
    The People of the State of New York ex rel. Dutilh-Smith, McMillan & Company, Relator, v. Nathan L. Miller, as Comptroller of the State of New York, Respondent.
    
      Corporate tax — time when such tax is payable — a foreign corporation, having its principal office in the State of New York, which simply sells, under an agency,
    
    
      ■the goods of another corporation through agents acting in foreign countries, is not liable to tax.
    
    Section 181 of the Tax Law (Laws of 1896; chap. 908, as amd. by Laws of 1901, chap. 558), which imposes a license fee upon corporations and provides, “The tax imposed by this section on a corporation not heretofore subject to its provisions shall be paid on the first day of December, nineteen hundred and one, to be computed upon the basis of the amount of capital stock employed by it within the State during the year preceding such date, unless on such date such corporation shall not have employed capital within the State for a period of thirteen months, in which case it shall be paid within the time otherwise provided by this section,” should be construed to mean that if the corporation has not done business for twelve months, it shall pay the license fee at the time otherwise prescribed in the section, to wit, between twelve and thirteen months after it shall have commenced to employ capital within the State of New York.
    A corporation organized under the laws of the State of Delaware, whose sole business consists in selling, under a contract of agency, the goods of another corporation in foreign countries, through agencies in such foreign countries, the orders for the goods and the purchase price being sent directly to its principal, and which maintains its principal office in the city of New York, using it simply as a headquarters for the transmission of orders to its agents and for the receipt of reports from such agents, does not employ any capital in the State of New York.
    
      Certiorari issued out of the Supreme Court and attested on the 28th day of July, 1903, directed to Nathan L. Miller, as Comptroller of the State of New York, commanding him to certify and return to the office of the clerk of the county of Albany all and singular his proceedings had in imposing a license fee upon the relator under section 181 of the Tax Law, and a franchise tax under section 182 of the Tax Law, for the year ending October 31, 1901.
    The relator is a corporation organized under the Haws of the State ' of ’ Delaware. Its > authorized capital stock is $500,000, of which $100,000 was issued for cash, and $400,000 for the good will of the firm of Dntilh-Smith, McMillan & •Co. of Philadelphia. On or about September 15, 1901, the relator moved its principal office from Philadelphia to New York city, where it has since been maintained. In 1902 the Comptroller stated an account for license fee against the.relator of $625, and for franchise tax for the year ending October 31, 1901, $750. Upon an-application for readjustment thereof, the license fee was reduced to $312.50 and ¡the tax to $375. This determination the relator seeks to have reviewed upon this writ of certiorari.
    
      Theodore L. Frothingham, for the relator.
    ■ John Gunneen, Attorney-General, and William H. Wood, for the respondent.
   Smith, J.:

By section 181 of the Tax Law (Laws of 1896, chap. 908, as amd. by Laws of 1901, chap. 558) the license fee is to be computed upon the basis of the capital stock employéd by the corporation within this State during the first year of carrying on its business. The section then reads: “ The tax imposed by this section on a corporation not heretofore subject to its provisions shall he paid on the first day of December, nineteen hundred and one, to be computed iipon the basis of the amount of capital stock employed by it within the State during the year preceding such date, unless on such date siich corporation shall not have, employed capital within the State for a period of thirteen months, in which case it shall be paid within the time otherwise provided by this section,” While this provision of the statute is not clear, the only interpretation possible which will give effect to its provisions is, that if the corporation has not done business for ^twelve months it shall pay the license fee at the time otherwise prescribed in the section, to wit, between twelve and thirteen months after it shall have commenced to employ capital within the State. Inasmuch as the company did not come into the State until September 15,1901, it had not at the time this tax was stated in the Comptroller’s account employed capital within this State for a period of twelve months, and was, therefore, not then subject to the payment of the license fee. The readjustment of this tax, however, was upon October 6, 1902. At that time the relator had been employing capital within the State for twelve months, and was properly subject to the payment of this license fee upon the actual capital employed within the State during said twelve months, and the first question presented for our determination is as to what part of the capital of the relator was employed within the State of Hew York.

From the evidence presented to the Comptroller it appeared that this corporation was simply acting as the agent of the American Car and Foundry Company. By the contract of its agency the relator was not permitted to sell any goods in the United States. Its business was solely in making contracts in foreign countries. These contracts were made through the agencies in those foreign countries, and the orders were sent direct to the American Car and Foundry Company as was also the money due upon the contracts. The compensation of the relator was two and one-half per cent upon the contract prices paid. There was in addition to this some construction work, which was sublet, however, but which was entirely carried on in England, and outside of the United States and the State of Hew York. In fact, the Hew York office of this corporation appears to have been simply the headquarters in which were received the reports from these various agents, and from which were given to them their instructions.

We are unable to find any capital of the relator employed within the State of Hew York. While the good will of a corporation has been held at times to be a part of the capital employed within this State, it has never been so held where substantially all the business of the corporation was carried on in foreign countries. Its business was that of selling goods exclusively in foreign countries, and there, it seems to me its capital, including its good will, was employed The mere fact that the headquarters were in New York, from which place directions were given and at which place orders were received, does not change the nature of the business from one essentially foreign to one transacted within the State. (See People ex rel. Chicago Junction, etc., Co. v. Roberts, 154 N. Y. 1.)

The decision of the Comptroller should, therefore, be reversed with fifty dollars costs and disbursements to the relator.

All concurred..

Determination of the Comptroller reversed, with fifty dollars costs and disbursements to the relator.  