The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-02-25
STATE INCOME TAKES.
Incidence and Application Of the Pro.
posed 1mpost.

40 THE EDTIOk VI 4 = oON-p"s A''N'
has been introduced in the Legislature
Of tho State of New York an income
tax bill subjectine to an income tax the
net income OF individuals and certain
corporations. The bill allows to indi-
viduals certain specific exemptions a.
follows $1,000 to an unmarried person :
20 husband and wife living together,
$500. and for each child under the .
Of Is years 800. provided the total ex-
emotion for husband. wife and children
under 10 years Of ago residing together
az members OF q family shall not exceed
$4,000.
Unfortunately. the state Of New York
BY Chapter l65 Of the Laws of 1915
| provided for the taxation OF certain Sc
| cured debts at the rate Of thfee-fourths
Of q mill. The secured debts upon which
this tax was paid wore exempted from
all taxation for q period OF i've years.
Therefore in drawing the proposed In
como tax act the Committee on Taxa
| ton that recommended the bill felt con-
strained 10 exempt from the provisions
Of the bill income from secured debts
| that had been specifically exempted un-
der Chapter ass. known as the Secured
Debt act" This removes from taxation
for q period Of five years a great deal
Of income which Of course mould be
subject to the proposed act
The proposed act does NOT follow the
principle Of the Connecticut and West
Virginia acts In ate TDting to appOrtion
n par of the total net income to the
state Of New York accruing to corpora
lions transact.ng business both within
and without the State. On the other
| hand. the bill attempts to allocate both
ncom and deductions to the state OF
New York. which process of course
makes the bill much more complicated
( than either the Connecticut act or the
West Virginia act. n gives to the New
York Tax Commission much wider dis
c~retionary powers.
The bill also provides that income
from and deductions allowable with re-
spect to stocks and securities and profit
or loss from ownership thereof or deal
ings therein. shall In the case OF cor
porations and copartnerships be al
located TO that place OF business or
the taxpayer where his financial con-
Germs are transacted. This o appear
to subject the entire net income arising
from stocks and securities owned by
copartnerships and corporations TO tax
alton in the State OF New York. even
though such net income were received
by a New York corporation az a result
OF tr~ansacting business outside the state
Of New FORK. In other words, a New
York State corporation having It's prin-
I rlpal OIlse IN inc slitt vi v AVN
would be required TO pay ar income tax
upon the total amount OF income re-
ceived from stocks and securities or Az
a result OF dealings therein regardless
OF where such income was earned ana
regardless of whether II was also taxa
bic outside the State.
The remaining net income OF corpora
tons ~transacting business both within
m without the state not exceeding 6
per cent. OF the value OF the tangible
property Is to be apportioned in accord
ance with the value OF such property
within and without the State. That Is.
such a proportion of tho income, other
than from stocks and securities, Up TO
an amount not exceeding . per cent. OF
the value of the tangible property ~ 10
be apportioned to the State of New York
In such n proportion as the tangible
property In the state bears TO the totd!
tangible property OF the company.
If any net income remains over u
above 6 per cent. o. the value Of the
tangible property above mentioned. It
IS to be apport'oned 70 the state o. New
York in such a proportion rs the busi-
ness transacted in the state bears 20
the total business OF the corporation
wherever transacted. Tie difficulty here
is that the bill does not specify what s.
or what IL not 70 be considered as bust
ness transacted In the state Of New
York. 1t IL therefore assumed tina. tina;
matter will a V to be decided Judicially
by the state Tax Commission.
The rate OF taxation upon individuals
Is from one-half OF ! per cent. to ] per
cent. where the taxable income does no
exceed 5 $1,000. all income over 1000
heing subject 20 a tax ~ . per cent.
That Is. ind viduals having "A taxable III
come amounting to 5000 pay a tax of
81 Individuals having a taxable income
az $4,000 pay n tax of $50, In case the
taxable income exceeds $4,000 the TAX
Is $50 plus . per cent. upon all income
in excess of $4,000.
The rate Of tax imposed uTon corpor-
at,ons IN 3 per cent As this income tax
is upon income from both real estate
and personal property. thereby subject
ing real estate 20 double taxation 90 that
extent. and as corporations Uns; neccS'
sarily use all their capital in their busi-
ness, Il would seem that the rate upor
corporate Income Is somewhat excessive
The corporate rate IL higher than In
either tho Connecticut act or the West
Virginia act.
The tax Is TO be administers ny the
state Tax Commission, and adequate
penalties are provided for failurc tC
make return. and full power IL Civer
the commission properly 20 administer
the act,
|; is provided that the returns fled
with the State Tax Commission for the
purpose OF the tax shall not be subjec;
to public inspection. II each Taxpayer
IL therefore protected from having his
tax return made public.
The bill provides that IL per cent. o.
the amount collected shall he paid int
the State Treasury for the benefit Of the
State Government. and tho balance