New-York tribune., 1906-01-27
TRANSFER TAX UPHELD.
,,ocVote Division Declares Lac
Constitutional.

-.-ss decided yesterday by the Appellate Di-
mat the Stock Transfer Tax law is con-
'-'.-.,oral The opinion was written by Justice
s--plin. Presiding Justice O'Brien and Justices
- anehlin and Houghton concurring. A dis
- oninion was written by Justice Ingra-
ban. ,,-. -. .,,o-+
- stock broker living in Connecticut, but
has Offices here, as a test case. John q.
,,.,t,,rn appeared for him in the proceedings
. Ease will be carried to the Court Of Ap-
= ss the Chamber of Commerce maintains
=. the law Will cost the brokers Of this city
s-..,asn 100000 and SSOO0OOO annually.
q hatch was arrested on June s. 1903, by
= ~ District Attorney Jeromes county detec-
- On :. warrant charging him with violating
,,s law in that he had committed a 'misde-
...or hv selling and delivering certain shares
= ,bs capital stock Of certain railroad COM
80 fl, The County Of New-YOrk without max
hin or memorandum of the sale or afiixing
80 - stamp or in any manner paying the
-, ,asyired by the provisions of Article XIV OF
= -sv law added by Chapter 241 OF the laws
--s,ioa T.aughlfn states in the beginning OF
,,.,rt-i,D that the validity Of the amendment
:. +bs Tax law is challenged upon the ground
.--o-r others. that the bill had only been on the
s.z,s Of the members Of the Assembly one day
--,or IN irs massage in that body"
1,srioe IaughIin then reviews al length the
Law, and says.
--,a provisions Of the amendment 10 the Tax
law clearly show that the stamp laN a. -, ,,jaI
.-s,rfsr Of stocks was intended as a suoslaIllaI
,,,-Ca ~ general revenue. The language tII-
r,oyed embraces every actual s4le anu u ~ -
81 stock anywhere within me SAT- - afsa
vel known that the sale Of such seGurltes e.
-.be-s +-sn on the changes or on the 'cuIp =
orIv 2 very small percentage IT II O. I--s' -
current history that II was eNpe,Ls1 '.5a "a &C.,
..s.ss,,-zr from the imposition Of the tax: aH9
,Ls+ -ra amount of such taxes thus faT co-tecLeu
indicates that the total for the year WI" "P
proY371ate the amount anticipated -
n nav ra under the decision or our own
courts as a tax on property ms slatuEe a. -
NOT be sustained owing 10 the iacl lL. lLts II =
based on value. and that no opporiullLy i a, a.
for5e5 The person upon "hoH Slt7 -, -
.r0sed for a hearing on the valuation OF ms tLyt
ertv or the amount or the tax. o3le.--o--9 -
presented 10y Mr.. Justice lngrahal1. 'tls1sL
Jtf-b him however as 10 the nature Of this tax
7b@ learned Attorney General and his associate
20 not seek 10 sustain the law as tax upon Fl't-
cry. They contend that II IS an eA.-S- - - =
stamp duty upon the transaction or TRANSFER %
certificates Of stock the amount Of the tax de-
rending upon the extent Of the business anu
grch literally il appears 70 be-
Since the legislature determined 10 lnauel-
rate the policy which clearly II was competent
fo- il 70 inaugurEte as 70 some property or the
not Ffl-if-l1-e ll6L lllF LEalLSl rI ''L
r+o-k fr foreign corporations on the exchanges
N this state should be put on p par with stock
n q domestic corporation This statute merely
regulates and taxes but does not prohibit the
sale The right 70 hold property Is also an es-
se.tiaI attribute of ownership, and Vet II is sub
1ect 70 the power of taxation under which the
state may take the property II the tax IS not
raid The tax is imposed only on transfers
made within this State and II operates alike On
transfers made by residents and by nOn-resi-
dents without discrimination.
Justice Ingrahsm, in his dissenting opinion, re-
views the Iaw fully. and then goes on 70 say:
I should have no doubt about the power Of the
legislature 10 impose e tax upon the sale Of all
personal property, al real property. or upon all
properly ~ a srTioular class, basing that tax
IIon the value Cf The property or the amount
n which it was actually sold. but the tax here
sought 70 5- enforced ir as I view IT, OF q very
different thSr-er-T. Shares Of stock Of inCor-
ICrated companies are selected, and upon a sale
of such stock there is imposed a tax. not based
upon The value of the property or the amount
f0- which II was actually sold. but upon what is
called the face value If the stock. a value which
rarely, II ever, represents its true selling value