The sun., 1919-06-19

in its income tax law a provision taken
Z, ON the Federal law, under which
nonresident of the State (like non
resident alien under the Federal law
does not receive the personal exemption
of $1,000 or $4,000. But there is dis
tinction between the authority of the
State over a citizen of another state
and that OF the United states in relation
to nonresident alien. The Federal
Government can prevent aliens from
coming into this country and 1t may de-
port them, but the citizens of another
state occupy no such anomalous status.
THE New York State income tax law
In computing the net income OF non
resident does not permit the deduction
OF all losses, although the nonresident
may have sustained losses in other
States to such an extent as to reduce his
entire income from all his property SO
that there we're he a resident of the
state he would not be required to pay
any income tax at all.
1.-The difficult point in the New York
Income Tax Law Is the situs of the in
come derived from non-residents sal
aries or earnings from professions or
occupations carried on in the State. Can
these be said to be from sources within
the State? A citizen of another State
is in different position from foreign
corporation doing business within the
State, that must obtain a certificate be-
fore 1t may be permitted to do business
In the State.
THE Federal courts have repeatedly
held that an agent delivering goods. or
a commercial traveller or drummer MAX
| ing sales in the State. cannot be taxed
as such. May not the personal services
| Of nonresident from his profession
| or business or occupation be considered
| in the light OF a sale Of service, and
| Is not the States exaction Of the tax
| an interference with commerce? A law
yer may write his brief in New Jersey
and render his bill from his New York
| office. An architect or designer may
formulate his plans or complete his de-
signs at his home in Connecticut and
be entitled to his fees or salary at his
New York office. An editor may write
his editorials in Pennsylvania, calling
at his city office periodically to receive
his salary.
The Comptroller Of the State Of New
York has already recognized the Con-
| stitutonal weakness of his position by
promuigatins regulations in explanation
| Of the new law under which a non-resi-
| dent salesman, drummer or other en-
ployee may apportion his earnings on
| the basis of business transacted and time
consumed. Mere regulations, however.
| 10 not go enough. lneTe ID q DaSlC
and fundamental principle which this
provision of New York's income tax law
violates.
| THE question OF interstate commerce
as applied to the imposition OF the State
income tax on non-residents Is vitality
important in relation to occupation and
labor The Federal Constitution grew
| out OF the necessity for freedom of
commerce among the different States,
and a Limitation on occupations and
labor among these equal sovereignties,
not only Involves a legal question of
Jurisdiction. but matters of great eco
nomic concern.
What position the New York courts
will take on the new law in relation to
the two important phases in which II
apparently violates the State and Fed
| eral Constitution. respectively, it Is diff
| fcult to predict. On the State consti-
tutional question they may pause before
| they overthrow the entire act involving
some $30.000,000 to $40, 600. 900 Of as
sessments. The Federal question. how
ever. is bound to go to the United States
Supreme Court because 1t not only in
wolves the fundamental contractual re-
lations between one citizen and another
but will determine the conflicting rights
of jurisdiction In the several States"