The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1898-01-29
Bp FADING STATE LAWS
New York's Hostility to
Fugitive Corporations
Shown in the Tax
Assessment
EFFORTS TO AppREREND OFFENDERS
Commercial America" Comments
. on New York Tax
Methods.

New York'S hostility to corporations or
ganized under the laws of other States is
manifesting itself this year in the tax as
sessments.
Corporations organized under the laws
of other States, doing business in NSw
York, are described as fugitive corpora
lions seeking to evade the avs of the
State" by Frank White, Esq, the expon-
ent of New York corporations and the au-
thor of white on Corporations In
1894, MI. White, speaking of foreign cor
porations doing business in New York,
said:-'"The prediction is hazardad that in
every succeeding Legislature there will
be found lawyers versed in corporations
matters whose efforts will be unremitting-
ly directed towards such constitutional
legislation as may be necessary to appre-
bend the fugitive corporations and return
them to their legitimate domiclle within
the territorial limits Of he State"
The endeavor of the New York Legis-
1ature to "~apprehend the fugitive corpora
| tons organized under the laws of New
Jersey this year. seems to be concentrated
in the Tax Department. Speaking of the
tax methods in New York this year, the
Commercial America of New York, UNI
der date of January IA instant, says
1.-THE facts in the matter, however, only
| serve to draw renewed attention to The
| utterly indefensible state of the laws of
this State in regard to foreign corpora
lions. If the object was to drive corpor-
| ations from the State the existing s.a-
tutes could be readily understood. They
discourage the formation of companies in
New York, and when New York capital
-ao1-o - ", aothar CtataS fh1 Of
fort is apparently put forth to haress and
restrict their operations here. The atten-
ton of the Legislature has been 50 often
directed to this point and the fact that
corporate interests are inclined to desert
this State has been illustrated by so many
striking instances, that it is almost hope
less to look for relief in that quarter
Last year. the New York Legislature,
by the Lexow act. sought to make 1T
impractical for a foreign corporation to
do business in New York. Thereupon the
New Jersey Legislature, without a dis
senting vote, passed what has been de-
scribed as the act in protection OF cor
porations which destroyed much of the
force of the New York Lexow act.
While the Lexow act was denounced by
the prominent dailies in New York as an
iniouitous proceeding, the passage of the
New Jersey act brought universal COM
mendation from the press and public gem
erally in all parts of. the country, both
to the legislature, to the leaders and to
the Governor of the State.
This year, the Tax Department in New
York State has caused the records to be
searched in New Jersey, and from these
records has been made a list which in
cludes:-
% The name of every corporation or
ganized under the laws of New Jersey
whose certificate of Incorporation states
that If intends to do business in New
York. -
tanned from the certificate OF lncofporae
ton filed of necessity in the secretary OF
States Office pursuant to sectlon .. par.
aeranh &. who resides in New York or
has an Office in New York.
() The name of every officer n direco
tor of a New Jersey corporation whose
residence and postoffice address is con-
tanned in the statement HE'D pursuant TO
section AZ of the Corporation act, and
who resides or does business IN 6eW oa nun
This was easily accomplished, because
two sections of the Corporation act OF
New Jersey make these matters pupnc
property. The first requires every celo
tihcate of Incorporation filed to give the
name and residence of the stockholders
The second requires each corporation TO
file an annual statement, stating the
name. residence and post once ADDRESS
of every director and officer
New York State has been more clever
in protecting it's corporations from LOT
eign taxation. They only require a
ers and directors, and this is not neces-
sarily the residence postofflce address.
Stockholders are at liberty to designate
a p4stoffce ADDRESS a o9A ~ 'ne Ne"
ThesState of New York having obtained
this information, has now proceeded 70
do two things: a They nave served
notice of taxation against the respective
CORPORATIONS upon every officer or stock
holder whose address appearS from the
New Jersey records to be IN New horh
State. irrespective of the question Whether
the corporation has ever done any puSl-
ness there or not.
Al letter from the director of a New DER
sey corporation to the New York TAX Pc
partment, stating that the corporation
never has transacted any business IN the
State of New York, that it has no office
there and has no property there and
never had, brings the response that un,
less the return is filed the Will
be taxed such an amount as the assessors
may see fit.
The New Jersey director residing in
New York or doing business in New York,
thus served is in this dilemma. III the
corporation is really doing no business in
New. York and has no property there,
and if he makes no return, then the tax
will be assessed against the company and
will BIT made a debt of the company to
the State, and upon its n-on-payment a
suit may be brought against him as one
of the directors residing in the State, I'M
der the provisions of the Lexow act. If,
on the other hand, he makes a return
certifying that the company has. no prop
erty whatever in the State subject to
tax. the Assessors will tax it atsuch
amount as they see fit, and the only way
=. tit 4. oa,a nof tha TOW VOW 1xYnl Sc
to begin proceedings in a court, which
will put him to an expense not incon-
siderable.
The third course for him or the COM
pany to pursue is to pay the tax, which,
maybe for the first year, is placed at a
small amount; but having thus obtained
jurisdiction the New York authorities for
the succeeding year will raise it to no in
considerable amount. Frequently the
New Jersey director or s~tockholder is