Court Opinion

ID: 5861937
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:21:28.18325+00
Date Added: 2024-06-11T08:44:27.547623
License: Public Domain

Mikoll, J. (dissenting).
I respectfully dissent. In my view, there is not substantial evidence in the record to support the determination that petitioner was doing business in New York and was therefore liable for corporate franchise taxes for the years 1953 through 1968 and the license fee for 1954. Petitioner’s sales activities in the State did not exceed mere solicitation of orders. Its activities in New York State did not provide a sufficient nexus for imposition of the franchise tax or license fee (cf. Matter of Pekao Trading Corp. v Bragalini, 9 AD2d 559, affd 8 NY2d 903, app dsmd 364 US 478). Petitioner’s New York sales staff did not have the authority to set prices, to approve leases or to decide to which of petitioner’s repair facilities a railroad car should be sent. The New York sales staff acted merely as a conduit for complaints, and those acts were performed as a courtesy rendered incidentally in the pursuit of their solicitation of orders. Railroad cars leased within New York State are not under petitioner’s control and the maintenance of a bank account is permitted by subdivision 2 of section 209 of the Tax Law without subjecting a foreign corporation to tax liability. Petitioner has also met the statutory criteria to prevent imposition of the franchise tax set forth in section 381 of title 15 of the United States Code (1970 Public Law 86-272). The handling of customer complaints by petitioner’s New York sales people amounted to no more than acts of accommodation to customers and did not venture beyond the realm of “solicitation” (Matter of Gillette Co. v State Tax Comm., 56 AD2d 475, affd 45 NY2d 846). I would, therefore, vote to annul.