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2. The word “taxpayer" includes any person, trust Taxpayer or estate subject 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 Military or United States" include the marine corps, the coast guard,

of the United the army nurse corps, female, and the navy nurse corps, States. female, but this shall not be deemed to exclude other units otherwise included within such words.

4. The words “taxable year" mean the calendar Taxable year. 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 ac- Fiscal year counting period of twelve months, ending on the last day of any month other than December.

5. The word “fiduciary” means a guardian, trustee, Fiduciary 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 deduc- Paid or tions 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 ac- Received or crued” and the term “received or accrued” shall be con- accrued strued 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 per- Resident

accrued.

Dividend

Foreign country

United States

Withholding agent

sons and includes 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 on or after January first and not later than March fifteenth of the next succeeding calendar year, be or become a resident of the state.

8. The word “dividend” means any distribution made by a corporation out of its earnings or profits to its shareholders or members, whether in cash or in other property or in stock of the corporation.

9. The words "foreign country” or “foreign govern. ment” 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, corporations, associations and partnerships, in whatever capacity acting, including lessees, or mortgagors of real or personal property, fiduciaries, 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.

Imposition of Income Tax. § 351. 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

Residents

Rates of tax

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

Non-residents 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 occupation 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. Exemption of Certain Personal Property from Taxation.

§ 352. The taxes imposed by this article are in Property subaddition to all other taxes imposed by law, except that ject to Income

Tax not submoney on hand, on deposit or at interest, bonds, notes and choses in action and shares of stock in corporations Personal 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, and from which any income is derived, 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.

Ascertainment of Gain and Loss. § 353. For the purpose of ascertaining the gain derived or loss sustained from the sale or other disposi

Gain and loss tion of property, real, personal or mixed, the basis shall

to

Property Tax

be first, in case of property acquired before January first, nineteen hundred 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.

Stock of same aggre

Exchange of Property. $ 354. 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, gate par value if any; but when in connection with the reorganization,

merger or consolidation of a corporation 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.

Gain Through Exchange. Stock of

§ 355. When in the case of any such reorganizagreater aggre- tion, merger or consolidation the aggregate par or face gate par valuc

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 received 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.

Inventory. $ 356. Whenever in the opinion of the comptroller the use of inventories is necessary in order clearly to determine the income of any taxpayer, inventories shall be taken by such taxpayer upon such basis as the comptroller may prescribe, conforming as nearly as may be to the best accounting practice in the trade or business and most clearly reflecting the income, and conforming so far as may be to the forms and methods prescribed by -the United States commissioner of internal revenue under to conform the act of congress known as the revenue act of nineteen to Revenue

Act of 1918 hundred and eighteen.

Net Income Defined. § 357. The term “net income” means the gross in- Net income - come of a taxpayer less the deductions allowed by this article.

Computation of Net Income. . § 358. 1. The net income shall be computed upon

Fiscal year or the basis of the taxpayer's annual accounting period calendar year (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

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