filed 45 
 
 Paid-up capital stosk, definition of 95 
 
 Partnership — 
 
 Limited, is, and subject to corporation tax 86 
 
 Ordinary, not subject to tax as 94 
 
 Payments on account of tax from covenant in bonds, not deduct- 
 ible in ascertaining net income 113 
 
 Penalty for — 
 
 Failure to 
 
 Make return 163 
 
 Profit or loss on sale, capital assets, how determined 110 
 
 Public utility, governmental function, income accruing through, 
 
 to State, exempt from tax 93 
 
 Railroad whose income paid by its lessee direct to stockholders 
 
 must make return of income 80 
 
 Repairs may be deducted, what 131 
 
 Reserve for — 
 
 Insurance of own property not deductible 122 
 
 Losses, not deductible 126 
 
 Taxes, not deductible 156 
 
470 INDEX TO INCOME TAX REGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Corporation — Continued. Article. 
 
 Return — 
 
 For 1913 must be on new form and not on excise form here- 
 tofore used 172 
 
 To be made, when 190 
 
 Shrinkage in value, capital assets, how treated 134 
 
 Status for taxation purposes to be established, how 88 
 
 Subject to tax — 
 
 Normal only, but on entire net income 185 
 
 Taxable status in doubt, must make return and attach thereto 
 
 statement showing what 91 
 
 Tax- 
 Computed on net income of 159 
 
 Paid by — 
 
 Constitute deduction, when 152 
 
 When not deductible 153 
 
 Unearned increment, not value for depreciation purposes 146 
 
 United States, filing certificates of ownership, exempt from with- 
 holding of foreign items 60 
 
 Cost: 
 
 Of buildings on leased ground, deductible as rent of corporation, 
 
 when 115 
 
 D. 
 Dairies: 
 
 Co-operative, not subject to tax, what 92 
 
 Debtor : 
 
 Annual — 
 
 List return by, when and what 50 
 
 Return by, to show totals only of monthly list return 51 
 
 Definition of. 38 
 
 How to treat substitute certificate of collecting agent and certifi- 
 cate of owner not subject to having tax withheld 51 
 
 Interest on bonds due, corporations organized in United States 
 
 and certain exempt, not to withhold tax if certificate filed . . 45 
 Maker of note given in payment of interest held responsible for 
 
 tax on 68 
 
 May appoint withholding and paying agent to act for it 38 
 
 Note given in payment of income, maker of note is 68 
 
 Not to withhold against nonresident alien or foreign organization 
 
 doing business in United States, when 46 
 
 Not to withhold when receiving certificate of collecting agent that 
 
 tax withheld by same, disposition of certificate 52 
 
 Return of withholding by, where to be filed 38 
 
 In United States {or its withholding agent) charged with duty of 
 
 withholding from coupons or registered interest 39 
 
 In United States, duty of, before payment of registered interest. . 41 
 When source for withholding purposes 31 
 
 "Deductible net addition to reserve": 
 
 Insurance company; definition; what basis of computation of; 
 
 what not to be included in 147d 
 
APPENDIX 471 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Deduction : Article. 
 Account partnership expense, account of and form for claiming. . 47 
 Additions and betterments constituting increase in capital invest- 
 ment, not 118 
 
 Bad debts of corporation, when 125 
 
 Basis, for depletion leased oil or gas territory 144 
 
 Claims for — 
 
 Filed with collector, withholding agent to be furnished state- 
 ment of 33c 
 
 May be filed with withholding agent, when 33e 
 
 Commission to salesmen paid in stock of corporation is, when. . . . 117 
 Compensation paid employees of corporation based on stockhold- 
 ing, not, why 119 
 
 Corporation — 
 
 Account interest paid on debt, limited to what, when. 81 
 
 Material and supplies on hand, what 123 
 
 Depreciation, amount, how treated 130 
 
 Donations for charitable purpose, when 121 
 
 Evidence requisite for allowance of 158 
 
 For interest paid at different rates, rule of application 151 
 
 Gifts or gratuities to employees, not 120 
 
 Pensions and damages for injuries to employees, are 120 
 
 Reserve — 
 
 For insurance its own property, not 122 
 
 To meet losses insurance companies, not 147o 
 
 Status of tax for, to bank, assessed against stockholder, paid , 
 
 by bank 154 
 
 Depletion of mines, regulation of rate of, limit of 142 
 
 Depreciation — 
 
 Defined 129 
 
 For amortization, allowed when, how 135 
 
 How determined 129 
 
 Loss by shrinkage in property value, insurance company, 
 
 what and when 147d 
 
 Reserve, how, disposition excess of 132 
 
 Of good will not allowable 136 
 
 Of natural deposits, basis and limit of 141 
 
 Of plant (in addition to deduction for depletion of mine), 
 
 what, and basis of 143 
 
 On patent, what, how determined 137 
 
 Unearned increment, not value for purpose of 146 
 
 Timberland — 
 
 Limit of, access of, is income 140 
 
 Removal of timber, amount, how determined 139 
 
 From gross income — 
 
 Mutual marine insurance companies, what 99 
 
 Foreign corporation, to ascertain net income 157 
 
 Insurance company — 
 
 Claims actually paid under policy contract, are 147e 
 
 Losses, what 147a 
 
 Interest paid by — 
 
 •Bank, etc., on deposits, etc., is 149 
 
472 INDEX TO IITCOME TAX EEGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Deduction — Continued. Article. 
 
 Interest paid by — Continued. 
 Corporation — 
 
 As rental, not allowable 148 
 
 Is, what, when 148 
 
 On indebtedness secured by collateral subject to sale, 
 
 when, why 150 
 
 On mortgage on property in which corporation has 
 
 equity, is and amount of 148 
 
 Life insurance company — 
 
 From gross income, applied surrendered values and considera- 
 tion for supplementary contracts 102 
 
 From gross income, what 100 
 
 Loss — 
 
 Which corporation may make, defined 124 
 
 From removal of building not deductible, why 127 
 
 From sale — 
 
 Capital assets, how ascertained 128 
 
 Corporation securities below par, how treated 135 
 
 May be claimed account tax on note given in payment of income. 68 
 
 Only, claim for, may be filed with collector, when 33c 
 
 Mutual marine insurance company, what 147d 
 
 Obsolescence of patents, what, how determined 138 
 
 Paragraph B — 
 
 May be claimed in case of fixed, determinable annual income. 66 
 Not claimed of withholding agent in time, only remedy, ap- 
 plication for refund 33o 
 
 When claim for (Form 1008), to be filed with withholding 
 
 agent or collector 33b 
 
 Repairs, when ' 131 
 
 Reserve for losses, not 126 
 
 Taxes paid by corporation — 
 
 Are, when 152 
 
 When not 153 
 
 To ascertain net income corporation engaged in more than one 
 
 class of business 113 
 
 Deeds of trust, etc.: 
 
 Corporation, income from, subject to withholding at source regard- 
 less of amount, when 37 
 
 Depletion : 
 
 Deduction for, mines, oil or gas wells operated on royalty basis, 
 
 not allowed operating corporation 145 
 
 Leased oil or gas territory, basis for deduction for 144 
 
 Of mines, etc., regulation of rate of deduction for, limit of 142 
 
 Deposit: 
 
 Interest on, not subject to withholding; must be included in per- 
 sonal return whether paid or not 67 
 
 Depbeciatiok: 
 
 Corporation, defined 129 
 
 Deductible, amount how treated 130 
 
APPENDIX 473 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Depreciation — Continued. Article. 
 
 Deduction for — 
 
 Of natural deposits, basis and limit of 141 
 
 Of plant (in addition to deduction for depletion of mine), 
 
 what, and basis of 143 
 
 On patent, what, how determined 137 
 
 Diversion reserve for, correction 133 
 
 For amortization, allowed when, how 135 
 
 Loss by shrinkage in property value, insurance company, what, 
 
 and when deductible 147b 
 
 Of good will not allowable deduction 136 
 
 Timberland — 
 
 From removal timber, amount, how determined 139 
 
 Deduction for, limit of, excess of is income 140 
 
 Unearned increment, not value for basis of deduction for 146 
 
 Depreciation reserve: 
 
 Use of, disposition excess of 132 
 
 Dispatch op business : 
 
 In collector's office 195 
 
 Diversion : 
 
 Depreciation reserve, correction 133 
 
 Dividends : 
 
 Compensation paid employees of corporation based on stockhold- 
 ing are, when 119 
 
 Co-operative dairies, is purchase price of raw material 92 
 
 Of corporations subject to tax not subject to withholding 32 
 
 Doctors : 
 
 Fees of, indefinite or irregular not subject to withholding 32 
 
 Donations : 
 
 By corporation for charitable purpose, deductible when 121 
 
 Domestic building and loan association: 
 
 Definition, what necessary to exempt from tax 87 
 
 Due date : 
 
 Return on Sunday or legal holiday, effect of 176 
 
 Duties: 
 
 Not tax and not deductible but are item of cost 155 
 
 E. 
 
 Evidence : 
 
 Furnished by agent of authority to sign ownership certificate to 
 
 be retained by verifying agent 43 
 
 Requisite for allowance of deduction by corporation 158 
 
474 INDEX TO INCOME TAX EEGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Excise and income: Article. 
 Tax, corporation, 1913 in one return 191 
 
 Excise tax : 
 
 Corporation, for what period, how computed 160 
 
 Executor: 
 
 la fiduciary when -70 
 
 Exempt: 
 
 From tax — 
 
 Corporations, what 87 
 
 Co-operative dairies, what 92 
 
 Income from public utility 93 
 
 Exemption : 
 
 Beneficiary may claim from fiduciary 74 
 
 Cemetery company, depends on what 90 
 
 Certificate claiming by corporation organized in United States 
 
 form of and how executed 45 
 
 Certificate claiming, what must show and how executed 42 
 
 Claimed by fiduciary, forms 1015 or 1019 70 
 
 Claimed for — 
 
 By whom, with whom and when to be filed 41 
 
 May be filed with withholding agent when. 33c 
 
 Under paragraph C — 
 
 Allowed to person permitted to claim 60 
 
 Failure to claim, effect of 65 
 
 Corporation claiming — 
 
 To establish rights to, how 88 
 
 Whose taxable status in doubt, must make return and attach 
 
 statement showing what 91 
 
 False claim or statement as to, penalty for 33a 
 
 May be claimed, note given in payment of income 68 
 
 None for corporations 160 
 
 Paragraph C — 
 
 Not claimed of withholding agent in time, only remedy ap- 
 plication for refund 33c 
 
 To be filed with withholding agent when 33 
 
 Expense: 
 
 Deductible, pension or amounts paid employees account injuries 
 
 are 120 
 
 General, foreign steamship companies, how treated 116 
 
 Of operation and maintenance corporate business, what includes. . 114 
 
 Extension : 
 
 To make return, not exceed what, how and to whom made 173 
 
 F. 
 Fiduciary : 
 
 Annual return by, what to show and how executed 73 
 
 Definition of 70 
 
APPENDIX 4Y5 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 I'lDUCIART — Continued. Article. 
 
 Filing notice with other withholding agent (Form 1015), nothing 
 
 to be withheld '. 70 
 
 Having withheld and paid tax on undistributed annual net income 
 
 not to again withhold when distribution made 75 
 
 Income of beneficiary not distributed during the year; what to be 
 
 shown in return ; tax to be withheld and paid when 74 
 
 May be appointed agent or attorney for the purpose of making 
 
 personal return of income (Form 1040) for beneficiary.... 72 
 
 Optional claim (Form 1015 or 1019) 70 
 
 Regulations as to 70-75 
 
 Return by must be made when 71 
 
 Return by to include only matter within scope of authority 72 
 
 Return of not to include income on which tax paid 71 
 
 Return, when to be made 190 
 
 To make annual return (Form 1041) to collector of district when, 
 
 to show what 71 
 
 Fiscal year : 
 
 Corporation — 
 
 Duty of collector upon receiving notice of 167 
 
 How established, what to be done 165 
 
 Illustration of and what to do 166 
 
 Making return on basis of but not so designating, return not 
 
 accepted and must be made for calendar year 171 
 
 Notice of not retroactive 169 
 
 Notice to collector not given in prescribed time, calendar year 
 
 to govern 168 
 
 Not properly established, return to be made for what calendar 
 
 year and filed when 170 
 
 Foreign : 
 
 Corporation — 
 
 Subject to tax on what 77 
 
 Tax on net income; net income defined; deductions to ascer- 
 tain 157 
 
 Items — 
 
 Too small for notation on, statement of facts may be attached 
 
 to 58 
 
 License required for collection of, when and from whom 54 
 
 Provisions for collection of tax on apply wherever said items 
 
 payable, if paid in United States 61 
 
 Income paid in United States, provisions for collection of tax on. 54-62 
 
 Organization doing business in United States subject to tax but 
 exempt from withholding upon filing certificate claiming 
 (Form 1018) 46 
 
 Partnership owning bonds of corporations organized or doing 
 business within United States, not subject to withholding on 
 interest of, when 48 
 
 Steamship company, general expense of, how treated 116 
 
 Forms. [See List of Forms at end of this Index.] 
 
476 INDEX TO INCOME TAX REGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 G. 
 
 Gas OB OIL TBRRITORT leased: Article. 
 Corporation, basis of deduction for depletion of I44 
 
 Gas or oil wells and mines: 
 
 Operated on royalty basis, deduction for depletion of deposits not 
 
 allowed operating corporation I45. 
 
 Gift: 
 
 To employees of corporation not deductible 120 
 
 Governmental function: 
 
 Income accruing to State from exercise of, exempt 93 
 
 Good will : 
 
 Corporation, depreciation of, not allowable deduction 136 
 
 GBATXnTIES : 
 
 To employees of corporation not deductible 120 
 
 Gross income: 
 
 Corporation — 
 
 Definition of 98 
 
 Engaged in more than one class business, ascertained in ac- 
 cordance with applicable definition each class 112 
 
 General definition of gross income 107 
 
 Manufacturing company, definition of 1 04 
 
 Mercantile company, definition of 105 
 
 Miscellaneous corporation, definition of 10& 
 
 Deductions from — 
 
 By mutual marine insurance companies, what 99 
 
 Insurance company, definition of 101 
 
 Life insurance company — 
 
 Definition 101 
 
 To include applied surrender values and consideration for 
 
 supplementary contracts 102 
 
 Gross value at the mine: 
 
 Corporation, definition 142 
 
 Guardian : 
 
 Is fiduciary, when 70 
 
 H. 
 Holiday: 
 
 Due date of return falling on, effect of 176 
 
 I. 
 
 Identity: 
 
 Persons presenting coupons or interest orders shoud be required 
 
 to establish 52 
 
APPENDIX 477, 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Income : Article. 
 
 Amount from which withholding to be had 32 
 
 Corporation — 
 
 Bad debts collected are 125 
 
 From sale of capital assets, how determined 108 
 
 Deductions from gross, mutual marine insurance company, what. 99 
 
 Fixed determinable annual — 
 
 From what derived 63 
 
 Withholding from, when 64 
 
 Foreign, paid in United States, provisions for collection of tax 
 
 on 54-62 
 
 From bonds, mortgages, deeds of trust, and similar obligations of 
 corporations, etc., subject to withholding at source regardless 
 of amount 37 
 
 From certain professions not subject to withholding at source. . . 32 
 
 From public utility or governmental function accruing to State, 
 
 etc., exempt from tax 93 
 
 From what, obligations not subject to tax and certificate of owner- 
 ship not required 37 
 
 Gross — 
 
 Corporation — 
 
 Engaged in more than one class of business, ascertained 
 in accordance with applicable definition for each 
 
 class 112 
 
 Definition of 96 
 
 General definition 107 
 
 Insurance company, definition of gross income 97, 101 
 
 Life insurance company, to include applied surrender 
 values and consideration for supplementary con- 
 tracts 102 
 
 Manufacturing company, definition 104 
 
 Mercantile corporation, definition 105 
 
 Miscellaneous corporation, definition 106 
 
 Mutual fire insurance company, definition 108 
 
 Individual, not subject to withholding when 32 
 
 Life insurance companies, what included, deductions 100 
 
 Mutual fire insurance companies 
 
 What taxable 98 
 
 Net— 
 
 Of corporation engaged in more than one class of business, 
 
 how ascertained 113 
 
 Not subject to withholding at source, to be covered in per- 
 sonal return ; 32 
 
 Note given in payment of; maker of note is debtor and 
 
 source; required to withhold, except, when 68 
 
 Of corporations, verified how 183 
 
 Tax paid at source ■ 
 
 On from coupon or registered interest to be deducted and 
 
 withheld, except to extent exemption claimed 44 
 
 What not liable to withholding at source 32 
 
478 IJSTDEX TO INCOME TAX EEGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed, by page. 
 
 iNDIVIDTJAIi : Article. 
 
 Duty of, collection interest coupons originating in United States. 39 
 
 Income accruing to, from contract with State, etc., prior to pas- 
 sage of act for construction, operation, or maintenance, pub- 
 lic utility, taxable 93 
 
 Income of, liable to withholding at source on and after Novem- 
 ber 1, 1913 29 
 
 Liable for income tax on share of net earnings of partnership . . 47 
 
 Return — 
 
 When to be made 190 
 
 Share of earnings, partnership, property of, subject to tax charge- 
 able to individual 94 
 
 Information : 
 
 From returns to officers of State, when, what, how 179 
 
 Insane : 
 
 Who make claim for deductions for 33b 
 
 Inspection : 
 
 Of returns, how 178 
 
 Insubance company: 
 
 "Deductible net addition to reserve"; definition; what basis of 
 
 computation of ; what not to be included in 147d 
 
 Deduction, claims actually paid under policy contract 147e 
 
 Depreciation loss by shrinkage in property value, what and when 
 
 deductible 147b 
 
 Gross income, definition 97, 101 
 
 Losses — 
 
 Deduction for what 147a 
 
 Making false return, penalty , p. 12 
 
 Mutual marine, deduct what 147d 
 
 Reserve — 
 
 Definition 147d 
 
 To meet losses, how treated 147e 
 
 Salvage, how treated in return of 147c 
 
 Interest : 
 
 Coupon or registered, originating or payable in the United States, 
 
 who to withhold 39 
 
 From what obligation not subject to tax and certificates of owner- 
 ship not required 37 
 
 How treated 63 
 
 On deposits — 
 
 Subject to withholding; must be included in personal return 
 
 whether paid or not 67 
 
 Paid as rental by corporation, how treated 148 
 
 Paid by bank, etc., on deposits, etc., allowable deduction 149 
 
 Paid by corporation — 
 
 Deduction of what, when 148 
 
 On indebtedness secured by collateral subject to sale, de- 
 ductible when, why 150 
 
APPENDIX 4:70' 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Interest — Continued. 
 
 Paid by corporation — Continued. Article. 
 
 At different rates, rule for application of deduction of 151 
 
 On mortgage on property in ■which corporation has equity or 
 
 is purchasing, how treated 148 
 
 Registered, certificate claiming exemption to be filed at least 
 
 five days before due date of interest 44 
 
 Registered, duty of debtor before payment of 41 
 
 Inventors : 
 
 Earnings of, indefinite or irregular not subject to withholding. . . 32 
 Inventory: 
 
 Corporation, purpose and use of, kinds of 161 
 
 L. 
 
 Last due date: 
 
 Defined 175 
 
 Lawyers : 
 
 Fees, indefinite or irregular, not subject to withholding 32, 
 
 License : 
 
 Bond may be required on form furnished 56 
 
 Failure to obtain, penalty for 55 
 
 For branch, to be made through principal ofiice 57 
 
 Form of application for, to be made to collector of district 55 
 
 Form of ; to be issued by collector, good until revoked 55 
 
 Required for collection of interest or other foreign items, when, 
 
 by whom, where obtained 54 
 
 Licensee : 
 
 First, receiving foreign item for collection to withhold and be 
 responsible for tax and to note fact of withholding on such 
 item, efifect of 5& 
 
 For collection of foreign items — 
 
 Disposition of certificates accompanying, by 61 
 
 To keep record showing what 62 
 
 To report to collector (Form 1043), what, when 59 
 
 Life insurance company: 
 
 Applied surrender values and consideration for supplementary 
 
 contracts both to be added and deducted in return 102 
 
 Deductions from gross income, what 100 
 
 Oross income, definition 101 
 
 Supplementary statement attached to return of, showing what.. 103 
 
 Limitation, statute of: 
 
 For income tax purposes, three years 177 
 
 Lodge system: 
 
 Corporation operating under, defined 89 
 
480 INDEX TO INCOME TAX EEGtrLATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Loss: 
 
 Corporation — Article. 
 
 Deductible, defined 124 
 
 From sale capital assets, how ascertained 128 
 
 From sale securities below par, how treated 135 
 
 Insurance company, deduction for, what 147a 
 
 Removal of building not deductible, why 127 
 
 Reserve for, not deductible 126 
 
 M. 
 Makjir: 
 
 Of note given in payment of interest held responsible for normal 
 
 tax 68 
 
 Manufacturing company : 
 
 Gross income, definition 104 
 
 Materials and supplies on hand: 
 
 Deduction by corporation on account of, what 123 
 
 Mercantile corporation: 
 
 Gross income, definition 105 
 
 Mine: 
 
 Gross value at — 
 
 Corporation, definition 142 
 
 Operated on royalty basis, corporation, deduction for depletion of 
 
 deposits not allowed operating corporation 145 
 
 Minor : 
 
 Who make claim for deductions for 33b 
 
 Miscellaneous corporations : 
 
 Gross income of, definition 106 
 
 Monthly list return : 
 
 Form of, what to contain, to be filed in duplicate 50 
 
 Of coupon or registered interest orders received with ownership 
 
 certificates, form of and what to show 53 
 
 Of licensee for collection of foreign item, form of, what to show, 
 
 with whom filed, when 59 
 
 Summary of, when to be filed and what to show 50 
 
 Totals only to be carried into annual return 51 
 
 MOETOAGES : 
 
 Interest on — 
 
 Paid by corporation which has equity, how treated 148 
 
 Of corporation, income from, subject to withholding regardless of 
 
 amount 37 
 
 Mutual companies: 
 
 To make return of income; definition of net income 80 
 
appendix 481 
 
 Mutual fire insurance company: 
 
 Gross income of, definition gg 
 
 Supplementary statement attached to return of, showing what! .' 103 
 
 Taxable income, what 98 
 
 Mutual maeine insurance company: 
 
 Deductions, what 99, 147d 
 
 Supplementary statement attached to return of, showing what. . 103 
 
 N. 
 Names : 
 
 Arrangement of, in list by collector 188 
 
 Natural deposits: 
 
 Deduction for depreciation of, basis and limit of 141 
 
 Net income : 
 
 Corporation — 
 
 Engaged in more than one class of business, how ascertained. 113 
 
 For 1913, how ascertained 159 
 
 Prom sale of capital assets, how determined 109 
 
 Should be what 158, 183 
 
 Foreign corporation, defined 157 
 
 Mutual companies, defined 80 
 
 Note: 
 
 Given in payment of income; maker is debtor or source and must 
 withhold on entire amount of note if in excess $3,000, except 
 allowance exemption or deduction claimed 68 
 
 Given in payment of interest ; failure of purchaser to make allow- 
 ance or deduction for tax, only remedy is against vendor, 
 how 68 
 
 Notice : 
 
 Assessment, advance preparation of, by collector 198 
 
 Claiming deduction account partnership expense, by whom filed, 
 
 what and how 47 
 
 Collector to give withholding agent, when tax withheld ia adjusted 
 
 in assessment 33o 
 
 Form 1015 filed by fiduciary with other withholding agent, 
 
 nothing withheld 70 
 
 Of assessment; failure to pay tax; make return; form of; time. . 197 
 
 Of claim for exemption by foreign partnership, when, what, how. 48 
 
 Of failure fiduciary to file return, served 71 
 
 To delinquent, failure to file return in time 196 
 
 0. 
 
 ObUQATIONS of corporations, ETC.: 
 
 Similar to bonds, mortgages, and deeds of trust, income from, 
 
 subject to withholding, regardless of amount 37 
 
 Obsolescence : 
 
 Of patents, deduction for, what, how determined 138 
 
482 INDEX TO INCOME TAX EEGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Oil or gas teeeitokt leased: Article. 
 Basis of deduction for depletion of 144 
 
 On. OB GAS WELLS AND MINES : 
 
 Operated on royalty basis, deduction for depletion of deposits not 
 
 allowed operating corporation 145 
 
 Omitted tax: 
 
 May be assessed and with penalty, when 184 
 
 P. 
 PAm-Tjp capital stock: 
 
 Definition of 95 
 
 Paktneeship : 
 
 Foreign — 
 
 Composed of nonresident aliens, resident aliens, and citizens 
 of United States, either or both, requisites of ownership 
 
 certificate for 49 
 
 Owning bonds, etc., of corporations, etc., organized or doing 
 business in the United States not subject to withholding 
 on interest of, provided exemption claimed (Form 1016) 48 
 
 Limited, is corporation and subject to corporation tax 86 
 
 Members of, liable in individual capacity for tax on their respec- 
 tive shares of earnings of, whether distribution or not 94 
 
 To file with withholding agent notice claiming deduction for ex- 
 pense of, what and how 47 
 
 Patents : 
 
 Deduction for — 
 
 Depreciation, what, and how determined 137 
 
 Obsolescence, what, how determined 138 
 
 Penalty: 
 
 For divulging — 
 
 Information on return, what 181 
 
 Unlawfully, information on return, fine or imprisonment, or 
 
 both, with costs 164 
 
 Failure to make return in prescribed time or for false or fraudu- 
 lent, fine or imprisonment, or both 164 
 
 Failure to pay tax, 5 per cent to tax plus 1 per cent per month . . 164 
 
 False claim or statement to secure exemption 33a 
 
 False or fraudulent return, 100 per cent to tax 164 
 
 False statement in regard to deduction 33b 
 
 Neglect or refusal to make return 164 
 
 Person or oflicer of corporation required to make return, making 
 
 false or fraudulent, with intent to defeat or evade assessment. 164 
 Return made and properly mailed in time but not received in 
 
 time, none 174 
 
 Pensions : 
 
 Or payments on account of injuries to employees of corporations, 
 
 deductible expense 120 
 
APPENDIX 483 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 PeESON: . Article. 
 
 Whose income is not subject to withholding at source, malce per- 
 sonal return 32 
 
 Plant: 
 
 Corporation, deduction for depreciation (in addition to the de- 
 duction for depletion of mine), what and basis of 143 
 
 Peofessional: 
 
 Persons whose income indefinite or irregular, not subject to with- 
 holding 32 
 
 PEOFIT OB LOSS : 
 
 Corporation, on sale of capital assets, how determined 110 
 
 Public eecoeds: 
 
 Returns are, inspection of or copies, how 178 
 
 Public utility: 
 
 Income from accruing to State, etc., exempt from tax 93 
 
 Pdechaseb : 
 
 Of note given in payment of interest, failure to make allowance 
 of deduction of tax in purchase or discount only remedy is 
 against vendor 68 
 
 E. 
 Eate: 
 
 Deduction for depletion of mines, etc., regulation and limit of . . . 142 
 
 Eecoed : 
 
 To be kept by — 
 
 Collecting agent, what 40 
 
 Licensee for collection of foreign items, what to show 62 
 
 Refund: 
 
 Failure to make claim for exemption or deductions with with- 
 holding agent in time; only remedy is by application for. . . . 33c 
 
 Eegisteeed inteeest: 
 
 Certificate claiming exemption from tax on, to be filed at least 
 
 five days before due date of interest 44 
 
 EEMOVAL of BUILDINGS: 
 
 Not deductible loss, corporation, why 127 
 
 Bent: 
 
 Corporation, cost of buildings on leased ground deductible, when. . 115 
 
 How treated 63 
 
 Interest paid by corporation as, how treated 148 
 
 Eepaies: 
 
 Deduction, when 131 
 
484 INDEX TO INCOME TAX EEGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Eeserve : Article. 
 
 Assessment insurance company, definition 1473 
 
 For depreciation — 
 
 Diversion of, correction 133 
 
 Use of, disposition of excess of 132 
 
 For insurance of corporate property not deductible 122 
 
 For losses not deductible 126 
 
 For taxes of corporation not deductible 156 
 
 Insurance company, deductible net addition to, definition; what 
 
 basis computation ; what not to be included in 147d 
 
 To meet loss, insurance company, how treated 147c 
 
 Resident ALtEN : 
 
 Certificates of ownership of bonds, when and how to be used and 
 
 to specify what 42 
 
 Income of, from coupon or registered interest, subject to with- 
 holding except to extent exemption claimed 44 
 
 Rettjens : 
 
 Annual list (Form 1013), to show what, and to be filed on or 
 
 before March 1 50 
 
 Annual, of coupon or registered interest orders not accompanied 
 by certificates of ownership; form of, and what to show; to 
 be filed when ; to show totals only on monthly return 53 
 
 Annual, of debtors or withholding agents to show totals only on 
 
 monthly list 51 
 
 Annual, fiduciary to collector of district when; show what 71 
 
 Annual, of withholding agent, form for, to be accompanied by 
 
 what, when to be filed 35 
 
 Annual, of withholding agent (Form 1042), what to show and 
 
 when to be filed 69 
 
 Blanks for, furnished corporations by collector 163 
 
 Certified copies of, when, why, delivered to whom 180 
 
 Corporation — 
 
 Every, not specifically exempt, to make 80 
 
 Fiduciaries, withholding agents, when to be made 190 
 
 Going into liquidation to make final; filed when and where. . 85 
 Not receiving blank for, should make application for, to 
 
 whom, when 163 
 
 One only for 1913 160 
 
 Organized during year, to make 84 
 
 To make complete or not accepted 163 
 
 When income paid by lessee direct to stockholders, must 
 
 nevertheless make 80 
 
 Divulging — ■ 
 
 Information from, penalty 181 
 
 Unlawfully, information on, penalty 164 
 
 Due date on Sunday or legal holiday, effect of 176 
 
 Duplicate, when, of whom required, disposition of 193 
 
 Duty of eollectoi- — 
 
 In forwarding and investigation of 192 
 
 Evidence by which to verify, what 183 
 
 Extension of time — 
 
 To make, not to exceed what, how, to whom made 173 
 
APPENDIX 485 
 
 Note.— Regulations are indexed by article number; law indexed by page. 
 
 Retuens— Continued. Article. 
 
 Failure of corporation to receive blank for, not excused from 
 
 making return or penalties for failure 163 
 
 Failure — 
 
 Of fiduciary to file, notice of, served 71 
 
 To make in prescribed time, of a false or fraudulent, penalty. 164 
 To make— ^ ■^ 
 
 Notice of, form and time to serve 197 
 
 False or fraudulent- 
 Penalty p. 12, Art. 164 
 
 Duty of collector in matter of 192 
 
 Fiduciary — 
 
 Must be made when 71 
 
 Not to include income on which tax paid 71 
 
 To include only matter within scope of authority 72 
 
 What to show, and how executed 73 
 
 For 1913, must be on new form and not on excise form hereto- 
 fore used 172 
 
 Foreign corporation having more than one branch oifice in United 
 
 States to designate principal office and person to make return. 83 
 
 Form of for corporation prescribed 163 
 
 Individual — 
 
 To be made when 190 
 
 Information or copies from, to officers of State, when, what, how; 
 
 original not removed except 179 
 
 Last due date defined 175 
 
 Leased corporations make their own 82 
 
 Lessee corporation assuming debts of lessor to include in lessee 
 
 return all receipts of lessor 81 
 
 Lessee corporation not to include in its own statement of capital 
 stock, that of lessor; nor in its own statement of indebted- 
 ness, that of lessor except when said indebtedness is assumed 
 by lessee 82 
 
 Life insurance company — 
 
 Applied surrender values and consideration for supple- 
 mentary contracts both added and deducted 102 
 
 Supplementary statement attached to return of, showing 
 
 what 103 
 
 Made and properly mailed in time, no penalty if not received in 
 
 time 174 
 
 Made on basis of fiscal year but not so designated, not accepted, 
 
 and must be made for calendar year 171 
 
 Monthly, by withholding agent, when to be filed; with whom, 
 
 what to accompany 35 
 
 Monthly list and annual, by licensee for collection of foreign 
 
 items, what, to whom, when 59 
 
 Monthly list, form of, what to contain, to be filed in duplicate. . . 50 
 
 Monthly list of coupon or interest orders not accompanied by cer- 
 tificates of ownership, form of, and what to show 53 
 
 Mutual companies to make; definition net income 80 
 
 Mutual fire insurance companies, supplementary statement at- 
 tached to, showing what 103 
 
 Mutual marine insurance companies, supplementary statement 
 
 attached to, showing what 103 
 
486 . INDEX TO INCOME TAX EEGULATIONS 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Eetubns — Continued. Article. 
 
 Neglect or refusal to make, 50 per cent additional tax 164 
 
 Not filed in time, notice sent to delinquent 196 
 
 On basis of calendar year or fiscal year, time of assessment and 
 
 payment of tax 177 
 
 Penalty — 
 
 Against corporation for failure to make , 163 
 
 Personal, Form 1040; fiduciary may be appointed agent or attor- 
 ney to make for beneficiary 72 
 
 Person or officer of corporation required to make, making false or 
 
 fraudulent with intent to defeat or evade; penalty 164 
 
 Public records, inspection or copies, how 178 
 
 Requisite of bookkeeping for verifying 182 
 
 To include — 
 
 Personal income not subject to withholding 32 
 
 Withholding agent, what disposition of; should not be filed until 
 expiration of time allowed for filing claims for exemption or 
 deductions 33o 
 
 Royalties : 
 
 How treated 63 
 
 Royalty basis : 
 
 Mines, oil or gas wells, operated on, deduction for depletion of 
 
 deposits not allowed operating corporation 145 
 
 S. 
 Salaries : 
 
 How treated ; . . 63 
 
 Sale op capital assets : 
 Corporation — 
 
 Income from, how determined 108, 109 
 
 Loss from, how ascertained 128 
 
 Profit or loss on 110 
 
 Salesmen : 
 
 Commission to, paid in stock, deductible expense when 117 
 
 Salvage : 
 
 How treated in return of insurance company 147c 
 
 Securities : 
 
 Income from; sale of, below par; loss 135 
 
 Shrinkage : 
 
 In book value capital assets, how treated ._ 134 
 
 In property value insurance company, depreciation loss by, what 
 
 and when deductible l*7b 
 
 Size: 
 
 Foreign items too small for notation on, statement may be at- 
 tached to 58 
 
APPENDIX 487 
 
 Note. — Regulations are indexed by article number; law indexed by page. 
 
 Article. 
 
 Society : 
 
 Operating under the "lodge system," defined ; exemptions 89 
 
 Source : 
 
 Defined 31 
 
 Example of where and where not withholding at 32 
 
 Fiduciary is, when 70 
 
 Note given in payment of income, maker of note is 68 
 
 Persons, firms, etc., acting as, designated "debtors" or "withhold- 
 ing agents" 31 
 
 Tax withheld at, to be paid to collector 34 
 
 Withholding at, applies only to normal tax imposed on indi- 
 viduals 29 
 
 Who required to act as; liable for tax withheld 30 
 
 State : 
 
 Information from return, when, how 179 
 
 Statute of limitation: 
 
 For income-tax purposes, three years 177 
 
 Stock : 
 
 Paid-up capital, definition 95 
 
 Substitute certificates 40 
 
 summabt of monthly list return 50 
 
 Sunday ok legal holiday 176 
 
 Supplementary statement attached to return 103 
 
 Supplies on hand 123 
 
 T. 
 Tax: 
 
 From withholding agent 36 
 
 Assessment — 
 
 Against income withheld at source 38 
 
 Of, against withholding agent deferred 189 
 
 Claim for abatement of 33c 
 
 Co-operative dairies exempt 92 
 
 Corporation s — 
 
 Exempt 87 
 
 On entire net income 185 
 
 Organized in United States, all (with certain exceptions) 
 
 subject to 76 
 
 Domestic building and loan association, what necessary to exempt. 87 
 
 "Duties" are not but item of cost 155 
 
 Evidence of payment of, by corporation for deduction purposes. . 158 
 
 Excise on corporation Arts. 160, 191 
 
488 INDEX TO INCOME TAX REGULATIONS 
 
 Note.— Regulations are indexed by article number; law indexed by page. 
 
 Tax — Continued. Article. 
 
 Failure to pay 164, 177, 197 
 
 Fixed determinable annual income, subject to withholding.... 65, 66 
 
 Individual — 
 
 Income from public utility taxable when 93 
 
 Income of corporations organized elsewhere than in the United 
 
 States, liability 79 
 
 Normal — 
 
 Deductions in connection with Art. 41 
 
 Not to be withheld against partnership profits 47 
 
 Not to be withheld on bank deposits 67 
 
 Omitted, procedure upon discovery of 184 
 
 Once withheld, subsequent withholding agent, exempt on filing 
 
 certificate (Form 1006) 34 
 
 Paid by corporation, when not deductible 153 
 
 Partnership limited is corporation and subject to corporation tax. 86 
 
 On income — 
 
 From bonds, etc., corporations, etc 37 
 
 Paid by note 68 
 
 On interest on bonds owned by corporations organized in United 
 
 States 45 
 
 On net income of foreign corporation; definition; deduction.... 157 
 
 On net income of corporation — 
 
 Computation of 159 
 
 Distributable to owners 79 
 
 To be paid 177 
 
 To be withheld 44, 64 
 
 Withheld— 
 
 At source, to be paid to 30 
 
 By first licensee, fact of withholding noted 58 
 
 Collector to adjust in assessment against withholding agent. 33c 
 
 From what 64, 75 
 
 To be paid to collector 33c, 34 
 
 Tax due 187 
 
 Taxes : 
 
 Paid by corporation constitute deduction 152 
 
 Reserve for, by corporation not deductible 156 
 
 Tax statements 199 
 
 Trustee : 
 
 As fiduciary 70 
 
 TiMBEKLAND : 
 
 Deduction for depreciation — 
 
 Account removal of timber 159 
 
 Limit of, excess of, is income 140 
 
 Time: 
 
 Extension of, for making and filing return 173 
 
 U. 
 Unearned increment: 
 
 Not value for depreciation purposes 146 
 
APPENDIX 489 
 Note.— Regulations are indexed by article number; law indexed by page.' 
 
 V. 
 YALTIE: Article. 
 
 Book, capital assets, shrinkage in 134 
 
 Gross at the mine, definition 142 
 
 Shrinkage in property, deductible 147b 
 
 Unearned increment, not as basis of deduction for depreciation. . 146 
 
 W. 
 
 Wages 63 
 
 WiTHHOLDINQ: 
 
 At source 30 
 
 Example of where and where not 32 
 
 On and after November 1, 1913 •. 29 
 
 By first liseensee; notation by; responsibility of 58 
 
 From what 64 
 
 Withholding agewt : 
 Annual return by — 
 
 By, when, to show what 50, 51 
 
 Of (Form 1042), when to be filed, to be accompanied by 
 
 what 35, 69 
 
 Not to be filed until 33c 
 
 Assessment of tax against, deferred until 189 
 
 Claim for exemption and deductions filed with (par. B and C). 
 
 p. 10, Arts. 3 Sac 
 
 Definition of, as source 31 
 
 Disposition of returns of 193 
 
 Duty in matter of certificates of ownership 43 
 
 Duty of, in matter of claims for deduction (par. B) 33c 
 
 Duty of, in case of foreign partnership 48 
 
 How to treat substitute certificate of collecting agent and cer- 
 tificates of owners not subject to having tax withheld 51 
 
 May file claim for abatement of tax 33e 
 
 Monthly return by, when to be made, with whom filed, to be ac- 
 companied by what 35 
 
 Notice filed with, claim for deduction, account partnership ex- 
 pense 47 
 
 Not to withhold against nonresident alien or foreign organization 
 
 doing business in United States, when 46 
 
 Return of, when to be made 190 
 
 To file monthly list return, form of, and what to contain 50 
 
 To forward to collector tax withheld, when 33c 
 
 To furnish statement of claim for deductions filed with collector. 33c 
 
 To pay to collector tax withheld 64 
 
 To withhold from, what, amount of 32, 65 
 
 When claim for deductions, paragraph B, to be filed with, duty 
 
 of 33b, 66 
 
 When so authorized, may file return of withholding in district of 
 
 his location 38 
 
 Who to be, in cases cited 64 
 
 Withholding and paying agent: 
 
 Of debtor in United States, charged with duty of withholding, 
 
 when 39 
 
FORMS 
 
 FOR CORPORATIONS UNDER 
 
 FEDERAL INCOME TAX 
 
 OF 1913 
 
 EETUEN OE ANNUAL NET INCOME 
 
 (Section 2, Act of Congress approved October 3, 1913) 
 
 BANKS AND OTHER FINANCIAL INSTITUTIONS 
 
 (form 1031) 
 
 BETUBN OF NET INCOME 
 
 Received during the calendar (fiscal) year 
 
 ended , 191. ., by 
 
 (Name of banking or otber financial institution) 
 a corporation, the principal place of business of which is located 
 
 at , City or Town of 
 
 (Street and No.) 
 
 in the State of 
 
 (The "year" as hereinafter used means the calendar year or fiscal 
 year as the case may be.) 
 
 1. Total amount of paid-up capital stock outstanding at 
 
 close of the' year, or if no capital stock, the cap- 
 ital employed in the business at the close of 
 the year $ 
 
 2. Total amount of bonded and other indebtedness out- 
 
 standing at close of year $ 
 
 3. Gross Income (see Note A, and "Instructions," para- 
 
 graphs 10, 17, 18, and 19 infra) $ 
 
 DEDUCTIONS 
 
 4. (a) Total amount of all the ordinary and necessary 
 
 expenses paid within the year in the main- 
 tenance and operation of the business and prop- 
 erties of the corporation exclusive of interest 
 
 PAYMENTS. (See Note B) $ 
 
 490 
 
FOEMS UNDER INCOME TAX LAW 491 
 
 (6) All rentals or other payments required to be made 
 as a condition to the continued use or possession 
 of the property. (See paragraph 12 of "In- 
 structions" infra) $ 
 
 (a) Total amount of losses sustained during the year 
 
 not compensated by insurance or otherwise. ... $ 
 
 (b) Total amount of depreciation for the year $ 
 
 (o) Total amount of interest, exclusive of interest on 
 
 deposits, accrued and paid within the year on 
 an amount of bonded or other indebtedness not 
 exceeding one-half of the sum of its interest- 
 bearing indebtedness and its paid-up capital 
 stock outstanding at the close of the year ; or if 
 no capital stock, the amount of interest paid 
 within the year on an amount of its indebted- 
 ness not exceeding the amount of capital em- 
 ployed in the business at the close of the year. . $ 
 
 (h) Total amount of interest paid within the year 
 
 on deposits $ 
 
 (c) Total amount of interest received from obliga- 
 
 tions of a State or political subdivision thereof, 
 and upon the obligations of the United States 
 or its possessions $ 
 
 (a) Total taxes paid during the year imposed under 
 authority of the United States or any State or 
 Territory thereof $ 
 
 (h) Foreign taxes paid $ 
 
 Total Deductions $ 
 
 Net income on which tax at 1 per centum is calcu- 
 lated $ 
 
 State of , County of , to wit : 
 
 , President, and , Treasurer, of 
 
 the , a corporation, whose return of annual 
 
 net income is set forth above, being severally duly sworn, each for 
 himself, deposes and says that the foregoing report and the several 
 items therein set forth are, to his best knowledge and belief and from 
 such information as he has been able to obtain, true and correct in 
 each and every particular; that the amount of gross income therein 
 set forth is the full amount of gross income, without any deduction 
 
492 APPENDIX 
 
 whatsoever, received from all sources by the said corporation during 
 the year stated, and that the net income therein set forth is the full 
 amount upon which the tax at 1 per centum is to be calculated and 
 assessed. 
 
 Sworn and subscribed to before me this 
 
 day of 191 
 
 Seal of officer 
 taking affidavit 
 
 (Official capacity) 
 
 President. 
 Treasurer. 
 
 Note A. — Gross income shall consist of the total revenues derived from 
 the operation and management of its, business and properties, together uAth 
 all amounts of income from other sources, including dividends received on 
 stock of other organizations, whether subject to this tax or not, and interest 
 received upon obligations of a State or political subdivision thereof, and 
 upon the obligations of the XJniicd States or its possessions, as shouM by 
 entries upon its books during tlie year for which the return is made. 
 
 Note B. — The deductions authorized shall include all expense items under 
 the various heads acknowledged as liabilities by the corporation making 
 the return and entered upon its books during the year. Amounts of income 
 expended in paying dividends on stock, preferred or common, or in making 
 permanent improvements or betterments, etc., or in any way transferred 
 to capital account, should not be deducted in ascertaining annual net in- 
 come. Interest paid on mortgage indebtedness on real estate occupied or 
 used by a corporation may be deducted under Item 4, if the interest is paid 
 as a rental or franchise charge, payment of which is required to be made 
 as u condition to the continued use and possession of the property. The 
 amount so paid and included in Item 4 should be stated separately under 
 Item 4 (6). (See paragraph 12 of Instructions infra.) 
 
 INSTRUCTIONS 
 
 Special Notice. — This form, properly filled out and executed, must 
 he in the hands of the collector of internal revenue for the district in 
 which is located the principal husiness office of the corporation mahing 
 the return, on or before March 1, in case the return is based on the 
 calendar year, or within 60 days after the expiration of the fiscal year 
 in case the return is made on that basis. 
 
 For failure to comply with this provision of the law, the amount 
 
I'OBMS tJlirDEE INCOME TAX LAW 493 
 
 of the assessment is increased 50 per cent, and liability to a specific 
 penalty not exceeding $10,000 is incurred. 
 
 1. This return of annual net income should be filed with the Col- 
 lector of Internal Eevenue of the district in which the corporation 
 has its principal place of business. 
 
 2. The principal place of business as used in the act and in these 
 regulations is held to mean the place in which the books of account 
 and other data to be used in preparing the return of annual net in- 
 come are ordinarily kept. 
 
 3. Returns must be verified by two officers of the corporation ; that 
 is, by two individuals, namely, the president, vice-president, or other 
 principal officer, and treasurer or assistant treasurer, or chief financial 
 officer. 
 
 4. The affidavit of verification must be made before a notary public 
 or some other officer qualified to administer oaths, and the seal of the 
 attesting officer, if such officer is required by law to have a seal, must 
 be impressed on the return in the space reserved for that purpose. 
 
 5. The return must be true and accurate in every respect and must 
 disclose all the income arising, accruing, or received from all sources 
 during the year for which the return is made. 
 
 6. If the return is based upon the calendar year it should be filed 
 with the collector on or before the first day of March next succeeding 
 such calendar year. If it is made on the basis of business transacted 
 during a fiscal year, duly designated in accordance with the law and 
 the regulations, the return must be filed with the collector on or before 
 the last day of the 60-day period next following the date designated as: 
 the close of the fiscal year. 
 
 1. In case of sickness or absence of an officer required to verify the 
 return, the collector of the district is authorized to extend the time 
 for filing such return not exceeding 30 days from the date when such 
 return is otherwise due. Appellation for such extension should he- 
 made prior to the date when the return is due, or within the thirty-day 
 period for which such extension is desired and can be granted. 
 
 8. Item No. 1 of the schedule of this form {supra) should 
 not include unissued or treasury stock, but only such stock as has 
 actually been issued and for which payment has been received ; or, in 
 case no stock is issued, there should be reported under this item the 
 amount of capital actually employed in the business and property of 
 the corporation. In cases wherein the capital stock is issued payable 
 in installments or upon assessment, only so much of the capital as has 
 
494 APPENDIX 
 
 been actually paid in upon such installments or assessments should be 
 reported under this item. 
 
 9. Item No. 2 should include all interest-bearing indebtedness for 
 the payment of which the corporation or its property is bound. In 
 case of banking corporations and like financial institutions, deposits 
 should not be reported as indebtedness under this head. 
 
 10. Item No. 3 of the return form (gross income) should include 
 all income derived from the operations and management of the busi- 
 ness and properties, together with all actual increases in value by 
 appraisement, adjustment, or otherwise in the value of the assets 
 which have been taken up on the books as income or credited to profit 
 and loss during the year. In the case of a corporation organized, 
 authorized, or existing under the laws of any foreign country, the 
 gross income to be returned is the gross amount of its income for the 
 year resulting from business transacted and capital invested within 
 the United States. 
 
 11. Item No. 4 {a) should include the total amount of all ordinary 
 and necessary expenses paid out of earnings in the maintenance and 
 operation of the business and properties of the corporation, etc., ex- 
 clusive of interest and other payments to be listed under their respect- 
 ive heads on the return forms. 
 
 12. Item No. 4 (6) should include all rentals or other payments 
 required to be made as a condition to the continued use or possession 
 of the property. In cases where interest on a mortgage on property 
 occupied or used by the corporation is paid as a condition to its 
 possession and use, thus becoming in the nature of a rental charge, 
 such interest charge may be included in the deduction under this 
 item. Mortgage indebtedness, assumed or unassumed, on property to 
 which the corporation has taken or is taking title, or in which it has 
 an equity, or in the acquirement of which the mortgage was consid- 
 ered a part of the purchase price, is held to be a debt of the 
 corporation and interest paid on such indebtedness will be deductible 
 ■only under Item 6 of the return. 
 
 13. The amount claimed under Item No. 5 (6) for depreciation 
 ■should be such an amount as Toeasures the loss which the corporation 
 -actually sustains during the year in the value of buildings, niaehinery, 
 and such other property as is subject to depreciation on account of 
 wear and tear, exhaustion, or obsolescence. The amount taken credit 
 for on this account in order to be allowable should be so entered on the 
 books as to constitute a liability against the assets of the corporation. 
 
FOBMS UNDEE INCOME TAX LAW 495 
 
 The amount claimed under this item should not cover losses in the 
 value of stocks and bonds. Decrease in the book value of securities 
 owned, so far as such decrease represents a decline in the actual value 
 of such securities, should be deducted under item 5 (a) of the return. 
 
 14. Where depreciation of physical property is made good by re- 
 newals, replacements, repairs, etc., and the expense of such renewals, 
 replacem.ents, repairs, etc., is charged to the general expense account, 
 no deduction for depreciation can be made in the return of annual net 
 income. Where a depreciation reserve is set up, all renewals and 
 replacements must be charged to such reserve and the addition to 
 this reserve each year must be a fair measure of the losa which the 
 corporation sustains by reason of the depreciation of its property. 
 
 15. The amount of interest deductible is the amount of interest 
 accrued and paid within the year on bonded or other indebtedness not 
 exceeding one-half of the sum of interest-bearing indebtedness and 
 the paid-up capital stock outstanding at the close of the year, or if 
 no capital stock, the amount of interest paid within the year on an 
 amount of indebtedness not exceeding the amount of capital employed 
 in the business at the close of the year; or in case of a corporation^ 
 joint stock company or association, or insurance company organized 
 under the laws of a foreign country, interest so paid on its bonded 
 or other indebtedness to an amount of such bonded or other indebted- 
 ness not exceeding the proportion of its paid-up capital stock out- 
 standing at the close of the year, or if no capital stock, the amount of 
 capital employed in the business at the close of the year, which the 
 gross amount of its income for the year from business transacted and 
 capital invested within the United States hears to the gross amount 
 of its income derived from all sources within and without the United 
 States. All interest deductions must be claimed under Item 6 on 
 the return form. 
 
 16. Dividends declared or paid are not deductible from gross 
 income. 
 
 17. Dividends received upon the stocTc of other corporations must be 
 included in gross income and are not deductible therefrom in the 
 ascertainment of the net income on which the tax is computed. 
 
 18. Interest received upon the obligations of a State or any political 
 subdivision thereof, and upon the obligations of the United States 
 or its possessions, should be included in gross income, as well as all 
 other interest due and accrued during the period for which the return 
 is made. 
 
496 APPENDIX 
 
 19. Accrued interest is considered to be interest due and payable, 
 except in the cases of banking or other similar institutions which close 
 their accounts on the basis of the interest earned. In all cases the 
 accrued interest shall be reported on the basis on which the books 
 are closed. 
 
 20. Taxes deductible in the return are such taxes, actually paid 
 within the year, as are imposed by authority of the United States 
 or of any State or Territory thereof, or by the government of any 
 foreign country, not including taxes paid by a corporation, pursuant 
 to guaranty, on its bonds or the income therefrom and not including 
 those taxes assessed against local benefits. A reserve for taxes, as 
 such, is not deductible. 
 
 21. The gross income of mercantile corporations should be ascer- 
 tained in the following manner : From the sum of the total sales 
 ■during the year plus the sum of the inventory at the end of the year, 
 deduct the sum of the inventory at the beginning of the year plus 
 the cost of the goods and materials purchased during the year; to 
 this difference add the income received from any other source and 
 the result will be the gross income to be reported under Item No. 3 
 of the return. 
 
 22. Gross income in the case of a manufacturing corporation shall 
 include the total receipts from the sale of all manufactured goods 
 sold during the year plus any increase in the inventoried value ascer- 
 tained through an accounting of the finished and unfinished product, 
 raw material, etc., on hand at the close of the year. 
 
 23. To the income thus ascertained there should be added the 
 income arising, accruing, or received from any and all other sources, 
 the aggregate thus ascertained to be the gross income to be returned 
 under Item No. 3 of the return form. Since the gross income thus 
 ascertained represents the total receipts as well as the inventoried 
 value of finished and unfinished products, raw material, etc., the 
 corporation will include in its deduction under Item No. 4 all expendi- 
 tures for material, labor, fuel, and other items going to make up the 
 cost of the goods sold or inventoried at the end of the year. 
 
 PUBLIC SEEVICE COEPORATIONS 
 
 (form 1032) 
 [Same form as for Banks supra except that there is no item 6 h 
 under the head of "Deductions."] 
 
POEMS UNDEE INCOME TAX LAW 497 
 
 INSURANCE COMPANIES 
 
 (form 1030) 
 
 BETUBN OF NET INCOME 
 
 Received during the calendar (fiscal) year 
 
 ended , 191. ., by 
 
 the principal place of business of which is located at 
 
 (Street and No.) 
 
 City or Town of , in the State of 
 
 (The "year" as hereinafter used means the calendar year or fiscal 
 year as the case may be.) 
 
 1. Total amount of paid-up capital stock outstanding, 
 
 or, if no capital stock the capital employed in 
 business, at close of the year above stated. (See 
 Note 8 under "Instructions" supra) $ 
 
 2. Total amount of b'onded and other indebtedness out- 
 
 standing at close of year. (See Note 9) $ 
 
 3. Gross Income (see Note A, and instructions, para- 
 
 graphs 10, 18, 21, 22, 23, 25, and 26) $ 
 
 DEDUCTIONS 
 
 4. (a) Total amount of all the ordinary and necessary 
 
 expenses of maintenance and operation of the 
 business and properties of the corporation 
 
 EXCLUSIVE of interest PAYMENTS. (See Note B) $ 
 
 (h) All rentals or other payments required to be 
 made as a condition to the continued use or 
 possession of the property. (See Note 12 on 
 reverse of this form) $ 
 
 5. (a) Total amount of losses sustained during the year 
 
 not compensated by insurance or otherwise. ... $ 
 
 (h) Total amount of depreciation for the year. (See 
 
 Note 13) $ 
 
 (c) Total amount (other than dividends) paid within 
 
 the year on policy and annuity contracts $ 
 
 (d) Total amount of net addition required by law 
 
 to be made within the year to reserve fund. 
 
 (See Note 28) $ 
 
4:98 APPENDIX 
 
 (e) Amounts of premiums repaid to policy holders 
 and interest paid thereon (applicable only to 
 Mutual Marine Insurance companies) 
 
 6. (a) Total amount of interest accrued and paid 
 
 within the year on an amount of bonded or other 
 indebtedness not exceeding one-half of the sum 
 of its interest-bearing indebtedness and its 
 paid-up capital stock outstanding at the close 
 of the year 
 
 (h) Total amount of interest received upon obliga- 
 tions of a State or political subdivision thereof 
 and upon the obligations of the United States 
 or its possessions 
 
 7. (a) Total taxes paid during the year imposed under 
 
 authority of the United States or any State or 
 Territory thereof. (See Note 20) 
 
 (6) Foreign taxes paid 
 
 Total Deductions 
 
 8. Net income on which tax at 1 per centum is calcu- 
 lated 
 
 State of , County of , to wit: 
 
 , President, and , Treasurer, 
 
 of the a corporation, whose return of 
 
 annual net income is set forth above, being severally duly sworn, each 
 for himself, deposes and says that the foregoing report and the several 
 items therein set forth are, to his best knowledge and belief and from 
 such information as he has been able to obtain, true and correct in 
 each and every particular; that the amount of gross income therein 
 set forth is the full amount of gross income, including interest upon 
 obligations of a State or any political subdivision thereof, and upon 
 the obligations of the United States or its possessions, without any 
 deduction whatsoever, received from all sources by the said corpora- 
 tion during the year stated, and that the net income therein set forth 
 is the full amount upon which the tax at 1 per centmn is to be calcu- 
 
FOEMS triirDEE IWCOME TAX LAW 499 
 
 lated and assessed under the terms of the Federal Income Tax Law 
 of October 3, 1913. 
 
 Sworn and subscribed to before me this 
 
 day of , 191 
 
 Seal of Officer 
 taking affidavit 
 
 (Official capacity) 
 
 President. 
 
 Treasurer. 
 
 Note A. — Gross income of insurance companies shall consist of the total 
 of the gross revenues derived from the operation and management of their 
 tusinesses and properties, together with all amounts of income from other 
 sources, including dividends on stock of other organizations, whether sui- 
 jeot to this tax or not, premiums, interest, rentals, and all items of income 
 resulting from appraisement or adjustment, and shown by entries upon the 
 ioohs during the year for which the return is made. 
 
 Mutual marine insurance companies may exclude from the gross pre- 
 miums collected the "amounts paid for reinsurance," including the re- 
 mainder in gross income. 
 
 Mutual fire insurance companies may omit from gross income "any por- 
 tion of the premium deposits returned to their policyholders." 
 
 Life insurance companies may also omit from their- gross income "such 
 portion of any actual premium received from any individual policyholder as 
 shall have been paid back or credited to such policyholder, or treated as an 
 abatement of premium of such individual policyholder within the year." The 
 amount thus omitted shall include only such dividends or premiums re- 
 turned or applied as represent a portion of the actual premium received 
 from amy individual policyholder. 
 
 Note B. — The deductions authorized shall include all expense items under 
 the various heads acknowledged as liabilities by the corporation making 
 the return and entered upon its books during the year. Amounts of income 
 expended in paying dividends on stock, preferred or common, or in making 
 permanent improvements or betterments, etc., or in any way transferred 
 to capital account are not proper deductions in ascertaining annual net 
 income. Interest paid on mortgage indebtedness on real estate occupied 
 or used by a corporation may be deducted under Item 4, if the interest 
 is paid as a rental or franchise charge, payment of which is required to be 
 made as a condition to the continued use and possessioni of the property. 
 The amount so paid and included in Item 4 should be stated separately 
 under Item 4 (6). {See note 12 under "Instructions" supra.) 
 ***** 
 
 See Instructions 1-20 on Form for "Banks," etc., which also apply 
 to Insurance Companies. The following additional Instructions also 
 apply: 
 
500 APPENDIX 
 
 21. Eeinsurance (except as provided by Note 23) and return pre- 
 miums should not be included in either gross income or deductions; 
 as "net written 'premiums," agreeing with report to States, should be 
 shown. 
 
 22. Mutual fire insurance companies which require their members 
 to make premium deposits to provide for losses and expenses need 
 not return as income any portion of the premium deposits returned 
 to their policyholders. 
 
 23. Mutual marine insurance companies shall include in their 
 return of gross income the gross premiums collected and received by 
 them, less reinsurance. (See Note 21.) 
 
 24. Mutual marine insurance companies are entitled to deduct from 
 gross income amounts repaid to policyholders oti account of premiums 
 previously paid by them and interest paid upon such amounts between 
 the ascertainment thereof and the payment thereof. 
 
 25. Life insurance companies need not include as income in any 
 year such portion of any actual premium received from any indi- 
 vidual policyholder as shall have been paid back or credited to such 
 individual policyholder, or treated as an abatement of premium of 
 such individual policyholder within such year. 
 
 26. Mutual fire insurance companies must return as income such 
 portions of premium deposits as are retained by the companies for 
 purposes other than the payment of losses and expenses and rein- 
 surance reserves. 
 
 27. The deduction allowed under the act of August 5, 1909, of 
 amounts received as dividends upon stock of other corporations sub- 
 ject to the tax therein imposed is not allowed under the act of 
 October 3, 1913. 
 
 28. In the case of assessment insurance companies, whether 
 domestic or foreign, the actual deposits of sums with the State or 
 Territorial ofScers pursuant to law, as additions to guarantee or 
 reserve funds shall be treated as being payments required by law to 
 reserve funds. 
 
FOEMS triTDEE IITCOME TAX LAW 501 
 
 MANUFAOTUEING COEPOEATIONS 
 (form 1033) 
 
 BETUBN OF NET INCOME 
 
 Received during the calendar (fiscal) year 
 
 ended , 191. ., by 
 
 (Name of corporation, joint stock company or association) 
 
 the principal place of business of which is located at , 
 
 City or Town of , in the State of 
 
 (Street and No.) 
 (The "year" as hereinafter used means the calendar year or fiscal 
 year as the case may be.) 
 
 1. Total amount of paid-up capital stock outstanding at 
 
 close of the year, or if no capital stock, the cap- 
 ital employed in the business at the close of 
 the year $ 
 
 2. Total amount of bonded and other indebtedness out- 
 
 standing at close of year $ 
 
 3. Gross Income (see Note A, and "Instructions," para- 
 
 graphs 10, 17, 18, 19, 22 and 23 supra) $ 
 
 DEDUCTIONS 
 
 4. (a) Total amount of all the ordinary and necessary 
 
 expenses paid within the year in the main- 
 tenance and operation of the business and prop- 
 erties of the corporation exclusive of interest 
 
 PAYMENTS. (See Note B and paragraph 23.) . . $ 
 
 (b) All rentals or other payments required to be made 
 as a condition to the continued use or possession 
 of the property. (See paragraph 12 of "In- 
 structions" infra) $ 
 
 5. (a) Total amount of losses sustained during the year 
 
 not compensated by insurance or otherwise. ... $ 
 
 (6) Total amount of depreciation for the year. (See 
 
 paragraphs 13 and 14.) $ 
 
 6. (a) Total amount of interest, accrued and paid within 
 
502 APPENDIX 
 
 the year on an amount of bonded or other in- 
 debtedness not exceeding one-balf of the sum 
 of its interest-bearing indebtedness and its paid- 
 up capital stock outstanding at the close of the 
 year; or if no capital stock, the amount of in- 
 terest paid within the year on an amount of its 
 indebtedness not exceeding the amount of capi- 
 tal employed in the business at the close of the 
 
 year 
 
 (&) Total amount of interest received upon obliga- 
 tions of a State or political subdivision thereof, 
 and upon the obligations of the United States 
 or its possessions 
 
 7. (a) Total taxes paid during the year imposed under 
 
 authority of the United States or any State or 
 
 Territory thereof 
 
 (6) Foreign taxes paid 
 
 Total Deductions 
 
 8. Net income on which tax at 1 per centum is calcu- 
 
 lated 
 
 [Verification as in Form 1031.] 
 
 Note A. — Oross income in the case of a manufacturing corporation shall 
 include the total receipts from all manufactured goods sold dMri/ng the year, 
 increased or decreased accordingly as there is gain or loss ascertained 
 through an accounting or inventory of the finished and unfinished product, 
 raw material, etc., on hand at the close of the year. To the income thus 
 ascertained there should be added the income received from any and all 
 other sources, including dividends received on stock of other organizations, 
 whether subject to this tax or not, and interest received on the obligations 
 of a State or political subdivision thereof, and interest received on the obli- 
 gations of the United States or its possessions, the aggregate to be the 
 gross income returned. 
 
 Note B. — The deductions authorized shall include all expense items 
 under the various heads acknowledged as liabilities by the corporation 
 making the return and entered on its books during the year. "Total amount 
 of all ordinary and necessary expenses," etc., shall include expenditures 
 for material, labor, salaries, wages, fuel, and other expenses incident to 
 the cost of the finished product. Amounts of income expended in paying 
 dividends on stock, preferred or common, or in making permanent improve- 
 ments or betterments, etc., or in any way transferred to property account, 
 should not be deducted in ascertaining the net income upon which the tax is 
 computed. Interest paid as rental or in lieu of rental is deductible under 
 Item 4 (6). {See paragraph 12 in Form 1031 supra.) 
 
 [Instructions as in Form 1031 supra.!! 
 
FOEMS triTDEE INCOME TAX LAW 503 
 
 MERCANTILE COEPOEATIONS 
 (Corporations whose Principal Business is Buying and Selling.) 
 
 (form 1034) 
 
 RETURN OF NET INCOME 
 Received during the calendar (fiscal) year 
 
 ended , 191. ., by 
 
 (Name of corporation, joint stock company or association) 
 
 the principal place of business of which is located at , 
 
 (Street and No.) 
 
 City or Town of , in the State of 
 
 (The "year" as hereinafter used means the calendar year or fiscal 
 year as the case may be.) 
 
 1. Total amount of paid-up capital stock outstanding at 
 
 close of the year, or if no capital stock, the 
 capital employed in the business at the close of 
 the year $ 
 
 2. Total amount of bonded and other indebtedness out- 
 
 standing at close of year $ 
 
 3. Gross Income (see Note A, and instructions, para- 
 
 graphs 10, 17, 18, and 19 infra) $ 
 
 DEDIJCTIONS 
 
 4. (a) Total amount of all the ordinary and necessary 
 
 expenses paid within the year in the mainte- 
 nance and operation of the business and proper- 
 ties of the corporation exclusive of interest 
 
 PAYMENTS. (See Note B.) $ 
 
 (b) All rentals or other payments required to be 
 made as a condition to the continued use or 
 possession of the property (see paragraph 12) . . $ 
 
 5. (a) Total amount of losses sustained during the year 
 
 not compensated by insurance or otherwise. ... $ 
 
 (&) Total amount of depreciation for the year $ 
 
 6. (a) Total amount of interest accrued and paid within 
 
 the year on an amount of bonded and other in- 
 debtedness not exceeding one-half of the sum 
 of its interest-bearing indebtedness and its paid- 
 up capital stock outstanding at the close of the 
 year; or if no capital stock, the amount of in- 
 
504 APPENDIX 
 
 terest paid within the year on an amount of its 
 indebtedness not exceeding the amount of capi- 
 tal employed in the business at the close of 
 
 the year $ 
 
 (&) Total amount of interest received upon obliga- 
 tions of a State or political subdivision thereof 
 and upon the obligations of the United States 
 or its possessions $ 
 
 1. (a) Total taxes paid during the year, imposed under 
 authority of the United States or any State or 
 
 Territory thereof $ 
 
 (6) Foreign taxes paid $ 
 
 Total Deductions $ 
 
 8. Net income on which tax at 1 per centum is calcu- 
 lated $ 
 
 Note. — The above blank spaces for figures should show the amount of 
 each respective item. If there is nothing to return as to any item, the word 
 "none" must be written in such blank spaces. 
 
 [Verification as in Form 1031.] 
 
 Note A. — The gross amount of income received during the year from all 
 sources shall, in the case of a mercantile corporation, consist of the total 
 amount ascertained through inventory, or its equivalent, which shows the 
 difference between the price received for goods sold and the cost of goods 
 purchased during the year, with an addition of a charge to the account 
 of the sum of the inventory at beginning of the year and a credit to the 
 account of the sum of the inventory at the end of the year. T!o this amount 
 should be added all items of income received during the year from other 
 sources, including dividends received on stock of other corporations, joint- 
 stock companies, and associations, whether subject to this tax or not, and 
 interest received upon obligations of a State or political subdivision 
 thereof, and upon tfie obligations of the United States or its possessions. 
 In determining this amount no account shall be taken of allowances for 
 depreciation or losses, which items shall be taken account of under the 
 proper heading above as a deduction. 
 
 Note B. — The deductions authorized shall include all expense items un- 
 der the various heads acknoivledged as liabilities by the corporation mak- 
 ing the return and entered on its books during the year. Amounts of in- 
 come expended in paying dividends on stock, preferred or common, or in 
 making permanent improvements or betterments, etc., or in any way trans- 
 ferred to capital account, should not be deducted in ascertaining annual 
 net income. Interest paid on mortgage indebtedness on real estate occupied 
 or used by a corporation may be deducted in Item 4, if the interest is paid 
 as a rental or franchise charge, payment of which is required to be rAade 
 as a condition to the continued use and possession of the property. The 
 amount so paid and included in Item 4 should, however, be separately 
 stated under Item 4 (6). (See paragraph 12 in Form 1031 supra.) 
 
 [Instructions as in Form 1031 supra.} 
 
FORMS UBTDEE INCOME TAX LAW 505 
 
 MISCELLANEOUS COEPOEATIONS 
 
 (form 1035) 
 
 BETVBN OF NET INCOME 
 
 Received during the calendar (fiscal) year 
 
 ended , 191. ., by 
 
 (Name of corporation, joint stock company or association) 
 
 the principal place of business of wbicb. is located at , 
 
 1 (Street and No.) 
 
 City or Town of , in the State of 
 
 (The "year" as hereinafter used means the calendar year or fiscal 
 year as the case may be.) 
 
 1. Total amount of paid-up capital stock outstanding at 
 
 close of the year, or if no capital stock, the 
 capital employed in the business at the close of 
 the year $ 
 
 2. Total amount of bonded and other indebtedness out- 
 
 standing at close of year $ 
 
 3. Gross Income (see Note A, and instructions, para- 
 
 graphs 10, lY, 18, and 19 supra) $ 
 
 DEDUCTIONS 
 
 4. (a) Total amount of all the ordinary and necessary 
 
 expenses paid within the year in the mainte- 
 nance and operation of the business and proper- 
 ties of the corporation exclusive op interest 
 
 PAYMENTS. (See Note B.) $ 
 
 (6) All rentals or other payments required to be 
 made as a condition to the continued use or 
 possession of the property (see paragraph 12) . . $ 
 
 6. (a) Total amount of losses sustained during the year 
 
 not compensated by insurance or otherwise $ 
 
 (h) Total amount of depreciation for the year. (See 
 
 paragraphs 13 and 14.) $ 
 
 6. (a) Total amount of interest accrued and paid within 
 the year on an amount of bonded or other in- 
 debtedness not exceeding one-half of the sum 
 of its interest-bearing indebtedness and its paid- 
 
506 APPEKTDIX 
 
 up capital stock outstanding at the close of the 
 year; or if no capital stock, the amount of in- 
 terest paid within the year on an amount of its 
 indebtedness not exceeding the amount of capi- 
 tal employed in the business at the close of 
 the year $ 
 
 (h) Total amount of interest received upon obliga- 
 tions of a State or political subdivision thereof 
 and upon the obligations of the United States 
 or its possessions $ 
 
 7. (a) Total taxes paid during the year, imposed under 
 
 authority of the United States or any State- or 
 
 Territory thereof $ 
 
 (h) Foreign taxes paid $ 
 
 Total Deductions $ 
 
 8. Net income on which tax at 1 per centum is calcu- 
 
 lated $ 
 
 Note. — The above blank spaces for figures should show^ the amount of 
 each respective item. If there is nothing to return as to any item, the'word 
 "non^' must be written in such blanh spaces. 
 
 [Verification as in Foem 1031.] 
 
 Note A. — Gross income shall consist of the total of the gross revenues 
 derived from the operation and management of its business and properties, 
 together with all amounts of income from other sources, including divi- 
 dends received on stock of other organizations, whether subject to this tax 
 or not, and interest received upon obligations of a State or political sub- 
 division thereof, and upon the obligations of the United States or its pos- 
 sessions, as shoum by entries upon its books during the year for which the 
 return is made. 
 
 Note B. — The deductions authorized shall include all expense items un- 
 der the various heads acknowledged as liabilities by the corporation making 
 the return and entered on its books during the year. Amounts of income 
 expended in paying dividends on stock, preferred or common, or in making 
 permanent improvements or betterments, etc., or in any way transferred to 
 capital account, are not proper deductions in ascertaining annual net in- 
 come. Interest paid on mortgage indebtedness on real estate occupied or 
 used by a corporation may be deducted in Item 4, if the interest is paid, as 
 a rental or franchise charge, payment of which is required to be made as a 
 condition to the continued use and possession of the property. The amount 
 so paid and included in Item 4 should be stated separately under Item 
 4 (6). (See paragraph 12 in Form 1031 supra.) 
 
 [Instructions as in Form 1031 supra.] 
 
FOEMS UNDEK INCOME TAX LAW 
 
 507 
 
 EETUEN OF ANNUAL INCOME BY FIDUCIARIES. 
 
 (form 1041) 
 
 (As provided by Act of Congress approved October 3, 1913.) 
 
 RETURN OF INCOME RECEIVED OR ACCRUED DURING 
 THE YEAR ENDED DECEMBER 31, 191. . 
 
 (For the year 1913, from March 1, to December 31.) 
 
 Filed hy (name of fiduciary), acting in the capacity 
 
 of (state whether trustee, executor, etc.), for the bene- 
 ficiaries of the estate or trust of 
 
 (EiU in pages 2 and 3 before making entries on this page.) 
 
 1. Gross Income (see page 2, line 11) $ 
 
 2. Total Deductions (see page 3, line 9) $ 
 
 3. Amount of income paid or payable to beneficiaries on 
 
 which the normal tax of 1 per cent has been de- 
 ducted and withheld as listed below $ 
 
 Name of 
 beneficiaries 
 
 Addresses 
 
 Amount of in- 
 come paid or 
 accrued' to 
 beneficiaries 
 
 Amount of 
 
 exemption 
 
 claimed 
 
 Amount of in- 
 come on which 
 fiduciary is 
 liable for tax 
 
 Amount of tax 
 withheld 
 
 Totals. 
 
508 APPENDIX 
 
 [Page 2 of Form 1041] 
 
 GB08S INCOME. 
 This statement must show in the proper spaces the entire amount of 
 gains, profits, and income coming into the custody or control and 
 management of the fiduciary, for the benefit of the beneficiaries of the 
 trust or estate, during the year specified on page 1. 
 
 DESCRIPTION OF INCOME. A. B. 
 
 Amount of in- Amount of in- 
 come on which come on which ' 
 tax has been tax has not 
 deducted and been deducted 
 withheld at and withheld 
 the source. at the source. 
 
 1. Total amount derived from salaries, wages, or 
 
 compensation for personal service of what- 
 ever kind and in whatever form paid $ $ 
 
 2. Total amount derived from professions, voca- 
 
 tions, businesses, trade, commerce, or sales 
 or dealings in property, whether real or per- 
 sonal, growing out of the ownership or use 
 of or interest in real or personal property, 
 including bonds, stocks, etc $ $ 
 
 3. Total amount derived from rents and from 
 
 interest on notes, mortgages, and securities 
 
 other than reported on lines 5 and 6) $ $ 
 
 4. Total amount of gains and profits derived 
 
 from partnership business, whether the 
 
 same be divided and distributed or not. ... $ $ 
 
 5. Total amount of fixed and determinable an- 
 
 nual gains, profits, and income derived from 
 interest upon bonds and mortgages or deeds 
 of trust, or other similar obligations of cor- 
 porations, joint-stock companies or associa- 
 tions, and insurance companies, whether 
 payable annually or at shorter or longer 
 periods $ .$ 
 
 6. Total amount of income derived from cou- 
 
 pons, checks, or bills of exchange for or in 
 payment of interest upon bonds issued in 
 foreign countries and upon foreign mort- 
 
FOEMS UNDEE INCOME TAX LAW 509 
 
 gages or like obligations (not payable in the 
 United States), and also from coupons, 
 checks, or bills of exchange for or in pay- 
 ment of any dividends upon the stock or 
 interest upon the obligations of foreign cor- 
 porations, associations, and insurance com- 
 panies engaged in business in foreign 
 countries $ S 
 
 7. Total amount of income derived from any 
 
 source whatever, not. specified or entered 
 
 elsewhere on this page $ 
 
 8. Totals $ 
 
 Note. — Enter total of Column A on line 8 of third page. 
 
 9. Aggregate Totals of Columns A and B $ 
 
 10. Total amount of income derived from dividends on the 
 stock or from the net earnings of corporations, joint- 
 stock companies, associations, or insurance companies 
 subject to like tax $ 
 
 (To be entered on line 7 of third page.) 
 
 11. Aggregate Total of "Gross Income" (to be entered on 
 
 line 1 of first page) $, 
 
 [Page 3 of Form 1041] 
 DEDUCTIONS. 
 
 1. The amount of necessary expenses actually paid in 
 
 carrying on business, but not including business ex- 
 penses of partnerships, and not including personal, 
 living, or family expenses $. 
 
 2. All interest paid within the year on personal indebted- 
 
 ness of taxpayer $• 
 
 3. All United States, State, county, school, and municipal 
 
 taxes paid within the year (not including those as- 
 sessed against local benefits) $. 
 
 4. Losses actually sustained during the year incurred in 
 
 trade or arising from fires, storms, or shipwreck, and 
 not compensated for by insurance or otherwise $. 
 
510 
 
 APPENDIX 
 
 5. Debts due which have been actually ascertained to be 
 
 worthless and which have been charged off within 
 the year ^ 
 
 6. Amount representing a reasonable allowance for the 
 
 exhaustion, wear, and tear of property arising out of 
 its use or employment in the business, not to exceed, 
 in the case of mines, 5 per cent of the gross value at 
 the mine of the output for the year for which the 
 computation is made, but no deduction shall be made 
 for any amount of expense of restoring property or 
 making good the exhaustion thereof, for which an 
 allowance is or has been made $. 
 
 1. Total amount of income derived from dividends on the 
 stock or from the net earnings of corporations, joint- 
 stock companies, associations, or insurance companies 
 subject to like tax (same as entry on line 10, page 2) . . $. 
 
 8. Amount of income on which the normal tax of 1 per 
 
 cent has been deducted and withheld at the source (see 
 page 2, line 8, column A) $. 
 
 9. Total Deductions (to be entered on line 2 of first page) $. 
 
 AFFIDAVIT TO BE EXECUTED WHERE FIDUCIARY IS AN INDIVIDUAL 
 
 I solemnly swear (or affirm) that I am the (state 
 
 whether trustee, executor, etc.) for the beneficiaries of the estate or 
 
 trust of ; that the foregoing return, to the best of my 
 
 knowledge and belief, contains a true and complete statement of all 
 gains, profits, and income coming into my custody or control and 
 management during the year for which the return is made; that said 
 beneficiaries are entitled, under the federal Income-tax Law of Oc- 
 tober 3, 1913, to all the deductions entered or claimed therein; that 
 all certificates claiming personal exemption, presented by 'the bene- 
 ficiaries, are herewith inclosed; and there is contained therein a true 
 and complete list of the names and addresses of all beneficiaries to 
 whom any part of the amount stated on line 3 of the first page thereof 
 has been paid or is payable. 
 
 (Signature of fiduciary.) 
 Address in full 
 
POEMS UNDBE INCOME TAX LAW 511 
 
 Sworn to and subscribed before me this. 
 day of 191.. 
 
 [seal of officer 
 taking affidavit.] 
 
 AFFIDAVIT TO BE EXECUTED WHERE FIDUCIARY IS AN ORGANIZATION. 
 
 I solemnly swear (or affirm) that I am the (state 
 
 official position) of the (state name of fiduciary or- 
 ganization) of (address in full), which organization 
 
 is the duly authorized or appointed (state whether 
 
 trustee, executor, etc.) for the beneficiaries of the estate or trust 
 
 of ; that I am duly authorized to act for said 
 
 fiduciary; that the foregoing return, to the best of my knowledge and 
 belief, contains a true and complete statement of all gains, profits, 
 and income coming into the custody or control and management of 
 said organization in its fiduciary capacity as stated during the year for 
 which the return is made ; that said beneficiaries are entitled under the 
 Federal Income-tax Law of October 3, 1913, to all the deductions 
 entered or claimed therein; that all certificates claiming personal 
 exemption, presented by the beneficiaries, are herewith inclosed; and 
 there is contained therein a true and complete list of the names and 
 addresses of all beneficiaries to whom any part of the amount stated 
 on line 3 of the first page thereof has been paid or is payable. 
 
 (Signature of officer representing fiduciary.) 
 
 Address in full 
 
 Sworn to and subscribed before me this 
 
 day of 191.. 
 
 [SEAL OF OFFICER 
 TAKING AFFIDAVIT.] 
 
 [Page 4 of Form 1041] 
 
 INSTRUCTIONS 
 
 1. Fiduciaries shall, when the annual interest of any beneficiary in 
 income accruing and payable through said fiduciary is in excess of 
 $3,000, make and render a return on this form of such income of the 
 person or persons for whom they act, to the Collector of Internal 
 Eevenue of the district in which the fiduciary resides. The return 
 
512 APPENDIX 
 
 shall be made as provided herein, whether the income is distributed 
 or not. 
 
 2. The list return required from fiduciaries by regulations pro- 
 vided in Treasury Decision 1906, issued November 28, 1913, shall be 
 made on page 1 of this return, giving thereon the name of each bene- 
 ficiary of the trust or estate, the amount of income paid or accrued to 
 each beneficiary, the amount of exemption claimed by each beneficiary, 
 if any, the amount of income on which fiduciary is liable for tax, and 
 the amount of income withheld for tax. 
 
 3. Where several individuals act jointly in a fiduciary capacity, 
 when -this return is required it may be made and executed by one of 
 two or more. When the fiduciary is an organization it shall be signed 
 and executed by the President, Secretary, or Treasurer of said organi- 
 zation. 
 
 4. This return shall be filed with the Collector of Internal Revenue 
 for the district in which the fiduciary resides if he has no other place 
 of business, otherwise in the district in which he has his principal 
 place of business. 
 
 5. This return must be filed on or before the first day of March 
 succeeding the close of the calendar year for which return is made. ' 
 
 6. The penalty for failure to file the return within the time speci- 
 fied by law is $20 to $1,000. In case of refusal or neglect to render 
 the return within the required time (except in case of sickness or 
 absence) 50 -per cent shall be added to amount of tax assessed. In 
 case of false or fraudulent return 100 per cent shall he added to such 
 tax and a fine not exceeding $2,000 or imprisonment not exceeding 
 one year or hoth may be imposed. 
 
 7. When the return is not filed within the required time by reason 
 of sickness or absence of the fiduciary, an extension of time not ex- 
 ceeding 30 days from March 1, within which to file such return 
 may be granted by the Collector, provided an application therefor is 
 made by the fiduciary within the period for which such extension is 
 desired. 
 
 8. This return properly filled out must be made under oath or affir- 
 mation. Affidavits may be made before any officer authorized by law 
 to administer oaths. If before a justice of the peace or magistrate, 
 not using a seal, a certificate of the clerk of the court as to the 
 authority of such officer to administer oaths should be attached to 
 the return. 
 
 The following instructions, so far as applicable, are to he con- 
 
FOEMS TJNDEE INCOME TAX XAW 513 
 
 sidered hy ihe fiduciary in determining the amount of income coming 
 into his custody or control and management which should he reported 
 in this return on page 2, and the deductions which should he reported 
 on page 3. 
 
 9. Expense for medical attendance, store accounts, family "supplies, 
 wages of domestic servants, cost of board, room, or house rent for 
 family or personal use, are not expenses that can be deducted from 
 gross income. In case an individual owns his own residence he can- 
 not deduct the estimated value of his rent, neither shall he be re- 
 quired to include such estimated rental of his home as income. 
 
 10. The farmer, in computing the net income from his farm for 
 his annual return, shall include all moneys received for produce and 
 animals sold, and for the wool and hides of animals slaughtered, pro- 
 vided such Wool and hides are sold, and he shall deduct therefrom 
 the sums actually paid as purchase money for the animals sold or 
 slaughtered during the year. 
 
 When animals are raised by the owner and are sold or slaughtered, 
 he shall not deduct their value as expenses or loss. He may deduct 
 the amount of money actually paid as expense for producing any 
 farm products, live stock, etc. In deducting expenses for repairs on 
 farm property the amount deducted must not exceed the amount 
 actually expended for such repairs during the year for which the 
 return is made. (See page 3, item 6.) The cost of replacing tools or 
 machinery is a deductible expense to the extent that the cost of the 
 new articles does not exceed the value of the old. 
 
 11. In calculating losses, only such losses as shall have been actually 
 sustained and the amount of which has been definitely ascertained 
 during the year covered by the return can be deducted. 
 
 12. Persons receiving fees or emoluments for professional or other 
 services, as in the case of physicians or lawyers, should include all 
 actual receipts for services rendered in the year for which the return 
 is made, together with all unpaid accounts, charges for services, or 
 contingent income due for that year, if good and collectible. 
 
 13. Debts which were contracted during the year for which re- 
 turn is made, but found in said year to be worthless, may be deducted 
 from gross income for said year, but such debts cannot be regarded 
 as worthless until after legal proceedings to recover the same have 
 proved fruitless, or it clearly appears that the debtor is insolvent. If 
 debts due to the taxpayer and contracted prior to the year for which 
 return is made were included as income in return for year in which 
 
514 APPENDIX 
 
 said debts were contracted, and such debts shall subsequently prove 
 to be worthless, they may be deducted under the head of losses in the 
 return for the year in which such debts were charged off as worthless. 
 
 14. Amounts due or accrued to the individual members of a part- 
 nership from the net earnings of the partnership, whether apportioned 
 and distributed or not, shall be included in the annual return of the 
 individual. 
 
 15. United States pensions shall be included as income. 
 
 16. Estimated advance in value of real estate is not required to be 
 reported as income, unless the increased value is taken up on the 
 books of the individual as an increase of assets. 
 
 17. Costs of suits and other legal proceedings arising from ordinary 
 business may be treated as an expense of such business, and may be 
 deducted from gross income for the year in which such costs were 
 paid. 
 
 18. An unmarried individual or a married individual not living 
 with wife or husband shall be allowed an exemption of $3,000. When 
 husband and wife live together they shall be allowed jointly a total 
 exemption of only $4,000 on their aggregate income. 
 
 19. In computing net income there should be excluded the compen- 
 sation of all officers and employees of a State or any political sub- 
 division thereof, except when such compensation is paid by the United 
 States Government. 
 
FOEMS UNDEE INCOME TAX LAW 515 
 
 FORM OF EETUEN FOE MAKING APPLICATION FOE 
 DEDUCTIONS, 
 
 (form 1008) 
 
 As provided hy paragraphs B and E, section 2 of the Federal 
 Income-tax Law of October 3, 1913 
 
 To (name of withholding agent) 
 
 (street and number) 
 
 (town or city), (State). 
 
 I hereby solemnly declare that the following is a true and correct 
 return of my gains, profits, and income from all other sources for the 
 calendar year ended December 31, 191. . (for the year 1913 the period 
 to be covered is only for ten months, from March 1 to December 31), 
 and a true and correct return of deductions asked for under paragraph 
 B of section 2 of the act of October 3, 1913, and I hereby claim 
 deductions as shown below. 
 
 Amount of gains, profits, interest, rents, royalties, profits 
 from copartnerships, and income from all other sources 
 whatsoever $ 
 
 DEDUCTIONS 
 
 1. The amount of necessary expenses actually paid in car- 
 
 rying on business, except business expenses of partner- 
 ships, and not including personal, living, or family 
 expenses $ 
 
 2. All interest paid within the year on personal indebted- 
 
 ness of taxpayer $ 
 
 3. All national. State, county, school, and municipal taxes 
 
 paid within the year (not including those assessed 
 
 against local benefits) $ 
 
 4. Losses actually sustained during the year incurred in 
 
 trade or arising from fires, storms, or shipwreck and 
 
 not compensated for by insurance or otherwise $ 
 
 5. Debts due which have been actually ascertained to be 
 
 worthless and charged off within the year $ 
 
 6. Amount representing a reasonable allowance for the ex- 
 
 haustion, wear, and tear of property arising out of its 
 use or employment in the business, not to exceed in the 
 case of mines 5 per cent of the gross value of the out- 
 put for the year for which the computation is made. 
 
516 APPENDIX 
 
 but not including the expense of restoring property or 
 making good the exhaustion thereof, for which an al- 
 lowance is or has been made $ 
 
 7. The amount received as dividends upon the stock or 
 from the net earnings of any corporation, joint-stock 
 company, association, or insurance company which is 
 taxable upon its net income $ 
 
 S. The amount of income, the tax upon which has been paid 
 
 or withheld for payment at the source of income $ 
 
 Total deductions $ 
 
 (Signed) 
 
 Address 
 
 Date , 191.. 
 
 Note. — ^Money or other things of value, disposed of by gift, dona- 
 tion, or endovsrment, shall not be deducted or be made the basis for a 
 deduction from the income of persons or corporations in their tax 
 returns under the income-tax law. 
 
rOEMS UNDEE II^COME TAX LAW 5lT 
 
 SIJIOIAIIY OF MONTHLY LIST EETUEN OF AMOUNT OF 
 
 NORMAL INCOME TAX WITHHELD AT THE SOURCE 
 
 (form 1012d) 
 
 Filed by (name of debtor organization.) 
 
 To be made in duplicate to the Collector of Internal Revenue for 
 the District in which the withholding agent is located, on or before 
 the 20th day of each month, showing the name and addresses of per- 
 sons who have received payments of interest upon bonds and mort- 
 gages, or deeds of trust, or other similar obligations of corporations, 
 joint-stock companies or associations, and insurance companies, on 
 which the normal tax of 1 per cent has been deducted and withheld 
 during the preceding month. 
 
 I (we) (name), of (state 
 
 address in full), the duly authorized withholding agent of 
 
 (state name of debtor organization), located at (ad- 
 dress in full), do solemnly swear (or affirm) that the following is a 
 true and complete return of all coupon and interest payments as 
 above described, made by said organization and from which the nor- 
 mal tax of 1 per cent was deducted and withheld, at the time of 
 payment, or for which it is liable as withholding agent, during the 
 month of , 191. ., on bonds (or other similar obliga- 
 tions) of the (name of debtor organization), as fully 
 
 set forth in detail, on lists attached hereto, said lists. Form 1012,* and 
 this Summary, constituting the Monthly List Return of Normal 
 Income Tax Withheld at the Source as required by the regulations ; 
 and that there are herewith inclosed all certificates of ownership which 
 were presented with said coupons or orders for registered interest 
 
 covering the interest maturing on $ of the bonds described, 
 
 and that said withholding agent has paid no coupons or orders for 
 registered interest not accompanied by the certificates of ownership 
 as required by Treasury Regulations. 
 
 *NoTE. — Form 1012 is a monthly list return similar to Form 1012-D, but 
 giving a list of all coupon or interest payments made, on which the normal 
 tax has been deducted and withheld, and shall show the name and address 
 in full of the owners of the bonds, amount of the income, amount of ex- 
 emption claimed, amount of claim on which withholding agent is liable for 
 tax and the amount of tax withheld. 
 
518 
 
 APPENDIX 
 
 Description of 
 Obligation. 
 
 Amount of In- 
 come. 
 
 Amount of Ex- 
 emption Claimed. 
 
 Amount of Income 
 
 on which with- 
 holding Agent is 
 Liable for 'JJax. 
 
 Amount of Tax 
 Withheld. 
 
 Totals.. $. 
 
 Amount of tax remitted herewith (if any) to Collector. 
 
 Signed : 
 
 . (capacity in which acting). 
 
 Sworn to and subscribed before me this 
 day of ,191.. 
 
 To , Collector, 
 
 District of 
 
 . (address) 
 
 Note A. — Withholding agents may, if they so desire, pay at the time this 
 list is filed, to the Collector of Internal Revenue with whom the list is filed, 
 the amount of tax withheld during the month for which the list is made. 
 
 Note B. — All substitute certificates of collecting agents, authorized by 
 regulations, that are received by debtors or withholding agents, will be con- 
 sidered the same as certificates of owners, and in entering same in making 
 Monthly List Returns, debtors or withholding agents will enter the name, 
 address, and the number of the substitute certificate of the collecting agent 
 in lieu of the name and address of the owner of the bonds. 
 
FOEMS UNDER INCOME TAX XAY," 
 
 51!) 
 
 ANNUAL LIST EETUEN 
 (form 1013) 
 
 Of Amount of Normal Income Tax Withheld at the Source from 
 Interest Upon Bonds and Mortgages or Deeds of Trust or other 
 Similar Obligations of Corporations, Joint Stock-Oompanies or 
 Associations, and Insurance Companies. 
 
 Filed by (name of debtor organization). 
 
 To be made in duplicate to the Collector of Internal Revenue for 
 the district in which the withholding agent is located on or before 
 March 1, showing the totals of each monthly return on Form 1012, 
 and their aggregate totals for the preceding calendar year. 
 
 I (we) (name), of (state address 
 
 in full), the duly authorized withholding agent of (state 
 
 name of debtor organization), located at (address in 
 
 full), do solemnly swear (or affirm) that the following is a true and 
 complete return of the monthly totals of all coupon and interest pay- 
 ments made and normal taxes withheld therefrom by said organiza- 
 tion, or for which it is liable as withholding agent, as reported on 
 Form 1012, and their aggregate totals for the year ended December 
 31, 191. . 
 
 Month. Amount of Amount of Amount of Amount of Amount of Balance 
 
 income. exemption income on tax tax of tax 
 
 claimed. which withhold- with- remitted to due. 
 
 ing agent is held. collector, 
 liable for tax. 
 
 January 
 
 February 
 
 March 
 
 April 
 
 May 
 
 June 
 
 July 
 
 August 
 
 September ^ 
 
 October 
 
 November 
 
 December 
 
 Aggregate totals for year 
 
520 APPENDIX 
 
 Signed : 
 
 (capacity in which acting) 
 
 Sworn to and subscribed before me this 
 
 day of , 191.. 
 
 To , Collector, 
 
 District of 
 
 (Address) 
 
FOEMS trWDEE INCOME TAX LAW 521 
 
 ANNUAL LIST EETUEN OF AMOUNT OF NORMAL INCOME 
 
 TAX WITHHELD AT THE SOURCE 
 
 (form 1042) 
 
 On Salaries, Wages, Bent, Interest, or other Fixed and Determinable 
 Annual Gains, Profits, and Income exceeding $3,000 for the Tax- 
 able Year. 
 
 The income to be made the subject of this return does not include 
 dividends on capital stock or net earnings of corporations, joint-stock 
 companies, etc., subject to like tax or income derived from interest 
 upon bonds or mortgages, or deeds of trusts, or other similar obliga- 
 tions of corporations, joint-stock companies, etc., or from interest 
 upon bonds, mortgages, or dividends of foreign corporations. 
 
 Filed by (name of debtor or vcithholding agent), 
 
 for the year 191 . . 
 
 To be made in duplicate to the Collector of Internal Revenue for 
 the District in which the debtor or his duly appointed vcithholding 
 agent, as the case may be, is located, on or before the first day of 
 March, showing the names and addresses of persons who have re- 
 ceived salaries, wages, rent, etc., as above described, in excess of 
 $3,000, on which the normal tax of 1 per cent has been deducted and 
 withheld during the preceding calendar year. 
 
 I (we), (name), of (address in full), 
 
 the (state official title) of (debtor or with- 
 holding agent), located at (address in full), do 
 
 solemnly swear (or affirm) that the following is a true and complete 
 return of all salaries, wages, rent, and other fixed and determinable 
 annual gains, profits, and income in excess of $3,000 as above described, 
 which were paid (or were payable) to each of the persons listed herein, 
 and on which the normal tax of 1 per cent was deducted and withheld 
 during the year stated, and there are herewith inclosed all certificates 
 claiming exemptions and deductions with respect to said income. 
 
522 
 
 APPENDIX 
 
 Name 
 
 Address 
 in Full. 
 
 Character of 
 Income. (State 
 whether Rent, 
 
 Wages, etc.) 
 
 Amount of 
 Income. 
 
 Amount of 
 
 Exemption 
 
 Claimed. 
 
 Amount of In- 
 come on which 
 Withholding 
 
 Agent is 
 Liable forTax. 
 
 Amount of 
 Tax with- 
 held. 
 
 Totals.. $ $ $ 
 
 Amount of tax remitted herewith (if any) to Collector. 
 
 Signed : 
 
 . (capacity in which acting). 
 
 Sworn to and subscribed before me this . 
 day of , 191.. 
 
 To Collector 
 
 District of 
 
 (Address) 
 
 Note A. — Withholding agents may, if they so desire, pay at the time this 
 list is filed, to the Collector of Internal Revenue with whom the list is 
 filed, the amount of tax withheld during the year for which the list is 
 made. 
 
FOEMS UNDER INCOME TAX LAW 523 
 
 MONTHLY LIST EETURN OF AMOUNT OF NOEMAL IN- 
 COME TAX WITHHELD ON FOKEIGN INCOME 
 (form 1043) 
 By Licensed Banks or Collecting Agencies. 
 
 Filed by (name of bank or collecting agency). 
 
 License No 
 
 To be made in duplicate to the Collector of Internal Revenue for 
 the District in which the licensee is located, on or before the 20th day 
 of each month, showing the names and addresses of persons who have 
 received payments from coupons, checks, or bills of exchange repre- 
 senting interest upon bonds issued in foreign countries and upon 
 foreign mortgages or like obligations (not payable in the United 
 States), or dividends upon the stock or interest upon the obligations 
 of foreign corporations, associations, or insurance companies engaged 
 in business in foreign countries, on which the normal tax of 1 per 
 cent has been deducted and withheld during the preceding month. 
 
 I (we), (name), of (state address 
 
 in full), the (official position) of the 
 
 above-named bank or collecting agency located at (address 
 
 in full), do solemnly swear (or affirm) that the following is a true 
 and complete return of all payments as above described, made by said 
 bank or collecting agency, and from which the normal tax of 1 per 
 cent was deducted and withheld at the time of payment, or for which 
 
 it is liable as withholding agent, during the month of , 191. . 
 
 and there are herewith inclosed all certificates claiming exemption 
 which were presented with said coupons, checks, etc. 
 
 Name. 
 
 Address 
 in Pull. 
 
 Character 
 
 of Income. 
 
 (See note 
 
 C; 
 
 Amount of 
 Income. 
 
 Amount of 
 Exemp- 
 tion 
 Claimed. 
 
 Amount of In- 
 come on which 
 Withholding 
 Agent is 
 Liable for 
 Tax. 
 
 Amount of 
 Tax With- 
 held. 
 
 Totals for month 
 
 Amount of tax remitted herewith (if any) to Collector. . . 
 
524 APPENDIX 
 
 Signed : 
 
 (capacity in wliich acting.) 
 
 Sworn to and subscribed before me this 
 
 day of , 191.. 
 
 To , Collector, 
 
 District of 
 
 (Address) 
 
 Note A. — Withholding agents may, if they so desire, pay at the time this 
 list is filed, to the Colleetor of Internal Revenue with whom the list is filed, 
 the amCunt of tax withheld during the month for which the list is made. 
 
 Note B. — All substitute certificates of collecting agents, authorized by 
 regulations, that are received by debtors or withholding agents will be 
 considered the same as certificates of owners, and in entering same in mak- 
 ing Monthly List Returns, debtors or withholding agents will enter the 
 name, address, and the number of the substitute certificate of the collecting 
 agent in lieu of the name and address of the owner of the bonds. 
 
 Note C. — Enter "Int. on Bonds," "Int. on Mortg.," "Dividends," etc., as 
 the case may be. 
 
FOEMS TJNDEE INCOME TAX LAW 525 
 
 MONTHLY LIST EETUEN OF AMOUNT OF NOEMAL IN- 
 COME TAX WITHHELD BY EIRST BANK OE 
 COLLECTING AGENCY 
 (fohm 1044) 
 
 Receiving Coupons and Interest Orders not Accompanied hy Certifi- 
 cates of Owners. 
 
 Filed by (name of bank or coUeeting agency). 
 
 To be made in duplicate to the Collector of Internal Eevenue for 
 the District in which the collecting agency is located, on or before 
 the 20th day of each month, showing the names and addresses of per- 
 sons who have received payments of interest upon bonds and mort- 
 gages, or deeds of trust, or other similar obligations of corporations, 
 joint-stock companies or associations, and insurance companies, on 
 which the normal tax of 1 per cent has been deducted and withheld 
 during the preceding month, the coupon and interest orders for said 
 payments having been presented without certificates of owners. 
 
 I (we) (name), of (state address 
 
 in full), the (official position) of (name 
 
 of bank or collecting agency), located at (address in 
 
 full), do solemnly swear (or affirm) that the following is a true and 
 complete return of all coupon and interest, orders purchased or ac- 
 cepted for collection as above described during the month of , 
 
 191. ., and the said bank or collecting agency, having acknowledged 
 its responsibility of withholding therefrom the normal tax of 1 per 
 cent, has deducted and withheld the tax as listed below, in accordance, 
 with the regulations of the Treasury Department. 
 
 (Describe the particular issue of bonds.)' 
 
 (State name and address of debtor organization.) 
 
 Name. 
 
 Address in Full. 
 
 Amount of Income 
 Subject to Tax. 
 
 Amount of Tax 
 Withheld. 
 
 Totals for month 
 
 Amount of tax remitted herewith (if any) to Collector. 
 
526 APPENDIX 
 
 Signed : 
 
 (capacity in whicli acting). 
 
 Sworn to and subscribed before me this 
 
 day of , 191.. 
 
 To , Collector, 
 
 District of 
 
 (Address) 
 
 Note A. — Withholding agents may, if they so desire, pay at the time 
 this list is filed, to the Collector of Internal Revenue with whom the list is 
 filed, the amount of tax withheld during the month for which the list is 
 made. 
 
POEMS TJlirDEE INCOME TAX LAW 527 
 
 ANNUAL LIST EETUEN 
 (form 1044a) 
 Of amount of Normal Income Tax withheld hy First Banh or Collect- 
 ing Agency from Payments of Interest upon Bonds and Mort- 
 gages, or Deeds of Trust, or other Similar Obligations of Cor- 
 'porations, Joint-stoch Companies or Associations, and Insurance 
 Companies where Coupon and Interest Orders were not accom- 
 panied by Certificates of Owners. 
 
 Filed by (name of bank or collecting agency). 
 
 (This return is to be made in duplicate to the Collector of Internal 
 Eevenue for the district in which the bank or collecting agency is 
 located on or before March 1, showing the totals of each monthly re- 
 turn on Form 1044 and their aggregate totals, for the preceding cal- 
 endar year.) 
 
 I (we) (name), of (state address in 
 
 full), , the (official position), of 
 
 the above-named bank or collecting agency, located at (ad- 
 dress in full), do solemnly swear (or affirm) that the following is a 
 true and complete return of the monthly totals of all coupon and in- 
 terest payments made and normal taxes withheld therefrom by said 
 organization, or for which it is liable as withholding agent, as re- 
 ported on Form 1044, and their aggregate totals for the year 191. . ; 
 and the Monthly List Eeturns, Form 1044, the totals of which are 
 listed below, constitute a part of this return. 
 
 Month. Amount of income Amount o£ tax Amount of tax remitted Balance of 
 subject to tax. withlield. to collector. tax due. 
 
 January 
 
 February 
 
 March 
 
 April 
 
 May 
 
 June 
 
 July 
 
 August 
 
 September 
 
 October 
 
 November 
 
 December 
 
 Aggregate totals for year 
 
528 APPENDIX 
 
 Signed : 
 
 (capacity in which acting). 
 
 Sworn to and subscribed before me this 
 
 day of ,191.. 
 
 To (Collector) 
 
 District of 
 
 (Address) 
 
 (form 1000) 
 
 Form of Certificate to be Presented with Coupons or Interest Orders 
 Stating Whether or Not Exemption is Claimed imder Paragraph C, 
 Section 2, of the Federal Income Tax Law. — I do solenmly declare 
 
 that I, , a citizen or resident of the United States 
 
 and residing at am the owner of $ bonds of the de- 
 nomination of $ each, Nos , of the 
 
 (give name of debtor), known as 
 
 bonds, 
 
 (describe the particular issue of bonds,) 
 
 from which were detached the accompanying coupons, due 
 
 191. ., amounting to $ or upon which there matured 
 
 191 . . , $ of registered interest. 
 
 I (do. . . .), (do not) now claim with respect to the income repre- 
 sented by said interest the benefit of a deduction of $ 
 
 allowed under Paragraph C, Section II of the Federal Income Tax 
 Law, the total exemption to which I am entitled thereunder being 
 
 Name 
 
 Address 
 
 Date , 191. 
 
 (form 1000a) 
 Form of Certificate to be Attached to Interest Coupons in Cases 
 Where the Collecting Agent's Certificate is Substituted for the Certifi- 
 cate of the Owners. — The Owner's Certificate, of which the following 
 certificate is the counterpart, and bears the same number as this cer- 
 tificate, wiU be sent by the collecting agent direct to the Commissioner 
 of Internal Eevenue, at Washington, as prescribed by regulations. 
 No 
 
POEMS TJITDEE INCOME TAX LAW 529 
 
 I (we), (name of collecting agent), do solemnly declare that 
 
 the owner of $ (description of issue) bonds of the (name 
 
 of debtor organization), from which were detached the accompanying 
 
 interest coupons due (maturity), 191. ., amounting to 
 
 $ , has filed with me (us) a duly executed certificate filled 
 
 up in accordance with Treasury Eegulations of October 25, 1913, 
 
 Form No , which certificate has been indorsed by me (us) as 
 
 follows : 
 
 "Owner's Certificate No , (name of collect- 
 ing agency), (date), 191. .," and in which the said owner 
 
 does (does not) claim, with respect to the income represented by said 
 interest, the benefit of a deduction of $ , allowed under Para- 
 graph C, Section II, of the Federal Income Tax Law, the total ex- 
 emption to which said owner now claims to be entitled thereunder 
 
 being $ , and I (we) do hereby promise and pledge myself 
 
 (ourselves) to forward the above-described certificate executed by the 
 
 owners as stated and dated , 191. ., to the Commissioner of 
 
 Internal Eevenue, at Washington, D. C, not later than the 20th day 
 of next month, in accordance with Treasury Regulations. 
 
 Signature of Collecting Agent : 
 
 Address : 
 
 Date ,191.. 
 
 (form 1001) 
 Certificate to be Furnished by Organizations Not Subject to Tax 
 
 on Interest at Source. — I, 
 
 (give name) 
 
 the of the 
 
 (give official position) (Name of Organization) 
 
 a of 
 
 (character of organization) (State) 
 
 located at , at 
 
 (post office address) 
 
 do solemnly declare that said 
 
 is the owner of $ bonds of the 
 
 denomination of $ each, Nos. 
 
 of the 
 
 (give name of Debtor) 
 
530 
 
 APPENDIX 
 
 known as bonds, 
 
 (describe Jiartieular issue of bonds) 
 
 from which were detached the accompanying coupons, due , 
 
 191. ., amounting to $ , or upon which there matured 
 
 , 191 . . , $ of registered interest, 
 
 and that under the provisions of the Income Tax Law of October 3, 
 1913, said interest is exempt from the payment of taxes collectible 
 at the source, which exemption is hereby claimed. 
 
 Name 
 
 (official position) 
 
 of 
 
 (name of organization) 
 
 Date , 191. . Address 
 
 (post office) 
 A substitute certificate similar in form to 1000a, tut corresponding 
 in terms to the requirements of 1001 and Jcnown as Form 1001a, may 
 ie executed hy the collecting agency. 
 
 (form 1002) 
 Form of Certificate to be Presented with Coupons or Interest Orders 
 
 When Not Accompanied by Certificate of Owners. — I, 
 
 (name) 
 
 of the 
 
 (official position) (bank or collecting agency) 
 
 of 
 
 (address) 
 
 do solemnly declare that said has (or have) 
 
 purchased or accepted for collection the accompanying coupons 
 
 amounting to $ and which represent interest matured 
 
 on $ of bonds of the 
 
 (name of Debtor) 
 and that we received said coupons or orders for registered interest 
 from of 
 
 and that no certificate of ownership accompanied said coupons, and I 
 hereby acknowledge responsibility of withholding therefrom the nor- 
 mal income tax of one per cent, in accordance with the regulations of 
 the Treasury Department." 
 
FOEMS TrWDEE INCOME TAX LAW 531 
 
 Address 
 
 Name 
 
 Date , 191.. 
 
 This certificate shall be dated and signed by, and shall state the ad- 
 dress of the corporation, organization, collecting agency, or person 
 withholding the tax, with f uU name and address. 
 
 (form 1003) 
 
 Form of Certificate to be Filled Out and Signed by Members of 
 Partnerships. — The following certificate should be used when coupons 
 or interest orders are presented by citizens or residents of the United 
 States for collection of interest on bonds, or other similar obligations 
 owned by the partnerships of which they are members : 
 
 I, , a member of the firm or partnership 
 
 of and residing at 
 
 (give full address) 
 do solemnly declare that the said partnership is the owner of 
 
 $ bonds of the denomination ®f $ 
 
 each, Nos 
 
 of the 
 
 (give name of debtor) 
 
 known as bonds, 
 
 (describe the particular issue of bonds) 
 from which were detached the accompanying interest coupons 
 
 due , 191 , amounting to $ 
 
 or upon which there matured , 191 , $ 
 
 of registered interest, and that the name and address of said firm or 
 partnership, and the names of the individual members thereof, and 
 their places of residence, are as follows: 
 Names of Partners : Address : 
 
 Name of partner signing 
 
 Of firm of 
 
 Address 
 
 Date , 191 
 
 A substitute certvficate similar in form to the preceding substitute 
 certificates, and known as Form 1003a, may be used by the collecting 
 agents. 
 
532 appendix 
 
 (foem 1004) 
 Non-Resident Foreigners Owning Interest Bearing Bonds Not Sub- 
 ject to Taxation on Income from Such Bonds if Proper Certificate 
 Furnished. — This tax will not be deducted from the income which may 
 be derived from interest on bonds, mortgages, equipment trusts, re- 
 ceivers' certificates, or other similar obligations of which the hona fide 
 owners are citizens of foreign countries residing in foreign countries, 
 provided that when such interest coupons, or, in case of wholly regis- 
 tered bonds, the orders for the payment of such interest shall- be ac- 
 companied by duly certified certificates hereinafter provided for to 
 cover the cases of foreign and non-resident owners of bonds and other 
 securities. Unless such proof of foreign ownership is duly furnished 
 the normal tax of 1 per cent, shall be deducted as herein provided. 
 Such certificate shall be in substantially the following form : 
 "I do solemnly declare that I am not a citizen or resident of the 
 
 United States of America, but a subject (or citizen) of 
 
 and the owner of $ bonds of the denominations of 
 
 $ each, Nos 
 
 of the known as 
 
 (give name of debtor corporation) 
 
 bonds, 
 
 (Describe the particular issue of bonds) 
 
 from which were detached the accompanying coupons, due 
 
 191. ., amounting to $ , or upon which there matured 
 
 , 191. ., $ , of registered interest and 
 
 that being a non-resident foreigner, I am exempt from the income tax 
 imposed on such interest by the United States Government under the 
 law enacted October 3, 1913, and that no citizen of the United States, 
 wherever residing, or foreigner residing in the United States, or any 
 of its possessions, has any interest in said bonds, coupons, or interest. 
 
 Signature of 
 
 Owner of bonds 
 
 Date: 
 
 , , 191.., Address 
 
 A substitute certificate known as Form 1004a may he used hy the 
 collecting agent. 
 
FORMS "CJN-DEE INCOME TAX LAW 533 
 
 (form 1006) 
 Form of Certificate to be Filed by Persons, Firms, or Organizations 
 Required to Withhold and Pay Said, Tax Other than the Debtor at 
 
 the Source. — To (name of collector of internal revenue). 
 
 Collector of Internal Revenue, 
 
 (give address and designate district). 
 
 I' (name), (official title, if any), of 
 
 tlie (person, firm^ or organization), (capacity 
 
 in whicii acting), of (post-office address), do solemnly de- 
 clare that I (we) received of (name from whom received), 
 
 $ , same being income derived from (state source, 
 
 whether rents, salary, or other sources), belonging to (give 
 
 name of person to whom income is due), (address), and 
 
 that tie tax thereon, amounting to $ to which said person is 
 
 subject, has been withheld at the source of said income by 
 
 (name of person withholding), (post-office address). 
 
 (Signed) 
 
 Address (street and number) 
 
 (city and State) 
 
 Date , 191.. 
 
 (form 1007) 
 
 Form for Claiming Exemption at the Source as Provided in Para- 
 graph C, Section 2, of the Federal Income Tax Law of October 3, 1913. — 
 
 To (give name of withholding agent), 
 
 (post-office address) . 
 
 I hereby serve you with notice that I am single — ^mar- 
 ried and living with my wife — ^husband, and now claim the benefit of 
 
 the exemption of $ , (strike out so as to show status correctly) 
 
 as allowed in paragraphs and D of section 2 of the Federal income- 
 tax law of October 3, 1913 (my total exemption under said paragraphs 
 being $ ). 
 
 Signed : 
 
 Address : (street and number) 
 
 (city and State) 
 
 Date: , 191- . 
 
534 appendix 
 
 (form 1009) 
 Form of Oath Required of a Withholding Agent When Acting for 
 Another in Filing Return and Making Application for Deductions 
 Allowable Under Paragraph B, as Provided in Paragraph E, Section 2, 
 of the Federal Income Tax Law of October 3, 1913.— I hereby swear (or 
 affirm) that I have sufficient knowledge of the afiairs and property 
 
 of (naming person and address for whom acting) to 
 
 enable me to make a full and complete return for (nam- 
 ing person) and that the return of income and application for de- 
 ductions made by me are true and accurate. 
 
 (Signed) 
 
 Address (street and number) 
 
 (city and State) 
 
 Date: , 191.. 
 
 (form 1010) 
 
 License for Collection of Foreign Income. — No 
 
 Treasury Department, 
 Office op the Commissioner of Internal Revenue. 
 
 , located and doing business at and engaged 
 
 in the business of , having made application in accordance 
 
 with the provisions of Section II of the act of October 3, 1913, and 
 the regulations made in pursuance thereof, is hereby licensed to ac- 
 cept for collection coupons, checks, and bills of exchange for or in 
 payment of interest upon bonds issued in foreign countries and upon 
 foreign mortgages or like obligations, and for the dividends upon 
 stock of foreign corporations, foreign joint-stock companies or asso- 
 ciations, or foreign insurance companies engaged in business in for- 
 eign countries, from , 191. ., until revoked. 
 
 This license will not be valid until countersigned by the collector 
 of internal revenue for the district in which issued. 
 
 , Commissioner of Internal Eevenue. 
 
 Countersigned : 
 
 , Collector. 
 
 Dist 
 
rOEMS UWDEE INCOME TAX LAW 535 
 
 (form 1017) 
 Form of Application for License for the Collection of Income from 
 Foreign Countries. — 
 
 United States Internal Eevenue 
 Application for license for collection of income from foreign countries 
 
 State of 
 
 County of 
 
 The undersigned, (name), (office), 
 
 of (state name of person, firm, or corporation) 
 
 being duly sworn according to law, declares that on and after 
 
 the day of , 191 . ., he (we) intend, .to engage in the 
 
 business of collecting foreign income payments of interest or divi- 
 dends by means of coupons, checks, or bills of exchange. The aggre- 
 gate amount of annual collections of such foreign income at the 
 principal and branch offices is estimated at $ 
 
 The location of the principal and branch offices is as follows: 
 
 Principal office Branch offices 
 
 (If a firm, state names of members) 
 
 Said person, firm, or corporation is now engaged in business 
 
 as and desires to conduct the business of collecting foreign 
 
 income at the above address or addresses, and hereby makes applica- 
 tion for the license required to be secured by persons, firms, or corpo- 
 rations engaging in the business of collecting income from foreign 
 countries under the provisions of paragraph E of Section II of the 
 income-tax law of October 3, 1913, and I (we) hereby promise and 
 pledge myself (ourselves) to comply strictly with the provisions of 
 said law and the rules and regulations of the Treasury Department 
 which have been or may hereafter be issued in respect to the collection 
 and payment of such foreign income. 
 
 Signed 
 
 for (name of firm or corporation) 
 
 Sworn to before me this day 
 
 of ,191.. 
 
 (form 1011) 
 Form of Certificate to be Filed with Withholding Agents by Partner- 
 ships Claiming Deductions. — I, , a member of the 
 
 firm or partnership of of , conducting the 
 
536 APPENDIX 
 
 business of (give character of business conducted by 
 
 partnership), and residing at (give full address), do 
 
 solemnly declare that the said partnership is the owner of $ 
 
 bonds of the denomination of $ each, Nos of 
 
 the (give name of debtor) known as (describe 
 
 the particular issue of bonds) bonds, from which were detached the 
 
 accompanying interest coupons due , 191. ., amounting to 
 
 $ , or upon which there matured , 191. ., $ 
 
 of registered interest, or is the owner of (property or 
 
 investments) upon which there accrued , 191. ., $ 
 
 of income. 
 
 We hereby claim a deduction of $ allowed on account of the 
 
 actual expenses incurred in conducting said business, under regula- 
 tions made in pursuance of section 2, act of October 3, 1913, and do 
 solemnly declare that neither the partnership nor its individual mem- 
 bers has claimed deductions in excess of its total actual legitimate 
 annual expenses of conducting the business of said partnership, and 
 that no portion of the living or personal expenses of the partners is 
 included in the deductions claimed. 
 
 Name of signing partner : 
 
 For (name of partnership) 
 
 Address : 
 
 Date, , 191.. 
 
 (form 1014) 
 Form of Certificate to be Presented with Coupons or Interest, or 
 Other Income Orders. Detached from Bonds or Other Obligations 
 
 Owned by Partnerships or Firms of Foreign Countries. — I, , 
 
 a member of the firm or partnership of of , 
 
 and residing at (give full address), do solemnly declare 
 
 that the said partnership is the owner of $ bonds of the de- 
 nomination of $ each, Nos of the (give 
 
 name of debtor) known as (describe the particular issue 
 
 of bonds), from which were detached the accompanying interest cou- 
 pons, due , 191. ., amounting to $ , or upon 
 
 which there matured , 191. ., $ of registered 
 
 interest, or is the ovraer of (property or investments), 
 
 upon which there has accrued , 191.., $..., of 
 
 income, and that all the members of said firm or partnership, ex- 
 cept (give name and address of partners not non- 
 
FORMS UNDER INCOME TAX LAW 537 
 
 resident aliens), are nonresident foreigners and as such are exempt 
 from the income tax imposed on such income by the United States 
 Government under the law enacted October 3, 1913, and that no 
 citizen of the United States, wherever residing, or foreigner residing 
 in the United States or any of its possessions, except those named 
 above, has any interest in said bonds, coupons, or interest. 
 
 Name of partner signing 
 
 For (name of partnership) 
 
 Address 
 
 Date , 191.. 
 
 (form 1015) 
 
 Form of Certificate to be Filed with Debtor or Withholding Agents 
 by Fiduciaries.— (The following form^ of 'certificate should be filed 
 with the debtor, or its paying agents, at the time of the payment to 
 the fiduciary, or his representative, of all coupons, interest orders, 
 rents, and all other kinds of income whatsoever upon which the tax 
 or income is required to be withheld at the source.) 
 
 I (we) do solemnly declare that I (we), (name of 
 
 fiduciary), am (are) the duly authorized (indicate in 
 
 what capacity acting) for the beneficiaries of the estate or trust of 
 
 (describe the estate or trust), which estate or trust 
 
 is entitled to the income from $ bonds of the denomina- 
 tions of $ each, Nos of the (give 
 
 name of debtor), knovrai as (describe the particular issue 
 
 of bonds) bonds, from which were detached the accompanying cou- 
 pons, due , 191., amounting to $ , or upon 
 
 which there has matured , 191. ., $ of registered 
 
 interest, or which estate or trust is entitled to other income from 
 
 property or investments upon which there accrued , 191. ., 
 
 $ of income. 
 
 Acting for and in the capacity as stated herein, I (we) hereby as- 
 sume the duty and responsibility, imposed upon withholding agents 
 under the law, of withholding and paying the income tax due, for 
 which I (we) may be liable, and acting in said fiduciary capacity as 
 stated herein, I (we) do hereby claim exemption from having the 
 normal tax withheld from said income. 
 
 (name), (capacity in which acting) 
 
 Address 
 
 Date , 191.. 
 
538 
 
 APPENDIX 
 
 (form 1016) 
 Certificate to be Furnished by Foreign Organizations not Subject to 
 
 Tax on Interest or Other Income at Source. — I, (give 
 
 name), the (give official position) of the (name 
 
 of organization), a (character of organization), 
 
 of (country), located at (post-office ad- 
 dress), do solemnly declare that said (give name of 
 
 organization) is a foreign organization, not engaged in business in 
 the United States, and is the owner of $ bonds of the de- 
 nomination of $ each, Nos of the (give 
 
 name of debtor), known as (describe particular issue of 
 
 bonds) bonds, from which were detached the accompanying coupons, 
 
 due , 191. ., amounting to $ , or upon which there 
 
 matured , 191. ., $ of registered interest, or is the 
 
 owner of (property or investments) upon which there 
 
 accrued , 191. ., $ of income, and that under the 
 
 provisions of the income-tax law of October 3, 1913, said organization 
 being a foreign organization, said interest or income is exempt from 
 the payment of taxes collectible at the source, which exemption is 
 hereby claimed. 
 
 Name (official position) 
 
 Of (name of organization) 
 
 Date , 191.. 
 
 Address (post office) 
 
 (form 1018) 
 Cerificate to be Furnished by Foreign Organizations Engaged in 
 
 Business in the United States. — I, (give name) the 
 
 (give official position) of the (name of organization) a 
 
 (character of organization) of (country) located at (post- 
 office address), do solemnly declare that said (give name of 
 
 organization) is a foreign organization, engaged in business in the 
 United States, and is the owner of $ ,. .bonds of the denomina- 
 tion of $ each, Nos of the (give name of 
 
 debtor), known as (describe particular issue of bonds) bonds, 
 
 from which were detached the accompanying coupons, due , 
 
 191. ., amounting to $ , or upon which there matured , 
 
 191. ., $ of registered interest, or is the owner of (prop- 
 
POEMS triTDEE INCOME TAX LAW 539 
 
 erty or investments), upon which there was accrued , 191. ., 
 
 $ of income. 
 
 Under the provisions of the income-tax law of October 3, 1913, the 
 said organization is subject to the normal tax of 1 per centum per 
 annum upon the amount of net income accruing from business trans- 
 acted and capital invested within the United States, for which tax it 
 will make its return in due course, but it hereby claims exemption 
 from having the said normal tax of 1 per centum of said income with- 
 held at the source. 
 
 Name , (official position) 
 
 Of (name of organization) 
 
 Address (post office) 
 
 Date , 191.. 
 
 (form 1019) 
 Form of Certficate to be Filed with Debtor or Withholding Agents 
 by Fiduciaries when Not Claiming any Exemption, as an Alternative 
 to the Filing of Form No. 1015 in which Exemption is Claimed. — 
 
 (The following form of certificate may be filed with the debtor, or its 
 paying agents, at the time of the payment to the fiduciary, or his 
 representative, of all coupons, interest orders, rents, and all other kinds 
 of income whatsoever upon which the tax on income is required to be 
 withheld at the source as an alternative to the filing of Form 
 No. 1015.) 
 
 I (we) do solemnly declare that T (we) (name of 
 
 iduciary), am (are) the duly authorized (indicate in what 
 
 capacity acting) for the beneficiaries of the estate or trust of , 
 
 which estate or trust is entitled to the income from $ bonds of 
 
 the denominations of $ each, Nos of the (give 
 
 name of debtor), known as (describe the particular issue of 
 
 bonds) bonds, from which were detached the accompanying coupons, 
 
 due , 191. ., amounting to $ , or upon which there has 
 
 matured , 191. ., $ of registered interest, or which 
 
 estate or trust is entitled to other income from property or invest- 
 ments upon which there accrued , 191. ., $ of income. 
 
 Acting for and in the capacity herein stated, I hereby declare that 
 I (we) do not now claim any exemption from having the normal tax 
 of 1 per cent withheld from said income by the debtor at the source. 
 
 (name), (capacity in which acting) 
 
 Address 
 
 Date , 191.. 
 
INDEX TO FORMS UNDER 
 INCOME TAX LAW 
 
 PAGE 
 
 Eeturn of net income by Banks and other financial institutions (Form 
 
 No. 1031) 490 
 
 Public service corporations (Form No. 1032) . 496 
 
 Insurance companies (Form No. 1030) 497 
 
 Manufacturing corporations (Form No. 1033) 501 
 
 Mercantile corporations (Form No. 1034)... 503 
 
 Miscellaneous corporations (Form No. 1035) . 505 
 
 of annual income by fiduciaries (Form No. 1041) 507 
 
 for making applications for deductions (Form No. 1008) 515 
 
 Summary of monthly list return of normal tax withheld at the source 
 (Form No. 1012-D) 517 
 
 Annual list return of normal tax withheld at the source from interest 
 
 on bonds, mortgages, etc. (Form No. 1013) 519 
 
 on salaries, wages, rent, interest, etc. (Form No. 1042) 521 
 
 Monthly list return of normal tax withheld on foreign income (Form 
 
 No. 1043) 523 
 
 of normal tax withheld by first bank or collection agency receiving 
 coupons and interest orders not accompanied by certificates of 
 owners ( Form No. 1034) 525 
 
 Annual list return of normal tax withheld by first bank or collection 
 agency for interest on bonds, mortgages, etc. (Form No. 1044-A) . . . 527 
 
 Certificate to be presented with coupons or interest orders for exemp- 
 tion claimed under Paragraph C, Section 2 (Form No. 1000) .. 528 
 to be attached to interest coupons in cases where the collection 
 agent's certificate is substituted for certificate of owner (Form 
 No. 1000-A) 528 
 
 to be furnished by organizations not subject to tax on interest at 
 source (Form No. 1001) 529 
 
 to be presented with coupons or interest orders when not accom- 
 panied by certificate of owners (Form No. 1002) 530 
 
 to be filled out and signed by members of partnership (Form 
 No. 1003) 531 
 
 to be presented with coupons or interest orders detached from 
 bonds, etc., owned by citizens or subjects and residents of for- 
 eign countries (Form No. 1004) 532 
 
 showing tax deducted by another (Form No. 1006) 533 
 
 for specific exemption claim (Form No. 1007) 533 
 
 to accompany return made for another (Form No. 1009) 534 
 
 540 
 
INDEX TO FOEMS UNDER INCOME TAX LAW 541 
 
 PAGE 
 Iiieense for collecting foreign interest items (Form No. 1010) 534 
 
 Application for license for collecting foreign interest items (Form 
 No. 1017) 535 
 
 Certificate to be filed with withholding agents by partnerships claiming 
 
 deductions (Form No. 1011) 535 
 
 to be presented with coupons or interest orders detached from 
 bonds, etc., by partnerships, or firms of foreign countries (Form 
 No. 1014) 536 
 
 to be filed with debtor or withholding agents by fiduciaries (Form 
 No. 1015) 537 
 
 to be furnished by foreign organizations not subject to tax on 
 interest or other income at source (Form No. 1016) 538 
 
 to be furnished by foreign organizations engaged in business in the 
 United States (Form No. 1018) 538 
 
 to be filed with debtor or withholding agents by fiduciaries when 
 not claiming any exemption as an alternative to the filing of 
 Form No. 1015 (Form No. 1019) 539 
 
TABLE OF CASES TO PART I (Local Taxation) 
 
 Consult separate indices to each part of the book, 
 
 PAGE 
 
 Peo. ex. rel. Adams v. Coleman. 109 
 
 In re Adler Bros. Co 54 
 
 Adriance v. Supervisors of N. Y. 59 
 Peo. ex rel. Am. Bible Soc. v. 
 
 Com'rs 71 
 
 Peo. ex rel. Am. Exchange Nat'l 
 
 Bank v. Purdy 100 
 
 In re Am. Pine Arts Soo 72 
 
 Peo ex rel. Am. Fire Ins. Co. v. 
 
 Com'rs 38 
 
 Peo. ex rel. Am. Linen T. Co. v. 
 
 Assessors 78 
 
 PAGE 
 
 Peo. ex rel. Am. Thread Co. v. 
 Feitner 107 
 
 Peo. ex rel. Armstrong Cork Co. 
 V. Barker 26, 47 
 
 Ass'n of Colored Orphans v. 
 Mayor 71 
 
 In re Atlas Construction Co 163 
 
 Austen v. Hudson Eiv. Tel. 
 Co 24, 25 
 
 Austen v. Westchester Telephone 
 Co 154, 161 
 
 Austen v. Electric Const. & Sup- 
 ply Co 161 
 
 Consult separate indices 
 
 Matter of Babcock 71, 90 
 
 Bank v. Supervisors 9 
 
 Bank of Commonwealth v. Mayor 143 
 Peo. ex rel. Bank of Montreal v. 
 
 Com'rs 5, 45 
 
 Bank of Utica v. City of 
 
 Utiea 28, 140 
 
 Barlow v. St. Nicholas Bank .... 87 
 
 Barhyte v. Shepard 95 
 
 Bassett v. Wheeler 147, 148 
 
 Pao. ex rel. Bay State Co. v. 
 
 McLean 26, 42 
 
 Bell v. Streeter 13 
 
 Bellinger v. Gray 135 
 
 Bells Gap E. R. v. Pa 11 
 
 Peo. ex rel. Bhumgara Co. v. 
 
 Wells 119, 120, 123 
 
 Peo. ex rel. Bibb Mfg. Co. v. 
 
 Wells 96 
 
 Peo. ex rel. Bijur v. Barker.. 36, 40 
 Peo. ex rel. Bijur v. Feitner 82 
 
 to each part of the book. 
 Peo. ex rel. Blakeslee v. Com'rs. 101 
 Peo. ex rel Bleecker St. By. Co. 
 
 v. Barker 30 
 
 Matter of Boyce 143 
 
 Boyd V. Gray 52, 135 
 
 Bradley v. Ward 134, 135, 150 
 
 Brase v. Miller 135 
 
 Peo. ex rel. Bridgeport Sav. 
 
 Bank v. Feitner 58 
 
 British Commercial Life Ins. Co. 
 
 V. Com'rs 28 
 
 Peo. ex rel. Broadway Imp. Co. 
 
 V. Barker 104 
 
 Peo. ex rel. Broadway R. R. v. 
 
 Com'rs 37, 105 
 
 Peo. ex rel Brokaw Bros. v. 
 
 Feitner 12, 17, 38 
 
 Peo. ex rel. Bronx Gas Co. v. 
 
 Barker 78, 108, 114 
 
 Peo. ex rel. Bklyn. City R. R. 
 
 V. Neff 12, 17 
 
 542 
 
TABLE OF CASES TO PART I (lOOAL TAXATION) 543 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 PAGE 
 
 Bklyn. El. E. E. v. Bklyn 
 
 56, 68, 80, 109 
 Peo. ex rel. Bklyn. H. E. R. Co. 
 
 V. Assessors 96 
 
 Brown v. Maryland 9 
 
 Peo. ex rel. Buffalo Mut. Gas L. 
 
 Co. Y. Steele 54 
 
 Peo. ex rel. Buffalo E. & P. Ey. 
 
 Co. V. Carmiehael 77, 121 
 
 Peo. ex rel. Buffalo E. E. v. Du- 
 
 guid 106 
 
 Consult separate indices 
 Peo. ex rel. Cagger v. Dolan. ... 28 
 Peo. ex rel. Canaday v. Williams 100 
 Peo. ex rel. Carey Mfg. Co. v. 
 
 Com'rs 47 
 
 Matter of Cathedral of Incarna- 
 tion 103, 106 
 
 Peo. ex rel. Cent. Stamping Co. 
 
 V. Barker 81 
 
 Central Trust Co. v. N. Y. C. & 
 
 N. E. E 149, 163 
 
 Matter of Chadwiek 57 
 
 Peo. ex rel. Chamberlain v. For- 
 rest 52, 58 
 
 Chamberlain v. Taylor 61 
 
 Peo. ex rel. Chambers v. Wells. . 107 
 Peo. ex rel. Champlin v. Gray 51, 121 
 
 Chegaray v. Jenkins 138 
 
 Chesebrough Mfg. Co. v. Cole- 
 man 23 
 
 Peo. ex. rel Church v. Supervis- 
 ors 91, 95, 96 
 
 Peo. ex rel. Citizens El. 111. Co. 
 
 V. NeS 25, 31 
 
 Peo. ex rel. Citizens G. L. Co. v. 
 
 B'd of Assessors 94 
 
 Peo. ex rel. Cit. Light Co. v. 
 
 Peitner 96, 111, 121 
 
 City of N. Y. V. Chase Talbot 
 & Co 148, 159 
 
 PAGE 
 
 Peo. ex rel. Buffalo & S. L. E. E. 
 Co. V. Fredericks 59, 05 
 
 Buffalo & State Line E. E. v. Su- 
 pervisors 62, 80, 95 
 
 Burr V. Palmer 87, 153 
 
 Peo. ex rel. Butchers Co. v. As- 
 ten 37 
 
 Peo. ex rel. Butterick Publ. Co. 
 V. Purdy 39 
 
 C 
 
 to each part of the book. 
 
 City of N. Y. V. Cleanfast Hos- 
 iery Co 164 
 
 City of N. Y. V. Ferris 88, 150 
 
 City of N. Y. V. Halsey. .82, 159, 160 
 
 City of N. Y. V. Holzderber 159 
 
 City of N. Y. V. McCaldin Bros. 159 
 
 City of N. Y. V. MeKan 162 
 
 City of N. Y. V. McLean 76, 161 
 
 City of N. Y. V. Matthews 161 
 
 City of N. Y. V. Selwyn Import- 
 ing Co 164 
 
 City of N. Y. V. Streeter 
 
 61, 63, 64, 151, 163 
 City of N. Y. V. Tucker. .79, 161, 162 
 City of N. Y. V. Vanderveer .... 162. 
 City of N. Y. v. Watt 
 
 150, 156, 88, 134, 154 
 City of Eochester v. Bloss. . .134, 147 
 City of Eochester v. Gleichauf . . . 160' 
 Peo. ex rel. Claflin Co. v. Feit- 
 
 ner 60, 78 
 
 Peo. ex rel Clapp v. Board of 
 
 Police 95- 
 
 Clark v. Lawrence 1 14 
 
 Clark v. Village of Dunkirk 130 
 
 Clarke v. Mayor 72 
 
 Peo. ex rel Clearing House Bldg. 
 
 Co. V. Barker 34 
 
 Clementi v. Jackson 132 
 
544 
 
 TABLE 
 (Cases under title 
 
 S OF CASES TO PAET I ( LOCAL TAXATION) 
 itie of "Peo. ex rel." are indexed under the relator's name.) 
 
 PAGE 
 
 Peo. ex rel. Cochrane v. i^eitner 132 
 
 Coe V. Errol , 10 
 
 Coleman v. Shattuck 61, 142 
 
 In re Columbian Ins. Co 139, 163 
 
 Peo. ex rel. Commercial Mut. 
 
 Ins. Co. V. Com'rs 102, 103 
 
 Comstock V. Porter 115 
 
 Peo. ex rel. Coney Is. & Bldyh. 
 
 R. R. v. Neff 12, 17 
 
 Peo. ex rel. Congress Hall v. On- 
 
 derkirk 109, 120 
 
 Matter of Conklin 147 
 
 Connolly v. Union Sewer Pipe 
 
 Co 10 
 
 Peo. ex rel. Consol. Gas Co. v. 
 
 Feitner 12, 17 
 
 Peo. ex rel. Consol. Steel & Wire 
 
 Co. V. Feitner 78 
 
 PAGE 
 
 Peo. ex rel. Consol. Tel. &c. v. 
 
 Barker 12, 17 
 
 Peo. ex rel. Conway v. Barker . . 66 
 Peo. ex rel. Cook v. Board of Po- 
 lice 94, 95 
 
 Cooper's Glue Factory v. Mc- 
 
 Mahon 23 
 
 Peo. ex rel. Cord Meyer Co. v. 
 
 Feitner 34 
 
 Peo. ex rel. Corn v. Com'rs 132 
 
 Peo. ex rel. Cornell Steamboat 
 
 Co. V. Dederick. .12, 17, 28, 35, 40 
 Matter of Corwin 95,97,107,108, 112 
 
 Coudert v. Huerstel 89 
 
 Peo. ex rel. Coyle v. Martin... 94 
 Peo. ex rel. Crane Co. v. Feitner 47 
 
 D 
 Consult separate indices to each part of the book. 
 
 Dale V. City of N. Y 126 
 
 Peo. ex rel. Dale v. Feitner 97 
 
 Matter of DeFreece 163 
 
 D. & H. Canal Co. v. At- 
 kins 131, 156 
 
 Peo. ex rel. Delaware &c. Canal 
 
 Co. V. Barker 52 
 
 Peo. ex rel. D. & H. Canal Co. 
 
 V. Becker 108 
 
 Peo. ex rel. D. & H. Co. v. Feit- 
 ner 41 
 
 Peo. ex rel. D. L. & W. R. R. v. 
 
 Clapp 63 
 
 Denton v. Carroll 157 
 
 Dinehart v. Wilson 137 
 
 Peo. ex rel. Dives Pelican Co. v. 
 
 Feitner 45 
 
 Doughty V. Hope 138 
 
 Downing v. Ruger 138 
 
 Peo. ex rel. Dufour v. Wells.... 76 
 Peo. ex rel. Durand Ruel Co. v. 
 
 Wells 46 
 
 E 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Eckerson v. Chris- 
 tie 127, 129 
 
 Peo. ex rel. Eden Musee Co. v. 
 Feitner 33, 123 
 
 Peo. ex rel Edison Co. v. Feit- 
 ner 15, 77 
 
 Peo. ex rel. Edison Co. v. 
 Nefl 12, 17 
 
 Peo. ex rel. Edison El. Co. v. 
 Barker 24, 79 
 
 Peo. ex rel. Edison Gen. El. Co. 
 V. Barker 38, 117 
 
 Edison Elec. Ilium. Co. v. Bar- 
 ker 38, 79 
 
 Peo. ex rel. Edison Elec. I. Co. 
 V. NefiF 9 
 
TABLE OF CASES TO PAET I (lOCAL TAXATION) 545 
 
 (Cases under title of "Peo. ex rel." are indexed under tlie relator's namE.) 
 
 PAGE 
 Peo. ex rel. Equitable Gaslight 
 
 Co. V. Barker. ..30, 32, 37, 104, 123 
 Peo. ex rel. Equitable Gas L. 
 
 Co. V. Com'rs 119 
 
 PAGE 
 
 Ensign v. Barse 61 
 
 Peo. ex rel. Erie R. E,. Co. v. 
 Webster ...59,78,97,105,109,113 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Fairfield Chemical 
 
 Co. V. Com'rs 32 
 
 Peo. ex rel. Farcy & Oppenheim 
 
 V. Wells 46 
 
 Ferguson v. Jones 115 
 
 Fire Dept. of N. Y. v. Stanton. . 11 
 First Nat'l Bank of Ossining... 100 
 
 Peo. ex rel. Fitzgerald v. Feit- 
 ner 113, 117 
 
 Foster Pump Works v. The City 
 of N. Y 155 
 
 Franklin v. Pearsall 135 
 
 Peo. ex rel. Friendly v. Daven- 
 port 112 
 
 G 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. General El. Co. v. 
 
 Barker 24 
 
 Peo. ex rel. Genesee Bank v. 
 
 Olmstead 31 
 
 Peo. ex rel. German Looking 
 
 Glass Co. V. Barker 38, 103 
 
 Gillman v. Gillman 131 
 
 In re Ginsburg 163 
 
 Peo. ex rel. Glen Head Realty 
 
 Co. V. Garland 109, 114 
 
 Peo. ex rel. Glens Falls Fire 
 
 Ins. Co. V. Ferguson 39 
 
 Peo. ex rel. Goetz Mfg. Co. v. 
 
 Wells 46 
 
 Matter of Gould 147, 159 
 
 Peo. ex rel. GriflSn v. Mayor of 
 
 Bklyn 91 
 
 Guest V. City of Bklyn 130 
 
 Gulf Colorado & S. F. R. R. v. 
 
 Ellis 10 
 
 H 
 Consult separate indices to each part of the book. 
 
 Haight V. Mayor 75 
 
 Peo. ex rel. Hartford & Conn. 
 Western R. R. Co. v. Frost... 120 
 
 In re Hartshorn 36, 74, 147 
 
 Peo. ex rel. Hawley Box & Lum- 
 ber Co. V. Barker 40 
 
 Peo. ex rel. Healy v. Fire 
 Com'rs 101 
 
 Peo. ex rel. Hecker-Jones-Jewell 
 Milling Co. v. Barker 48 
 
 Peo. ex rel. Hecker-Jones Co. v. 
 Com'rs 129 
 
 6 
 
 Peo. ex rel. Heermance v. Deder- 
 iek 
 
 Peo. ex rel. Herkimer & M. R. 
 R. V. Assessors 113 
 
 Herkimer Co. Light & P. Co. v. 
 Johnson 15 
 
 Peo. ex rel. Hermance v. Super- 
 visors 86 
 
 Hersee v. Porter 13f 
 
 Hey wood v. City of Buffalo 130 
 
 Peo. ex rel. Hoffman v. Oster- 
 houdt 103 
 
646 TABLE OF CASES TO PAET I (lOCAL TAXATION) 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 PAGE 
 
 Home Ins. Co. v. New York 
 
 Peo. ex rel. Hoyt v. Com'rs 
 
 Peo ex rel. Hyde & Sons v. Mil- 
 
 ler 
 
 18 
 
 49 
 
 Peo. ex rel. Hyde & Sons v. 
 
 O'Donnell 20 
 
 Hyde & Sons, A. G. V. Wells 30 
 
 PAGE 
 
 Hudson River Bridge Co. v. Pat- 
 terson 22 
 
 Peo. ex rel. India Rubber &e. v. 
 Barker 23, 25 
 
 Peo. ex rel. Intern'l Banking Co. 
 V. Raymond 5, 45 
 
 International Life Assurance Soc. 
 v. Com'rs 46 
 
 Consult separate indices to each part of the book. 
 Peo. ex rel. I. R. T. Co. v. O'Don- Peo. ex rel. Ithaca Savings Bk. 
 nell 16 V. Beers 5 
 
 Consult separate indices to each part of the book. 
 
 Jackson v. City 131 Peo. ex rel. Jefferson v. Smith. . 
 
 Peo. ex rel. J. B. Co. v. Roberts 29 
 
 K 
 Consult separate indices to each part of the book. 
 
 Kane v. City of Bklyn 62, 63 
 
 Peo. ex rel. Kellogg v. Wells... 100 
 
 Peo. ex rel. Kemp R. E. Co. v. 
 O'Donnel 82 
 
 Peo. ex rel. Kendall v. Feitner . . 97 
 
 Peo. ex rel. Kennelly v. O'Don- 
 nell 107 
 
 Peo. ex rel. Keppler & Swarzman 
 Co. V. Barker 41 
 
 Peo. ex rel. Keystone Gas Co. 
 V. Assessors 26 
 
 l.S 
 
 Peo. ex rel. Knickerbocker Co. 
 V. Wells 06 
 
 Peo. ex rel. Knickerbocker Fire 
 Ins. Co. V. Coleman 29 
 
 Peo. ex rel. Knickerbocker Press 
 V. Barker 23 
 
 Peo. ex rel. Knickerbocker S. D. 
 Co. V. Wells 34, 120 
 
 Peo. ex rel. Kohler v. Feit- 
 ner 100, 114 
 
 Peo. ex rel. Kursheedt Mfg. Co. 
 V. Feitner 19 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Langdon v. Feitner 108 
 
 Lathers v. Keogh 87, 153 
 
 Peo. ex rel. Law v. Com'rs. ... 91 
 Peo. ex rel. Lazarus v. Feitner . . 120 
 Peo. ex rel. Lemmon v. Feitner 17 
 Peo. ex rel. Leroy v. Feitner . . 83 
 
 Peo. ex rel. Litchfield v. O'Don- 
 
 nel 102 
 
 Peo. ex rel. Littman v. Wells 81, 102 
 
 Livingston v. HoUenbeek 130 
 
 Peo. ex rel. L. I. R. R. v. Feit- 
 ner 85, 113 
 
 In re Lord 70 
 
TABLE OF CASES "to PAET I (lOCAL TAXATIOTt) 547, 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 Me 
 
 Consult separate indices to each part of the book. 
 
 PAGE 
 
 McLean v." N. Y. & So. Bklyn F. 
 
 & S. T. Co 160 
 
 MeMahon v. Beekman 71 
 
 MeMahon v. Palmer 14, 67, 68 
 
 Peo. ex rel. McShane Mfg. Co. 
 
 V. Barker 48 
 
 McLean v. Walburger Horn .... 75 
 
 McLean v. Wyandanee Co. ... 24, 80 
 
 PAGE 
 
 McCullough V. Maryland 9 
 
 McLanahan v. City of Syracuse. . 139 
 McLean v. Couper Milling Co. .. 25 
 
 McLean v. Erlanger 147, 158 
 
 McLean v. Jephson 49 
 
 McLean, Eecr. of Taxes v. Julien 
 
 El. Co 53, 161 
 
 McLean v. Meyers 161 
 
 M 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Malcolm Brewing Co. 
 
 V. Assessors 129 
 
 Peo. ex rel. Malcolm Brewing Co. 
 
 V. Nefif 29 
 
 Peo. ex rel. Man. Fire Ins. Co. 
 
 V. Com'rs 54 
 
 Man. Life Ins. Co. v. Wells 
 
 73, 75, 85, 114 
 Peo. ex rel. Man. Ky. Co. v. 
 
 Barker 30, 31, 40, 
 
 68, 79, 93, 95, 96, 109, 119, 123, 129 
 Peo. ex rel. Man. By. Co. v. Cole- 
 man 126 
 
 Peo. ex rel. Man. Ry. Co. v. 
 
 Com'rs 17, 61 
 
 Man. By. Co. v. Merges 156 
 
 Peo. ex rel. Marlborough Hotel 
 
 Co. V. Feitner 105 
 
 Peo. ex rel. Marsh v. Delaney.. 91 
 Peo. ex rel. Martin Bros. Co. v. 
 
 Barker 44 
 
 May V. New Orleans 9 
 
 Mayor v. Davenport 80 
 
 Mayor v. Goldman 155, 163 
 
 Peo. ex rel. The Mayor v. Mc- 
 Carthy 93 
 
 Mercantile Nat'l Bank v. May- 
 or 94, 112, 131 
 
 Messeck v. Supervisors of Colum- 
 bia 130 
 
 Metcalf V. Messenger 51 
 
 Peo. e.x; rel. Metropol. Co. v. 
 Com'rs 3 
 
 Peo. ex rel. Mohawk R. E. Co. 
 V. Garmon 36 
 
 Peo. ex rel. Moller v. O'Don- 
 nell 25, 51 
 
 Mooers v. Smedley 130 
 
 Peo. ex rel. Moulton v. Mayor.. 132 
 
 Peo. ex rel. Mt. Vernon C. B. Co. 
 V. Feitner 78 
 
 Mutual Benefit Life Ins. Co. v. 
 Supervisors 130 
 
 Peo. ex rel. Mut. Union T. Co. 
 V. Com'rs 55, 77, 106 
 
 Peo. ex rel. Mygatt v. Supervis- 
 ors 51 
 
 Mygatt V. Supervisors of Chenan- 
 go 132 
 
 Mygatt V. Washburn 52 
 
548 TABLE OF CASES TO PAET I (lOCAL TAXATION) 
 
 (Cases under title of "Peo. ex rel." are indexed under tlie relator's name.) 
 
 N 
 Consult separate indices to each part of the book. 
 
 PAGE 
 
 Nat'l Bank of Chemung v. El- 
 mira 80, 102 
 
 Peo. ex rel. National Sewing Ma- 
 chine Co. V. Feitner 46 
 
 Peo. ex rel. Nat. Starch Co. v. 
 Waldron 16 
 
 Peo. ex rel. Nat. Surety Co. v. 
 Feitner 5, 38 
 
 Peo. ex rel. Newburgh Savings 
 Bk. V. Peck 6 
 
 Peo. ex rel. N. J. Tel. Co. v. 
 Neff 9 
 
 Newman v. Supervisors 79 
 
 Peo. ex rel. N. Y. & Harlem R. 
 R. V. Com'rs 132 
 
 Peo. ex rel. N. Y. & N. J. Tel. 
 Co. V. Neff 39 
 
 Peo. ex rel. N. Y. C. & H. R. R. 
 V. Budlong 109 
 
 PAGE 
 
 Peo. ex rel. N. Y. C. R. R. Co. 
 
 V. Cook 97, 113 
 
 Peo. ex rel. N. Y. C. & H. R. R. 
 
 Co. V. Feitner no 
 
 Peo. ex rel. N. Y. C. & H. R. R. 
 
 Co. V. Keno 107 
 
 Peo. ex rel. N. Y. Hotel & Rest. 
 
 Co. V. Barker 83 
 
 N. Y. L. E. & W. R. R. Co. v. 
 
 Asten 132 
 
 Peo. ex rel. N. Y. Lake Erie & 
 
 W. R. R. V. Low 97, 116 
 
 Peo. ex rel. N. Y. Real Estate 
 
 Assn. V. Barker 33 
 
 Niagara Elevating Co. v. McNa- 
 
 mara 139 
 
 Peo. ex rel. Nichols v. Cooper.. 114 
 Matter of Nisbet 103, 104 
 
 O 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Oak Hill Cemetery Peo. ex rel. Orinoka Mills v. 
 
 Ass'n. V. Pratt 127 Barker 20 
 
 ^ , ^ , , ^ T^ Peo. ex rel. Oswald v. GofiF 56 
 
 Peo. ex rel. Ogdensburg, etc. R. ^^^^^^ ^^^^^^ ^^^^^^^ ^ ^^^^_ 
 
 R. Co. V. Pond 54 away 23, 29 
 
 O'Reilly V. Good 139 Overing v. Foote 56 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Pacific Mail S. S. v. 
 
 Com'rs 4, 18, 54 
 
 Pacific Mail S. S. Co. v. May- 
 or 130, 131 
 
 Paddell v. City of N. Y 12 
 
 Peo. ex rel. Paddock v. Lew- 
 is 107, 117 
 
 Palmer v. McMahon 11 
 
 Peo. ex rel. Panama R. R. Co. v. 
 Com'rs 29, 32, 47 
 
 Peo. ex rel. Parker Mill v. 
 
 Com'rs 44 
 
 Patchin v. Ritter 139 
 
 Peo. ex rel. Patterson, G. & H. 
 
 V. Wells 12, 17 
 
 Pauley v. Wahle 137 
 
 Pembina Mining Co. v. Pa 10 
 
 Peo. V. Pennock 143 
 
 Peo. V. Ross 59 
 
 Pittsburgh R. R. Co. v. Backus. . U 
 
TABLE OF CASES TO PAET I (lOCAL TAXATIOk) 549 
 
 (Cases under title of "Peo. ex rel." are indexed under tlie relator's name.) 
 
 PAGE 
 
 Peo. ex rel. Piatt v. Wemple... 13 
 Peo. ex rel. Powder Co. v. Feit- 
 ner 77, 92, 97 
 
 PAGE 
 
 Peo. ex rel. Powell v. Supervis- 
 ors 121 
 
 Matter of Pullman 52 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Radeziwon v. City 
 
 of Buffalo 109 
 
 Randall v. Elwell 137 
 
 Matter of Ranger 163 
 
 Peo. gx rel. Raplee v. Reddy. . . 91 
 Peo. ex rel. Reinhardt v. Feit- 
 
 ner ^" 
 
 Peo. ex rel. Reversible Collar Co. 
 
 V. Feitner ^'^ 
 
 Rochester & C. T. R. Co. v. Joel. . 11 
 Peo. ex rel. Rochester Lamp Co. 
 
 V. Feitner 77, 117 
 
 Peo. ex rel. Rochester Ry. Co. v. 
 
 Pond 36, 49 
 
 Peo. ex rel. Rome W. & 0. R. R. 
 V. Eddy 128 
 
 Peo. ex rel. Rome W. & 0. R. R. 
 V. Haupt 58, 108, 134, 150 
 
 Peo. ex rel. Rome W. & 0. R. R. 
 V. Hicks 108, 128 
 
 Peo. ex rel. Rome W. & 0. R. R. 
 V. Jones 63, 88 
 
 Rome, Watertown etc. R. E. v. 
 
 Smith 62, 130 
 
 Rorabeck v. Stebbins 139 
 
 Russell V. Com'rs 101 
 
 10 
 
 Consult separate indices 
 San Bernardino Co. v. Southern 
 
 Pac. Ry ^^ 
 
 Peo. ex rel. Sands v. Feit- 
 ner 38. 96, 129 
 
 Sanford v. Board of Supervisors 13 
 SanMateo Co. v. Southern Pac. 
 
 Ry 
 
 Santa Clara Co. v. Southern Pa- 
 cific Ry 1" 
 
 Saratoga & Washington R. R. Co. 
 v. McCoy 115 
 
 Savacol v. Boughton 138 
 
 Peo. ex rel. Second Ave. R. R- 
 Co. V. Barker 28, 35 
 
 Peo. ex rel. Second Ave. R. R- 
 V. Coleman 92 
 
 Peo. ex rel. Seidenberg S. & Co. 
 V. Feitner 37, 79 
 
 Peo. ex rel. Seelye v. Keefe 52 
 
 to each part of the book. 
 
 Sheldon v. VanBuskirk 135, 137 
 
 Peo. ex rel. Sherwin-Williams 
 
 Co. V. Barker 44, 47 
 
 Shimer v. Mosher 139, 140, 157 
 
 Peo. ex rel. Sicilian Asphalt Co. 
 
 V. Feitner 38 
 
 Peo. ex rel. Simpson v. Wells.. 81 
 
 Sisters of St. Francis v. Mayor. . 71 
 
 Peo. ex rel. Slade v. Com'rs. ... 41 
 
 Peo. ex rel. Smith v. Com'rs . . . 127 
 Smyth V. International Life Ins. 
 
 Co 46 
 
 Peo. ex rel. Sodus Bay R. R. v. 
 
 Cheatham 109, 114 
 
 Peo. ex rel. Standard Rock Co. 
 
 V. Feitner 78 
 
 Stanley v. Supervisors 95 
 
 State Freight Tax case 10 
 
 Peo. ex rel. Stebbins v. Purdy. . 75 
 
550 TABLE OF CASES TO PAET I (lOCAL, TAXATION^) 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 PAGE 
 Stevens v. N. Y. & Oswego I. R. 130 
 Peo. ex rel. Strong v. O'Don- 
 
 nell 100, 107 
 
 Susquehanna Bank v. Supervis- 
 ors of Broome 131 
 
 Peo. ex rel. Sutphen v. Feit- 
 
 ner 105, 114, 121 
 
 Stuart V. Palmer 11 
 
 Supervisor v. Betts 58 
 
 Peo. ex rel. Supervisors v. Had- 
 ley 115 
 
 PAGE 
 
 Peo. ex rel. Supervisors v. Har- 
 denburgh 145 
 
 Peo. V. Supervisors of Westchest- 
 er 59 
 
 Peo. ex rel. Swartwout v. Port 
 Jervis 108 
 
 Peo. ex rel. Sweet v. Blake.. 103, 107 
 
 Peo. ex rel. Sweet v. Raymond.. 101 
 
 Swift V. Poughkeepsie 79 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Taber Prang Art Co. 
 
 V. Wells 108 
 
 Peo. ex rel. Tate v. Dalton 152 
 
 Thompson v. Burhans 142 
 
 Peo. ex reL Thompson v. Peitner 67 
 Peo. ex rel. Thomson v. Peitner 108 
 Peo. ex rel. Thurber-Wyland Co. 
 
 V. Barker 48 
 
 TiflFt V. City of Buffalo 61 
 
 Peo. ex rel. Toms v. Supervisors 93 
 
 Peo. ex rel. Townshend v. Cady 132 
 Peo. ex rel. Tower Co. v. 
 
 Wells 44, 
 
 Peo. ex rel. Trowbridge v. 
 
 Com'rs 
 
 Peo. ex rel. Turl's Sons v. O'Don- 
 
 nell 
 
 Peo. ex rel. 23rd St. B. R. v. 
 
 Com'rs 3, 31, 
 
 Peo. ex rel. 23rd St. R. Co. v. 
 
 Peitner 96 
 
 46 
 
 6 
 
 29 
 
 32 
 
 U 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Ulster & Del. R. R. 
 
 Co. V. Burhans Ill 
 
 Peo. ex rel. Ulster & Del. R. R. 
 
 V. Smith 94, 111, 116, 117, 120 
 
 Union Steamboat Co. v. Buffalo 23 
 Peo. ex rel. Union Trust Co. y. 
 
 Coleman 28, 165 
 
 Peo. ex rel. Union Trust Co. v. 
 
 Com'rs 12 
 
 Peo. ex rel. U. S. Trust Co. v. 
 
 Com'rs 40 
 
 U. S. Trust Co. V. Mayor 30, 80 
 
 Peo. ex rel. United Verde Copper 
 
 Co. V. Feitner 19 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Van Nest v. Van Voorhis v. Budd 74 
 
 Com'rs 31, 32 In re Veith 142, 147 
 
 Van Rensselaer v. Kidd 130, 138 Vose v. Willard 60 
 
 Van Rensselaer v. Witbeck 138 
 
TABLE OI' CASES TO PAET I (lOCAL TAXATIOISt) 551 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 W 
 
 Consult seoarate indices 
 
 PAGE 
 
 Peo. V. Wall St. Bank 99, 106 
 
 Wallace Co. Bankrupt 164 
 
 Peo. ex rel. Wallkill Valley K. 
 
 K. Co. V. Keator 95, 128 
 
 Ward V. Boyce 137 
 
 Ward V. City of Bklyn 61 
 
 Ward V. Maryland 10 
 
 Peo. ex rel. Warren v. Car- 
 ter 112, 127 
 
 Peo. ex rel. Washington Bldg. 
 
 Co. V. Feitner 101, 114 
 
 Waters Pierce Oil Co. v. Texas.. 10 
 Peo. ex rel. Weber Co. v. Wells 33 
 Peo. ex rel. Weehsler v. Hark- 
 
 ness 103, 104 
 
 Peo. ex rel. Weeks v. Supervis- 
 ors of Queens 91 
 
 In re Welsbaoli Incandescent Gas 
 
 L. Co 71, 163 
 
 Peo. ex rel. Westchester Fire Ins. 
 
 Co. V. Davenport 38, 123 
 
 Western E. R. Co. v. Nolan 130 
 
 Peo. ex rel. Western Union Tel. 
 
 Co. V. Dolan 60, 77 
 
 Peo. ex rel. Western Union Tel. 
 
 Co. V Tierney 10, 60, 77 
 
 Western Transportation Co. v. 
 Scheu 23 
 
 to each part of the book. 
 
 PAGE 
 
 Peo. ex rel. West Shore E. E. 
 
 V. Adams 58, 108 
 
 Peo. ex rel. W. S. E. E. & N. Y. 
 
 C. E. R. V. Johnson 59, 78 
 
 Peo. ex rel. W. S. E. E. Co. v. 
 
 Pitman 55, 107, 112, 114, 115 
 
 Westfall V. Preston 63, 138 
 
 Weston V. Charleston 9 
 
 Peo. ex rel. West Side & Yonkers 
 
 Ey. Co. V. Com'rs 29 
 
 Wheeler v. Mills 58 
 
 Williams v. Supervisors of 
 
 Wayne 4 
 
 Peo. ex rel. Williamsburgh Gas 
 
 Light Co. V. Assessors 31 
 
 Peo. ex rel. Winchester v. Cole- 
 man 13 
 
 Winegard v. Kromer 116 
 
 Matter of Winegard 106, 112, 113 
 
 Peo. ex rel. Witherbee v. Super- 
 visors 11 
 
 Peo. ex rel. Witthaus v. O'Don- 
 
 nel 104 
 
 Wise V. Wise 163 
 
 Peo. ex rel. Wood v. O'Donnell . . 74 
 
 Woodruff V. Oswego Starch Co... 21 
 
 Woolsey v. Morris 140 
 
 Matter of Wright, Peters & Co. 147 
 
 Peo. ex rel. Wright v. Chapin.. 99 
 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Yellovsr Pine Co. v. 
 Barker 48 
 
 Consult separate indices to each part of the book. 
 Peo. ex rel. ZoUikoffer v. Feit- 
 ner 68, 101, 121 
 
TABLE OF CASES TO PART II. 
 
 (Special Franchise Tax). 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 A 
 Consult separate indices to each part of the book. 
 
 PAGE PAGE 
 
 Peo. ex rel. Abraham v. Com'rs' 171 American Dist. Tel. Co. v. State 
 Matter of Anthony Avenue 198 Board 187 
 
 B 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. B. & L. E. T. Co. Peo. ex rel. Bklyn E. E. Co. v. 
 
 V. Com'ra 208 Neff 166, 173 
 
 Peo. ex rel. Bklyn City R. K. P^o. ex rel. Bryan v. Com'rs 170, 184 
 
 Co V Com'rs 202 ^^°- ^^ ^^^- Buffalo & Lake Erie 
 
 .„ ' ' , ™ , ri ^ ^D o T. Co. V. Com'ra 192 
 
 Peo. ex rel. Bklyn C. R. E. Co. i t> «. i r^ ,-, 
 
 „ .,_. ,-, Peo. ex rel. Buffalo Gas Co. v. 
 
 V. N. y 175 
 
 Com'rs 191 
 
 Peo. ex rel. Bklyn His. E. E. Co. Buffalo Gas Go. v. Volz 175 
 
 V. Com'rs.. 179, 182, 183, 184, Peo. ex rel. Buffalo E. Co. v. 
 
 205,211,213 Priest 192 
 
 
 Consult separate indices to each part of the book. 
 Peo. ex rel. City of Auburn v. Matter of Consolidated Tel. & El. 
 
 Duryea 171 S. Co 197 
 
 Peo. ex rel. City of Rochester v. 
 
 DeWitt 171 Peo. ex rel. Cooper Glue Factory 
 
 Peo. ex rel. Consolidated G. Co. v. Com'rs 171, 176 
 
 V. Feitner 166 
 
 D 
 
 Consult separate indices to each part of the book. 
 Peo. ex rel. D. L. & W. R. E. Co. 
 V. Com'rs 185 
 
 B 
 Consult separate indices to each part of the book. 
 Peo. ex rel. E. Eiver Terminal Peo. ex rel. Edison 111. Co. v. 
 Ey. v. Com'rs 169 Com'rs 168 
 
 652 
 
TABLE OF CASES TO PAET II (sPEOIAL rEAWCHISE TAX J 553 
 
 (Cases under title of "Peo. ex rel." are indexed under tlie relator's name.) 
 
 PAGE PAGE 
 
 Edison Eleo. Ilium. Co. v. Neff. . 166 Peo. ex rel. Erie R. R. v. Wood- 
 
 Peo. ex rel. Equitable G. L. Co. bury 169, 175 
 
 V. Barker 166 
 
 G 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Glen Tel. Co. v. Guaranty Trust Co. v. Moyna- 
 
 Eailing 168, 198 han 198 
 
 Peo. ex rel. Glen Telephone Co. 
 V. Hall 168, 198 
 
 H 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Harlem River & P. Peo. ex rel. Hudson & M. R. R. 
 
 R. R. Co. V. Com'rs 171 Co. v. Com'rs 168, 170, 
 
 Heerwagen v. Crosstown St. Ry. 175, 185, 190, 191, 192, 193, 201 
 
 Co 197 
 
 I 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Interborough R. T. 
 Co. V. Com'rs 171 
 
 J 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Jamaica W. S. Co. v. Kronsbein v. The City of Rocbes- 
 
 Com'rs 179, 180, 181, 182, 183, ter 198 
 
 185, 192, 195, 199, 202, 210, 211 
 
 L 
 Consult separate indices to each part of the book. 
 Laekawn. R. R. Co. v. Roll 169, 176 Peo. ex rel. L. I. R. R. Co. v. 
 
 Peo. ex rel. Lehigh V. R. Co. v. Com'rs 169, 170 
 
 Woodbury 191 
 
 M 
 Consult separate indices to each part of the book. 
 Peo ex rel. Man. R. R. Co. v. Bar- Peo. ex rel. Met. St. Ry. Co. v. 
 ker 166, 173, 203, 207, 209, 210, 211 Com'rs 166, 168, 172 
 
 N 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Nassau Ry. Co. v. Peo. ex rel. New England Tele- 
 (jjout 196 graph Co. v. Com'rs 186 
 
554 TABLE OI" OASES TO PART II (SPECIAL PEAITCHISB TAx) 
 (Cases under title of *'Peo. ex rel." are indexed under the relator's name.) 
 
 PAGE PAGE 
 
 Peo. ex rel. N. Y. & R. B. E,. Co. Peo. ex rel. N. Y. C. & H. R. E,. 
 
 V. Com'rs 190 Co. v. Woodbury 170, 171, 175, 
 
 Peo. ex rel. N. Y. C. & H. E. R. 176, 177, 180, 181, 182, 183, 185 
 
 Co. V. Gourley 178 ^^°- ^^^ '■e'- N- Y- Westchester 
 
 & B. R. R. Co. V. Hyde. . .179, 197 
 
 Peo. ex rel. N. Y. C. & H. E. R. p^^ ^^ ^^j Niagara Falls Co. 
 
 Co.v.Keno 178,191 y. Com'rs 176,182 
 
 Peo. ex rel. N. Y. C. & H. E. E. Peo. ex rel. Niagara Falls Hy- 
 
 Co. V. Priest 169, draulie P. Co. v. Com'rs 
 
 170, 179, 185, 190, 192, 199 192, 193, 197 
 
 Q 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Queens Bor. Gas & Peo. ex rel. Queens Co. Water 
 
 El. Co. V. Woodbury 194 Co. v. Com'rs. . .180, 181, 183, 
 
 185, 187, 191, 193, 200, 205, 208 
 
 R 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Retsof Mining Co. v. Peo. ex rel. Rochester Tel. Co. 
 Priest 168, 171 v. Priest 192 
 
 S 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Sinkler v. Terry... 173 Sweet v. City of Syracuse 173 
 
 Peo. ex rel. Subway Co. v. Bar- 
 ker 166 
 
 T 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Third Ave. R. R. Co. Peo. ex rel. Troy Gas Co. v. 
 
 V. Com'rs 180, Hall 178 
 
 181, 182, 183, 203, 206, 208 
 
 U 
 Consult separate indices to each part of the book. 
 
 Union Ry. v. Com'rs 213 Peo. ex rel. United Natural Gas 
 
 Co. V. Priest 169 
 
 W 
 Consult separate indices to each part of the book. 
 Matter of West Farms Road 198 Peo. ex rel. W. & H. Co. v. Rob- 
 erts 172 
 
TABLE OF CASES TO PART III. 
 
 (State Taxation). 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 Consult separate indices to each part of the book. 
 
 PAGE 
 
 Aetna Ins. Co. v. Mayor 302 
 
 Peo. ex rel. Amer. Axe & Tool 
 
 Co. V. Roberts 286, 295 
 
 Peo. ex rel. Amer. Bank Note 
 
 Co. V. Sohmer 245 
 
 Peo. V. Amer. Bell Tel. Co. . .256, 257 
 Peo. ex rel. Amer. Con. & D. Co. 
 
 V. Wemple 291 
 
 PAGE 
 
 Peo. ex rel. Amer. Soda F. Co. v. . 
 
 Roberts 262 
 
 Peo. ex rel. Amer. Surety Co. v. 
 
 Campbell 250, 293 
 
 Peo. ex rel. Armstrong. Cork Co. 
 
 V. Barker 226 
 
 Peo. ex rel. Auto. Vending Co. 
 
 V. Kelsey 247 
 
 B 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Badische A. & S. 
 
 Fabrik v. Roberts 255 
 
 Peo. ex rel. Bank for Savings v. 
 
 Miller 275 
 
 Binghamton Trust Co. v. Bing- 
 
 hamton 274 
 
 Peo. ex rel. Blaekinton Co. v. 
 
 Roberts 260 
 
 Peo. ex rel. Brooklyn El. R. R. 
 
 Co. V. Roberts 245, 295 
 
 Peo. ex rel. Brooklyn R. T. Co. 
 
 V. Morgan 244 
 
 Peo. ex rel. Brooklyn Union Gas 
 
 Co. V. Morgan 269 
 
 Brooklyn Cooperage Co. v. New 
 
 Orleans 264 
 
 Brown v. Commonwealth 237 
 
 Peo. ex rel. Brush Elec. Mfg. Co. 
 
 V. Wemple 263, 291 
 
 Burr V. Palmer 283 
 
 
 Consult separate indices to each part of the book. 
 
 Carson v. Maryland 225 
 
 Central Trust Co. v. N. Y. C. & 
 H. R. R. Co 283 
 
 Peo. ex rel Chicago Junction Ry. 
 Co. V. Roberts 252, 257 
 
 Chickasaw Cooperage Co. v. Po- 
 lice Jury 264 
 
 Peo. ex rel. Cohen &. Co. v. Mil- 
 ler 244 
 
 Peo. ex rel. Colonial Trust Co. v. 
 Morgan 245 
 
 Peo. ex rel. Commercial Cable 
 
 Co. V. Morgan 217, 250 
 
 Comm. V. Arrott Mills Co 264 
 
 Comm. V. Brush EI. Co 264 
 
 Comm. V. Edison El. Co 264 
 
 Comm. V. Mahoney Rolling Mills 263 
 Comm. V. Westinghouse Air 
 
 Brake Co 263 
 
 Comm. V. Northern El. Co 264 
 
 Comm. V. Keystone Bridge Co. . . 263 
 Comm. V. William Mann Co. ... 263 
 
 555 
 
556 TABLE OF CASES TO PAET III ( STATE TAXATION) 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 PAGE PAGE 
 
 Peo. ex rel. Conn. Mutual Life Peo. ex rel. Consol. Ginseng Co. 
 
 Ins. Co. V. Kelsey 270, 273 v. Kelsey 225 
 
 Consol. Gas Light Co. v. Balti- Matter of Consol. K. C. S. Co. 222 
 
 more 264 Peo. ex rel. Continental Ins. Co. 
 
 Covington Gas Light Co. v. Gov- v. Miller 273 
 
 ington 264 Peo. ex rel. C. T. E. Co. v. Miller 266 
 
 D 
 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. Davis-Colby Co. v. Dunbarton Flax Spinning Co. v. 
 
 Campbell 252 G- & J. R. Co 230 
 
 •n 1 TV «. -D ij P^°- ^^ rel. Dunkirk, etc., Ry. 
 
 Peo. ex rel. Devoe & Raynolds „ ^ , „ 
 
 •' Co. V. Campbell 265 
 
 Peo. ex rel. Dutilh Smith Co. v. 
 
 Co. V. Roberts 260 
 
 Ducat V. Chicago 230 Miller 229 
 
 E 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Eastern Bermudez Peo. ex rel. Edison Elec. L. Co. 
 
 Asph. Co. V. Morgan 260 v. Campbell 295 
 
 Peo. ex rel. Eastern Transp. Line Peo. ex rel. Edison Elec. L. Co. 
 
 T^- Com'rs 302 y. Campbell 257 
 
 Peo. ex rel. Edison Co. v. Camp- p^^ ^^ ^^j ^^.^^^ ^ ^ ^ ^^ 
 
 ^11 257 ^ ^^^ 25^ 
 
 Peo. ex rel. Edison Co. v. Wem- 
 
 J 263 ®^ ^^^- Elliott Fisher Co. v. 
 
 Peo. ex ' rel'. Edison Co.' v. ' Wem- ^°^™«'" 225 
 
 pie 257 Emmerich Co. v. Sloane 229 
 
 Peo. ex rel. Edispn Elec. Ilium. Peo. ex rel. Eppens, Smith & 
 
 Co. V. Wemple 247,293 Wieman Co. v. Roberts. .254, 286 
 
 Peo. ex rel. Edison Elec. Ilium. Evening Journal Ass'n. v. State 
 
 Co. V. Wemple 286 Board 264 
 
 F 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Fifth Ave. Bldg. Co. Peo. ex rel. Fruin Bambrick Co. 
 
 V. Williams 249 y Knight 260 
 
 Peo. ex rel. Fort George Co. v. _, , . , , ...,.-, .„ , 
 
 Miller 248, 274 Fi'edenck, etc., Light Co. v. Fred- 
 
 Peo. ex rel. Fourteenth St. R. Co. eriok City 264 
 
 V. Kelsey 250 Frazee v. MofEt 264 
 
 G 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Gramercy Co. v. 
 Roberts 295 
 
TABLE OF CASES TO PAET III (sTATE TAXATION) 557! 
 
 (Cases under title of "Peo. ex rel." are indexed under tlie relator's name.) 
 
 H 
 Consult separate indices to each part of the book. 
 
 PAGE PAGE 
 
 Peo. ex rel. Harlan & H. Co. v. Peo. v. Horn Silver Mining Co.. 260 
 
 Campbell. . .252, 256, 290, 291, 296 Horn Silver Mining Co. v. N. Y. 220 
 
 Halsey v. Jewett Dramatic Co. 228 Peo. ex rel. Hyde & Sons v. Mil- 
 
 Hartranft v. Weigman 264 ler 246 
 
 Harvard Co. v. Wieht 229 Peo. ex rel. Hubert Ap't Ass'n. v. 
 
 Home Ins. Co. v.. N. Y 247 Kelsey 249, 294 
 
 I 
 Consult separate indices to each part of the book. 
 Peo. ex rel. International Elevat- Peo. ex rel. International Con. 
 or Co. V. Roberts 253 Co. v. Roberts 287 
 
 J 
 Consult separate indices to each part of the book. 
 Peo. ex rel. J. B. Co. v. Roberts 246 Peo. ex rel. Johnson Co. v. Rob- 
 
 Peo. ex rel. Jerome Park Co. v. erts 246, 254 
 
 Roberts 247 Peo. ex rel. Joline v. Wilcox . . . 290 
 
 Peo. ex rel. Jewellers' Circular 
 Co. V. Roberts 261 
 
 K 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Keochl & Co. v. Mor- Peo. ex rel. Knickerbocker Ice Co. 
 
 gan 247 v. Comptroller 261 
 
 Peo. ex rel. A. N. Kellogg News- Peo. ex rel. ICriiekerbocker Trust 
 
 paper Co. v. Roberts 256 Co. v. Kelsey 298. 
 
 Kinney v. Reid lee Cream Co. 227 
 Peo. ex rel. Klipstein v. Roberts 254 
 
 L 
 Consult separate indices to each part of the book. 
 
 Lake v. Guillotte 264 Peo. ex rel. Lester v. Eno 294 
 
 Lathers v. Keogh 283 Peo. ex rel. Lorena Co. v. Mor- 
 gan 243 
 
 M 
 Consult separate indices to each part of the book. 
 
 Peo. ex rel. McNeary v. McLean 290 Peo. ex rel. Miller v. Peck 291 
 
 Maine v. Grand Trunk Ry 265 Peo. ex rel. Mut. Trust Co. v. 
 
 Peo. ex rel. Metropolitan S. Co. Miller 244, 274 
 
 V. Kelsey 281 
 
558 TABLE OF CASES TO PAET III ( STATE TAXATION) 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 N 
 Consult separate indices to each part of the book. 
 
 Nassau Gas Light Co. v. City of 
 
 Brooklyn 262 
 
 Feo. ex rel. Nat'l Enameling Co. 
 
 V. Miller 225, 245, 297 
 
 Peo. ex rel. N. Eng. Dressed Meat 
 
 & Wool Co. V. Roberts 261, 286 
 
 Peo. ex rel. N. E. Loan & Invest. 
 
 Co. V. Roberts 254 
 
 New Orleans v. Ernst 263 
 
 New Orleans v. Manesier 264 
 
 Peo. ex rel. N. Y. C. & H. R. R. 
 
 V. Gaus 244 
 
 Peo. ex rel. N. Y. C. & H. R. R. 
 
 V. Knight 246 
 
 Peo. ex rel. N. Y. C. & H. R. R. 
 
 V. Morgan 266 
 
 Peo. ex rel. N. Y. C. & H. R. R. 
 
 V. Roberts 267 
 
 PAGE 
 
 Peo. ex rel. N. Y. Loan & Im- 
 provement Co. V. Roberts .... 300 
 
 Peo. ex rel. N. Y. Mail & T. Co. 
 V. Gaus 236 
 
 Peo. ex rel. N. Y. Realty Corpo- 
 ration V. Miller 294 
 
 N. Y. Terminal Co. v. Gaus 283 
 
 Peo. ex rel. N. Y. & E. R. Ferry 
 Co. V. Roberts 234 
 
 Peo. ex rel. Niagara R. Hydraulic 
 Co. V. Roberts 248 
 
 Peo. ex rel. Non-Antem Sulphite 
 Digester Co. v. Knight 261 
 
 Peo. ex rel. North Amer. T. Co. 
 V. Knight 246 
 
 Novelty Mfg. Co. v. Connell 229 
 
 O 
 Consult separate indices to each part of the book. 
 
 Matter of O'Berry 298 Osborne v. Mobile 
 
 Consult separate indices 
 
 Pacific Express Co. v. Seibert... 266 
 Peo. ex rel. Parke, Davis & Co. v. 
 
 Roberts 225 
 
 Parmele v. Haas 228 
 
 Peo. ex rel. Penn. R. R. v. Knight 253 
 Peo. ex rel. Penn. R. R. v. Wem- 
 
 ple 253 
 
 Peo. V. Albany Ins. Co 279 
 
 Peo. V. Campbell & Roberts 
 
 250, 285, 291 
 Peo. V. Thames & Mersey Marine 
 
 Ins. Co 271 
 
 Phila. Fire Ins. Co. v. N. Y. ... 230 
 Peo. ex rel. Piatt v. Wemple... 251 
 
 P 
 
 to each part of the book. 
 
 Peo. ex rel. Port Morris L. & T. 
 
 Co. V. Glynn 246 
 
 Peo. ex rel. Postal Tel. Co. v. 
 
 Campbell 250 
 
 Postal Tel. Co. v. Charleston... 266 
 Peo. V. President, etc., D. & H. 
 
 Canal Co 246 
 
 Peo. ex rel. Provident S. L. A. 
 
 Society v. Miller 273 
 
 Press Printing Co. v. State 
 
 Board • 263 
 
 Press Printing Co. v. State 
 
 Board 264 
 
 Peo. ex rel. Pullman Co. v. Glynn 246 
 
TABLE OV CASES TO PAET III (STATE TAXATION) 559 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 E 
 Consult separate indices to each part of the book. 
 
 PAGE PAGE 
 
 Heading E. R. v. Pa 266 Eobbins v. Shelby County Taxing 
 
 Eeedy Elevator Co. v. American District 225 
 
 Grocery Co 230 Peo. ex rel. Eoebling's Sons' Co. 
 
 Peo. ex rel. Bees Sons v. Miller y. Wemple 261, 295 
 
 244, 251 
 
 S 
 Consult separate indices to each part of the book. 
 
 San Francisco F. L. Co. v. Ban- Peo. v. Spring Valley Hydraulic 
 
 bury 237 Gold Co 279 
 
 Peo. ex rel. Schurz v. Cook 222 Peo. ex rel. Standard Wood Co. 
 
 Peo. ex rel. Sehwarzschild Co. v. v. Eoberts 262 
 
 Eoberts 258 Peo. ex rel. Staten I. E. E. v. 
 
 Peo. ex rel. Seth Thomas Clock Eoberts 294 
 
 Co. V. Wemple 262, 295 State Tax on Foreign Held Bonds 217 
 
 Peo. ex rel. Singer Mfg. Co. v. Peo. ex rel. Steinway Sons v. 
 
 Wemple 248 Kelsey 263 
 
 Peo. ex rel. Smith Co. v. Eoberts 255 Peo. ex rel. Studebaker v. Knight 287 
 
 Peo. ex rel. Southern Cotton Oil Peo. ex rel. Stokes v. Eoberts 
 
 Co. V. Eoberts 255 258, 282, 295 
 
 Peo. ex rel. So. Cotton Oil Co. v. Peo. ex rel. Syracuse Imp. Co. v. 
 
 Wemple 226 Morgan 260 
 
 Peo. ex rel. Spencerian Pen Co. 
 
 V. Kelsey 247, 286 
 
 T 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Tiffany Co. v. Camp- In re application to review, etc., 
 
 bell 258 Tax against Tiffany & Co. ... 293 
 
 Matter of Tilyou 291 
 
 U 
 Consult separate indices to each part of the book. 
 Peo. ex rel. U. P. Tea Co. v. Bob- Peo. ex rel. U. S. Aluminum 
 erts 261, 294 Plate Co. v. Knight 247, 254 
 
 V 
 Consult separate indices to each part of the book. 
 Peo. ex rel. Vandervoort v. Glynn 249 
 
560 TABLE OF CASES TO PART III (sTATE TAXATION) 
 
 (Cases under title of "Peo. ex rel." are indexed under the relator's name.) 
 
 w 
 
 Constilt separate indices to each part of the bnok. 
 
 PAGB 
 
 Peo. ex: rel. Waelark R. Co. v. 
 
 Williams 249 
 
 Peo. ex rel. Wall & Hanover St. 
 
 Realty Co. v. Miller 248 
 
 Peo. ex rel. Washington Mills 
 
 Co. V. Roberta 255 
 
 In re Waterman Co. v. Oilman. . 298 
 Peo. ex rel. Waterman Co. v. 
 
 Morgan 261 
 
 Welsbach v. Norwich Gas Co. . . 227 
 
 PAGE 
 
 Peo. ex rel. Western Eleo. Co. v. 
 
 Campbell 258 
 
 Peo. ex rel. Western Union Tel. 
 
 Co. V. Roberts 285 
 
 Peo. ex rel. Wiebusch & Hilger v. 
 
 Roberts 245, 250, 294 
 
 Peo. ex rel. Williams Co. v. 
 
 Sohmer 251, 253 
 
 Wilson McNeill Co. v. Standard 
 
 Oil Co 227 
 
 Wood & Sellick Co. v. Ball. .227, 228 
 
INDEX TO STATUTES IN PART I. 
 
 (Local Taxation.) 
 
 PAGE 
 
 86 
 
 134 
 
 136 
 
 137 
 
 140 
 
 141 
 
 141 
 
 142 
 
 143 
 
 143 
 
 144 
 
 145 
 
 145 
 
 77 
 
 55, 99, 101 
 
 110 
 
 116 
 
 293 119, 122 
 
 127 
 
 128 
 
 124 
 
 147 
 
 148 
 
 148 
 
 8 
 
 8 
 
 REVISED STATUTES. 
 
 PAGE PAGE 
 
 E. S. of 1813 1 1 E. S., chap. 13, title 2, see. 6 22 
 
 1 R. S.., chap. 13, title 1, see. 2 15 2 R. S., chap. 13, title 2, sees. 
 
 1 R. S., chap. 13, title 1, sec. 3 16 7 and 8 51 
 
 1 R. S., chap. 13, title 1, sees. 1 R. S., chap. 13, title 2, sees. 
 
 6-7 143 19 and 20 57 
 
 1 R. S., chap. 13, title 1, sec. 7 6 1 R. S., chap. 13, title 2, see. 20 59 
 
 1 R. S., chap. 13, title 2, sec. 5 4 1 E. S., chap. 13, title 2, sec. 27 62 
 
 561 
 
 SEC. 
 
 91 
 
 
 
 TAX LAW. 
 
 PAGE SEC. 
 
 51 e,». 
 
 9. 
 
 subd. 
 subd. 
 subd. 
 
 3 
 
 15 
 
 59 
 
 ^j 
 
 4 
 
 16 
 
 69 
 
 2 
 
 5 
 
 16 
 
 71 
 
 3 
 
 
 14 
 
 73 
 
 4, 
 4, 
 4, 
 4, 
 4, 
 4, 
 6 
 
 subd. 
 subd. 
 subd. 
 subd. 
 subd. 
 subd. 
 
 6 
 
 12 
 
 13 
 
 14 
 
 15 
 
 16 
 
 3 
 
 4 
 
 4 
 
 5 
 
 6 
 
 6 
 
 40 
 
 74 
 81 
 82 
 83 
 84 
 85 
 94 
 
 7 
 11 
 
 
 
 ....42, 43, 76 
 22 
 
 95 
 250 
 
 1' 
 
 
 
 28 
 
 290 
 
 20 
 
 
 
 51 
 
 291 
 
 I"! 
 
 
 
 35, 99 
 
 292 
 
 91 
 
 
 
 53 
 
 293 
 
 'X^ 
 
 
 
 56 
 
 294 
 
 34 
 
 
 
 56 
 
 295 
 
 ^6 
 
 
 
 57 
 
 296 
 
 '^'J 
 
 
 
 59 
 
 299 
 
 TiS 
 
 
 
 61 
 
 301 
 
 39 
 
 
 
 62 
 
 306 
 
 41 
 
 
 
 63 
 
 330 
 
 42 
 
 
 
 239 
 
 336 , 
 
562 INDEX TO STATUTES IIT PAET I (lOCAL TAXATION) 
 
 SEC. PAGE SEC. PAGE 
 
 1 R. S., chap. 13, title 2, sees. 1 R. S., chap. 13, title 4, sees. 
 
 28-30 63 1 to 3 53 
 
 1 R. S., chap. 13, title 2, sees. 1 R. S., chap. 13, title 4, sees. 
 
 33-35, as am'd 86 4 and 5 55 
 
 1 R. S., chap. 13, title 2, sees. 2 R. S., chap. 13, title 4, sees. 
 
 36-39 134 21-23 149 
 
 1 R. S., chap. 13, title 2, sec. 9, 1 R. S., chap. 13, title 1, sec. 1 14 
 
 subd. 4 40 
 
 NEW YORK CHARTER. 
 
 SEC. PAGE SEC. PAGE 
 
 95 65 908 88 
 
 884 64 909 89 
 
 885 64 910 90 
 
 886 65 911 150 
 
 887 66 912 151 
 
 888 66 913 151 
 
 889 67 914 152 
 
 890 69 917 153 
 
 892 70 921 154 
 
 893 ■ 73 923 154 
 
 894 74 926 155 
 
 894a 75 927 156 
 
 895 76 928 157 
 
 896 81 929 157 
 
 897 83 932 157 
 
 898 84 933 158 
 
 899 85 934 158 
 
 906 98,108 936 160,161 
 
 907 88 
 
 CONSOLIDATION ACT. (Ch. 410, Laws of 1882.) 
 
 SEC. PAGE SEC. PAGE 
 
 34 64 822 83 
 
 43 64 828 88 
 
 812 69 831 89 
 
 813 66 832 90 
 
 814 67 833 150 
 
 817 70 834 151 
 
 818 74 840 151 
 
 819 81 841 152 
 
 820 77 848 154 
 
INDEX TO STATUTES IN PAET I (lOCAL TAXATIOWy 563 
 
 CONSOLIDATION ACT— Continued 
 
 SEC. PAGE SEC. PAGE 
 
 850 154 859 157 
 
 853 155 860 158 
 
 854 156 861 158 
 
 855 157 863 160 
 
 856 157 
 
 CODE OP CIVIL PEOCEDURE. 
 
 SEC. PAGE SBC. PAGE 
 
 723 110 2127 93, 97 
 
 1351 128 2133 110 
 
 2120 92 2140 93 
 
 See Part III (State Taxation) for Code Provisions in Certiorari. 
 U. S. CONSTITUTION. 
 
 SEC. AET. PAGE PAGE 
 
 8, 1 9, 10 14th Amendment 11 
 
 N. Y. STATE CONSTITUTION. 
 
 PAGE 
 
 Art. I, see. 6 10 
 
 GENERAL CORPORATION LAW. 
 
 SEC. PAGE SBC. PAGE 
 
 16 26 16 39 
 
 STATUTORY CONSTRUCTION LAW. 
 
 SEC. PAGE 
 
 5 35 
 
 BANKRUPTCY ACT. 
 
 SEC. PAGE SEC. PAGE 
 
 17 164 64 163 
 
 57, N 164 
 
 COUNTY LAW. 
 
 PAGE 
 
 Sees. 12, 240, 242 86 
 
 TOWN LAW. 
 
 PAGE 
 
 Sec. 170 86 
 
564 INDEX TO STATUTES IN PAET I (lOCAL TAXATION) 
 
 LAWS 
 
 CHAP 
 
 '. SEC. 
 
 1843 
 
 23 
 
 2 
 
 1845 
 
 180 
 
 29 
 
 1845 
 
 180 
 
 29-30 
 
 1846 
 
 327 
 
 
 1850 
 
 121 
 
 24-26 
 
 1850 
 
 121 
 
 27 
 
 1851 
 
 176 
 
 2 
 
 1851 
 
 176 
 
 8 
 
 1851 
 
 371 
 
 1 
 
 1853 
 
 69 
 
 
 1853 
 
 463 
 
 
 1853 
 
 469 
 
 
 1855 
 
 57 
 
 
 1855 
 
 83 
 
 
 1857 
 
 7 
 
 
 1857 
 
 456 
 
 3 
 
 1857 
 
 456 
 
 4 
 
 1857 
 
 536 
 
 
 1858 
 
 110 
 
 
 1859 
 
 302 
 
 3 
 
 1859 
 
 302 
 
 6 
 
 1859 
 
 302 
 
 7 
 
 1859 
 
 302 
 
 10 
 
 1859 
 
 302 
 
 11 
 
 1859 
 
 302 
 
 12-13 
 
 1865 
 
 453 
 
 1 
 
 1867 
 
 361 
 
 
 1867 
 
 410 
 
 5 
 
 1870 
 
 382 
 
 8 
 
 1870 
 
 506 
 
 2-3 
 
 1871 
 
 573 
 
 1 
 
 1871 
 
 573 
 
 3 
 
 1873 
 
 335 
 
 26 
 
 1873 
 
 335 
 
 87 
 
 1873 
 
 758 
 
 
 1876 
 
 96 
 
 
 1879 
 
 492 
 
 
 1880 
 
 269 
 
 
 1880 
 
 269 
 
 1 
 
 1880 
 
 269 
 
 2-3 
 
 1880 
 
 269 
 
 3 
 
 1880 
 
 269 
 
 4-5 
 
 SESSION LAWS. 
 
 PAGE LAWS CHAP. SEC. PAGE 
 
 150 1880 269 6 127 
 
 . . . . 139 1880 269 7 128 
 
 . ... 141 1881 293 15 
 
 21 1881 433 4 
 
 90 1881 640 147 
 
 . ... 150 1883 392 16 
 
 4 1884 353 1 6 
 
 61 1885 10, 32 144 
 
 16 1885 201 61 
 
 143 1886 659 3-6 141 
 
 46 1892 58 154 
 
 6 1892 58 2 156 
 
 . 42, 76 1892 685 7 4 
 
 6 1892 689 187 5 
 
 144 1894 705 5 
 
 28 1897 80 3 
 
 5 1897 489 145 
 
 59 1897 766 159 
 
 57, 1899 342 136 
 
 66 1899 712 61 
 
 . . . . 69 
 
 68 ( 'S'ee Part II, Special Franchise 
 
 .... 77 Tax). 
 
 81 1900 512 51 
 
 88 1901 158 134 
 
 56 1901 159 137 
 
 147 1901 358 62 
 
 74 1901 466 2 157 
 
 . ... 83 1901 517 142 
 
 140 1901 550 134 
 
 90 1901 618 5 
 
 89 1902 192 83 
 
 64 1902 202 40 
 
 64 1902 324 51 
 
 .... 70 1903 454 67, 70, 88 
 
 136 1904 279 62 
 
 143 1904 375 65 
 
 .... 77 1904 385 57 
 
 99 1904 624 158 
 
 . ... Ill 1904 757 64 
 
 116 1905 61 51 
 
 119 1905 281 127 
 
INDEX TO STATUTES IN PAET I (lOCAL TAXATION) 565 
 
 SESSION LAWS— Continued 
 
 LAWS 
 
 1905 
 
 CHAP. SEC. 
 
 330 
 
 PAGE 
 
 06 
 
 LAWS 
 
 1910 
 1911 
 1911 
 1911 
 1911 
 
 1911 
 1911 
 1911 
 1912 
 1912 
 1913 
 
 CHAP. 
 
 374 
 116 
 302 
 315 
 455 
 
 579 
 802 
 805 
 221 
 270 
 324 
 
 SEC. 
 
 
 PAGE 
 8 
 
 1905 
 
 348 
 207 
 
 148 
 
 75 
 
 
 
 51 
 
 1906 
 
 
 
 119 
 
 1906 
 
 248 
 
 43 
 
 35 
 
 1906 
 
 425 
 
 56 
 
 85, 
 108, 
 
 74, 
 
 88, 
 
 150, 
 
 . 67, 70 
 
 1906 
 
 469 
 
 4 
 
 81, 84 
 
 1907 
 
 718 
 
 4 
 
 89, 98 
 
 1907 
 1908 
 1908 
 
 721 
 12 
 64 
 
 126 
 
 158 
 
 83 
 
 152, 153 
 . ... 145 
 8 
 
 1909 
 
 240 
 330 
 374 
 403 
 
 141 
 
 119 
 
 148 
 
 57 
 
 
 
 51 
 
 1909 
 1909 
 
 
 
 .... 140 
 51 
 
 1909 
 
 
 
 . 77, 83 
 
 1910 
 
 332 
 
 144 
 
 
INDEX TO STATUTES IN PART II. 
 
 (The Special Franchise Tax.) 
 
 TAX LAW. 
 
 PAGE PAGE 
 
 Art. I, sec. 2, subd. 3 167 Art. II, sec. 45 187 
 
 See. 2, subd. 4 176 Art. II, sec. 45a 187 
 
 Sec. 39 178 Art. II, sec. 46 189 
 
 Art. II, sec. 40 177 Art. II, sec. 46a 194 
 
 Sec. 42 179 Art. II, sec. 47 195 
 
 Art. II, sec. 43 179 Art. II, sec. 48 195 
 
 Art. II, sec. 44 186 Art. II, sec. 49 197 
 
 REVISED STATUTES. 
 
 PAGE 
 
 E. S., Pt. 1, chap. 13, title 1, 
 sec. 2 168 
 
 SESSION LAWS. 
 
 LAWS CHAP. SEC. PAGE LAWS CHAP. SEC. PAGE 
 
 1881 293 168 1907 720 176 
 
 1896 908 168 1908 295 176 
 
 1896 908 182-190 172 1909 275 2 179 
 
 1899 712 ...168, 179, 186 1909 276 179 
 
 187, 196, 197 1910 7-458 179 
 
 1900 254 179, 190 1911 84 '.189 
 
 1901 490 176 1911 471 195 
 
 1902 112 179 1911 804 ...179,187,190 
 
 1905 382 179 1911 875 195 
 
 1906 155 195 1912 271 178 
 
 1906 458 187 1913 134 195 
 
 566 
 
INDEX TO STATUTES IN PART III. 
 
 (State Taxation.) 
 
 SEC. 
 
 180 
 181 
 182 
 183 
 184 
 185 
 186 
 187 
 188 
 189 
 190 
 191 
 
 LAWS 
 
 1880 
 
 1881 
 
 1882 
 1882 
 1885 
 1886 
 1886 
 1886 
 1889 
 1891 
 1892 
 1893 
 1894 
 1894 
 1895 
 1895 
 1895 
 1895 
 1897 
 
 TAX LAW. 
 
 PAGE SEC. PAGE 
 
 . 221 192 277 
 
 . 224 193 234 
 
 . 232 194 279 
 
 . 259 195 280 
 
 . 265 198 285 
 
 .267 199 287 
 
 . 268 200 288 
 
 . 271 201 299 
 
 . 274 202 300, 302 
 
 . 274 203 300 
 
 . 275 204 301 
 
 . 276 207 301 
 
 SESSION LAWS. 
 
 CHAP. PAGE LAWS 
 
 542 233, 259, 280 1897 
 
 285, 287, 288, 300 1897 
 
 361 233,259,265,271 1899 
 
 279, 280, 282, 300 1900 
 
 409 279,280,282,300 1901 
 
 151 280 1901 
 
 501 280, 288, 299 1901 
 
 143 222 1901 
 
 266 300 1901 
 
 679 271,279,282,300 1901 
 
 463 285, 287 1902 
 
 218 302 1903 
 
 668 222 1904 
 
 725 272 1905 
 
 196 229, 300 1905 
 
 562 265, 280 1906 
 
 196 280, 282 1906 
 
 240 224 1907 
 
 418 271, 282 1907 
 
 425 271, 279 1907 
 
 369 222 1908 
 
 567 
 
 CHAP. 
 
 494 . 
 
 785 . 
 
 737 . 
 
 500 . 
 
 PAGE 
 . 271 
 
 . 259 
 . 300 
 
 . 276 
 
 117 274, 279 
 
 118 271, 278 
 
 132 274, 278, 302 
 
 448 221 
 
 535 274 
 
 558 233, 259 
 
 172 278, 302 
 
 642 285 
 
 708 272 
 
 94 271, 278 
 
 425 279 
 
 474 233, 259, 267 
 
 524 222 
 
 121 302 
 
 734 265, 268, 285 
 
 739 302 
 
 228 275 
 
568 INDEX TO STATUTES IN PAET III (sTATE TAXATION) 
 
 
 
 SESSION LAWS— Continued 
 
 SEC. 
 
 CHAP. 
 
 PAGE SEC. CHAP. 
 
 1910 
 
 340 
 
 224 1911 91 . 
 
 1910 
 
 472 
 
 222 1911 357. . 
 
 PAGE 
 
 . 222 
 
 . 275 
 
 CODE OF CIVIL PROCEDURE. 
 
 SEC. PAGE SEC. PAGE 
 
 2120 280 2134 281 
 
 2123 280 2135 281 
 
 2127 280 2136 281 
 
 2128 280 2138 281 
 
 2129 280 2139 282 
 
 2130 281 2141 282 
 
 2132 281 2144 282 
 
 2133 281 
 
 INSURANCE LAW. 
 
 SEC. PAGE 
 
 34 271 
 
INDEX TO PART I. 
 
 (Local Taxation.) 
 
 A 
 
 Consult separate indices to each part of the book. page 
 
 Acceptance of report by tax commissioner is binding 79 
 
 Accounts of receiver of taxes, how to be kept 154 
 
 Accumulations of co-operative loan associations, exemption of 5 
 
 Agent competent to verify report of corporation 59, 78 
 
 Aldermen, Board of, duties of in respect to rolls 87, 89 
 
 assessment rolls to remain in custody of 88 
 
 issuance of warrant to receiver of taxes, by 89 
 
 Aldermen, Board of, to be punished for neglect or omission 151 
 
 Annual meeting of board of supervisors 86 
 
 Annual record of assessed valuation 69 
 
 of assessed valuation of corporations 72 
 
 Appeal in certiorari {See Cbetiobabi) 128 
 
 Application for correction of assessment 76, 83, 85 
 
 Assessors to ascertain person and property taxable 50 
 
 majority of, must assess property 51 
 
 may administer oath on examination 59 
 
 neglect or omission of duty by 63 
 
 act judicially and rolls cannot be collaterally attacked 79 
 
 Assessment of omitted property 56 
 
 in New York City 64 
 
 {See New York City; also Department op Taxes.) 
 
 time when deemed completed in New York City 70 
 
 of real estate of corporations, how entered 73 
 
 of personal property in New York City, how entered 73 
 
 against non-residents 75 
 
 application for correction of 76 
 
 Assessment roll, arrangement of columns in 35 
 
 erroneous arrangement of 36 
 
 abbreviation of names in 36 
 
 notice of completion of 57 
 
 is jurisdictional 58 
 
 does not apply to bank stock 58 
 
 after completion cannot be changed 58 
 
 verification and completion of 60 
 
 defects that may be cured 61 
 
 presumption in favor of legality of 61 
 
 what omissions are fatal 61 
 
 569 
 
5Y0 INDEX TO PAET I (lOCAL TAXATION) 
 
 . . , PAGE 
 
 omission of venue not fatal 61 
 
 filing of and notice thereof 62 
 
 when it may be verified 63 
 
 in parts valid 63 
 
 to be delivered to board of aldermen 87 
 
 time of delivery to board of aldermen 87 
 
 in New York when corrected to be delivered to receiver of taxes 150 
 
 proof of entries in, how made 155 
 
 Attorney general may prosecute for failure to file statement 55 
 
 to bring sequestration proceedings 148 
 
 B 
 Consult separate indices to each part of the book. 
 
 Bills receivable and open accounts of foreign corporations, when tax- 
 able 46 
 
 Board of Aldermen {See Aldermen). 
 
 Board of Taxes and Assessments, meaning of words 88 
 
 {See Depaetment op Taxes). 
 
 Bonds, mortgages, securities sent into state, exemption of 4 
 
 Book value sometimes considered in assessing capital stock 29 
 
 C 
 Consult separate indices to each part of the book. 
 
 Cancellation of assessment, application for 83, 85 
 
 Capital stock defined, and surplus of domestic corporations, how 
 
 assessed 29 
 
 not assessed when indebtedness exceeds assets 29 
 
 value of may be sometimes fixed by market price 29 
 
 book value sometimes considered 29 
 
 erroneous to assess on share value 30 
 
 sometimes assessed on basis of dividends and earnings 30 
 
 assessed by deducting assessed value of real estate 31 
 
 assessed value of building, on leased ground to be deducted 32 
 
 Certificate of incorporation conclusive as to place of taxation 23 
 
 Certiorari prior to the law of 1880 91 
 
 under the Common Law 91 
 
 distinction between Common Law and Statutory Writ of 92 
 
 stay not granted under Statutory Writ pending 96 
 
 proceedings under New York Charter in 98 
 
 proceedings under the Tax Law in 98 
 
 petition in 99 
 
 person aggrieved 99 
 
 who may join in 101 
 
INDEX TO PAET I (lOCAL TAXATION) 571 
 
 PAGE 
 
 grounds for certiorari stated in 102 
 
 how "error" or "illegality" set forth in 102 
 
 allegations as to description of property in 102 
 
 allegations as to over -valuation in lOS 
 
 allegations as to inequality in 104 
 
 preliminary application for correction must be shown in 106 
 
 time limitation for amendment of 107 
 
 verification of and subscription to 109 
 
 amendment of 109 
 
 the writ 110 
 
 allowance of 110 
 
 parties defendant Ill 
 
 is matter of right 112 
 
 amendment of 112 
 
 motions to supersede, or quash 113 
 
 the return 116 
 
 by whom made 116 
 
 when and where made 116 
 
 statements and allegations in 117 
 
 pr(K;eedings upon 118 
 
 the issue 119 
 
 how raised 120, 121 
 
 the trial 121 
 
 practice for bringing proceedings on for 121 
 
 the hearing or 122 
 
 when sent to a referee 123 
 
 when before the court 123 
 
 burden of proof on relator in 123 
 
 the determination or final order 123 
 
 form of 124 
 
 provisions for refund of tax in 125 
 
 costs in 127 
 
 the appeal 128 
 
 what may be reviewed on 128 
 
 Charter of New York 
 
 certiorari proceedings under {See Certioraki) 98 
 
 proceedings to collect personal tax under 150 
 
 City of New York may sue for personal taxes 160 
 
 statute of limitations in such proceedings 160 
 
 proof of pleadings in such proceedings 160 
 
 action against non-resident in such proceedings 161 
 
 proof required by plaintiff in such proceedings 162 
 
 Closing of books of assessment is a limitation of time 72 
 
 Collateral proceeding, assessment cannot be effected by 79 
 
572 INDEX TO PAET I (lOCAL TAXATION) 
 
 PAGE 
 
 Collection of taxes 133 
 
 methods of 133 
 
 voluntary payment in 133 
 
 by distress and sale 136, 155 
 
 constitutionality of 137 
 
 replevin in 139 
 
 sale of goods in 139 
 
 from non-residents 155 
 
 demand no longer necessary in 156 
 
 Collection of taxes by judicial proceeding 146 
 
 supplementary proceedings in {See Supplementary Peoceedings) .. 146 
 
 Collector, notice by 135 
 
 actions against 140 
 
 fees of 141 
 
 return of unpaid taxes by 141 
 
 sufficient and insufficient returns by 142 
 
 return when collection has been enjoined by 142 
 
 payment of money collected by 143 
 
 extension of time for collection of taxes by 144 
 
 provision in case of vacancy or failure to qualify by 144 
 
 receipts for taxes to be delivered by 145 
 
 warrant of 133 
 
 defects in 134 
 
 what may be seized under 137 
 
 defects which invalidate 138 
 
 Common law certiorari 91 
 
 (See Ceetioeaei). 
 
 Complaints in relation to assessment, hearing of 58 
 
 Completion and veriiication of assessment roll 60 
 
 of assessment rolls in New York City 70 
 
 Constitutional limitation on local taxation 9 
 
 Co-operative loan associations, accumulations of, exemption of 5 
 
 Corporations, report of, for local assessors 53 
 
 deriving an income or profit, definition of 53 
 
 may be assessed' in default of statement 54 
 
 value of property by secretary sometimes controlling 54 
 
 failure to file statement bars relief 54 
 
 may be prosecuted by attorney-general for such failure 55 
 
 data respecting, to be furnished county clerks 55 
 
 Corporation Counsel to receive delinquent tax rolls 157 
 
 duties of, in relation thereto 158 
 
 court to dismiss proceedings brought by, in certain cases 158 
 
 County clerks to be furnished data respecting corporations 55 
 
 Costs in certiorari {See Certiobabi) 127 
 
INDEX TO PART I (lOCAL TAXATION) 5Y3 
 
 D 
 Consult separate indices to each part of the book. page 
 
 Debts, must be clearly shown, to be deducted 37 
 
 must be deducted where statement is uncontradicted 37 
 
 must be fixed and not contingent 38 
 
 in the nature of unearned rentals, not deductible 39 
 
 in the nature of unearned subscriptions deductible 39 
 
 incurred in the purchase of non-taxable property not deductible 40 
 
 Deduction of assessed value of real estate 31 
 
 of assessed value of building on leased ground 32 
 
 of indebtedness 37 
 
 {See Debts). 
 
 of foreign corporations 49 
 
 Defects in assessment roll may be cured 61 
 
 Definition of real and personal property 14 
 
 of "tax district" 51 
 
 Demand no longer necessary in collection of taxes 155 
 
 Department of Taxes, New York City 64 
 
 how composed, terms and salaries 64 
 
 composition of board 65 
 
 president of C5 
 
 powers of 65 
 
 seal of 65 
 
 may add names and property to assessment roll 75 
 
 power to remit or reduce tax 82 
 
 Deposits in savings banks, exemption of 5 
 
 Deputy tax commissioners, how appointed, their duties 66 
 
 are ministerial not judicial officers 66 
 
 apportionment and assignment of in the boroughs 66 
 
 qualifications of , » 66 
 
 to furnish detailed statements 67 
 
 to compute aggregate valuations 67, 85 
 
 Detailed statement, of property to be furnished by deputy tax com- 
 missioner 67 
 
 refers to real property 67 
 
 Determination of final order in certiorari {See Ceetioeabi) 123 
 
 Development of corporate taxation for local purposes 1, 2 
 
 Dismissal of proceedings to collect a tax 148 
 
 to collect personal tax in New York City 158 
 
 Distinction between Common Law and Statutory Writ of Certiorari ... 92 
 
 Distress and sale {See Collection of Taxes) 136 
 
 collection of unpaid tax by 155 
 
 Dividends and earnings sometimes considered in assessing capital 
 
 stock 30 
 
574: INDEX TO PART I ( LOCAL TAXATION) 
 
 PAGE 
 
 Doing business by foreign corporation, what is 45 
 
 JJomestio vessels registered in state, exemption of 4 
 
 E 
 Consult separate indices to each part of the book. 
 
 Equalization by board of supervisors, and correction of errors 86 
 
 Equity, proceedings in to prevent collection of tax 130 
 
 Examination, assessors may administer oaths on 59 
 
 in. supplementary proceedings 147 
 
 Executor s name may be substituted for deceased owner 75 
 
 Exemption of corporate property from taxation 3 
 
 of municipal bonds 3 
 
 of domestic vessels registered in state 4 
 
 of bonds, mortgages, securities sent into state for collection 4 
 
 of goods of non-resident sent into state for sale 4 
 
 of moneys of non-resident in agent's hands for investment 4 
 
 of deposits in savings banks 5 
 
 of co-operative loan associations 5 
 
 of premium reserve of insurance companies 5 
 
 of surplus of savings banks 6 
 
 of collections by co-operative life and casualty insurance companies . . 6 
 
 of stock in corporations not liable to taxation 6 
 
 of property of domestic mutual life insurance companies 6 
 
 of mortgages paying recording tax 7 
 
 of secured debts paying stamp tax 7 
 
 of motor vehicles paying registration fee 8 
 
 of personal property of trust companies 8 
 
 of plank road or turnpike companies 8 
 
 of property by virtue of federal laws or constitution 9 
 
 patent rights 9 
 
 imports . . . •. 9 
 
 interstate commerce 10 
 
 fourteenth amendment 10 
 
 of corporate franchises 12 
 
 of good-will 12 
 
 of joint stock association 13 
 
 P 
 Consult separate indices to each part of the book. 
 
 Failure of corporation to file statement, bars relief 54 
 
 to appear on grievance day, effect of 60, 77 
 
 Federal laws and constitution, exemption by reason of 9 
 
 Fees of collector 141 
 
 Filing of assessment roll and notice thereof 62 
 
INDEX TO PABT I (lOCAL TAXATION) 575 
 
 PAGE 
 
 Pine and imprisonment abolished for non-payment of taxes 157 
 
 Foreign corporations, how assessed 42 
 
 the statute regulating assessment of 42 
 
 facts necessary to tax 43 
 
 taxable on capital invested in business 42 
 
 taxable at place where certificate is filed when engaged in "doing 
 
 business" in state 45 
 
 when open accounts and bills receivable are taxable 46 
 
 when engaged in a continuous business in the state 47 
 
 deductions of 48 
 
 debts not to be deductible generally 48 
 
 debts growing out of investments 48 
 
 Fourteenth amendment, exemption from taxation by reason of 10 
 
 Franchises of corporations not assessed as personalty 17 
 
 Franchises of corporations exempt from taxation 12 
 
 "Full value" comprehends allowance for debts 36 
 
 G 
 Consult separate indices to each part of the book. 
 
 Grievance day, failure to appear on, effect of 60, 77 
 
 Good- will exempt from taxation 12 
 
 Good- will not taxable for local purposes 17 
 
 Goods of non-residents sent into state for sale, exemption of 4 
 
 H 
 
 Consult separate indices to each part of the book. 
 
 Hearing of complaints in relation to assessments 58 
 
 I 
 Consult separate indices to each part of the book. 
 
 Imports exempt from taxation !)■ 
 
 Increase of assessment, when made in. New York City 81 
 
 notice to be given of 81 
 
 without notice, is void ^i 
 
 Injunction, remedy by to prevent collection of illegal tax 130 
 
 Inspection of assessment rolls by taxpayer 70 
 
 Insurance companies exempt from taxation 5 
 
 Interest on unpaid taxes to receiver of taxes 153 
 
 Interstate commerce, exempt from taxation 10 
 
 Issue in certiorari {See Cbetioraki) H^ 
 
 J 
 Consult separate indices to each part of the book. 
 
 Joint stock association, exempt from local taxation 13 
 
 liable for state tax 1^ 
 
676 INDEX TO PAET I (lOCAL TAXATION) 
 
 PAGE 
 
 Jurisdiction, where there is none, assessment is void 80 
 
 how waived 80 
 
 method of review when there is 80 
 
 L 
 Consult separate indices to each part of the book. 
 
 Xevy of tax by supervisors 86 
 
 Lien of tax on completion and delivery of rolls 87 
 
 in New York City 87 
 
 Limitation of time to commence personal tax suit 160 
 
 M 
 Consult separate indices to each part of the book. 
 
 Machinery taxed as real estate 15 
 
 Mandamus to compel acceptance and discharge of tax 132 
 
 to correct error in assessment 132 
 
 when granted ■ > . . . . 132 
 
 Manner of assessing corporations before 1853 27 
 
 of assessing capital stock 28 
 
 (See Capital Stock). 
 
 of assessing foreign corporations 42 
 
 (See roEEiGN Corporations). 
 
 Market price sometimes fixes value of capital stock 29 
 
 Marshal may collect by distress and sale . i , . 155 
 
 may add costs of distress and sale 156 
 
 fees of 156 
 
 sale to be advertised 156 
 
 disposition of surplus by 157 
 
 Misnomer in personal assessment, does not invalidate it 74 
 
 Moneys of non-resident in agent's hands for investment, exemption of 4 
 
 Mortgages paying recording tax, exempt from taxation 7 
 
 Motor vehicles paying registration fee, exempt from taxation 8 
 
 N 
 Consult separate indices to each part of the book. 
 
 Neglect or omission of duties by assessors 63 
 
 New York Charter (See Charter). 
 
 New York City Department of taxes, powers and duties 64 
 
 Non-residents, assessment against 75 
 
 power to collect from 155 
 
 action against, to collect personal tax 161 
 
 Notice of completion of assessment rolls 57 
 
 does not apply to bank stock 57 
 
 is jurisdictional , 58 
 
INDEX TO PAET I (lOCAL TAXATIOw) 577 
 
 PAGE 
 
 Notice of filing of assessment roll 62 
 
 Notice by collector 135 
 
 Notice by receiver of taxes not required 154 
 
 O 
 Consult separate indices to each part of the book. 
 
 Omission of venue not material 61 
 
 of dollar-mark in assessment roll not fatal 61 
 
 of signature to roll not fatal, if it appear elsewhere 61 
 
 of owner's name deprives city of personal remedy 75 
 
 Omitted property, how assessed 56 
 
 Open accounts and bills receivable of foreign corporations, when tax- 
 able 46 
 
 Opening of books of annual record 72 
 
 • P 
 Consult separate indices to each part of the book. 
 
 Patent rights exempt from taxation 9 
 
 Payment of taxes, priority in 163 
 
 Penalty for Board of Aldermen's neglect 151 
 
 Personal property defined 16 
 
 situated or owned within this state 18 
 
 Persons and property taxable, to be ascertained by assessors 50 
 
 Petition, in certiorari proceedings ( See Certioraei ) 99 
 
 Place of taxation of corporations 22 
 
 statute as to 22 
 
 certificate of incorporation conclusive 23 
 
 what designation in certificate sufficient 23 
 
 when corporation does business at diiJerent places 23 
 
 where statute does not require principal office 24 
 
 corporation created under special act 24 
 
 of corporation estopped by its return 24 
 
 when corporation changes its principal place of business 25 
 
 proceedings to change principal place of business 25 
 
 of foreign corporations 26 
 
 Plank road companies exempt from taxation 8 
 
 Presumption in favor of legality of assessment roll 61 
 
 Priority in payment of taxes 163 
 
 in the case of receivers 163 
 
 in the case of assignees 163 
 
 in bankruptcy proceedings 164 
 
 Property of corporations subject to taxation 14 
 
 of corporations exempt from taxation 3 
 
678 INDEX TO PABT I (lOCAL TAXATION) 
 
 E 
 Consult separate indices to each part of the book. page 
 
 Real estate of corporations, how assessed in New York City 73 
 
 Real estate, assessed value of, to be deducted in assessing capital 
 
 stock 31 
 
 Real Property defined 14 
 
 Receipt for taxes by collector 145 
 
 Receiver of taxes to obtain corrected assessment roll 150 
 
 payment of taxes to 151 
 
 responsible for subordinate's act 151 
 
 to give public notice 152 
 
 interest on unpaid taxes to 153 
 
 bow taxes against corporations to be collected by 153 
 
 accounts of, how to be kept 154 
 
 no personal notice need be given by 154 
 
 Reduction or remission of taxes by the board of taxes 82 
 
 Refusal to answer questions by corporation oflBcer 78 
 
 Remedies {See Certiorari) 91 
 
 in equity 130 
 
 by injunction 130 
 
 by mandamus 132 
 
 Rents reserved in lease, how taxable 21 
 
 Replevin (See Collection of Taxes) 130 
 
 Report of corporations 53 
 
 agent competent to verify 59, 78 
 
 acceptance of binds tax commissioner 79 
 
 made in previous years may be considered 79 
 
 Residence of corporation for purposes of taxation 22 
 
 {See Place of Taxation). 
 
 Return to writ of certiorari {See Certiorari) 116 
 
 Revision or cancellation of assessment, application for 83, 85 
 
 S 
 Consult separate indices to each part of the book. 
 
 Secured debts paying stamp tax, exempt from taxation 7 
 
 Sequestration proceedings by Attorney General 148 
 
 Situated or owned within this state, defined 18 
 
 Situs of personal property owned by residents 18, 19 
 
 Supervisors to equal valuations 86 
 
 annual meeting of board of 86 
 
 levy of tax by 86 
 
 Supplementary proceedings to collect a tax 146 
 
 the application in 147 
 
 motion for vacation of order in 147 
 
INDEX TO PAET I (lOCAL TAXATION) 5Y9 
 
 PAGE 
 
 the examination in 147 
 
 what may be reviewed on appeal 148 
 
 dismissal of suits or proceedings in 148 
 
 Surplus of domestic corporations, how assessed 29 
 
 T 
 Consult separate indices to each part of the book. 
 
 "Tax district" defined 51 
 
 Time of assessment 52 
 
 of verification of assessment roll 63 
 
 when assessment completed in New York City 70, 78 
 
 Trial in certiorari {See Certiorabi) 121 
 
 Trust companies exempt from taxation 8 
 
 Turn-pike companies exempt from taxation 8 
 
 V 
 Consult separate indices to each part of the book. 
 
 Value, uncontradicted, must stand 78 
 
 Verification of corporation's report may be made by agent 59 
 
 Verification and completion of assessment roll 60 
 
 W 
 Consult separate indices to each part of the book. 
 
 Waiver of jurisdiction 80 
 
 Warrant of collector {See Collbctoe) 133 
 
 Writ of certiorari {See Certigbabi) 110 
 
INDEX TO PART II. 
 
 (The Special Franchise Tax.) 
 
 A 
 Consult separate indices to each part of the book. page 
 
 Advertisement to sell special franchises, when insufficient 198 
 
 Allowance imder net earnings rule of claims for personal injuries 206 
 
 for return on investment in tangible property 206 
 
 Apportionment of valuation of railroad, telegraph, telephone and pipe 
 
 line companies . . . ; 177 
 
 of franchise 178 
 
 Assessment of special franchises, statute regulating 179 
 
 valuation of special franchises, how determined 179 
 
 rule for 179 
 
 net earnings rule for 179 
 
 deduction from gross earnings not allowed in 180 
 
 deduction from gross earnings allowed in 180 
 
 obsolescence in 180 
 
 depreciation in 180 
 
 uncollectible accounts 181 
 
 franchise tax to be deducted in 181 
 
 reconstruction in 181 
 
 sums paid for damages in 181 
 
 capitalization of net earnings in 181 
 
 tangible property, how valued in 182 
 
 engineering cost to be included in 182 
 
 indestructible property, how valued in 182 
 
 apportionment of expense of operation in 183 
 
 return on tangible property in 183 
 
 net earnings rule when applicable in 183 
 
 stock and bond theory in 185 
 
 consideration to be given nature of management in 199 
 
 Attorney general to designate counsel in certiorari proceedings 195 
 
 C 
 Consult separate indices to each part of the book. 
 
 Capitalization, rate of for net earnings (See Assessment) 181 
 
 Certiorari to review special franchise assessment 189 
 
 petition for writ of 189 
 
 when defective 190 
 
 when right to review is lost 191 
 
 when right to review is not lost 191 
 
 580 
 
INDEX TO PAET II (tiIE SPECIAL FEANCHISE TAx) 581 
 
 PAGE 
 
 return in 191 
 
 burden is on relator in 191 
 
 court may order re-valuation in 192 
 
 local assessors cannot intervene in over-valuation in proceedings on. . 192 
 
 City clerk to receive statement of special franchise valuation 188 
 
 Clerk of town or city to receive statement of special franchise valua- 
 tion 188 
 
 Constitutionality of special franchise tax 171 
 
 Counsel to be designated by attorney general in certiorari proceed- 
 ings 195 
 
 compensation and how allowed 195 
 
 D 
 Consult separate indices to each part of the book. 
 
 Damages, sums paid for to be deducted [See Assessment) 181 
 
 Debt limit, special franchises to be considered in fixing 198 
 
 Deduction from gross earnings allowed (See Assessment) 180 
 
 Deduction from gross earnings not allowed {See Assessment op 
 
 Special Franchises ) 180 
 
 Deductions, from special franchise tax for local purposes 195 
 
 payment in the nature of a tax, when allowed as a 196 
 
 Deduction in application of net earnings rule 202 
 
 Definition of special franchise tax 168 
 
 Department of Taxes and Assessments (See New York City). 
 
 Depreciation (See Assessment) 180 
 
 Deterioration, allowance out of gross earnings for, under net earnings 
 
 rule 203 
 
 E 
 
 Consult separate indices to each part of the book. 
 
 Equalization of special franchise assessments 185 
 
 r 
 
 Consult separate indices to each part of the book. 
 Federal license tax does not relieve » corporation from special fran- 
 chise tax 175 
 
 Final valuations of special franchise to be fixed 187 
 
 Franchise tax to be deducted (See Assessment) 181 
 
 Full value, presumption in favor of assessment at 194 
 
 H 
 Consult separate indices to each part of the book. 
 
 Hearing of special franchise tax assessment 187 
 
 notice of, to be given 187 
 
582 INDEX TO PAET II (tHE SPECIAI. PEANCHISE TAx) 
 
 PAGE 
 
 of hearing 187 
 
 History of special franchise tax 165 
 
 Holding company, application of net earnings rule in case of 212 
 
 I 
 Consult separate indices to each part of the book. 
 Interstate commerce does not relieve corporation from the special 
 
 franchise tax 175 
 
 L 
 
 Consult separate indices to each part of the book. 
 
 Local improvement, special franchise not assessable for a 198 
 
 N 
 Consult separate indices to each part of the book. 
 
 Net earnings rule commented on 201 
 
 applied 202 
 
 taxes when deducted under 203 
 
 allovjrance for deterioration under 203 
 
 obsolescence considered in 204 
 
 allowance of claims for personal injuries 206 
 
 allowance for return on investment in tangible property in 206 
 
 illustrations of tangible property 210 
 
 capitalization of, rate of 211 
 
 equalization under 212 
 
 application by a holding company under 212 
 
 New York City, department of taxes and assessments to receive state- 
 ment of valuation 188 
 
 O 
 Consult separate indices to each part of the book. 
 
 Obsolescence (See Assessment) 180 
 
 Obsolescence 204 
 
 Operation expense, apportionment of 183 
 
 P 
 
 Consult separate indices to each part of the book. 
 
 Payment in the nature of a tax, when deducted 196 
 
 Pipe line, railroad, telegraph and telephone companies, apportionment 
 
 of valuation of 177 
 
 Publicity and filing of special franchise tax report 186 
 
 E 
 Consult separate indices to each part of the book. 
 Railroad, telephone, telegraph and pipe line companies, apportionment 
 of valuation of 177 
 
INDEX TO PART II (tHE SPECIAL FEANCHISE TAx) 583 
 
 PAGE 
 
 Eate of capitalization under net earnings rule 211 
 
 Eeconstruetion expense to be deducted {8ee Assessment) 181 
 
 Report to State Board of Tax Commissioners 186 
 
 Eeturn on investment in tangible property, allowance for under net 
 
 earnings rule 206 
 
 Rule for valuing franchises (See Assessment) 179 
 
 Rules of valuation 200 
 
 S 
 Consult separate indices to each part of the book. 
 
 Special franchise, grant of, by whom 176 
 
 legislature may grant 176 
 
 railroad crossings not included in 176 
 
 Special franchise tax, origin of 165 
 
 history of 16g 
 
 definition of 168 
 
 constitutionality of 171 
 
 interstate commerce does not relieve a corporation from the 175 
 
 federal license tax does not relieve corporation from 175 
 
 State Board of Tax Commissioners, to receive report 186 
 
 shall hear complaints 187 
 
 shall fix final valuation 187 
 
 testimony to be taken by 188 
 
 statement of valuation to be filed by 188 
 
 presumed to assess at full value 194 
 
 authorized to appear by counsel 195 
 
 Stock and bond theory 185 
 
 T 
 Consult separate indices to each part of the book. 
 
 Tangible property, valuation of 182 
 
 what included in 182 
 
 return on 183 
 
 Tax Commissioners ( See State Boakd ) . 
 
 Taxes, when deducted under net earnings rule 203 
 
 Telegraph, telephone, railroad and pipe line companies, apportionment 
 
 of valuation of 177 
 
 Town clerk to receive statement of special franchise valuation 188 
 
 U 
 
 Consult separate indices to each part of the book. 
 
 UncoUectable accounts {See Assessment) 181 
 
 W 
 Consult separate indices to each part of the book. 
 
 Writ of certiorari for reveiw of special franchise assessment 190 
 
 where granted and where returnable 190 
 
INDEX TO PART III. 
 
 (State Taxation.) 
 
 A 
 Consult separate indices to each part of the book. page 
 
 Account, revision of by comptroller 284 
 
 Action not to be maintained by foreign corporation until license tax 
 
 paid 226 
 
 for recovering state tax 300 
 
 Actual or intrinsic value of capital stock, how ascertained 244 
 
 Additional franchise tax on transportation, transmission, heat, light, 
 
 and power companies 265 
 
 Affidavit of officer to be annexed to report 280 
 
 Agricultural companies, exemption of 259 
 
 Amendments of 1906 and 1907 to Franchise Tax Law discussed 234 
 
 Appeal in certiorari 297 
 
 Application for revision, pre-requisite to writ of certiorari 292 
 
 Apportionment of indebtedness 245 
 
 of tax against trust company 224 
 
 Appraised value of capital stock, how ascertained 23? 
 
 Appraisement of capital stock of corporations 233 
 
 evidence of comptroller's dissatisfaction with 281 
 
 Asphalt company making a new compound is manufacturing 260 
 
 preparing street for pavement is not manufacturing 260 
 
 Assembling of parts is not manufacturing 264 
 
 Assignment by corporation of credit on resettlement 284 
 
 Attorney-general may commence action for forfeiture of charter 300 
 
 Average capital, how ascertained 244 
 
 market price, how ascertained 244 
 
 B 
 Consult separate indices to each part of the book. 
 
 Bank balance to pay current expenses not taxable 255 
 
 Banker, exemption of personal property or private. , 301 
 
 Banks exempt from franchise tax 259 
 
 Basis for computing license tax 224 
 
 of tax on foreign corporations 252 
 
 Book value does not govern in computing franchise tax 245 
 
 Books and records of corporation may be examined by comptroller .... 280 
 
 Bridge building regarded as manufacturing 263 
 
 Brokers, foreign corporation is not engaged in business when carrying 
 
 on business through 255 
 
 Burden of proof on corporation on re-hearing 285 
 
 in certiorari 295 
 
 584 
 
INDEX TO PAET III (sTATE TAXATION) 585 
 
 
 Consult separate indices to each part of the book. page 
 
 "Capital" stock, organization tax to be paid on increase of 221 
 
 measure of, for license tax 230 
 
 for franchise tax 232 
 
 ' employed, rule for ascertaining average 244 
 
 in patent rights taxable under franchise tax 247 
 
 invested in U. .S. securities liable to franchise tax 247 
 
 when invested in unimproved swamp land, held not ''employed" 2,48 
 
 when invested in a realty corporation, held "employed" 248 
 
 and "capital," definition of 249 
 
 in freight cars, outside state 250 
 
 in real estate outside of state 250 
 
 in U. S. bonds outside of state 250 
 
 in imported goods subject to franchise tax 253 
 
 in interstate commerce : 253 
 
 of foreign corporation invested in stock of foreign corporation 256 
 
 used ultra vires by corporation 258 
 
 Certificate of incorporation not to be filed until organization tax is 
 
 paid 221 
 
 of foreign corporation to be filed before commencing business 226 
 
 of insurance company revoked on neglect or refusal to pay tax 272 
 
 Certiorari, accounts and evidence to be returned on 287 
 
 review of comptroller's determination in 287 
 
 to review comptroller's determination 287 
 
 code provisions applicable to 288 
 
 deposit for tax, etc., to be made with state treasurer and under- 
 taking filed .■ 288 
 
 provisions of the tax law as to writ of 288 
 
 the application for 288 
 
 the petition for 288 
 
 hearing on 289 
 
 notice of application for writ of 289 
 
 return to 289, 294 
 
 service of writ of 289 
 
 final order in 290 
 
 proofs on hearing 290 
 
 relator in 291 
 
 application for revision, pre-requisite to writ of 292 
 
 limitation of time to apply for 292 
 
 verification of petition for 293 
 
 further return to 294 
 
 burden of proof in 295 
 
 determination on 295, 297 
 
686 INDEX TO PAET III (sTATE TAXATION) 
 
 PAGE 
 
 reassessment by comptroller after determination on appeal 296 
 
 appeal in 297 
 
 costs in 297 
 
 limitation of time for bringing 297 
 
 Charge and credit, meaning of 286 
 
 Charter of corporation, forfeited for non-payment of state tax 300 
 
 Citizens, foreign corporations are not 225 
 
 Coffee and tea, selling and mixing is not manufacturing 261 
 
 Collection of state tax by sheriff 299 
 
 warrant to be issued by comptroller for 299 
 
 Commissioners appointed by comptroller to examine books of corpor- 
 ation 280 
 
 Comptroller may require a further report 279 
 
 may examine the books and records of the corporations 280 
 
 not bound by corporation's report 280 
 
 may charge or credit account on revision 283 
 
 revision of account by 283 
 
 time for revising account by 283 
 
 to send notice of re-settlement of account 283 
 
 cannot increase assessment on revision of franchise tax 286 
 
 determination in prior proceedings not binding 286 
 
 review of determination of, on certiorari 287 
 
 limitation as to time for revievping examination of 288 
 
 office is continuous 297 
 
 may employ person informing him of evasion of tax 299 
 
 Consigning goods or printed matter is not employing capital 255 
 
 Consolidation of corporations, payment of organization tax on 222 
 
 Constitutional for corporations paying lesser dividends to pay higher 
 
 tax 246 
 
 license tax on drummers is not 225 
 
 to tax capital invested in patents 247, 254 
 
 Constitutionality of tax on gross earnings 266 
 
 Copyrights granted by United States subject to franchise tax 254 
 
 Corporations taxed for state purposes 218 
 
 foreign, to pay license tax 223 
 
 are not citizens 225 
 
 cannot do business until organization tax is paid 225 
 
 in business less than 13 months may commence action 229 
 
 shipping goods into state, not doing business 229 
 
 not within jurisdiction until license fee is paid 230 
 
 paying less than 6%, amount of franchise tax from 232 
 
 basis of tax when dividends are 6% or more 232 
 
 when dividends are less than 6% 232 
 
 when there are no dividends 232 
 
INDEX TO PAET III (sTATE TAXATIOH")' 587 
 
 PAGK 
 
 when there ia more than one kind of capital stock 232 
 
 domestic, basis for franchise tax 232 
 
 taxable on capital invested in imported goods 253 
 
 foreign, becoming special pa,rtner is doing business in state 25^ 
 
 investing in stocks of foreign corporation 256 
 
 of domestic corporation 256 
 
 leasing telephone to others is not doing business 256 
 
 may be examined by comptroller 280 
 
 charter of, forfeited for non-payment of state tax 299 
 
 paying franchise tax exempt from other taxation 301 
 
 Costs in certiorari 297 
 
 Credit allowed by comptroller in revising account 284 
 
 D 
 Consult separate indices to each part of the book. 
 
 Debts to be deducted in computing franchise tax 244 
 
 what not to be deducted 245 
 
 Deduction of debts in ascertaining franchise tax 244 
 
 Definition of gross earnings.'. 268 
 
 of license tax 223 
 
 of organization tax 220 
 
 Deposit of tax with state treasurer on certiorari 288 
 
 Determination of previous comptroller not binding 286 
 
 on certiorari 295, 297 
 
 Dividend, when stock distribution not considered as 246 
 
 Doing business, foreign corporation shipping goods into state not 
 
 engaged in 229 
 
 in the state, sale by sample, is not 255 
 
 Domestic corporation, capital invested in stock of 257 
 
 {See Also, Cobporations). 
 
 to pay organization tax to the state 220 
 
 Drummer's tax not constitutional 225 
 
 B 
 Consult separate indices to each part of the book. 
 
 Electric lighting company, report of 278 
 
 Elevated and surface railroads, exemption of 259 
 
 franchise tax on 267 
 
 exempt from tax based on capital stock 267 
 
 reports of 277 
 
 "Employing capital" {See Doing Business). 
 
 Engraving regarded as manufacturing 267 
 
 Evidence of comptroller's dissatisfaction of appraisement 281 
 
588 INDEX TO PAET III (sTATE TAXATION) 
 
 PAGE 
 
 Examination of corporation by comptroller 280 
 
 Excise or license fee to be paid by transportation, etc., companies .... 265 
 
 Exemption of trust companies from taxation on personal property. . . . 224 
 
 of agricultural companies 259 
 
 of banks, title guarantee and insurance companies 259 
 
 of elevated and surface railroads 259 
 
 of horticultural companies 259 
 
 of laundrying companies 259 
 
 of manufacturing corporations from franchise tax 259 
 
 of mining companies 259 
 
 of water, power and light companies 259 
 
 from other taxation of corporations paying franchise tax 301 
 
 of personal property of private banker 301 
 
 insurance company 302 
 
 E 
 Consult separate indices to each part of the book. 
 
 Failure of corporation to pay license tax, effect of 224 
 
 Final order in certiorari 290 
 
 Foreign bankers, report of 278 
 
 tax on 275 
 
 Foreign commerce, corporation engaged in, is subject' to franchise 
 
 tax 253 
 
 Foreign corporations, to pay license tax 223 
 
 when liable for license tax or franchise 224 
 
 in business less than 13 months may commence action 229 
 
 shipping goods into state may commence action 229 
 
 conditions determining taxation of by state 252 
 
 maintaining sale oiBce, not taxable 255 
 
 soliciting orders and keeping sales office, not doing business. 255 
 
 investing in stock of domestic corporation 257 
 
 Forfeiture of charter of corporation for non-payment of tax 300 
 
 Fountain pen company is a manufacturing company 250 
 
 Fourteenth amendment in taxation , 225 
 
 foreign corporations are not citizens within meaning of 225 
 
 Franchise tax, corporations subject to annual 231 
 
 to be paid on basis of capital stock employed 232 
 
 when dividends are less than 6% 232 
 
 when dividends are more than 6 % 232 
 
 on corporations (the statute) 232 
 
 amendments of 1906 and 1907 234 
 
 amount of, on what it depends 235 
 
 illustrations showing this 239 
 
 ; debts to be deducted in computing 244 
 
INDEX TO PAET III (sTATE TAXATION) 58& 
 
 PAGE 
 
 includes value of good-will 244 
 
 intrinsic value ascertained in computing 244 
 
 actual value ascertained in computing 245 
 
 book value does not govern iu computing 245 
 
 capital employed in patent rights and copyrights, subject to 247, 254 
 
 on capital invested in patent rights 247 
 
 payable on U. S. securities 247 
 
 realty outside of state not subject to 250 
 
 freight cars outside of state not subject to 250 
 
 to be paid by corporations with shares without nominal or par value 251 
 
 capital employed in interstate commerce not subject to 253 
 
 manufacturing corporation exempt from 259 
 
 on transportation, heat, light and power company 265 
 
 on gas and electric companies, based on gross earnings 268 
 
 on lighting and power companies, based on gross earnings 263 
 
 on water works companies based on gross earnings 268 
 
 on insurance companies, based on gross earnings 270 
 
 on savings bank 274 
 
 on trust companies 274 
 
 Freight receipts, tax on gross 266 
 
 Further report may be required by comptroller 279 
 
 G 
 Consult separate indices to each part of the book. 
 
 Gas and electric companies exempt from franchise tax 262 
 
 making of, regarded as manufacturing 264 
 
 franchise tax on, based on gross earnings 268 
 
 report of 278 
 
 Goods consigned, not capital employed 255 
 
 Good-will of foreign corporation subject to franchise tax 254 
 
 taxable under franchise tax 245 
 
 value of, for purposes of franchise tax 247 
 
 Grass cutting and making hay not manufacturing 264 
 
 Gross earnings, constitutionality of tax on 266 
 
 defined 267 
 
 derived from carrying United States mail by interstate railroad 
 
 not subject to tax 266 
 
 franchise tax on elevated or surface railroads based on 267 
 
 freight receipts, tax on 266 
 
 from subway road not taxed 267 
 
 of transportation, heat, light and power companies to pay license 
 
 or excise fee 265 
 
 receipts derived from storage business of interstate character 266 
 
 haymaking and cutting grass not manufacturing 264 
 
590 INDEX TO PAET III (sTATE TAXATIOw) 
 
 PAGE 
 
 Hearing on certiorari 289 
 
 "Holding" company, when engaged in business 253 
 
 Horticultural companies, exemption of 259 
 
 I 
 Consult separate indices to each part of the book. 
 
 Ice cream, making and selling, not regarded as manufacturing 264 
 
 Illustration when dividends are 6% or more 239 
 
 when there are no 239 
 
 Imported goods not to be deducted in computing franchise tax 253 
 
 Increase of assessment by comptroller on rehearing not to be made. . . . 286 
 
 of capital stock, organization tax to be paid on 221 
 
 Indebtedness, apportionment of, in cases of franchise tax 245 
 
 Information of corporations, etc., evading state tax 299 
 
 Insurance companies, corporation, report of 278 
 
 franchise tax on, based on gross premiums 270 
 
 tax on cancelled policies of 273 
 
 tax on renewal policies of 273 
 
 Interest to run on account stated by comptroller 281 
 
 Interstate business, character of gross receipts derived from storage 
 
 business of 266 
 
 of mail carriers, not subject to tax on gross earnings 268 
 
 Interstate commerce, not subject to franchise tax 253 
 
 railroad engaged in, subject to taxation on cab service 253 
 
 Intrinsic value, how ascertained in computing franchise tax 245 
 
 J 
 
 Consult separate indices to each part of the book. 
 
 Joint stock company liable to franchise tax 250 
 
 K 
 
 Consult separate indices to each part of the book. 
 
 Kiln-dried kindling wood, company is a manufacturing corporation .... 261 
 
 L 
 Consult separate indices to each part of the book. 
 
 Laundrying companies, exemption of 259 
 
 License tax, law enacted 216 
 
 defined 223 
 
 to be paid by foreign corporations 224 
 
 change in method of computing 224 
 
 failure to pay is bar to action 226 
 
 to be paid by transportation, heat, light and power companies ..... 265 
 
 may be imposed on gross earnings within this state 266 
 
 Lien of warrant for state tax 299 
 
INDEX TO PART III (sTATE TAXATION) 591 
 
 PAGE 
 
 when it attaches 282 
 
 Lighting companies, exemption of 259 
 
 report of 278 
 
 Limitation of time for bringing certiorari 297 
 
 in action to recover franchise tax 301 
 
 to apply for certiorari 292 
 
 M 
 Consult separate indices to each part of the book. 
 Mail of, United States, earnings derived from carrying, not subject 
 
 to tax on gross earnings 266 
 
 Maintaining sales office is not doing business 256 
 
 Manufacturing corporations, asphalt company making new compound 
 
 is 260 
 
 preparing street for paving is not , 260 
 
 exempt from franchise tax 259 
 
 fountain pen company is a 260 
 
 kiln-dried kindling wood company is a 261 
 
 paint and chemical company is a 260 
 
 preparation of goods for market made out of state is not 261 
 
 publishing a newspaper is not 261 
 
 selling and mixing tea and coffee is not 261 
 
 slaughtering sheep and preparing the product is not 261 
 
 wood pulp company is a 261 
 
 purpose of exemption 259 
 
 Market price, when it fixes value of capital stock 232 
 
 rule for ascertaining average 244 
 
 Measure of capital stock employed for franchise tax 232 
 
 Mining companies, exemption of 259 
 
 sending bullion for assay is not manufacturing 260 
 
 N 
 Consult separate indices to each part of the book. 
 Neglect or refusal to pay tax revokes certificate of insurance com- 
 pany 272 
 
 Newspaper agency forwarding printing matter is not employing cap- 
 ital 255 
 
 Newspaper publishing is not manufacturing 261 
 
 Notice of statement of tax by comptroller 281 
 
 of resettlement of account by comptroller 284 
 
 of application for writ of certiorari 289 
 
 O 
 Consult separate indices to each part of the book. 
 
 Offset of claim by corporation against the state 284 
 
502 INDEX TO PART III (STATE TAXATION) 
 
 PAGE 
 
 Organization tax, law enacted , 215 
 
 basis of 220 
 
 defined 220 
 
 rate of 220 
 
 payable on increase of capital stock 221 
 
 payment of, when, bow, and to whom made 221 
 
 the statute regulating the 221 
 
 when railroad corporation may pay 221 
 
 on consolidation of corporations 222 
 
 on reorganization of corporations 222 
 
 amount payable by corporations with shares without designated or 
 
 monetary value 222 
 
 Outstanding accounts of domestic corporations 251 
 
 P 
 Consult separate indices to each part of the book. 
 
 Paint and chemical company is a manufacturing company 260 
 
 Patent rights, how their value is computed 247 
 
 subject to franchise tax 247 
 
 Payment of organization tax 221 
 
 Payment of tax into state treasury 281 
 
 Penalty for failure to make report, or pay tax 281 
 
 Personal property of private banker exempt 77 
 
 Petition for writ of certiorari 288 
 
 Petition to resettle tax, failure to verify 285 
 
 Power companies, exemption of 259 
 
 Power companies, report of 278 
 
 Power of the state to tax 217 
 
 Premiums, franchise tax on insurance companies based on gross 
 
 amount of 270 
 
 received on business done in the state 270 
 
 tax on, collected from renewal policies 270 
 
 not collected from policies cancelled 270 
 
 Preparation of goods for market manufactured out of state is not 
 
 manufacturing 262 
 
 Proofs in hearing on certiorari 290 
 
 Provisions of tax law as to writ of certiorari 288 
 
 Publishing books and printing is manufacturing 263 
 
 Publishing newspaper is not manufacturing 261 
 
 Purpose of exempting manufacturing corporation 259 
 
 R 
 Consult separate indices to each part of the book. 
 Railroad corporation engaged in interstate business taxable on cab 
 
 service 253 
 
 Railroad corporation, payment of organization tax by 221 
 
INDEX TO PAET III (sTATE TAXATION) 593 
 
 PAGE 
 
 Keal estate, employed in the state subject to franchise tax 250 
 
 outside of the state not subject to franchise tax 250 
 
 Eealty corporation in active business has "capital employed" 248 
 
 not engaged in active business is not "employing capital" 248 
 
 Recovery of state taxes by action 300 
 
 Rehearing, burden of proof on corporation in 285 
 
 Relator in certiorari 291 
 
 Renewal policies of insurance corporations, tax on 273 
 
 Report of elevated and surface railroad companies 277 
 
 of transportation and transmission companies 277 
 
 of foreign bankers 278 
 
 of insurance company 278 
 
 of savings bank 278 
 
 of trust companies 278 
 
 of water works, gas, electric, steam heating, lighting and power 
 
 corporations 278 
 
 of corporation does not bind comptroller 280 
 
 of comptroller, penalty for failure to make 280 
 
 Return of writ of certiorari 289, 294 
 
 Rice milling regarded as manufacturing 263 
 
 S 
 Consult separate indices to each part of the book. 
 Sales office maintained by foreign corporation is not employing cap- 
 ital 255 
 
 Samples kept here by foreign corporation, not capital employed 255 
 
 sale by, is not employing capital 255 
 
 Savings banks, franchise tax on 274 
 
 method of valuing surplus of 274 
 
 report of 278 
 
 Securities forming surplus, method of valuation of 275 
 
 Service of writ of certiorari 289 
 
 settlement of account by 281 
 
 statement of account by 28 1 
 
 Shells cleaned and etched by acid, not manufacturing 264 
 
 Sheriff to collect state tax for comptroller 299 
 
 Slaughtering sheep, and preparing products, not manufacturing 261 
 
 Soliciting orders and keeping samples is not employing capital 255 
 
 Special partner, foreign corporation is doing business when it be- 
 comes 254 
 
 Statement of account by comptroller 281 
 
 Steam heating companies, franchise tax on, based on gross earnings . . . 268 
 
 Steam heating company, power supplying, not manufacturing 264 
 
 Steam heating company, report of 278 
 
 Stock dividends, when considered profits, or distribution of capital 246 
 
594 INDEX TO PART III (STATB TAXATION) 
 
 PAGE 
 
 Superintendent of insurance, no deduction for 2% paid to 271 
 
 to receive tax of 2% from insurance companies 271 
 
 Surface railroads, exemption of 259 
 
 Surface railroads, franchise tax on 267 
 
 Surplus of savings bank subject to franchise tax 274 
 
 method of valuing securities forming 274 
 
 System of taxing corporations for state purposes 215 
 
 T 
 Consult separate indices to each part of the book. 
 
 Taxation of corporations for state purposes, system of 215 
 
 Telephone company leasing telephones, is not doing business 256 
 
 Time for making report of corporations 281 
 
 for payment of state tax 281 
 
 Time for revision of account stated by comptroller 284 
 
 Transportation and transmission companies, reports of 277 
 
 to pay annual excise or license fee on gross earnings 265 
 
 Trust company, frajichise tax on 274 
 
 companies exempt from taxation on personal property 274 
 
 U 
 Consult separate indices to each part of the book. 
 
 Ultra vires, corporation employing capital 258 
 
 Undertaking to be filed with comptroller on certiorari 288 
 
 United States Constitution {See Constitutional) 247 
 
 securities liable to franchise tax 247 
 
 V 
 Consult separate indices to each part of the book. 
 
 Valuation of surplus of savings banks, method of 275 
 
 Value of capital stock to be appraised, the statutory provision 233 
 
 Verification of petition for certiorari 293 
 
 for resettlement of state tax 285 
 
 Voluntary payment does not bar revision 286 
 
 W 
 Consult separate indices to each part of the book. 
 
 Warrant by comptroller to sheriff 299 
 
 lien of, for state tax 299 
 
 Water works companies, franchise tax, based on gross earnings 268 
 
 Water works company, exemption of 259 
 
 Water works company, report of 278 
 
 when dividends are less than 6% 240 
 
 when there is more than one kind of stock 241 
 
 under the "drag-net" clause 242 
 
 payable in advance 243 
 
 Wood pulp company is exempt as a manufacturing company 261 
 
INDEX TO PART IV. 
 
 (Forms.) 
 
 Note— For Index to Appendix and to Forms used in Federal Income 
 Tax Law, see Pages 466, 461, 640. 
 
 FOKMS FOR LOCAL TAXATION. 
 
 PAGE 
 
 Petition for Writ of Certiorari 303 
 
 Order for Writ 309 
 
 Writ of Certiorari 310 
 
 Eeturn to Writ (Resident Corporation) 312 
 
 Return to Writ (Foreign Corporation) 316 
 
 Final Order reducing assessment of the capital stock and surplus of 
 
 a corporation 320 
 
 Complaint in action to collect local tax in arrears from a domestic 
 
 corporation in the City of New York 321 
 
 Answer setting up residence in another county, in action brought to 
 
 collect tax from corporation in the City of New York 323 
 
 Answer, setting up inability to pay the tax, etc 324 
 
 Report to be filed by domestic corporation with New York City Tax 
 
 Dept 324 
 
 Report to be filed by foreign corporation with New York City Tax 
 
 Dept 327 
 
 FORMS FOB SPECIAL FRANCHISE TAX. 
 
 Petition for Writ 329 
 
 Order allowing writ 332 
 
 Writ of Certiorari 332 
 
 Return to writ 334 
 
 FORMS FOR STATE TAXATION. 
 
 Application for re-settlement of state tax , 339 
 
 Notice of application for writ of certiorari 341 
 
 Petition for writ of certiorari 341 
 
 Order for writ of certiorari 345 
 
 Writ of Certiorari 346 
 
 Undertaking for costs 347 
 
 Comptroller's return to the writ of certiorari 348 
 
 Afiidavit for exemption from the payment of the annual franchise tax 
 
 under Section 183 of the Tax Law 349 
 
 Report by domestic or foreign corporation under Section 182 Tax 
 
 Law 350 
 
 595 
 
596 INDEX TO PAET IV (fOEMS) 
 
 FAOE 
 Report to be made for additional franchise tax by transportation and 
 
 transmission corporations taxable under section 184 Tax Law 355 
 
 Report by elevated railroads or surface railroads not operated by 
 
 steam, taxable under section 185 Tax Law 356 
 
 Report by water works, gas, electric or steam heating, lighting or 
 
 power companies, taxable under section 186 Tax Law 357 
 
 Report of insurance company taxable under section 187 Tax Law 359 
 
 Report by trust company taxable under section 188 Tax Law 359 
 
 Report by savings bank, taxable under section 189 Tax Law 361 
 
 Report by foreign banker or foreign corporation doing a banking 
 
 business and taxable under section 191 Tax Law 362 
 
 [602 pages, total.]