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CHAPTER XIX.

FRANCHISE TAX ON BUSINESS CORPORATIONS.

(Article 9-a of the Tax Law.) Chapter 726, Laws of 1917, as amended by Laws of 1918 and 1919.

(Text of the Law)
(1919 Amendments in Italics.)

Section
208. Definitions.
209. Franchise tax on corporations based on net income.
210. Corporations exempted from article.
211.

Reports of corporations to tax commission. 212. Reports by corporation on basis of fiscal year. 213. Reports to be sworn to; forms. 214. Computation of tax. 214-a. Taxation of corporations acquiring assets or franchises of other

corporations. 215. Rate of tax. 216. Penalty for failure to report. 217. Powers of tax commission. 218. Revision and readjustment of accounts by tax commission. 219. Review of determination of tax commission by certiorari and

regulations as to writ. 219-a. Audit and statement of tax. 219-b. Notice of tax. 219-c. When tax payable. 219-d. Corrections and changes. 219-e. Warrant for the collection of taxes. 219-f. Action for recovery of taxes; forfeiture of charter by delinquent

corporations. 219-9. Deposit of revenues collected. 219-h. Disposition of revenues collected. 219-i. Secrecy required of officials; penalty for violation. 219-j. Exemption from certain other taxation. 219-k. Limitation of time. 219-1. Personal property defined.

§ 208. Definitions. As used in this article:

1. The term "corporation" includes a joint-stock company or association;

2. The words “tangible personal property" shall be taken to mean corporeal personal property, such as machinery, tools, implements, goods, wares and merchandise, and shall not be taken to mean money, deposits in bank, shares of stock, bonds, notes, credits or evidences of an interest in property and evidences of debt;

3. The term "entire net incomemeans the total net income before any deductions have been made for taxes paid or to be paid to the Government of the United States on either profits or net income or for any losses sustained by the corporation in other fiscal or calendar years whether deducted by the Government of the United States or not.

[SOURCE:-Ch. 726, L. 1917, as am'd by Ch. 417, L. 1918, and by Ch. 628, L. 1919. The 1918 amendment eliminated the definitions of "manufacturing corporationand mercantile corporation,contained in former paragraphs 3 and The 1919 amendment added the present paragraph 3.]

§ 209. Franchise tax on corporations based on net income. For the privilege of exercising its franchise in this state in a corporate or organized capacity every domestic corporation, and for the privilege of doing business in this state, every foreign corporation, except corporations specified in the next section, shall annually pay in advance for the year beginning November first next preceding an annual franchise tax, to be computed by the tax commission upon the basis of its entire net income for its fiscal or the calendar year next preceding, as hereinafter provided, which entire net income is presumably the same as the entire net income upon which such corporation is required to pay a tax to the United States.

[SOURCE:--Ch. 726, L. 1917, as am'd by Ch. 276, L. 1918, and by Ch. 628, L. 1919. The 1918 amendment added the words "presumably the same as the income upon which,and the 1919 amendment prefixed the words "entire net" to income.]

§ 210. Corporations exempted from article. Corporations wholly engaged in the purchase, sale and holding of real estate for themselves, holding corporations whose principal income is derived from holding the stocks and bonds of other corporations and corporations liable to a tax under sections one hundred and eighty-four to one hundred and eighty-nine inclusive of this chapter, banks, savings banks, institutions for savings, title guaranty, insurance or surety

corporations shall be exempt from the payment of the taxes prescribed by this article.

[SOURCE:—Ch. 726, L. 1917no change.]

§ 211. Reports of corporations to tax commission. Every corporation taxable under this article as well as foreign corporations hav. ing officers, agents or representatives within the state shall annually on or before July first, or within thirty days after the making of its report of entire net income to the United States treasury department for any fiscal or calendar year, transmit to the tax commission a report in the form prescribed by the tax commission specifying: 1. The name and location of the principal place of business of such corporation, the state under the laws of which organized, and the date thereof; the amount of its issued capital stock and the kind of business transacted. Any corporation not organized under the laws of any state within the United States shall state the facts in relation to its entire net income as though organized under the laws of this state.

2. The amount of its entire net income for its preceding fiscal or the preceding calendar year as shown in the last return of annual net income made by it to the United States treasury department. If the corporation shall claim that the return made to the United States treasury department was inaccurate, the amount claimed by it to be the net income for such period shall be specified. If any deduction has been allowed for losses sustained by the corporation in prior years the amount so' allowed and deducted shall be specified.

3. The average monthly value for the fiscal or calendar year of its real property and tangible personal property in each city, village or portion of a town outside of a village within the state, and the average monthly value of all its real property and tangible personal property wherever located.

4. The average monthly value for the fiscal or calendar year of bills and accounts receivable for (a) personal property sold by the corporation from merchandise manufactured by it within this state; (b) personal property sold by the corporation from merchandise owned by it and located within the state at the time of the acceptance of the order, but not manufactured by it within this state; and (c) services performed, based on all orders received at offices maintained by the corporation within this state; excluding bills and accounts receivable arising from sales made from a stock of merchandise or other property located at a place of business maintained by the reporting corporation within this state. Also the average total monthly value for the fiscal or calendar year of bills and accounts receivable for

(a) personal property sold by the corporation from merchandise manufactured by it within and without the state, (b) personal property sold by the corporation from merchandise owned by it at the time of the acceptance of the order but not manufactured by it; and (c) services performed, based on orders received at offices maintained by the corporation, excluding bills and accounts receivable on orders filled from a stock of merchandise or other property maintained by the reporting company.

5. The average total value for the fiscal or calendar year of the stock of other corporations owned by the corporation, and the propor. tion of the average value of the stock of such other corporations within the state of New York, as allocated pursuant to section two hundred and fourteen of this chapter.

6. If the corporation has no real or tangible personal property within the state, the city, village or portion of a town outside of a village in the state in which is located the office in which its prin. cipal financial concerns within the state are transacted.

7. Such other facts as the tax commission may require for the purpose of making the computation required by this article.

8. Any corporation taxable hereunder upon its entire net income may omit from its report the statements required by subdivisions four and five by incorporating in its report a consent to be taxed upon its entire net income. Corporations having no net income shall, however, complete the segregation of assets in every case.

[SOURCE:--Ch. 726, L. 1917, as am'd by Ch. 417, L. 1918 and by Oh. 628, L. 1919.

The 1918 amendment added the limitation of time as to transmitting the state report within 30 days after filing report with the Treasury Department. The amount of issued capital stock was to be returned. It also permitted corporations to return net income on basis other than that determined by the U. 8. Treasury Department, where that was inaccurate. There were changes in subdivision 4 avoiding duplication of accounts receivable and a more definite statement of accounts receivable for services rendered.

The 1919 amendment added subdivision 5 and the words italicized in subdivisions 1, 2 and 8.]

§ 212. Reports by corporation on basis of fiscal year. A corporation which reports to the United States treasury department on the basis of its fiscal year, may report to the tax commission upon the same basis, except as provided in section two hundred and four. teen-a of this chapter.

(SOURCE:-Ch. 726, L. 1917, as am'd by Ch. 628, L. 1919. The words italicized were added in 1919.)

$213. Reports to be sworn to; forms. Every report required by this article shall have annexed thereto the affidavit of the president, vice-president, secretary or treasurer of the corporation to the effect that the statements contained therein are true. Blank forms of the report shall be furnished by the tax commission, on application, but failure to secure such a blank shall not release any corporation from the obligation of making a report herein required. The commission may require a further or supplemental report under this article to contain further information and data necessary for the computation of the tax herein provided.

[SOURCE:- Ch. 726, L. 1917—no change.] § 214.

Computation of tax. If the entire business of the corporation be transacted within the state, the tax imposed by this article shall be based upon the entire net income of such corporation for such fiscal or calendar year as defined in section two hundred and eight of this chapter, subject, however, to any correction thereof for fraud, evasion or error, as ascertained by the state tax commission.

If the entire business of such corporation be not transacted within the state, the tax imposed by this article shall be based upon a proportion of such entire net income, to be determined in accordance with the following rules :

The proportion of the entire net income of the corporation upon which the tax under this article shall be based, shall be such portion of the entire net income as the aggregate of

1. The average monthly value of the real property and tangible personal property within the state.

2. The average monthly value of bills and accounts receivable for (a) personal property sold by the corporation from merchandise manufactured by it within this state; (b) personal property sold by the corporation from merchandise owned by it and located within the state at the time of the acceptance of the order, but not manufactured by it within this state; and (c) services performed within this state, excluding bills and accounts receivable arising from sales made from a stock of merchandise or other property located at a place of business maintained by the reporting corporation without this state.

3. The proportion of the average value of the stocks of other corporations owned by the corporation, allocated to the state as provided by this section, but not exceeding ten per centum of the real and tångible personal property segregated to this state under this article, bears to the aggregate of

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