The sun., 1919-06-19
SAYS INCOME TAX
VIOLATES h.Y.LAW
Henry NJ. Powell Also Asserts
New Statute Contrayenes
Federal Constitution.
"HOME RULE" SET ASIDE
Powers of Assessors \Existing
Since 1777 Are Nullifie0, He
Tells Tax Conference.
Special Dsspotch TO THE Sex.


CHICAGO. June 1s.-Henry NJ. Pow
ell, former assistant corporation coun-
sci OF New York. and counsel to the
Mills Committee on Taxation, in an adj
dress to the National Tax Conference
at La Sale Hotel tonight styled tho
New York personal income tax law
contrary to the State constitution and
as violating the Constitution of the
United States Mr.. Powell said II con-
travened the home rule" principle by
taking away the powers of local as
SCISSORS over personal property and
incomes. which. they formerly exercised,
and transferred them to the state
Comptroller. These powers had existed
| from the beginning of the State gov
eminent and local assessors were pro-
tected In these powers and in their
tenure Of office, under the constitution
adopted by the State of New York in
1877.
The assessment Of income, like the
assessment Of property. has been the
function OF local assessors," said Mr..
Powell, land has been exercised IN this
State as far back as 1878, under Chap
ter II of the laws of that year, when
local assessors taxed each person with
an income of $1,000 or over, on
the advantage, profits or gains made
by trade, merchandise, traffic or manu-
facture.' at the rate OF $50 for each
$1,000. To permit incomes to be
fixed by the State Comptroller. would,
therefore require a structural amend
ment.
1.-THE New York Constitutional Con-
vention submitted to the voters of New
York in 1915. an amendment, modifying
a. rtDfA 20 hA aefA Ct
that the Legislature shall prescribe how
| taxable subjects should be assessed
ARTICLE X. proposed constitution), and
| II is noteworthy that this proposed
amendment received the most signal
defeat OF any submitted to the psople
Of the State during the election of that
year. BY many It has been declared
to be the reason for the defeat Of the
proposed constitution.
The courts in the past have jealousy
, guarded the home rule principle and
| rendered numerous decisions unfolding
1t, notably during the Tweed regime. in
defeating the effort to take from the
local authorities OF New York the ap-
pointment of a tax commissioner and
vesting II in the Governor of the State.
| people ex rel. Raymond. 81 N. Y, 42S.)
And again in preventing Westchester
county from changing Its tax assessing
| and collecting system. (People ex rel,
Pelham v. Pelham 215 N. .,.374)
THE only extenuating cause that saved
| the State franchise tax act In 1905 from
| a like defeat by this provision Of the
constitution was that the Court of APP
peals held that in the assessment of spe-
cial franchises new form Of property
was reached which was not known to
local assessors of former days"
Mr.. Powell expressed the opinion that
| should the court hold the New York in
come tax law to be violation OF the
home rule" provision of the State con-
| stitution. It would nullify and defe. the
| entire act which could not be effec lively
| administered in its present form by local
| assessors.
There seems to be little doubt that
New York may levy a tax upon its own
Inhabitants or residents based on the en-
| tire net income, whether derived from
property. business or occupation" Mr..
Powell went on. I'm so far as non-resi-
| dents are concerned, II may only levy a
| tax based on net income from sources
| within the State. |. O., within its juris-
diction. provided IL does not contravene
| the Federal Constitution. In general, II
may be said that the State of New York
cannot prevent the citizens of sister
State FROM doing business in this State
on any other basis than that accorded to
her own citizens The Federal Constitu-
ton has guaranteed this In the Four
tenth Amendment.
! The State of New York has copied