New York State 
 Personal 
 Income Tax Law 
 
 A Synopsis of the 
 Law and Regulations 
 
 COLUMBIA 
 
 TRUST 
 
 COMPANY 
 
 Columbia Trust Company 
 
 In Financial District: 60 Broadway 
 In Shopping Centre: 5th Avenue and 34th Street 
 In Harlem : 125th Street and Lenox Avenue 
 In Bronx : 148th Street and Third Avenue 
 
 New York 
 
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 ] 
 
 f 
 
f 
 
 1 
 
New York State 
 Personal 
 
 Income Tax Law 
 
 A Synopsis of the 
 Law and Regulations 
 
 Columbia Trust Company 
 
 New York 
 
Copyright 1920 
 By Columbia Trust Company 
 
FOREWORD 
 
 ) 
 
 
 
 <r 
 
 
 ^TpHE following synopsis of the New York State Personal 
 Income Tax Law, which imposes a tax upon the net in- 
 come of residents and nonresidents of the State, together with 
 information taken from the official Regulations issued by the 
 State Comptroller in explanation of the Law, is offered as a 
 practical guide to those required under the Law to file returns 
 with the State Comptroller. 
 
 It is important that every person whose income will be subject 
 to the Tax, should keep an accurate list of all amounts of income 
 received during the year. Also, a statement of all losses sus- 
 tained either in business or otherwise, business expenses, interest 
 paid on indebtedness, taxes, bad debts and all other facts relating 
 to the income of the tax payer. 
 
 COLUMBIA TRUST COMPANY 
 Main Office, 60 Broadway 
 Borough of Manhattan, New York City 
 
 Branch Offices: 
 
 34th Street and Fifth Avenue 
 100 West 125th Street 
 148th Street and Third Avenue 
 
 V 
 
Digitized by the Internet Archive 
 in 2017 with funding from 
 
 University of Illinois Urbana-Champaign Alternates 
 
 https://archive.org/details/newyorkstatepersOOnewy 
 
CONTENTS 
 
 Page 
 
 Accident Insurance 
 
 Amounts received through 17 
 
 Accounting, methods of 24 
 
 Inventories 23 
 
 Actors 
 
 Deductions from gross income. 18 
 
 Alimony 17 
 
 Annuities ...16 
 
 When received by non-resi- 
 
 Ascertainment of Gain or Loss . . 22 
 
 Bad Debts 20 
 
 Basis of Computing Net In- 
 come 24 
 
 Bond Interest 
 
 Tax-free covenant 16 
 
 Bonus to Employees ........... 18 
 
 Calendar Year 
 
 Returns made on basis of 24 
 
 Commutation Ticket 21 
 
 Compensation Paid other than 
 
 in Cash 16 
 
 Contributions, charitable, etc. 
 
 Not allowable deductions to 
 
 partnerships 20 
 
 By nonresidents 20 
 
 Corporations 9 
 
 Credit for Taxes 24 
 
 Debts, worthless 20 
 
 Decedent 11,13 
 
 Deductions 17 
 
 Allowed estates and trusts. 20, 21 
 
 Allowed nonresidents 19, 20 
 
 Bad debts 20 
 
 Bonus to employees 18 
 
 Business expenses 18 
 
 Business losses 19 
 
 Contributions, charitable, 
 
 etc 20 
 
 Depletion 20 
 
 Depreciation 20 
 
 Donations to employees 18 
 
 Dues 17 
 
 Executor’s commissions 21 
 
 Inheritance taxes 19 
 
 Interest paid on indebtedness. .19 
 Losses not connected with 
 
 business 19 
 
 Professional expenses.., 18 
 
 Property losses 20 
 
 Taxes 19 
 
 Trustees’ commissions 21 
 
 Dependents 10 
 
 Depletion 20 
 
 Depreciation ..... .20 
 
 District Offices, location of 27 
 
 Dividends 23 
 
 Nonresidents 23 
 
 Page 
 
 Stock dividends 23 
 
 When income 23 
 
 Dues 17 
 
 Estates and Trusts 10 
 
 Classification of 13 
 
 Computation of 12,13 
 
 Deductions allowed 13, 20 
 
 Income of 12,13 
 
 Nonresidents 13, 14 
 
 Payment of tax by beneficiary . 13 
 Payment of tax by fiduciary.. 13 
 
 Resident 14 
 
 Estate Taxes, Federal 19 
 
 Executors 20 
 
 Exempt Income 16, 17 
 
 Nonresidents 16 
 
 Exemption of Certain Personal 
 
 Property from Taxation 25 
 
 Expenses 17 
 
 Actors 18 
 
 Business 17 
 
 Estates and Trusts 20, 21 
 
 Professional 18 
 
 Exchange of Property 
 
 Determining gain or loss 22 
 
 Extension of Time 26,27 
 
 Fiduciary 
 
 Definition of 12 
 
 Return by 12,13 
 
 Tax not payable by 13 
 
 Tax payable by 13 
 
 Fire Insurance 
 
 On residence, premiums not 
 
 deductible 21 
 
 Fiscal Year 
 
 Return made on basis of 24 
 
 Gains and Profits 
 When included in gross in- 
 come 15 
 
 Gain or Loss 
 
 Determination of 22 
 
 Gifts 22 
 
 Gross Income 
 
 Definition 14 
 
 Of nonresidents 15 
 
 Of residents 14,15 
 
 What included in 14,15 
 
 What not included in 17 
 
 Head of a Family 10,11,12 
 
 Health Insurance 
 
 Amount received through 17 
 
 Husband and Wife 10,11 
 
 Income 
 
 Gross 14 
 
 Net 14 
 
 Individuals 
 
 Returns by 10, 11, 12 
 
CONTENTS — Continued 
 
 Page 
 
 Information and Payment at 
 
 Source 25 
 
 Information Returns 
 
 By estates and trusts 13 
 
 By partnership 12,26 
 
 By withholding agents 25,26 
 
 Inheritance Taxes 18 
 
 Insurance Policy 
 
 Income from by nonresidents. 16 
 Income from by residents. .. 16 
 
 Interest 
 
 New York State and munici- 
 
 pal obligations 17 
 
 Paid on indebtedness 18 
 
 United States obligations 17 
 
 Items not Deductible ...21 
 
 Insurance premiums 21 
 
 Commutation ticket 21 
 
 Inventories 23 
 
 Life Insurance 
 
 Premiums not deductible 21 
 
 Proceeds of policies when ex- 
 empt 16 
 
 Returned premiums 16 
 
 Losses 
 
 In business 19 
 
 Not connected with business.. 19 
 Property 19 
 
 Market Value 22 
 
 Marriage Settlement 17 
 
 Married Persons 10 
 
 Minors 11 
 
 N on-resident minors 11 
 
 Net Income 
 
 Definition 14 
 
 Basis of computing 24 
 
 New York City Teachers’ Re- 
 tirement Fund 16 
 
 Nonresidents 
 
 Allowable deductions 20 
 
 Annuities, non-taxable 15,16 
 
 Credit for taxes 24 
 
 Gross income of 15 
 
 Losses as deductions 19,20 
 
 Personal exemption 11 
 
 Sale of securities by 19 
 
 Taxable income 9 
 
 Partnerships 
 
 Charitable contributions 20 
 
 Individual members taxable. 9, 10 
 
 Not taxable as such 9 
 
 Returns by 12 
 
 Returns by members thereof. 9, 10 
 Pensions 
 
 Received by nonresidents .... 15 
 Received by residents 15,16 
 
 Page 
 
 Personal Exemptions 
 
 Dependents 10 
 
 Head of a family 10,11 
 
 Husband and wife 10 
 
 Married persons 10 
 
 Nonresidents 11 
 
 Single persons 10 
 
 Personal Expenses 21 
 
 Personal Property 
 
 Exempt from other taxation.. 25 
 
 Rates of Tax 10 
 
 Resident 
 
 Definition of 9 
 
 Estate and Trust, defined 14 
 
 Returns 
 
 Accounting period 24 
 
 Beneficiary 13 
 
 Decedent 11 
 
 Extension of time for filing. 26, 27 
 
 Fiduciaries 12 
 
 Filing date 26 
 
 Head of a family 11 
 
 Husband and wife 10 
 
 Individuals 10 
 
 Of information 25, 26 
 
 Married persons 10 
 
 Minors U 
 
 Nonresidents 11 
 
 Partnerships 12 
 
 Penalties 26 
 
 Period covered by 26 
 
 Place for filing 26 
 
 Residents 9, 10 
 
 Salaries and Wages 
 From United States Govern- 
 ment 17 
 
 Included in gross income.. 14, 15 
 
 Of nonresidents 15 
 
 Securities 
 
 Sale of by nonresidents 19 
 
 Shrinkage in value 19 
 
 Single Persons 10 
 
 State Officers, compensation of. 15 
 
 Stock Dividends 23 
 
 Tax 
 
 A personal debt 9 
 
 Method of payment 26 
 
 Rate 10 
 
 When payable 26 
 
 Unmarried Persons 10 
 
 Waiver of Penalty by Comp- 
 troller 27 
 
 Withholding Agents 25, 26 
 
 Extension of time to file return 27 
 When to make return 26 
 
 Note: — The full text of the New York State Personal Income 
 Tax Law follows the Summary thereof on page 28. 
 
NEW YORK STATE PERSONAL 
 INCOME TAX LAW 
 
 A SYNOPSIS OF THE LAW AND REGULATIONS 
 
 Who Must Pay the Tax — Every resident of New York State 
 must pay a tax upon his entire net income, as defined in the Act, 
 which includes that which arises from every source within or with- 
 out the State, exclusive of certain deductions. 
 
 The word “resident” applies only to natural persons, and in- 
 cludes for the purpose of determining liability to the tax any 
 person who at any time during the last six months of the calendar 
 year was a resident of the State of New York. ('Sec. 350 (7)). 
 
 Every non-resident of the State must pay a tax upon the net 
 income from all property owned and from every business, trade, 
 profession or occupation carried on in New York State. (Sec. 
 351.) 
 
 The tax, in addition to being a tax against property, business, 
 trade, profession or occupation, is declared to be a personal debt 
 due by the taxpayer to the State of New York. This provision 
 will enable the State of New York to sue for the amount of tax 
 due, and upon recovering a judgment against the taxpayer, to 
 enforce collection of such judgment by suit and execution against 
 the property of a nonresident taxpayer in the State of his resi- 
 dence. (Sec. 351 (b)). 
 
 Corporations are not subject to the tax. (Sec. 350 (2)). 
 
 Partnerships, as such are not required to pay a tax, but the 
 partnership is required to file a return stating specifically the items 
 of its gross income and the deductions allowed and setting forth 
 the names and addresses of the members of the 'firm who would 
 be entitled to share in the distribution of the net income of the 
 partnership* and showing the distributive share of each of the 
 partners, whether distributed or not. (iSec. 368.) The individual 
 partners must each file a return, and are liable for the tax only in 
 their individual capacity, and each partner will be taxed on his 
 
10 
 
 New York State Personal Income Tax Law 
 
 distributive share of the net income of the partnership, whether 
 distributed or not. (Sec. 364.) 
 
 Estates and Trusts — The act applies to income derived 
 through estates or trusts by the beneficiaries whether distributed 
 or distributable. (Sec. 365.) 
 
 Rate of Tax — The tax imposed is as follows : — 
 
 On the first $10,000 of net taxable income. . . .1% 
 
 On the next $40,000 of net taxable income. . . . 2 % 
 
 On the excess of $50,000 of net taxable income. 3% 
 
 (Sec. 351.) 
 
 Personal Exemptions Allowed — The following exemptions 
 are allowed any taxpayer: 
 
 To a single person, or to a married person not living with 
 husband or wife, $1,000. 
 
 To a married person living with husband or wife and to the 
 head of a family, $2,000. 
 
 A husband and wife living together shall receive but one per- 
 sonal exemption of $2,000 against their aggregate net in- 
 come; and in case they make separate returns, the personal 
 exemption of $2,000 shall be equally divided between them. 
 An additional exemption of $200 for each person (other 
 than husband or wife) dependent upon and and receiving 
 his chief support from the taxpayer, if such dependent is 
 under eighteen years of age or is incapable of self support 
 because mentally or physically defective. (Sec. 362.) 
 
 RETURNS— 
 
 Individuals: Every taxpayer having a net income of 
 $1,000, or over, if single, or if married and not living with 
 husband or wife, or of $2,000 if married and living with hus- 
 band or wife, shall make a return stating the items of his 
 gross income and the deductions and credits allowed by the 
 Act. If a husband and wife living together have an aggre- 
 gate net income of $2,000, or over, each shall make such 
 return unless the income of each is included in a single joint 
 return. 
 
A Synopsis of the Law and Regulations 
 
 11 
 
 A nonresident taxpayer is entitled to the personal exemp- 
 tions, but is not entitled to the deductions allowed resident 
 taxpayers, unless a complete return is made of his gross in- 
 come both within and without the State of New York. 
 (Sec. 367.) 
 
 Minors — An individual under 21 years of age is 
 required to make a return of income if he has a net in- 
 come of his own of $1,000, or over, for the taxable year. 
 If he is married his net income must be $2,000, or over, 
 before he is required to make a return. If the aggregate 
 of the net income of a minor from any property which 
 he possess, and from any funds held in trust for him 
 by a Trustee or Guardian, and from any earnings for his 
 own use, is at least $1,000, a return must be made by 
 him or by his Guardian or some other person charged 
 with the care of his person or property for him. If a 
 minor is dependent upon his parent, who appropriates 
 his earnings, such earnings are income of the parent and 
 not of the minor for the purpose of the tax. Nonresident 
 minors must make return in the same manner and of the 
 same classes of income as other nonresidents. 
 
 Decedent — If the net income of a decedent from the 
 beginning of a taxable year to the date of his death is 
 $1,000, if unmarried, or $2,000, if married and living with 
 husband or wife, the executor or administrator of his 
 estate shall make a tax return for such decedent cover- 
 ing such period and pay the tax due thereon. 
 
 Head of a Family is a person, either resident or 
 nonresident, who actually supports and maintains in one 
 household one or more individuals, who are closely con- 
 nected with him by blood, marriage or adoption, and 
 whose right to exercise family control and provide for 
 these dependent individuals is based upon some moral or 
 legal obligation. Whether or not an individual is the 
 
12 
 
 New York State Personal Income Tax Law 
 
 head of a family or has dependents is immaterial in de- 
 termining his liability to render a return. It follows, 
 therefore, that although a married individual living with 
 husband or wife is not required to file a return where 
 the aggregate net income is less than $2,000, neverthe- 
 less the head of a family must file a return if the net 
 income is more than $1,000, even though he is not re- 
 quired to pay a tax. 
 
 A resident alien with children abroad is not entitled to 
 the exemption of a head of a family. 
 
 Partnerships — Every partnership shall make a return 
 specifying its gross income and the deductions allowed by the 
 Act, giving the names and addresses of the partners and their 
 distributive share. The return must be sworn to by one of 
 the partners. (Sec. 368.) 
 
 Fiduciaries — Every fiduciary, which term means a guar- 
 dian, trustee, executor, administrator, or any person, whether 
 individual or corporate, acting in any fiduciary capacity for 
 any person, trust or estate, excepting receivers appointed by 
 authority of law in possession of part only of the property of 
 a taxpayer, must file a return for the individual or estate or 
 trust for which he acts in the following cases : 
 
 First — If the entire income of an individual is in his 
 charge, and the net income of the individual is $1,000 
 or over if single, or if married and not living with hus- 
 band or wife, or $2,000 or over if married and living 
 with husband or wife. 
 
 Second — If he acts (a) for an estate of a deceased 
 person during the period of administration or settle- 
 ment, whether or not the income of such estate is paid 
 or credited to a beneficiary; (b) for an estate or trust 
 the income of which is accumulated for the benefit of 
 unborn or unascertained persons, or persons with con- 
 tingent interests; (c) for an estate or trust the income 
 of which is held for future distribution under the terms 
 
A Synopsis of the Law and Regulations 
 
 13 
 
 of the Will or Trust; provided, in each case the net 
 income of such estate or trust is $1,000 or over. 
 
 Third — If he acts (a) for an estate or trust the 
 income of which is to be distributed periodically; or (b) 
 if he acts as the guardian of an infant whose income 
 is subject to the direction of the Court, provided in each 
 case the distributed or distributive share of a beneficiary 
 is $1,000 or over. (Sec. 369.) 
 
 For the purpose of the income tax, incomes of estates 
 and trusts may be divided into two classes : 
 
 First — Income, the tax upon which is imposed upon 
 the estate or trust, and the tax paid by the fiduciary , 
 consisting of 
 
 (a) Income received by estates of deceased persons 
 during the period of administration or settlement; 
 
 (b) Income accumulated in trust for the benefit of 
 unborn or unascertained persons, or persons with con- 
 tingent interests; 
 
 (c) Income held in trust for future distribution 
 under the terms of the will or trust. 
 
 Second — Income, the tax upon which is imposed 
 upon and paid by the beneficiaries, consisting of 
 
 (d) Income which is to be distributed to beneficiaries 
 periodically ; 
 
 (e) Income collected by the guardian of an infant 
 to be held or distributed as the Court may direct ; 
 
 (f) Income of the estate of any deceased person 
 which during the period of administration or settlement 
 is properly paid or credited to any beneficiary. 
 
 In subdivision (f ) above, in determining the net income of 
 the estate of any deceased person during the period of admin- 
 istration, there may be deducted the amount of any income 
 properly paid or credited to any legatee, heir, or other bene- 
 ficiary. A trust created by a person not a resident, and an 
 estate of a person not a resident shall be subject to tax only 
 to the extent to which individuals other than residents are 
 liable. (Sec. 365.) 
 
14 
 
 New York State Personal Income Tax Law 
 
 Resident and Nonresident Estates and Trusts — If the dece- 
 dent was a resident of the State of New York at the time of his 
 death, his estate is a resident estate, and any trust created by his 
 will is a resident trust. If the decedent was a nonresident , then 
 his estate is a nonresident estate, and any trust created by his will 
 is a nonresident trust. Also, if the creator of a voluntary trust 
 was a resident at the time the trust was created, such trust is a 
 resident trust, but if he was a nonresident, then the trust is a non- 
 resident trust. The residence of the (fiduciary does not in any 
 sense determine whether an estate or trust is resident or non- 
 resident. Whether the estate or trust is resident or nonresident is 
 material only with respect to income as to which the estate or 
 trust is the taxable entity. When the beneficiary is the taxable 
 entity, then the residence or nonresidence of the beneficiary is 
 material. 
 
 INCOME — 
 
 Net Income means the gross income of a taxpayer less 
 the deductions allowed under the law (Sec. 357). The statu- 
 tory deductions are in general, though not exclusively, expen- 
 ditures other than capital expenditures, connected with the 
 production of income. 
 
 Gross Income includes all gains, profits, and income 
 derived from 
 
 1st — Salaries, wages or compensation for personal 
 service of whatever kind and in whatever form paid : or 
 from 
 
 2nd — Professions, vocations, trades, businesses, com- 
 merce or sales, or dealings in property, whether real or 
 personal : also from 
 
 3rd — Interest, rent, dividend, securities, or the trans- 
 action of any business carried on for gain or profit, or 
 gains or profits and income derived from any source 
 whatever (Sec. 359). 
 
A Synopsis of the Law and Regulations 
 
 15 
 
 When Gains, Profits, etc., to Be Included in Gross In- 
 come — Gains, profits and income are to be included in the 
 gross income for the taxable year in which they are received 
 by the taxpayer, unless they are included when they accrue 
 to him in accordance with the approved method of accounting 
 followed by him. Income which is credited to the account of 
 or set apart for a taxpayer and which may be drawn upon by 
 him at any time is subject to tax for the year during which so 
 credited or set apart, although not then actually reduced to 
 possession. 
 
 Gross Income of Nonresidents — In the case of non- 
 residents, gross income includes only the gross income from 
 sources within the State of New York, but shall not include 
 annuities, interest on bank deposits, interest on bonds, notes, 
 or other interest-bearing obligations, or dividends from cor- 
 porations, except to the extent to which the same shall be a 
 part of income from any business or occupation carried on 
 in New York State subject to taxation under this Act. (Sec. 
 359— Sub.-Div. (3).) 
 
 Compensation of State Officers — Compensation paid its of- 
 ficers and employees by the State of New York, which is exempt 
 from tax under the Federal statute, is taxable under the New 
 York statute. 
 
 Pensions — When received by a nonresident , a pension of 
 any kind is not taxable income, as it is an annuity, and, therefore, 
 is specifically exempted from taxation under the Act. 
 
 When received by a resident, a pension is not taxable (a) when 
 received from the United 'States Government, or (b) if received 
 as compensation for personal injuries or sickness or under work- 
 men’s compensation acts or through war risk insurance, or under 
 any law for the benefit or relief of injured members of the mili- 
 tary or naval forces of the United States. Pensions arising upon 
 the retirement for disability are not regarded as compensation for 
 personal injuries within the meaning of this paragraph. 
 
16 
 
 New York State Personal Income Tax Law 
 
 Pensions received from the New York City Teachers’ Retire- 
 ment Fund are exempt from taxation. 
 
 All other pensions received by residents are taxable. 
 
 If the recipient has contributed to the fund out of which the 
 pension is paid, the pension receipts are taxable only when, and 
 to the extent that, they exceed the aggregate amount of all pay- 
 ments or contributions made by him to the fund. 
 
 Compensation Paid Other Than in Cash — Where services 
 are paid for with something other than money, the fair market 
 value of the thing taken in payment at the time such payment is 
 made is the amount to be included as income. 
 
 Tax-Free Bond Interest — The amount paid for or to a 
 bondholder by an obligor pursuant to a tax-free covenant in its 
 bonds is in the nature of additional interest paid the bondholder 
 and must be included in his gross income. He is not, however, en- 
 titled to deduct such income tax paid on his behalf. 
 
 Annuities and Insurance Policies — Where an insured re- 
 ceives under life insurance, endowment, or annuity contracts sums 
 in excess of the premiums paid therefore, such excess is income 
 for the year of its receipt. But income received by a nonresident 
 from an annuity, even though it is in excess of the amount paid 
 in, is not taxable. If, however, such income is received in con- 
 nection with a trade or business carried on in New York State, 
 the income of which is itself subject to tax, then such income from 
 the annuity is a part of the income of the business and is taxable 
 to the nonresident. 
 
 Exempt Income — Income not subject to tax includes — 
 
 (a) Proceeds of life insurance policies and contracts paid 
 upon the death of the insured to individual beneficiaries or 
 to the estate of the insured. 
 
 (b) Returned premiums received by the insured under 
 life insurance, endowment or annuity contracts. 
 
 (c) Value of property acquired by gift, bequest, devise 
 or descent (but the income from such property shall be in- 
 cluded in gross income.) 
 
A Synopsis of the Law and Regulations 
 
 17 
 
 An amount of principal paid under a marriage settlement 
 is a gift. Neither alimony nor an allowance based on a sepa- 
 ration agreement is included in gross income, nor is either an 
 allowable deduction. 
 
 (d) Interest upon the obligations of the United States 
 or its possessions ; or on securities issued under the provisions 
 of the Federal Farm Loan Act of July 17th, 1916; or on 
 bonds issued by the War Finance Corporation ; or on obliga- 
 tions of the State of New York or of any municipal corpora- 
 tion or political division thereof ; or on investments upon 
 which the investment tax has been paid between June 1, 1917, 
 and May 14, 1919, during the period of years for which such 
 tax shall have been paid. However, the income from securi- 
 ties (1) upon which the investment tax was paid after May 
 14th, 1919, or (2) upon which the secured debt tax or the 
 mortgage tax was paid, is not exempt from the income tax. 
 
 (e) Amounts received through accident or health insur- 
 ance or under workmen’s compensation acts, through the 
 War Risk Insurance Act or under any law for the benefit 
 or relief of injured members of the military or naval forces 
 of the United States. 
 
 (f) Salaries, wages and other compensation received 
 from the United States by officials or employees thereof, in- 
 cluding persons in the military and naval forces of the 
 United States. 
 
 (g) Income received by an officer of a religious denomi- 
 nation, or by any institution or trust for moral, benevolent 
 or educational purposes ; but the fees, stipends, personal earn- 
 ings or other private income of such officer or trustee shall 
 not be exempt. (iSec. 359.) 
 
 Deductions — In computing net income the following deduc- 
 tions from gross income are allowed — 
 
 (a) All ordinary and necessary expenses paid or incurred 
 in carrying on any trade or business. 
 
 Dues paid by business and professional men to Cham- 
 bers of Commerce are deductible expenses. The Comptroller 
 has, however, ruled that where a tax payer is not in business, 
 his membership fee in a Chamber of Commerce is not a de- 
 ductible item. Dues to Labor Unions and organizations are 
 deductible, where no part of such dues is applied toward in- 
 surance and personal benefits. 
 
18 
 
 New York State Personal Income Tax Law 
 
 Actors — In computing net income, an actor is entitled 
 to deduct from gross income the amounts expended for cos- 
 tumes and other items of wardrobe used for professional pur- 
 poses, as well as powder and grease paints which are neces- 
 sarily used; also the actual and necessary traveling expenses 
 incurred in connection with the rendering of professional 
 services. 
 
 Professional Expenses — A professional man may claim 
 as deductions, the cost of supplies used by him in the prac- 
 tice of his profession, expenses paid in the operation and 
 repair of an automobile used in making professional calls, 
 dues to professional societies and subscriptions to profes- 
 sional journals, office rent, cost of fuel, light, water, tele- 
 phone, etc., used in such offices and the salaries of office 
 assistants. Amounts expended for books, furniture and pro- 
 fessional instruments and equipment of a permanent charac- 
 ter are not allowable deductions, but a proper allowance for 
 the depreciation of such capital assets may be deducted. 
 
 Bonus to Employees — Gifts, or bonuses to employees 
 will constitute allowable deductions from gross income when 
 such payments are made in good faith and as additional com- 
 pensation for services actually rendered by the employees, 
 provided such payments, when added to the stipulated sal- 
 aries, do not exceed a reasonable compensation for the serv- 
 ices rendered. Donations made to employees and others 
 which do not have in them the element of compensation or 
 are in excess of reasonable compensation for services, are 
 considered gratuities and are not deductible from gross in- 
 come. 
 
 (b) All interest paid or accrued during the taxable year 
 on indebtedness. 
 
 (c) Taxes paid or accrued, other than income taxes, 
 imposed by the United States or by any State, territory or 
 subdivision thereof, or by any foreign government, not in- 
 cluding taxes assessed against local benefits of a kind tend- 
 ing to increase the value of the property assessed. 
 
 Inheritance Taxes — State inheritance taxes paid by the 
 executor or administrator of an estate of a deceased person, 
 which are provided by law to be deducted from the respective 
 legacies or distributive shares, are not allowable deductions 
 
A Synopsis of the Law and Regulations 
 
 19 
 
 in computing the net income of such estate subject to tax, 
 even though the will contains a direction to pay inheritance 
 taxes out of the residuary estate. Since, moreover, the tax 
 is imposed upon the transfer before the property reaches the 
 legatee or distributee, and merely diminishes the capital 
 share of the estate received by him, such tax is not imposed 
 upon the legatee or distributee and is not an allowable deduc- 
 tion from his income. Similarly, Federal estate taxes are 
 not deductible. 
 
 (d) Losses sustained and not compensated for by insur- 
 ance or otherwise, if incurred in trade or business. 
 
 (e) Losses sustained in any transaction entered into for 
 profit, though not connected with trade or business. 
 
 In the case of a nonresident of the State this deduction is 
 allowable only as to such transactions in real property or in 
 tangible personal property, having an actual situs within the 
 'State. 
 
 Shrinkage in Value of Securities — A person possessing 
 securities, such as stocks and bonds, cannot deduct from gross 
 income any amount claimed as a loss on account of the 
 shrinkage in value of such securities through fluctuation of 
 the market or otherwise. The loss allowable in such cases 
 is that actually suffered when the securities mature or are 
 disposed of. 
 
 Sale of Securities by Nonresident — Gains and profits of 
 a nonresident from the sale, exchange or other disposition of 
 stocks, bonds, etc., are not taxable, and should not be in- 
 cluded in gross income, except to the extent to which the 
 same shall be a part of the income from a business carried 
 on in New York State, even though the sale or other dispo- 
 sition may have been made within the State. Likewise, losses 
 sustained from the sale or other disposition of stocks, bonds, 
 etc., under like conditions, are not deductible, except to the 
 extent that they may be losses sustained in connection with 
 a business carried on within the State. 
 
 (f) Losses sustained of property not connected with 
 trade or business if arising from fires, storms, ship-wrecks, 
 or other casualty, or from theft, and not compensated for by 
 insurance or otherwise. In the case of a nonresident of the 
 
20 
 
 New York State Personal Income Tax Law 
 
 State, this deduction is only allowed in the case of real 
 property or tangible personal property having an actual situs 
 within the State of New York. 
 
 (g) Debts ascertained to be worthless and charged off 
 within the taxable year. 
 
 (h) Depreciation — a reasonable allowance for the ex- 
 haustion, wear and tear of property used in the trade or 
 business, including a reasonable allowance for obsolescence. 
 
 (i) Depletion — In the case of mines, oil and gas wells, 
 and other natural deposits, and timber, a reasonable allow- 
 ance for depletion. 
 
 (j) Contributions to religious, charitable and other 
 benevolent corporations or associations, and to the vocational 
 rehabilitation fund, to an amount not in excess of 15% of 
 the taxpayer’s net income as computed without the benefit of 
 this subdivision. A partnership as such is not allowed the 
 deduction for contributions. (Sec. 360.) 
 
 Deductions Allowed a Nonresident — In the case of a non- 
 resident of the State, the deduction shall be allowed only if and to 
 the extent that they are connected with income arising from 
 sources within the State, and provided that a complete return be 
 made of his gross income both within and without the State. The 
 deduction for charitable contributions by a nonresident only in- 
 cludes those made to corporations or association organized in New 
 York State or to the vocational rehabilitation fund. (Sec. 360.) 
 
 Deductions Allowed Estates and Trusts — Distinction is 
 made between ( 1 ) expenses which are charges against the corpus 
 of an estate or trust, and (2) expenses which are incident to the 
 business management of the estate or trust. Items falling under 
 (1) are not proper deductions in computing net income, whereas 
 items which fall under (2) are proper deductions in computing 
 net income. 
 
 In accordance with the foregoing, executor’s commissions, court 
 costs and attorney’s fees in connection with the settlement of an 
 estate or the creation of a trust which are directly chargeable to 
 
A Synopsis of the Law and Regulations 
 
 21 
 
 the corpus of the estate or trust, are not proper deductions in de- 
 termining net income. Likewise, expenses incurred by a fiduciary 
 in litigation to sustain a will are not proper deductions in de- 
 termining net income. On the other hand, if trustees’ commis- 
 sions are deducted from the income of the estate or trust distribut- 
 able among the beneficiaries, the amount of such commission 
 should be entered as legitimate and necessary expenses properly 
 deductible by the fiduciary for income tax purposes. 
 
 Expenses necessary to carrying on the business of the trust or 
 estate by the fiduciary are deductible in the same manner as sim- 
 ilar expenses of an individual ; likewise interest, taxes, losses, de- 
 preciation and depletion are subject to the same rules relating to 
 these deductible items as apply to individuals. 
 
 In the return of a fiduciary, in addition to the deductions pro- 
 vided for individuals, there shall also be allowed as a deduction 
 any part of the gross income which pursuant to the terms of the 
 will or trust deed is during the taxable year paid to or permanently 
 set aside for the United States or any political subdivision thereof, 
 or any corporation or association organized for religious, char- 
 itable, scientific, or educational purposes, or for the prevention of 
 cruelty to children or animals, no part of the net earnings of 
 which inures to the benefit of any private stockholder or 
 individual. 
 
 Items Not Deductible — In computing net income no deduc- 
 tion shall be allowed in respect of — 
 
 (a) Personal, living, or family expenses. 
 
 Insurance Premiums — Insurance paid on a dwelling owned 
 and occupied by the taxpayer, is a personal expense, and not 
 deductible. Also, premiums paid for life insurance by the 
 insured are not deductible. 
 
 Commutation Ticket — The expense of traveling to and 
 from business of a person employed in New York and re- 
 siding in the suburbs, is not deductible. 
 
22 
 
 New York State Personal Income Tax Law 
 
 (b) Expenditures for new buildings or for permanent 
 improvements made to increase the value of any property 
 or estate. 
 
 (c) Expenditures in restoring property or making good 
 the exhaustion thereof for which an allowance is or has been 
 made. 
 
 (d) Premiums paid on any life insurance policies cover- 
 ing the life of any officer or any employee or person finan- 
 cially interested in the business of the taxpayer, when the 
 taxpayer is directly or indirectly a beneficiary under such 
 policy. (Sec. 361.) 
 
 Ascertainment of Gain or Loss — In determining the gain 
 or loss from the sale or other disposition of property, the basis 
 shall be 
 
 First — For property acquired before January 1, 1919, 
 the fair market price or value of such property as of January 
 1, 1919. 
 
 Second — For property acquired on or after January 1, 
 1919, the cost thereof, or the inventory value. (Sec. 353.) 
 
 Gift — The Comptroller has ruled that a gift constitutes 
 a disposition of property which may result in a profit or loss 
 to be measured by the cost and the value at the date of the 
 gift. This profit or loss is to be reported by the donor and not 
 by the recipient of the property. 
 
 Market Value — In determining market value, it is not neces- 
 sary that an actual market be established. In the absence of an 
 actual market, market value may be regarded as the price which 
 might reasonably be agreed upon between a willing buyer and a 
 willing seller. 
 
 Exchange of Property — When property is exchanged for 
 other property, the property received, for the purpose of determ- 
 ining gain or loss, shall be treated as the equivalent of cash to the 
 amount of its fair market value. But, when in the case of a reor- 
 ganization, merger or consolidation of a corporation, a taxpayer 
 
A Synopsis of the Law and Regulations 
 
 23 
 
 receives, in place of stock or securities owned by him, new stock 
 or securities of no greater aggregate par or face value, no gain or 
 loss shall be deemed to occur from the exchange, the new stock 
 taking the place of that exchanged. (iSec. 354.) 
 
 But when the aggregate par value of the new stock or securi- 
 ties received as above is in excess of the aggregate par value of the 
 stock or securities exchanged, a like amount in par or face value 
 of the new stock received shall be treated as taking the place of the 
 stock exchanged, and the amount of the excess in par value shall 
 be treated as a gain to the extent that the fair market value of the 
 new stock is greater than the cost of the stock exchanged, if ac- 
 quired on or after January 1st, 1919; if acquired prior to January 
 1st, 1919, the fair market price or value as of that date of the 
 stock exchanged. (Sec. 355.) 
 
 Dividends — For the purpose of the statute, dividends com- 
 prise any distribution in the ordinary course of business even 
 though extraordinary in amount, made by a domestic or foreign 
 corporation to its shareholders out of its earnings or profits. Divi- 
 dends are income for the year in which payable, regardless of 
 when the earnings or profits out of which they were paid were 
 accumulated. 
 
 Stock Dividends — In the case of Macomber vs. Eisner, 
 which arose under the Federal Income Tax Law, it was held 
 that stock dividends are not income. This decision also settles 
 the question in respect to their taxability under the New York 
 State Law. 
 
 In the case of nonresidents, dividends are not subject to tax 
 and need not be reported as a part of gross income, unless they 
 are a part of income from any trade or business carried on in New 
 York State, the income of which is itself subject to taxation under 
 the Act. 
 
 Inventories — Whenever in the opinion of the Comptroller 
 the use of inventories is necessary for the determination of net 
 
24 
 
 New York State Personal Income Tax Law 
 
 income, inventories shall be taken upon such basis as he may pre- 
 scribe, conforming as nearly as possible to the best accounting 
 practice in the trade or business and most clearly reflecting the 
 income of the taxpayer. (Sec. 356.) 
 
 Credit for Taxes — A nonresident taxpayer who is liable to 
 income tax to the State where he resides, upon his net income de- 
 rived from sources in New York State and subject to taxation in 
 this State, shall be allowed to credit the amount of income tax 
 payable to New York State with such proportion of the tax pay- 
 able where he resides as his income subject to the New York In- 
 come Tax bears to his entire income upon which the tax payable 
 to such other State was imposed. This credit is only allowed if 
 the laws of such other State grant a substantially similar credit 
 to residents of New York State subject to income tax under such 
 laws. (Sec. 363.) <+ 
 
 Basis of Computing Net Income — Taxpayers are required 
 to make returns upon the basis of their annual accounting period, 
 whether a calendar year or a fiscal year. A fiscal year means an 
 accounting period of twelve months ending on the last day of any 
 month other than December. (Sec. 350 — ‘Subdiv. 4.) 
 
 A taxpayer having no annual accounting period shall make his 
 return on the basis of a calendar year. 
 
 It is recognized that no uniform method of accounting can be 
 prescribed for all taxpayers, and the law contemplates that each 
 taxpayer shall adopt such forms and systems of accounting as are 
 in his judgment best suited to his purpose. The law requires each 
 taxpayer to make a return of his true income, and he must there- 
 fore maintain such accounting records as will enable him to do so. 
 If a taxpayer changes his accounting period from fiscal to calendar 
 year, or vice versa , he must give written notice thereof and his 
 reasons therefor to the Comptroller. If the change is approved 
 by the Comptroller, the taxpayer must thereafter make his returns 
 upon the basis of the new accounting period. (Sec. 358.) 
 
A Synopsis of the Law and Regulations 
 
 25 
 
 Withholding Agents — Include all individuals, corporations, 
 associations, partnerships, fiduciaries, employers, etc., having the 
 control, receipt, custody, disposal or payment, of interest, rents, 
 salaries, wages, compensations or other fixed or determinable 
 gains, profits and income taxable under this Act. (Sec. 350.) 
 
 Information and Payment at Source — Every withholding 
 agent shall deduct and withhold the tax due from all salaries, 
 wages and compensation of whatever kind, earned for personal 
 services and taxable under this Act, of which he shall have con- 
 trol, custody, disposal or payment, if such compensation of any in- 
 dividual equals or exceeds $1,000, unless the taxpayer shall file a 
 certificate with the withholding agent showing that he is a resident 
 of New York State and setting forth his residence address within 
 the State. If the employee files a claim for personal exemption 
 greater than $1,000, the employer shall withhold the tax only on 
 the amount in excess of the exemption claim. Every withholding 
 agent shall make a RETURN OF INFORMATION to the 
 Comptroller in the case of every taxpayer under this act where 
 the income to which the taxpayer is entitled amounts to $1,000, 
 or more, in any taxable year. 
 
 The withholding agent is required to deduct and withhold any 
 tax due hereunder and to make return thereof on or before April 
 15th in each year, and at the same time pay the tax to the 
 Comptroller. 
 
 Income upon which any tax is required to be withheld shall be 
 included in the return made by the recipient of such income, but 
 the amount of tax withheld shall be credited against the amount 
 of tax shown to be due on the return of the taxpayer. (Sec. 366.) 
 
 Exemption of Certain Personal Property from Taxation — 
 
 The income tax is in addition to all other taxes imposed by law, 
 except that money on hand or on deposit with or without interest, 
 bonds, notes and choses in action, and stock (other than bank 
 stock), owned by an individual or constituting a part of a trust or 
 estate subject to the income tax, shall not after July 31st, 1919, be 
 
26 
 
 New York State Personal Income Tax Law 
 
 included in the valuation of personal property on the assessment 
 rolls of the various tax districts of the State. (Sec. 352.) 
 
 Time and Place of Filing Returns — Returns shall be made 
 to the Comptroller of the State of New York, on or before April 
 15th of each year, if the return is made on the basis of a calendar 
 year ; if made on the basis of a fiscal year, the return must be filed 
 on or before the fifteenth day of the fourth month following 
 the close of the taxpayer’s fiscal year. Provision is made for an 
 extension of time for filing returns upon good cause shown. The 
 above provisions apply to both resident and nonresident taxpayers. 
 (Sec. 371.) 
 
 Returns of income must be delivered or mailed to any one of 
 the district officers of the Income Tax Bureau, preferably to the 
 district office in which the taxpayer resides. However, partner- 
 ship returns and information returns, which are not accompanied 
 by the payment of any tax, should be mailed to the office of the 
 New York State Tax Bureau, at Albany, New York. 
 
 Payment of Tax — At the time of filing his return, each tax- 
 payer shall pay to the State Comptroller the amount of the tax 
 as the same shall appear from the face of the return. (Sec. 377.) 
 
 The Comptroller will accept uncertified checks in payment of in- 
 come taxes, provided such checks are collectible at par, that is, 
 for their full amount without any deduction for exchange or other 
 charges. 
 
 Penalties — A taxpayer failing to make any return within the 
 time required, or who makes a false or fraudulent return, with 
 intent to evade the tax imposed, shall be guilty of a misdemeanor, 
 and shall be liable to a fine of not more than $1,000, or imprisoned 
 for one year, or both. 
 
 If a person who has failed to make a return without intent to 
 evade the tax, shall voluntarily make a correct return within 60 
 days after the same is due, there shall be added to his tax 5% of 
 the amount otherwise due, but such additional amount shall in no 
 case be less than $2.00, and 1% for each month or fraction of a 
 month during which the tax remains unpaid. 
 
A Synopsis of the Law and Regulations 
 
 27 
 
 Upon the failure to file any return or pay a tax within 60 days 
 after the due date thereof, the tax is doubled with the addition of 
 1% of the doubled tax for each month or fraction thereof. (Sec. 
 
 376. ) 
 
 The law also provides penalties where an understatement of the 
 tax is made in the return, the amount of such penalties depending 
 upon whether or not the understatement is unintentional or is done 
 with fraudulent intent. Provision is also made for a refund by the 
 Comptroller to any taxpayer who has made an overpayment. ( Sec. 
 
 377. ) 
 
 Waiver of Penalties and Interest by Comptroller — The law 
 
 now gives the Comptroller the power to waive or reduce or com- 
 promise any of the penalties or interest imposed on delinquent tax- 
 payers, upon the Comptroller making a record of his reasons 
 therefor. (Sec. 379.) 
 
 Extension of Time for Filing Returns — If the time for filing 
 a return is extended by the Comptroller, the taxpayer is required 
 to pay interest on the amount of the tax at the rate of 6% per 
 annum from the time such tax was originally due to the time of 
 payment. The above also applies to a withholding agent , but such 
 interest cannot be charged by him to the taxpayer. 
 
 Location of District Offices of Income Tax Bureau — 
 District No. 1 — 42 No. Pearl St., Albany, New York. 
 
 “ “ 2—120 Broadway, New York, N. Y. 
 
 3 — 319 Washington St., Brooklyn, New York. 
 
 “ “ 4 — St. Ann’s Ave. & 161st St., Bronx, N. Y. 
 
 5 — 2 No. Washington St., Jamaica, New York. 
 
 6 — Court House, White Plains, New York. 
 
 “ “ 7-11-13 W. Swan St., Buffalo, N. Y. 
 
 “ “ 8-106-108 Main St., E., Rochester, N. Y. 
 
 “ “ 9—4 23j/ 2 Salina St., Syracuse, N. Y. 
 
 “ “ 10 — 110 Genesee St., Utica, N. Y. 
 
 “ ‘ 11—230 Lake St., Elmira, N. Y. 
 
 “ 12 — Court and State Sts., Binghamton, N. Y. 
 
 “ “ 13—518 Broadway, Kingston, N. Y. 
 
28 
 
 New York State Personal Income Tax Law 
 
 NEW YORK STATE PERSONAL INCOME TAX LAW. 
 
 In effect May 14, 1919. 
 
 An Act to Amend the Tax Law, in Relation to Imposing Taxes upon 
 and with Respect to Incomes. 
 
 Chapter 627, Laws of 1919, and Amendments thereto 
 
 Section 1. — Chapter sixty-two of the laws of nineteen hundred 
 and nine, entitled “An act in relation to taxation, constituting chapter 
 sixty of the consolidated laws,” is hereby amended by adding a new 
 article to be article sixteen, to read as follows: 
 
 Article 16. 
 
 Taxes Upon and with Respect to Personal Incomes. 
 
 Chapter 62 7, Laws of 1919, and Amendments thereto, 
 
 Section 350. Definitions. 
 
 351. Imposition of income tax. 
 
 351-a. Reimposition of tax against nonresidents. 
 
 351-b. Tax a debt. 
 
 352. Exemption of certain personal property. 
 
 353. Ascertainment of gain and loss. 
 
 354. Exchange of property. 
 
 355. Gain through exchange. 
 
 356. Inventory. 
 
 357. Net income defined. 
 
 358. Computation of net income. 
 
 359. Gross income defined. 
 
 360. Deductions. 
 
 361. Items not deductible. 
 
 362. Exemptions. 
 
 363. Credit for taxes in case of taxpayers other than resi- 
 
 dents of the state. 
 
 364. Partnerships. 
 
 365. Estates and trusts. 
 
 366. Information and payment at source. 
 
 367. Taxpayers’ returns. 
 
 368. Partnership returns. 
 
 369. Fiduciary returns. 
 
 370. Returns when accounting period changed. 
 
 371. Time and place of filing returns. 
 
 372. Administration of income tax law. 
 
 373. Powers of comptroller. 
 
 373-a. Oaths and acknowledgments. 
 
 374. Revision and readjustment of accounts by comptroller. 
 
 375. Review of determination of comptroller by certiorari 
 
 and regulation as to writ. 
 
 376. Penalties, additional taxes and interest. 
 
 377. When payable. 
 
 378. [Notice of assessment. Repealed.] 
 
 379. Collections of taxes; penalties and interest. 
 
New York State Personal Income Tax Law 
 
 29 
 
 380. Warrant for the collection of taxes. 
 
 381. Action of recovery of taxes. 
 
 382. Distribution of the income tax. 
 
 383. Comptroller to make regulations and collect facts. 
 
 384. Secrecy required of officials; penalty for violation. 
 
 385. Contract to assume income tax illegal. 
 
 Section 350. Definitions. — For the purpose of this article and 
 unless otherwise required by the context: 
 
 1. The word “comptroller” means the state comptroller. 
 
 2. The word “taxpayer” includes any person, trust or estate sub- 
 ject to a tax imposed by this article, or whose income is in whole or in 
 part subject to a tax imposed by this article, and does not include 
 corporations. 
 
 3. The words “military or naval forces of the United States” in- 
 clude the marine corps, the coast guard, the army nurse corps, female, 
 and the navy nurse corps, female, but this shall not be deemed to 
 exclude other units otherwise included within such words. 
 
 4. The words “taxable year” mean the calendar year, or the fiscal 
 year ending during such calendar year, upon the basis of which the 
 net income is computed under this article. The words “fiscal year” 
 mean an accounting period of twelve months, ending on the last day 
 of any month other than December. 
 
 5. The word “fiduciary” means a guardian, trustee, executor, 
 administrator, receiver, conservator, or any person, whether individual 
 or corporate, acting in any fiduciary capacity for any person, trust 
 or estate. 
 
 6. The word “paid” for the purposes of the deductions and credits 
 under this article, means “paid or accrued” or “paid or incurred,” and 
 the terms “paid or incurred” and “paid or accrued” shall be construed 
 according to the method of accounting upon the basis of which the 
 net income is computed, under this article. The term “received” for 
 the purpose of the computation of net income under this article, means 
 “received or accrued” and the term “received or accrued” shall be 
 construed according to the method of accounting upon the basis of 
 which the net income is computed under this article. 
 
 7. The word “resident” applies only to natural persons and in- 
 cludes for the purpose of determining liability to the tax imposed by 
 this article upon or with reference to the income of any taxable year, 
 commencing with the year nineteen hundred and nineteen, any person 
 who shall, at any time during the last six months of the calendar year, 
 be a resident of the state. 
 
 8. The word “dividend” means any distribution made by a cor- 
 poration out of its earnings or profits to its shareholders or mem- 
 bers, whether in cash or in other property or in stock of the cor- 
 poration. 
 
30 
 
 New York State Personal Income Tax Law 
 
 9. The words “foreign country” or “foreign government” mean 
 any jurisdiction other than one embraced within the United States. 
 The words “United States” include the states, the territories of Alaska 
 and Hawaii and the District of Columbia. 
 
 10. The words “withholding agent” include all individuals, cor- 
 porations, association and partnerships, in whatever capacity acting, 
 including lessees, or mortgagors of real or personal property, fidu- 
 ciaries, employers, and all officers and employees of the state, or of 
 any municipal corporation or political subdivision of the state, having 
 the control, receipt, custody, disposal or payment, of interest, rent, 
 salaries, wages, premiums, annuities, compensations, remunerations, 
 emoluments or other fixed or determinable annual or periodical gains, 
 profits and income taxable under this article. 
 
 Sec. 351. Imposition of Income Tax. — A tax is hereby imposed 
 upon every resident of the state, which tax shall be levied, collected 
 and paid annually upon and with respect to his entire net income as 
 herein defined at rates as follows: One per centum of the amount 
 of net income not exceeding ten thousand dollars; two per centum of 
 the amount of net income in excess of ten thousand dollars but not 
 in excess of fifty thousand dollars; three per centum of the amount 
 of net income in excess of fifty thousand dollars. A like tax is hereby 
 imposed and shall be levied, collected and paid annually, at the rates 
 specified in this section, upon and with respect to the entire net 
 income as herein defined, except as hereinafter provided, from all 
 property owned and from every business, trade, profession or occu- 
 pation carried on in this state by natural persons not residents of the 
 state. Such tax shall first be levied, collected and paid in the year 
 nineteen hundred and twenty upon and with respect to the taxable 
 income for the calendar year nineteen hundred and nineteen, or for 
 any taxable year ending during the year nineteen hundred and 
 nineteen. 
 
 Sec. 351-a. Reimposition of tax against nonresidents. — The tax 
 
 provided for in section three hundred and fifty-one of this chapter, 
 upon and with respect to income derived from all property owned 
 and from every business, trade, profession or occupation carried on 
 in this state by natural persons not residents of this state, is hereby 
 reimposed with respect to the taxable income for the calendar year 
 nineteen hundred and nineteen and for any taxable year ending during 
 the year nineteen hundred and nineteen, and for each year thereafter. 
 Such tax shall be levied, collected and paid for the year nineteen 
 hundred and nineteen, and returns with respect thereto shall be filed 
 on or before June thirtieth, nineteen hundred and twenty, unless the 
 time shall be extended as provided in this article. 
 
 Sec. 351-b. Tax a Debt. — Every tax imposed by this article, and 
 all increases, interest and penalties thereon, in addition to being 
 a tax against property, business, trade, profession or occupation, as 
 in this article provided, shall also become, from the time it is due 
 and payable, a personal debt, from the person or persons liable to pay 
 the same, to the state of New York. 
 
New York State Personal Income Tax Law 
 
 31 
 
 Sec. 352. Exemption of Certain Personal Property from Taxa- 
 tion. — -The taxes imposed by this article are in addition to all other 
 taxes imposed by law, except that money on hand or on deposit with 
 or without interest, bonds, notes and choses in action and shares of 
 stock in corporation other than banks and banking associations, 
 owned by any individual or constituting a part of a trust or estate 
 subject to the income tax imposed by this article, shall not after 
 July thirty-first, nineteen hundred and nineteen, be included in the 
 valuation of the personal property included in the assessment-rolls 
 of the several tax districts, villages, school districts and special tax 
 districts of the state. 
 
 Sec. 353. Ascertainment of Gain and Loss. — For the purpose of 
 ascertaining the gain derived or loss sustained from the sale or other 
 disposition of property, real, personal or mixed, the basis shall be 
 first, in case of property acquired before January first, nineteen hun- 
 dred and nineteen, the fair market price or value of such property, 
 as of January first, nineteen hundred and nineteen, and, second, in 
 case of property acquired on or after that date, the cost thereof; or 
 the inventory value, if the inventory is made in accordance with this 
 article. 
 
 Sec. 354. Exchange of Property. — When property is exchanged 
 for other property, the property received in exchange shall for the 
 purpose of determining gain or loss be treated as the equivalent of 
 cash to the amount of its fair market value, if any; but when in con- 
 nection with the reorganization, merger or consolidation of a cor- 
 poration a taxpayer receives, in place of stock or securities owned 
 by him, new stock or securities of no greater aggregate par or face 
 value, no gain or loss shall be deemed to occur from the exchange, 
 and the new stock or securities received shall be treated as taking 
 the place of the stock, securities or property exchanged. 
 
 Sec. 355. Gain through Exchange. — When in the case of any 
 such reorganization, merger or consolidation the aggregate par or 
 face value of the new stock or securities received is in excess of the 
 aggregate par or face value of the stock or securities exchanged, a 
 like amount in par or face value of the new stock or securities re- 
 ceived shall be treated as taking the place of the stock or securities 
 exchanged, and the amount of the excess in par or face value shall 
 be treated as a gain to the extent that the fair market value of the 
 new stock or securities is greater than the cost of the stock or 
 securities exchanged, if acquired on or after January first, nineteen 
 hundred and nineteen, and its fair market price or value as of January 
 first, nineteen hundred and nineteen, if acquired before that date. 
 
 Sec. 356. Inventory. — Whenever in the opinion of the comp- 
 troller the use of inventories is necessary in order clearly to deter- 
 mine the income of any taxpayer, inventories shall be taken by such 
 taxpayer upon such basis as the comptroller may prescribe, conform- 
 ing as nearly as may be to the best accounting practice in the trade 
 or business and most clearly reflecting the income, and conforming 
 
32 
 
 New York State Personal Income Tax Law 
 
 so far as may be to the forms and methods prescribed by the United 
 States commissioner of internal revenue under the act of congress 
 known as the revenue act of nineteen hundred and eighteen. 
 
 Sec. 357. Net Income Defined. — The term “net income” means 
 the gross income of a taxpayer less the deductions allowed by this 
 article. 
 
 Sec. 358. Computation of Net Income. — 1. The net income shall 
 be computed upon the basis of the taxpayer’s annual accounting 
 period (fiscal year or calendar year as the case may be) in accordance 
 with the method of accounting regularly employed in keeping the 
 books of such taxpayer; but if no such method of accounting has 
 been so employed, or if the method employed does not clearly reflect 
 the income, the computation shall be made upon such basis and in 
 such manner as in the opinion of the comptroller does clearly reflect 
 the income. If the taxpayer’s annual accounting period is other than 
 a fiscal year as defined in this article, or if the taxpayer has no annual 
 accounting period or does not keep books, the net income shall be 
 computed on the basis of the calendar year. 
 
 2. If a taxpayer changes his accounting period from fiscal year 
 to calendar year, from calendar year to fiscal year, or from one fiscal 
 year to another, the net income shall, with the approval of the comp- 
 troller, be computed on the basis of such new accounting period, sub- 
 ject to the provisions of section three hundred and seventy. 
 
 Sec. 359. Gross Income Defined. — The term “gross income”: 
 
 1. Includes gains, profits and income derived from salaries, wages 
 or compensation for personal service, of whatever kind and in what- 
 ever form paid, or from professions, vocations, trades, businesses, 
 commerce, or sales, or dealings in property, whether real or personal, 
 growing out of the ownership or use of or interest in such property; 
 also from interest, rent, dividends, securities, or the transaction of 
 any business carried on for gain or profit, or gains or profits and 
 income derived from any source whatever, including gains or profits 
 or income derived through estates or trusts by the beneficiaries 
 thereof, whether as distributed or as distributable shares. The amount 
 of all such items shall be included in the gross income for the taxable 
 year in which received by the taxpayer, unless, under the methods 
 of accounting permitted in this article, any such amounts are to be 
 properly accounted for as of a different period; but 
 
 2. Does not include the following items which shall be exempt 
 from taxation under this article: 
 
 a. The proceeds of life insurance policies and contracts paid 
 upon the death of the insured to individual beneficiaries or to the 
 estate of the insured. 
 
 b. The amount received by the insured as a return of premium 
 or premiums paid by him under life insurance, endowment or annuity 
 contracts, either during the term or at the maturity of the term men- 
 tioned in the contract or upon surrender of the contract. 
 
New York State Personal Income Tax Law 
 
 33 
 
 c. The value of property acquired by gift, bequest, devise or 
 descent (but the income from such property shall be included in 
 gross income). 
 
 d. Interest upon the obligations of the United States or its 
 possessions; or securities issued under the provisions of the federal 
 farm loan act of July seventeen, nineteen hundred and sixteen; or 
 bonds issued by the war finance corporation; or the obligations of 
 the State of New York or of any municipal corporation or political 
 subdivision thereof; or investments upon which the tax provided for 
 in section three hundred and thirty-one of this chapter has here- 
 tofore been paid since June first, nineteeen hundred and seventeen, 
 during the period of years for which such tax shall have been paid. 
 
 e. Any amount received through accident or health insurance or 
 under workmen’s compensation acts, as compensation for personal 
 injuries or sickness, plus the amount of any damages received whether 
 by suit or agreement on account of such injuries or sickness, or 
 through the war risk insurance act or any law for the benefit or relief 
 of injured or disabled members of the military or naval forces of the 
 United States. 
 
 f. Salaries, wages and other compensation received from the 
 United States of officials or employees thereof, including persons in 
 the military or naval forces of the United States. 
 
 g. Income received by any officer of a religious denomination or 
 by any institution, or trust, for moral or mental improvement, reli- 
 gious, bible, tract, charitable, benevolent, fraternal, missionary, hos- 
 pital, infirmary, educational, scientific, literary, library, patriotic, his- 
 torical or cemetery purposes, or for the enforcement of laws relating 
 to children or animals, or for two or more of such purposes, if such 
 income be used exclusively for carrying out one or more of such 
 purposes; but nothing herein shall be construed to exempt the fees, 
 stipends, personal earnings or other private income of such officer 
 or trustee. 
 
 3. In the case of taxpayers other than residents, gross income 
 includes only the gross income from sources within the state, but 
 shall not include annuities, interest on bank deposits, interest on 
 bonds, notes or other interest-bearing obligations or dividends from 
 corporations, except to the extent to which the same shall be a part 
 of income from any business, trade, profession or occupation carried 
 on in this state subject to taxation under this article. 
 
 Sec. 360. Deductions. — In computing net income there shall be 
 allowed as deductions: 
 
 1. All the ordinary and necessary expenses paid or incurred 
 during the taxable year in carrying on any trade or business, including 
 a reasonable allowance for salaries or other compensation for personal 
 services actually rendered, and including rentals or other payments 
 required to be made as a condition to the continued use or possession, 
 for purposes of the trade or business, of property to which the tax- 
 payer has not taken or is not taking title or in which he has no equity. 
 
34 
 
 New York State Personal Income Tax Law 
 
 3. Taxes other than income taxes paid or accrued within the 
 taxable year imposed, first, by the authority of the United States, or 
 of any of its possessions, or, second, by the authority of any state, 
 or territory, or any county, school district, municipality, or other 
 taxing subdivision of any state or territory, not including those 
 assessed against local benefits of a kind tending to increase the value 
 of the property assessed, or, third, by the authority of any foreign 
 government. 
 
 4. Losses sustained during the taxable year and not compensated 
 for by insurance or otherwise, if incurred in trade or business. 
 
 5. Losses sustained during the taxable year and not compensated 
 for by insurance or otherwise, if incurred in any transaction entered 
 into for profit, though not connected with the trade or business; but 
 in the case of a taxpayer other than a resident of the state, only as 
 to such transactions in real property or in tangible personal property 
 having an actual situs within the state. 
 
 6. Losses sustained during the taxable year of property not con- 
 nected with the trade or business (but, in the case of a taxpayer other 
 than a resident, only of real property or tangible personal property 
 having an actual situs within the state) if arising from fires, storms, 
 shipwrecks, or other casualty or from theft, and not compensated for 
 by insurance or otherwise. 
 
 7. Debts ascertained to be worthless and charged off within the 
 taxable year. 
 
 8. A reasonable allowance for the exhaustion, wear and tear of 
 property used in the trade or business, including a reasonable allow- 
 ance for obsolescence. 
 
 9. In the case of mines, oil and gas wells, other natural deposit 
 and timber, a reasonable allowance for depletion and for depreciation 
 of improvements, according to the peculiar conditions in each case, 
 based upon cost including cost of development not otherwise de- 
 ducted; provided, that in case of such properties acquired prior to 
 January first, nineteen hundred and nineteen, the fair market value 
 of the property (or the taxpayer’s interest therein) on that date shall 
 be taken in lieu of cost up to that date; provided, further, that in the 
 case of mines, oil and gas wells, discovered by the taxpayer on or 
 after January first, nineteen hundred and nineteen, and not acquired 
 as the result of a purchase of a proven tract or lease, where the fair 
 market value of the property is materially disproportionate to the 
 cost, the depletion allowance shall be based upon the fair market 
 value of the property at the date of the discovery or within thirty 
 days thereafter; such reasonable allowance in all the above cases to 
 be made under rules and regulations to be prescribed by the comp- 
 troller. In the case of leases the deductions allowed by this para- 
 graph shall be equitably apportioned between the lessor and lessee. 
 
New York State Personal Income Tax Law 
 
 35 
 
 10. Contributions or gifts made within the taxable year to cor- 
 porations or associations operated exclusively for religious, charitable, 
 scientific or educational purposes, or for the prevention of cruelty 
 to children or animals, no part of the net earnings of which inures to 
 the benefit of any private stockholder or individual, or to the special 
 fund for vocation rehabilitation authorized by section seven of the 
 act of congress known as the vocational rehabilitation act, to an 
 amount not in excess of fifteen per centum of the taxpayer’s net 
 income as computed without the benefit of this subdivision. Such 
 contributions or gifts shall be allowable as deductions only if verified 
 under rules and regulations prescribed by the comptroller. In the 
 case of a taxpayer other than a resident of the state this deduction 
 shall be allowed only as to contributions or gifts made to corpora- 
 tions or associations incorporated by or organized under the laws of 
 this state or to the vocational rehabilitation fund above mentioned. 
 
 11. In the case of a taxpayer other than a resident of the state 
 the deductions allowed in this section shall be allowed only if, and to 
 the extent that, they are connected with income arising from sources 
 within the state; and the proper apportionment and allocation of the 
 deductions with respect to sources of income within and without the 
 state shall be determined under rules and regulations to be prescribed 
 by the comptroller. 
 
 Sec. 361. Items Not Deductible. — In computing net income no 
 deduction shall in any case be allowed in respect of: 
 
 1. Personal, living, or family expenses. 
 
 2. Any amount paid out for new buildings or for permanent im- 
 provements or betterments made to increase the value of any property 
 or estate; 
 
 3. Any amount expended in restoring property or in making- 
 good the exhaustion thereof for which an allowance is or has been 
 made; or 
 
 4. Premiums paid on any life insurance policy, covering the life 
 of any officer or employee, or of any person financially interested in 
 any trade or business carried on by the taxpayer, when the taxpayer 
 is directly or indirectly a beneficiary under such policy. 
 
 Sec. 362. Exemptions. — The following exemptions shall be 
 allowed to any taxpayer: 
 
 1. In the case of a single person, a personal exemption of one 
 thousand dollars, or in the case of the head of a family or a married 
 person living with husband or wife, a personal exemption of two 
 thousand dollars. A husband and wife living together shall receive 
 but one personal exemption of two thousand dollars against their 
 aggregate net income; and in case they make separate returns, the 
 personal exemption of two thousand dollars shall be equally divided 
 between them. 
 
36 
 
 New York State Personal Income Tax Law 
 
 2. Two hundred dollars for each person (other than husband or 
 wife) dependent upon and receiving his chief support from the tax- 
 payer, if such dependent person is under eighteen years of age or 
 is incapable of self-support because mentally or physically defective. 
 
 Sec. 363. Credit for taxes in case of taxpayers other than resi- 
 dents of the state. — Whenever a taxpayer other than a resident of the 
 state has become liable to income tax to the state or country where 
 he resides upon his net income for the taxable year, derived from 
 sources within this state and subject to taxation under this article, 
 the comptroller shall credit the amount of income tax payable by him 
 under this article with such proportion of the tax so payable by him 
 to the state or country where he resides as his income subject to 
 taxation under this article bears to his entire income upon which the 
 tax so payable to such other state or country was imposed; provided 
 that such credit shall be allowed only if the laws of said state or 
 country (1) grant a substantially similar credit to residents of this 
 state subject to income tax under such laws or (2) impose a tax upon 
 the personal incomes of its residents derived from sources in this 
 state and exempt from taxation the personal incomes of residents of 
 this state. No credit shall be allowed against the amount of the tax 
 on any income taxable under this article which is exempt from taxa- 
 tion under the laws of such other state or country. This section as 
 amended shall apply to taxes for the year nineteen hundred and nine- 
 teen and each year thereafter. 
 
 Sec. 364. Partnerships. — Individuals carrying on business in 
 partnerships shall be liable for income tax only in their individual 
 capacity. There shall be included in computing the net income of 
 each partner his distributive share, whether distributed or not, of the 
 net income of the partnership for the taxable year, or, if his net 
 income for such taxable year is computed upon the basis of a period 
 different from that upon the basis of which the net income of the 
 partnership is computed, then his distributive share of the net income of 
 the partnership for any accounting period of the partnership ending 
 within the fiscal or calendar year upon the basis of which the partner’s 
 net income is computed. Taxpayers who are members of partnerships 
 may be required by the comptroller to make a return stating the 
 gross receipts and net gains or profits of the partnership for any 
 taxable year. The net income of the partnership shall be computed 
 in the same manner and on the same basis as provided in computing 
 the net income of individuals except that the deduction provided in 
 subdivision ten of section three hundred and sixty shall not be allowed 
 and the personal exemptions provided for in section three hundred and 
 sixty-two shall be allowed only to the individual partners. 
 
 Sec. 365. Estates and trusts. — 1. The tax imposed by this article 
 shall apply to estates and trusts, which tax shall be levied, collected 
 and paid annually upon and with respect to the income of estates or 
 of any kind of property held in trust, including: 
 
 a. Income received by estates of deceased persons during the 
 period of administration or settlement of the estate; 
 
New York State Personal Income Tax Law 
 
 37 
 
 b. Income accumulated in trust for the benefit of unborn or un- 
 ascertained person or persons with contingent interests; 
 
 c. Income held for future distribution under the terms of the 
 will or trust; 
 
 d. Income which is to be distributed to the beneficiaries period- 
 ically, whether or not at regular intervals, and the income collected 
 by a guardian of an infant to be held or distributed as the court may 
 direct; and 
 
 e. Income of an estate during the period of administration or 
 settlement permitted by subdivision three to be deducted from the 
 net income upon which the tax is to be paid by the fiduciary. 
 
 2. The fiduciary shall be responsible for making the return of 
 income for the estate or trust for which he acts, whether such income 
 be taxable to the estate or trust or to the beneficiaries thereof. The 
 net income of an estate or trust shall be computed in the same manner 
 and on the same basis as provided in this article for individual tax- 
 payers, except that there shall also be allowed as a deduction any 
 part of the gross income which pursuant to the terms of the will or 
 deed creating the trust, is during the taxable year paid to or perma- 
 nently set aside for the United States, any state, territory, or any 
 political subdivision thereof, or the District of Columbia, or any cor- 
 poration or association organized and operated exclusively for reli- 
 gious, charitable, scientific or educational purposes, or for the pre- 
 vention of cruelty to children or animals, no part of the net earnings 
 of which inures to the benefit of any private stockholder or indi- 
 vidual; and in cases under paragraphs d and e of subdivision one of 
 this section, the fiduciary shall include in the return a statement of 
 each beneficiary’s distributive share of such net income, whether or 
 not distributed before the close of the taxable year for which the 
 return is made. 
 
 3. In cases under paragraphs a, b and c of subdivision one, of this 
 section, the tax shall be imposed upon the estate or trust with respect 
 to the net income of the estate or trust and shall be paid by the 
 fiduciary, except that in determining the net income of the estate of 
 any deceased person during the period of administration or settlement 
 there may be deducted the amount of any income properly paid or 
 credited to any legatee, heir or other beneficiary. In such cases, the 
 estate or trust shall be allowed the same exemptions as are allowed 
 to single persons under section three hundred and sixty-two, and in 
 such cases an estate or trust created by a person not a resident and an 
 estate of a person not a resident shall be subject to tax only to the extent 
 to which individuals other than residents are liable under section three 
 hundred and fifty-nine, subdivision three. 
 
 4. In cases under paragraphs d and e of subdivision one of this 
 section the tax shall not be paid by the fiduciary, but there shall be 
 included in computing the net income of each beneficiary his distribu- 
 tive share whether distributed or not, of the net income of the estate 
 or trust for the taxable year, or, if his net income for such taxable 
 
38 
 
 New York State Personal Income Tax Law 
 
 year is computed upon the basis of a period different from that upon 
 the basis of which the net income of the estate or trust is computed, 
 then his distributive share of the net income of the estate or trust for 
 any accounting period of such estate or trust ending within the fiscal 
 or calendar year upon the basis of which such beneficiary’s net income 
 is computed. In such cases the income of a beneficiary not a resi- 
 dent, derived through such estate or trust, shall be taxable only to 
 the extent provided in section three hundred and fify-nine, subdivision 
 three, for individuals other than residents. 
 
 Sec. 366. Information and Payment at Source. — 1 . For the calen- 
 dar year nineteen hundred and twenty and for each calendar year 
 thereafter, every withholding agent shall deduct and withhold from 
 all salaries, wages, commissions, gratuities, emoluments, perquisites 
 and other fixed or determinable annual or periodcial compensation 
 of whatever kind and in whatever form paid or received, earned by 
 any taxpayer for personal services and taxable under this article, of 
 which he shall have control, receipt, custody, disposal or payment, 
 the following amounts: one per centum of the first ten thousand dol- 
 lars or less, two per centum of the next forty thousand dollars or 
 less, and three per centum of the excess over fifty thousand dollars, 
 by which the amount of such compensation paid or to be paid in the 
 calendar year, by such withholding agent to such taxpayer, exceeds 
 the amount of the exemptions granted to such taxpayer under sec- 
 tion three hundred and sixty-two of this chapter as shown by a cer- 
 tificate filed with the withholding agent in form to be prescribed by 
 the comptroller or one thousand dollars if no certificate showing his 
 personal exemption status is filed with the withholding agent by a 
 taxpayer other than a resident of this state. If it appears that another 
 state has passed a law taxing incomes in such manner as will result 
 in its residents being entitled to credit under section three hundred 
 and sixty-three hereof, sufficient to offset all taxes imposed by this 
 article, the comptroller may, by regulation, relieve residents of such 
 state from being required to make any return under this article, and 
 may prescribe a form of certificate to be filed by residents of such 
 state with withholding agents. A withholding agent with whom such 
 a certificate shall be filed, or with whom a certificate, in such form as 
 shall be prescribed by the comptroller, to the effect that the person 
 entitled to such compensation is a resident of this state and setting 
 forth his residence address, shall be filed after the beginning of the 
 calendar year and before the time when he is required to make return 
 and payment, need not deduct or withhold anything from the com- 
 pensation of the person filing such certificate. The comptroller may, 
 by regulation, require withholding agents to forward to him at stated 
 times any of the certificates mentioned in this subdivision. 
 
 2. Every withholding agent shall make return to the comptroller 
 of complete information concerning the amount of all interest, rent, 
 salaries, wages, premiums, annuities, compensations, remunerations, 
 emoluments or other fixed or determinable gains, profils and income, 
 except interest coupons payable to bearer, of any taxpayer taxable 
 under this article of one thousand dollars or more in any taxable year 
 
New York State Personal Income Tax Law 
 
 39 
 
 under such regulations and in such form and manner and to such 
 extent as may be prescribed by the comptroller. 
 
 3. Every withholding agent required to deduct and withhold any 
 tax under subdivision one of this section shall make return thereof 
 on or before the fifteenth day of March in each year and shall at the 
 same time pay the tax to the comptroller. Every such individual, 
 corporation or partnership is hereby made liable for such tax and is 
 hereby indemnified against the claims and demands of any individual, 
 corporation or partnership for the amount of any payments made in 
 accordance with the provisions of this section. 
 
 4. Income upon which any tax is required to be withheld at the 
 source under this section shall be included in the return of the 
 recipient of such income, but any amount of tax so withheld shall 
 be credited against the amount of income tax as computed in such 
 return. 
 
 5. If any tax required under this section to be deducted and with- 
 held is paid by the recipient of the income, it shall not be recollected 
 from the withholding agent; nor in cases in which the tax is so paid 
 shall any penalty be imposed upon or collected from the recipient of 
 the income or the withholding agent for failure to return or pay the 
 same, unless such failure was fraudulent and for the purpose of 
 evading payment. 
 
 Sec. 367. Taxpayers’ Returns. — Every taxpayer having a net in- 
 come for the taxable year of one thousand dollars or over if single 
 or if married and not living with husband or wife, or of two thousand 
 dollars or over if married and living with husband or wife, shall make 
 under oath a return stating specifically the items of his gross income 
 and the deductions and credits allowed by this article. If a husband 
 and wife living together have an aggregate net income of two thou- 
 sand dollars or over, each shall make such a return unless the income 
 of each is included in a single joint return. If the taxpayer is unable 
 to make his own return the return shall be made by a duly authorized 
 agent or by the guardian or other person charged with the care of 
 the person or property of such taxpayer. A taxpayer other than a 
 resident shall not be entitled to the deductions authorized by section 
 three hundred and sixty unless he shall make under oath a complete 
 return of his gross income both within and without the state. 
 
 Sec. 368. Partnership Returns. — Every partnership shall make a 
 return for each taxable year, stating specifically the items of its gross 
 income and the deductions allowed by this article, and shall include 
 in the return the names and addresses of the individuals who would 
 be entitled to share in the net income if distributed and the amount 
 of the distributive share of each individual. The return shall be 
 sworn to by any one of the partners. 
 
 Sec. 369. Fiduciary Returns. — Every fiduciary (except receivers 
 appointed by authority of law in possession of part only of the 
 property of a taxpayer) shall make under oath a return for the indi- 
 vidual or estate or trust for whom he acts, as follows: 
 
40 
 
 New York State Personal Income Tax Law 
 
 1. If he acts for an individual whose entire income from what- 
 ever source derived is in his charge and the net income of such indi- 
 vidual is one thousand dollars or over if single, or if married and not 
 living with husband or wife, or two thousand dollars or over if mar- 
 ried and living with husband or wife. 
 
 2. If he acts (a) for an estate of a deceased person during the 
 period of administration or settlement, whether or not the income of 
 such estate . during such period of administration or settlement is 
 properly paid or credited to any legatee, heir or other beneficiary; 
 (b) for an estate or trust the income of which is accumulated in trust 
 for the benefit of unborn or unascertained persons, or persons with 
 contingent interests; or (c) for an estate or trust the income of which 
 is held for future distribution under the terms of the will or trust; 
 and the net income of such estate or trust is one thousand dollars or 
 over. 
 
 3. If he acts (a) for an estate or trust the income of which is to 
 be distributed to the beneficiaries periodically; or (b) as the guardian 
 of an infant whose income is to be held or distributed as the court 
 may direct; and any beneficiary of such estate or trust receives or 
 is entitled to a distributive share of the income of the estate or 
 trust of one thousand dollars or more. The return made by a fidu- 
 ciary shall state specifically the items of the gross income and the 
 deductions, exemptions and credits allowed by this article. Under 
 such regulations as the comptroller may prescribe, a return made by 
 one or [sic. Should be of] two or more joint fiduciaries shall be a 
 sufficient compliance with the above requirement. The fiduciary 
 shall make oath that he has sufficient knowledge of the affairs of 
 the individual, estate or trust for whom or which he acts to enable 
 him to make the return, and that the same is, to the best of his 
 knowledge and belief, true and correct. 
 
 Fiduciaries required to make returns under this article shall be 
 subject to all the provisions of this article which apply to taxpayers. 
 
 Sec. 370. Returns When Accounting Period Changed. — If a tax- 
 payer, with the approval of the comptroller, changes the basis of 
 computing net income from fiscal year to calendar year, a separate 
 return shall be made for the period between the close of the last 
 fiscal year for which the return was made and the following December 
 thirty-first. If the change is made from calendar year to fiscal year, 
 a separate return shall be made for the period between the close 
 of the last calendar year for which return was made and the date 
 designated as the close of the fiscal year. If the change is made 
 from one fiscal year to another fiscal year, a separate return shall 
 be made for the period between the close of the former fiscal year 
 and the date designated as the close of the new fiscal year. If a 
 taxpayer making his first return for income tax keeps his accounts 
 on the basis of a fiscal year, he shall make a separate, return for the 
 period between the beginning of a calendar year in which such 
 calendar year ends and the end of such fiscal year. 
 
New York State Personal Income Tax Law 
 
 41 
 
 In all of the above cases the net income shall be computed on 
 the basis of such period for which separate return is made, and the 
 tax shall be paid thereon at the rate for the calendar year in which 
 such period is included; and the exemptions allowed in this article 
 shall be reduced respectively to amounts which bear the same ratio 
 to the full exemptions provided for as the number of months in such 
 period bears to twelve months. 
 
 Sec. 371. Time and place of filing returns. — Returns shall be 
 made to the comptroller on or before the fifteenth day of the fourth 
 month following the close of the fiscal year, or if the return is made 
 on the basis of the calendar year, then the return shall be made on 
 or before the fifteenth day of April in each year. The comptroller 
 may grant a reasonable extension of time for filing returns whenever 
 in his judgment good cause exists and shall keep a record of every 
 such extension and the reason therefor. Except in the case of tax- 
 payers who are abroad, no such extension shall be granted for more 
 than six months. Such returns shall, so far as may be, set forth the 
 same or similar items called for in the blank forms of return pre- 
 scribed by the United States commissioner of internal revenue for 
 the enforcement of the act of congress known as the revenue act of 
 nineteen hundred and eighteen, together with such other facts as 
 the comptroller may deem necessary for the proper enforcement of 
 this article. There shall be annexed to such return the affidavit or 
 affirmation of the person making the return, to the effect that the 
 statements contained therein are true. Blank forms of returns shall 
 be furnished by the comptroller upon application, but failure to 
 secure the form shall not relieve any taxpayer from the obligation 
 of making any return herein required. 
 
 Sec. 372. Administration of Income Tax Law. — The comptroller 
 shall administer and enforce the tax herein imposed for which pur- 
 pose he may divide the state into districts in each of which a branch 
 office of the comptroller may be maintained; provided that in no 
 cases shall a county be divided in forming a district. 
 
 Sec. 373. Powers of comptroller. — 1. If in the opinion of the 
 comptroller, any return of a taxpayer is in any essential respect 
 incorrect, he shall have power to revise such return, or if any tax- 
 payer fails to make return as herein required, the comptroller is 
 authorized to make an estimate of the taxable income of such tax- 
 payer from any information in his possession, and to audit and state 
 an account according to such revised return of the estimate so made 
 by him for the taxes, penalties and interest due the state from such 
 taxpayer. Except in the case of a wilfully false or a fraudulent 
 return with intent to evade the tax, the amount of tax due under any 
 return shall be determined by the comptroller within three years after 
 the return was due or was made. In the case of such wilfully false 
 or fraudulent returns the amount of tax due may be determined at 
 any time after the return is filed and the tax may be collected at any 
 time after it becomes due. 
 
42 
 
 New York State Personal Income Tax Law 
 
 2. The comptroller, for the purpose of ascertaining the correct- 
 ness of any return or for the purpose of making an estimate of tax- 
 able income of any person where information has been obtained, 
 shall also have power to examine or cause to have examined, by 
 any agent or representative designated by him for that purpose, any 
 books, papers, records or memoranda bearing upon the matters re- 
 quired to be included in the return, and may require the attendance 
 of the person rendering the return or any officer or employee of such 
 person, or the attendance of any other person having knowledge in 
 the premises, and may take testimony and require proof material for 
 his information, with power to administer oaths to such person or 
 persons. 
 
 Sec. 373-a. Oaths and Acknowledgments. — The director of the 
 income tax bureaus, and each assistant, deputy and district director, 
 and each cashier, senior auditor, auditor and junior auditor of the 
 income tax bureau, shall have the power to administer an oath to any 
 person, or to take the acknowledgment of any person in respect of 
 any income tax report or return required by or pursuant to this article, 
 or the rules and regulations of the comptroller. 
 
 Sec. 374. Revision and Readjustment of Accounts by Comp- 
 troller. — If an application for revision be filed with the comptroller by 
 a taxpayer within one year from the time of the filing of the return, 
 or if the tax of such taxpayer shall have been recomputed, then from 
 the time of such recomputation, the comptroller shall grant a hear- 
 ing thereon and if it shall be made to appear, upon any such hearing 
 by evidence submitted to him or otherwise, that any such computation 
 includes taxes or other charges which could not have been lawfully 
 demanded, or that payment has been illegally made or exacted of 
 any such amount so computed, the comptroller shall resettle the same 
 according to law and the facts, and adjust the computation of taxes 
 accordingly, and shall send notice of his determination thereon to the 
 taxpayer. 
 
 Sec. 375. Review of Determination of Comptroller by Certiorari 
 and Regulations as to Writ. — The determination of the comptroller 
 upon any application made to him by any taxpayer for revision and 
 resettlement of any computation of tax, as prescribed by this article, 
 may be reviewed in the manner prescribed by and subject to the pro- 
 visions of section one hundred and ninety-nine of this chapter. No 
 certiorari to review any statement of a computation or any determi- 
 nation by the comptroller under this article shall be granted unless 
 notice of application 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. Before 
 making the application an undertaking must be filed with him, 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 deter- 
 mination of the comptroller affirmed, the applicant for the writ will 
 pay all costs and charges which may accrue against him in the prose- 
 cution of the writ, including costs of all appeals. 
 
New York State Personal Income Tax Law 
 
 43 
 
 Sec. 376. Penalties, Additional Taxes and Interest. — 1. If any tax- 
 payer, without intent to evade any tax imposed by this article, shall 
 fail to make a return of income or pay any tax if one is due at the 
 time required by or under the provisions of this article, but shall 
 voluntarily make a correct return of income and pay the tax due 
 within sixty days thereafter, there shall be added to the tax an 
 additional amount equal to five per centum thereof, but such addi- 
 tional amount shall in no case be less than two dollars, and an addi- 
 tional one per centum for each month or fraction of a month during 
 which the tax remains unpaid. If any withholding agent, without in- 
 tent to evade any tax imposed by this article, shall fail to make a 
 return and pay a tax withheld by him at the time required by or under 
 the provisions of this article, but shall voluntarily make a correct 
 return and pay the tax due within sixty days thereafter, the with- 
 holding agent shall pay, and may not charge to the taxpayer, an addi- 
 tional amount equal to five per centum thereof, but such additional amount 
 shall in no case be less than two dollars, and an additional one per centum 
 for each month or fraction of a month during which the tax remains 
 unpaid. 
 
 2. If any taxpayer fails voluntarily to make a return of income 
 or to pay a tax if one is due within sixty days of the time required 
 by or under the provisions of this article, the tax shall be doubled and 
 such double tax shall be increased by one per centum for each month 
 or fraction of a month from the time the tax was originally due to the 
 date of payment. 
 
 3: Any individual, corporation or partnership, who, without 
 fraudulent intent, shall fail to pay, or to deduct or withhold and pay 
 any tax, or to make, render, sign or verify any return, or to supply 
 any information, within the time required by or under the provisions 
 of this article, shall be liable to a penalty of not more than one 
 thousand dollars, to be recovered by the attorney-general in the 
 name of the people by action in any court of competent jurisdiction. 
 
 4. Any individual, corporation or partnership, or any officer or 
 employee of any corporation, or member or employee of any part- 
 nership, who, with intent to evade any tax or any requirement of this 
 article or any lawful requirement of the comptroller thereunder, shall 
 fail to pay the tax, or to make, render, sign or verify any return, 
 or to supply any information, within the time required by or under 
 the provisions of this article, or who, with like intent, shall make, 
 render, sign or verify any false or fraudulent return or statement, 
 or shall supply any false or fraudulent information, shall be liable 
 to a penalty of not more than one thousand dollars, to be recovered 
 by the attorney-general, in the name of the people, by action in any 
 court of competent jurisdiction, and shall also be guilty of a misde- 
 meanor and shall, upon conviction, be fined not to exceed one thou- 
 sand dollars or be imprisoned not to exceed one year, or both, at 
 the discretion of the court. 
 
 5. The attorney-general shall have the power, with the consent 
 of the comptroller, to compromise any penalty for which he is author- 
 
44 
 
 New York State Personal Income Tax Law 
 
 ized to bring action under subdivisions three and four of this section. 
 The penalties provided by subdivisions three and four of this section 
 shall be additional to all other penalties in this article provided. 
 
 b. The failure to do any act required by or under the provisions 
 of this article shall be deemed an act committed in part at the 
 office of the comptroller in Albany. The certificate of the comptroller 
 to the effect that a tax has not been paid, that a return has not been 
 filed, or that information has not been supplied, as required by or 
 under the provisions of this article, shall be prima facie evidence that 
 such tax has not been paid, that such return has not been filed, or that 
 such information has not been supplied. 
 
 Sec. 377. When Payable. — 1. Each taxpayer shall, or in cases 
 where an agent or a guardian or other fiduciary makes return for the 
 taxpayer on whose behalf he is acting, then the agent, guardian or 
 other fiduciary shall, at the time of filing his return, pay to the 
 comptroller the amount of tax payable hereunder as the same shall 
 appear from the face of the return. If the time for filing the return 
 shall be extended, he shall pay in addition interest thereon at the rate 
 of six per centum per annum from the time when the return was 
 originally required to be filed to the time of payment. If the time for 
 filing a return by a withholding agent shall be extended, the with- 
 holding agent shall pay, and may not charge to the taxpayer, interest 
 at the rate of six per centum per annum from the time when the 
 return was originally required to be filed to the time of payment. 
 
 2. As soon as practicable after the return is filed, the comptroller 
 shall examine it and compute the tax. 
 
 3. If the amount of tax as computed shall be greater than the 
 amount theretofore paid, the excess shall be paid by the taxpayer to 
 the comptroller within ten days after the amount of the tax as com- 
 puted shall be mailed by the comptroller. In such case, if the return 
 is made in good faith and the understatement of the amount in the 
 return is not due to any fault of the taxpayer, there shall be no penalty 
 or additional tax because of such understatement, but interest shall 
 be added to the amount of the deficiency at the rate of one per centum 
 for each month or fraction of a month. If the understatement is due 
 to negligence on the part of the taxpayer, but without intent to de- 
 fraud, there shall be added to the amount of the deficiency five per 
 centum thereof, and in addition, interest at the rate of one per centum 
 per month for each month or fraction of a month. If the under- 
 statement is false or fraudulent with intent to evade the tax, the tax 
 on the additional income discovered to be taxable shall be doubled 
 and an additional one per centum shall be added to the amount so 
 due for each month or fraction of a month. The interest provided 
 for in this subdivision shall in all cases be computed from the date the 
 tax was originally due to the date of payment. 
 
 4. If the amount of tax as computed shall be less than the amount 
 theretofore paid, the excess shall be refunded by the comptroller out 
 of the proceeds of the tax retained by him as provided in this article. 
 
New York State Personal Income Tax Law 
 
 45 
 
 Sec. 378. Notice of Assessment. [Repealed by Chap. 691, Laws 
 of 1920, in effect May 10, 1920.] 
 
 Sec. 379. Collection of Taxes; Penalties and Interest. — 1. The 
 
 comptroller is authorized at his discretion to designate agents for the 
 purpose of collecting income taxes and shall require from them rea- 
 sonable bond. 
 
 2. The comptroller shall have power, upon making a record of 
 his reasons therefor, to waive or reduce any of the additional taxes 
 or interest provided in section three hundred and seventy-six, sub- 
 divisions one and two, and section three hundred and seventy-seven, 
 subdivision three, of this article, or to compromise the same. 
 
 Sec. 380. Warrant for the Collection of Taxes. — If any tax 
 imposed by this article or any portion of such tax be not paid within 
 sixty days after the same becomes due, the comptroller shall 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 owning the same, found within 
 his county, for the payment of the amount thereof, with the added 
 penalties, interest and the cost of executing the warrant, and to return 
 such warrant to the comptroller and pay to him the money collected 
 by virtue thereof by a time to be therein specified, not less than sixty 
 days from the date of the warrant. The sheriff shall within five days 
 after the receipt of the warrant, file with the clerk of his county a 
 copy thereof, and thereupon the clerk shall enter in the judgment 
 docket, in the column for judgment debtors, the name of the taxpayer 
 mentioned in the warrant, and in appropriate columns the amount 
 of the tax or portion thereof and penalties for which the warrant 
 is issued and the date when such copy is filed, and thereupon the 
 amount of such warrant so docketed shall become a lien upon the title 
 to and interest in real property or chattels real of the person against 
 whom it is issued in the same manner as a judgment duly docketed 
 in the office of such clerk. The said sheriff shall thereupon proceed 
 upon the same in all respects, with like effect, and in the same manner 
 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. In the discretion of the comptroller a warrant 
 of like terms, force and effect may be issued and directed to any 
 agent authorized to collect income taxes, and in the execution thereof, 
 such agent shall have all the powers conferred by law upon sheriffs, 
 but shall be entitled to no fee or compensation in excess of actual 
 expenses paid in the performance of such duty. If a warrant be re- 
 turned not satisfied in full, the comptroller shall have the same 
 remedies to enforce the claim for taxes against the taxpayer as if 
 the people of the state had recovered judgment against the taxpayer 
 for the amount of the tax. 
 
 Sec. 381. Action for Recovery of Taxes. — Action may be brought 
 at any time by the attorney-general of the state at the instance of the 
 comptroller, in the name of the state, to recover the amount of any 
 taxes, penalties and interest due under this article. 
 
46 
 
 New York State Personal Income Tax Law 
 
 Sec. 382. Distribution of the Income Tax. — Of the revenue col- 
 lected under this article the comptroller shall retain in his hands suffi- 
 cient to provide at all times a fund in his hands in the sum of two 
 hundred and fifty thousand dollars out of which he shall pay any 
 refunds to which taxpayers shall be entitled under the provisions of 
 this article. Of the remainder, fifty per centum shall be paid into the 
 state treasury to the credit of the general fund. The remaining fifty 
 per centum thereof shall, not later than the first day of July, and in 
 case of moneys subsequently collected at least quarterly thereafter, 
 be distributed and paid to the treasurers of the several counties of the 
 state, in the proportion that the assessed valuation of the real property 
 of each county bears to the aggregate assessed valuation of the real 
 property of the state. As to any county included in the city of New 
 York such payment shall be made to the receiver of taxes in such city 
 and be paid into the general fund for the reduction of taxation of the 
 City of New York. The county treasurer shall apportion the amount 
 so received among the several towns and cities within the county, 
 except a city containing a part of a town, in proportion that the 
 assessed valuation of the real property of each town or city bears 
 to the aggregate assessed valuation of the real property of the county. 
 The county treasurer shall pay the amount so apportioned to each 
 city to the chief fiscal officer of the city to be paid into the general 
 fund for city purposes; and in a county having a population of over 
 three hundred thousand according to the last federal or state census 
 and adjoining a city of the first class having a population of one 
 million and upwards, the county treasurer shall pay the amount so 
 apportioned to the supervisor of the town and such amount shall be 
 by him credited to general town purposes, and such amounts shall 
 not be appqrtioned as hereinafter provided. If a town does not con- 
 tain any part of a city or village, the county treasurer shall pay the 
 amount so apportioned to the town to the supervisor of the town and 
 such amount shall be by him credited to general town purposes. 
 If one or more incorporated villages or cities be wholly or partly 
 within a town, the county treasurer shall divide the amount appor- 
 tioned to such town between such town and such village, villages or 
 city in the proportions that the assessed valuations of the real prop- 
 erty of such town, as appears by the last preceding town assessment- 
 rjll, and of the real property of such village, villages or city, or 
 the portion thereof wholly within such town, as appears by the last 
 preceding village or city assessment-roll, bear respectively to the 
 aggregate assessed valuation of the real property of such town and 
 of such village, villages or city, determined by adding together the 
 assessed valuation of the real property of the town, as appears by the 
 last preceding town assessment-roll and the assessed valuation of the 
 real property of such village, villages or city, or the portion thereof 
 wholly within such town, as appears by the last preceding village 
 or city assessment-roll, as the case may be. If two or more villages 
 be entitled to share in such division, the county treasurer shall 
 divide between them the amount to which they are entitled in the 
 proportion that the assessed valuation of the real property of such 
 villages located in the town, as appears by the last preceding village 
 
New York State Personal Income Tax Law 
 
 47 
 
 assessment-rolls bears to the aggregate assessed valuations of the 
 real property of such villages located in such town, as so determined. 
 The county treasurer shall pay over to the chief fiscal officer or 
 officers of such village or villages or such city the amount to which 
 such village, villages or city is entitled in accordance with the above 
 apportionment, and shall pay the remaining portion thereof to the 
 supervisor of the town and such amount shall be by him credited to 
 general town purposes. 
 
 Sec. 383. Comptroller to Make Regulations and to Collect Facts. 
 
 — The comptroller is hereby authorized to make such rules and regu- 
 lations, and to require such facts and information to be reported; 
 as it [sic] may deem necessary to enforce the provisions of this 
 article. 
 
 Sec. 384. Secrecy Required of Officials; Penalty for Violation. — 
 
 1. Except in accordance with proper judicial order or as otherwise 
 provided by law, it shall be unlawful for the comptroller, any agent, 
 clerk or other officer or employee to divulge or make known in any 
 manner the amount of income or any particulars set forth or disclosed 
 in any report or return required under this article. Nothing herein 
 shall be construed to prohibit the publication of statistics so classified 
 as to prevent the identification of particular reports or returns and 
 the items thereof, or the inspection by the attorney-general or other 
 legal representatives of the state of the report or return of any taxpayer 
 who shall bring action to set aside or review the tax based thereon, or 
 against whom an action or proceeding has been instituted in accord- 
 ance with the provisions of sections three hundred and eighty and 
 three hundred and eighty-one of this chapter. Reports and returns 
 shall be preserved for three years and thereafter until the comptroller 
 orders them to be destroyed. 
 
 2. Any offense against subdivision one of this section shall be 
 punished by a fine not exceeding one thousand dollars or by imprison- 
 ment not exceeding one year, or both, at the discretion of the court, 
 and if the offender be an officer or employee of the state he shall be 
 dismissed from office and be incapable of holding any public office 
 in this state for a period of five years thereafter. 
 
 3. Notwithstanding the provisions of this section, the comptroller 
 may permit the commissioner of internal revenue of the United 
 States, or the proper officer of any state imposing an income tax 
 upon the incomes of individuals, or the authorized representative 
 of either such officer, to inspect the income tax returns of any indi- 
 viduals, or may furnish to such officer or his authorized representa- 
 tive an abstract of the return of income of any individual or supply 
 him with information concerning any item of income contained in 
 any return, or disclosed by the report of any investigation of the 
 income or return of income of any individual; but such permission 
 shall be granted or such information furnished to such officer or his 
 representative only if the statutes of the United States or of such 
 other state, as the case may be, grant substantially similar privileges 
 to the proper officer of this state charged with the administration 
 of the personal income tax law thereof. 
 
48 
 
 New York State Personal Income Tax Law 
 
 Sec. 385. Contract to Assume Income Tax Illegal. — It shall be 
 unlawful for any person to agree or contract directly or indirectly to 
 pay or assume or bear the burden of any tax payable by any tax- 
 payer under the provisions of this article. Any such contract or 
 agreement shall be null and void and shall not be enforced or given 
 effect by any court. 
 
 Section 2. [Invalidating Clause.] — If any clause, sentence, para- 
 graph, or part of this act shall for any reason be adjudged by any 
 court of competent jurisdiction to be invalid, such judgment shall 
 not affect, impair, or invalidate the remainder of this act, but shall 
 be confined in its operation to the clause, sentence, paragraph, or part 
 thereof directly involved in the controversy in which such judgment 
 shall have been rendered. 
 
 Sec. 3. [Personal Property Taxes.] — An assessment on account 
 of personal property made prior to August first, nineteen hundred and 
 nineteen, shall be as valid and effectual as if this act had not been 
 passed, and nothing in this act shall be construed to impair the obli- 
 gation to pay taxes assessed on account of personal property in the 
 year nineteen hundred and eighteen or the year nineteen hundred and 
 nineteen prior to August first whether payable in that year or not. 
 
 Sec. 4. [Revision of City Estimates for 1920.] — If in any city 
 
 entitled to receive a portion of the taxes collected under article six- 
 teen of the tax law as added by this act the budget for the fiscal year 
 current on July first, nineteen hundred and twenty, shall be completed 
 prior to that date, the board of estimate and apportionment or other 
 board or body having the duty of preparing the budget in such city 
 shall have the power subsequent to such date and before the levy of 
 the taxes on account of the appropriations made by such budget to 
 revise the estimates of city revenue so as to include in such calcula- 
 tion the income to the city from taxes collected under article sixteen 
 of the tax law as added by this act. 
 
 Sec. 5. [Appropriations and Personnel.]— Section 1, Chapter 8, 
 Laws of 1920, in effect February 18, 1920, reads as follows: “The sum 
 of five hundred thousand dollars ($500,000), or so much thereof as 
 may be necessary, is hereby appropriated out of any moneys in the 
 state treasury not otherwise appropriated, for the expenses of the 
 state comptroller to be incurred in administering the provisions of 
 chapter six hundred and twenty-seven of the laws of nineteen hundred 
 and nineteen, entitled “An act to amend the tax law, in relation to 
 imposing taxes upon and with respect to incomes,” but no new posi- 
 tion shall be created nor salary fixed or changed except with the 
 unanimous approval of the governor, the chairman of the senate 
 finance committee and the chairman of the assembly ways and means 
 committee.” 
 
 Sec. 6. [Effective Date.] — Except as otherwise provided herein 
 this act shall take effect immediately. (May 14, 1919.) 
 
COLUMBIA 
 
 TRUST 
 
 COMPANY