
    The People of the State of New York ex rel. Elliott-Fisher Company, Relator, v. William Sohmer, as Comptroller of the State of New York, Respondent.
    Third Department,
    December 28, 1911.
    Tax—corporations — license tax on foreign corporation — par value of stock..
    The tax imposed on foreign corporations doing business in this State by section 181 of the Tax Law, as amended by Laws of 1906, chapter 474," is . to be computed on the par valué of their capital stock employed in this State.-
    As the organization and license tax imposed on corporations by sections 180 and 181 of the Tax Law had an origin and purpose distinct from that of the franchise tax imposed by section 183, the sections imposing the two taxes Will be treated as though they had remained separate statutes and had not been brought together in the statutory revision.
    ' Certiorari issued out of the Supreme Court and attested on the 12th day of June, 1911, directed to. William Sohmer, 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 assessing the relator for a license tax pursuant to section 181 of the Tax Law (Gen. Laws, chap. 24 [Laws of 1896, chap. 908], as amd. by Laws of 1901, chap. "558, and Laws of 1906, chap. 414) for the privilege of doing business in this State, and in refusing to make a revision or adjustment of said tax.
    The relator is a foreign corporation organized under the laws of the State of Delaware, and in 1906 was transacting business in this State and had tangible assets here as well as- elsewhere. The Comptroller determined that the amount of its capital stock employed in this State during the year ending October 31,. 1906, was $1,030,240 and fixed the license fee thereon at $1,281; 80, less the amount of. a license fee previously. paid amounting to $122.31.
    
      Cornelius C. Beekman, for the relator.
    
      Thomas Carmody, Attorney-General [Franklin Kennedy, Deputy, of counsel], for the respondent.
   Kellogg, J.:

The only question presented to us is whether the license tax should he based upon the par value or the appraised value of the capital stock.

This license tax first came into our law by chapter 240 of the Laws of 1895, which was entitled “An act to provide for licensing foreign stock corporations.” It provided for such corporations then authorized to do business in this State a license fee of one-eighth of one per centum payable on December 1, 1895, “to be computed upon the basis of the amount of capital stock employed by it within this State during the year preceding that date,” and for such corporations thereafter authorized to do business in this State it provided a like license fee payable before receiving the certificate of authority to be computed upon the basis of the capital stock employed by it within this State for its business during the first year of carrying on its business in this State.” The tax was to be paid but once. Chapter 143 of the Laws of 1886 imposed an organization tax of one-eighth of one per cent upon the capital stock of a domestic corporation, and in the year 1895 the Comptroller in his report to the Legislature suggested that foreign corporations were required to pay no organization tax here and, therefore, had an advantage over domestic corporations, which was an inducement to corporations to organize outside of the State to transact business in the State, and he suggested that such corporations should have no advantage over domestic corporations, and referred to the fact that the last Legislature had passed an act which would compel foreign corporations to pay a tax similar to the organization tax of domestic corporations, but that the act was so defective- that it was not suffered to become a law. It is evident by the passage of the statute in question immediately following the report, and from the nature of the act itself, that its purpose was to impose upon foreign corporations a tax similar to the organization tax required of domestic corporations. Notwithstanding this evident purpose this court felt compelled by former decisions to hold in People ex rel. Consolidated Ginseng Co. v. Kelsey (105 App. Div. 175) that the license tax was not to be computed on the par value of the stock of the corporation, which decision, June 16, 1905, was affirmed without opinion by the Court of Appeals (182 N. Y. 526).

In People ex rel. Commercial Cable Co. v. Morgan (178 N. Y. 433), in a special franchise case, the court held that the basis upon which the tax was to be computed was not the issued capital but the money or property representing the capital, the court saying (at p. 439): “ What, then, is the basis upon which the tax is to be computed ? Is it the share stock held by individuals, or is it the capital held by the corporation % The tax is upon the corporation. It would seem to follow that the amount of the taxis to be measured by something that the corporation owns.” It treated “capital stock” and “capital” as equivalent to each other, and this court in the Ginseng Co. case felt controlled by those considerations.

In his report to the Legislature for the year 1906 the Comptroller called attention to this decision and the advantage which it gave foreign corporations over a domestic corporation, and continued.: “It is respectfully suggested that section 181 of the Tax Law be so amended that the domestic corporation is in at least as favorable relation to the taxing power of the State as is the foreign corporation coming within our borders to transact its business.” The Legislature, thereupon, by chapter 414 of the Laws of 1906, amended section 181 by inserting the provision: “The measure of the amount of capital stock employed in this State shall be such a portion of the issued capital stock as the gross assets employed in any business within this State bear to the gross assets wherever employed in business.”

I think the history of the legislation up to that time and the use of the words “issued capital stock” in the statute indicate clearly that the par value of the stock issued is to be the basis of taxation rather - than its appraised value. While it cannot be satisfactorily contested that the Legislature intended that the foreign corporation must pay a tax at least as great as the organization tax of the domestic corporation, it is urged upon us that we are precluded from giving the statute that construction by People ex rel. Fifth Avenue Building Co. v. Williams (198 N. Y. 238). The history of the statutes and of .that case indicate otherwise. The license tax originated in an independent statute, designed for a special purpose, and was complete in itself, but in a revision of the Tax Law for convenience was brought into it and became section 181 of that law.

The Fifth Avenue ■ case held that the franchise tax on a corporation paying no. dividends was to be computed upon the appraised and not the par value of the stock. It conceded that section 182, as amended, standing alone might fairly be held to mean otherwise, but that section must be read with section 190, as amended, which related to the same subject, and the sections could not in any other way be harmonized and given full effect. But sections 182 and 190, as amended, relate to a subject entirely different from sections 180 and 181, as amended, and would not be thought of in connection with this case were it not for the fact that in the consolidation of the Tax Laws the provision relating to the organization tax and the license tax are sections 180 and 181, and the separate provisions as to the franchise tax begin at section 182. These taxes, having a distinct origin and purpose, may be considered separately and the sections imposing them may be given the same effect as if they had remained separate statutes and had not been brought together in the revision. The amendment inserting the word “issued” before the words “capital stock” indicates clearly that the stock referred to is the stock issued and not the money value representing the stock. I think the clear intention of the Legislature was that this tax should be based upon the par value of the capital stock which is employed in business in the State. The determination of the Comptroller was right and should be confirmed, with fifty dollars costs and disbursements.

All concurred.

Determination of the Comptroller unanimously confirmed, with fifty dollars costs and disbursements.  