CHAPTER XX.

REMEDIES.

The administrative provisions for the revision and collection of corporation franchise taxes and personal income taxes, whether assessed by the State Tax Commission or by the State Comptroller are similar in character and scope and are therefore treated together. Indeed, the State Comptroller originally levied, as well as collected, all the State corporation taxes and the power was taken away from him by Chapter 317 of the Laws of 1915, which established the State Tax Department and defined its powers and duties transferring thereto certain powers of the Comptroller. Thus under the Laws of 1919, the State Comptroller, who is now authorized to assess as well as to collect the personal income tax under Article 16, is in a measure coming into his own again.

Section 198, Article 9, Sections 218 and 219-d, Article 9-a, respectively, provide the procedure for the revision of an erroneous or illegal corporation tax, and Section 374, Article 16, for an erroneous or illegal personal income tax. The various statutory provisions in each case and the practice covering them are substantially similar.

Revision of corporation taxes under Article 9:-Section 198 of the Tax Law providing for a revision of an illegal or erroneous tax stated against a corporation under Article 9 of the Tax Law, is given below:

Revision and readjustment of accounts by tax commission.-If an application be filed with the commission by the party against whom the account is stated or by the attorney-general within one year from the time any such account shall have been audited and stated, the commission may at any time, upon notice thereof sent to the person, partnership, company, association or corporation against whom it is

stated, revise and readjust such account, and if it shall be made to appear upon any such application by evidence submitted to it or otherwise, that any such account included taxes or other charges which could not have been lawfully demanded, or that payment has been illegally made or exacted of any such account, the commission shall resettle the same according to law and the facts, and charge or credit, as the case may require, the difference, if any, resulting from such revision or resettlement upon the accounts for taxes of or against any such person, partnership, company, association or corporation. Such credit, whether allowed before or after the passage of this chapter, may be, by the person, partnership, company, association or corporation in whose favor it is allowed, assigned to a person, partnership, company, association or corporation liable to pay taxes under article nine of this chapter and the assignee of the whole or any part of such credit on filing with the commission such assignment shall thereupon be entitled to credit on the books of the commission for the amount thereof on the current account for taxes of such assignee in the same way and with the same effect as though the credit had originally been allowed in favor of such assignee. The commission shall forthwith send written notice of its determination upon such application to the applicant, and to the attorney-general, which notice may be sent by mail to its post-office address. (Sec. 198, former sec. 195, Tax Law, as amended by ch. 642, L. 1903, ch. 734, L. 1907; and by ch. 317, L. 1915.)

Source: L. 1880, ch. 542, sec. 19, as added by L. 1889, ch. 463.

(Recent Amendments.-The amendment of 1915 substituted the word "commission" for "comptroller" where it formerly occurred.)

Similar provisions under Articles 9-a and 16.-Sections 218 and 219-d, containing the statutory provisions for the revision of a tax under the Business Corporations Tax Law (Article 9-a) will be found in the last Chapter of Part II (supra). Section 374 (Article 16) covers a similar provision in the Personal Income Tax Law, and will be found in Part IV infra.

Revision and readjustment of tax.-Under Section 198, Article 9, or under Section 218 of the Tax Law, which is contained in Article 9-a, a corporation dissatisfied with the tax settled against it by the State Tax Commission may make an application, "within one year from the time any such account shall have been audited and stated," for a correction and revision thereof, and it is further

provided under Section 218 that "the Commission shall grant a hearing thereon."

It will be noticed that under this section, it makes it mandatory upon the Commission to grant a hearing, whereas under Section. 198 of Article 9, the Commission was not obliged to comply with the request. Written application for revision must be made, for the section requires the application to be filed.

The auditing and stating of an account by the Tax Commission refers to its determination on the original return filed by the corporation, the entry of the tax, the assessment upon the books of the Tax Commission and notice thereof to the corporation assessed.

Under the practice in the State of Pennsylvania, it has been held that "an account' or 'settlement' is a physical, tangible thing, a paper with figures and writing upon it, signed by the AuditorGeneral and State Treasurer, indorsed, copied into a ledger and filed away in its appropriate place. Whether such a settlement has been made against a given corporation, for a tax of a given year, is therefore a question of fact to be ascertained by looking in the proper place for the settlement." Hardenbergh's Opinions and Decisions under Acts of Pennsylvania, p. 31.

The settlement of taxes against corporations by the AuditorGeneral and State Treasurer, being a purely ministerial act, may be made by clerks acting respectively under the direction and by the authority of the Auditor-General and State Treasurer. See Phila. & Read. R. R. Co. v. Com., 104 Pa. 86; Hamilton Wheel Co. v. Com., 12 W. N. C. 328.

Revision of personal income tax.-Under Section 374, Article 16, providing for the revision of a personal income tax, the application must be filed within one year from the time of the filing of the return. Since the personal income tax is self-assessed by the taxpayer, the filing of the return marks the period when the time begins to run. No notice is required unless there be a recomputation, when it would seem that the comptroller must send notice of the recomputation. The granting of the application for

a revision appears to be mandatory as is the case of business corporation taxes under Article 9-a.

Form of application for revision.-The statute does not set forth any formal requirements to be contained in an application of this character, but it would seem that the following may be used as a precedent. This form of application may be modified to suit the law and facts in cases arising under Articles 9 and 16. In the Matter

of

The Application of the.....

Company for a Revision and Readjustment of the Account Heretofore Audited and Stated by the State Tax Commission of the State of New York, for Taxes under Article 9-a of the Tax Law.

To the Honorable State Commission of the State of New York: The application of the....

respectfully shows:

....Company

(1). That it is a domestic corporation duly organized and existing under the Laws of the State of New York [or, if a foreign corporation, say: that it is a foreign corporation organized and existing under the Laws of the State of.... ..and transacting business in the State of New York].

(2). That for the year beginning November 1st, 1917, it was engaged in the business of [allege the facts] in the State of New York, and in other places outside of said State as will more particularly be referred to hereafter: that part of its capital, including tangible property is employed in the State of New York, but that the greater part of its tangible property consisting of [state nature thereof] is employed outside of said State as will more particularly be referred to hereafter.

(3). That on or about the......day of..... 1917, it made a written report to the State Tax Department, as required

by Article 9-a of the Tax Law, such report being in the form prescribed by said department: that a copy of said report is hereto annexed, made a part hereof, and marked Exhibit A.

(4). That thereafter the State Tax Commission audited and stated the account for taxes to be paid by your petitioner for the year beginning November 1st, 1917, and sent notice thereof to it. (5). That the said account so audited and stated imposed a tax of $..... upon said corporation.

(6). That said account was erroneous and illegal in that [here set forth in detail the facts upon which it is claimed that the account was erroneous or illegal].

(7). That in consequence of the fact that said tax was erroneous and illegal, it cannot be lawfully demanded, and the said tax is wholly without warrant or authority either in fact or law.

WHEREFORE, the said company makes application for a revision and readjustment of such account, so audited and stated, so that your petitioner shall be given credit for [here state credit claimed]. That upon such hearing your petitioner will present evidence to corroborate such facts as will support its claim for such credit, to wit: [here set forth facts to be adduced], and your petitioner prays that the Tax Commission shall resettle such tax according to the law and the facts, and adjust the account of the taxes accordingly, and that it shall thereafter send notice of its determination to the State Comptroller; and the said company prays for such other and further relief as may be proper.

By..

.Company.

President (or other officer).

Attorney.

Office and P. O. Address...

(Verification in usual form.)

Verification. The failure to verify a petition for resettlement is no ground for assuming that facts therein stated are insufficient on certiorari. When the comptroller has granted an application