Court Opinion

ID: 5399838
Source: CourtListenerOpinion
Date Created: 2022-01-08 10:35:16.060497+00
Date Added: 2024-06-11T08:30:25.927036
License: Public Domain

Cohn, J. P.
(dissenting). I dissent and vote to modify the determination of the comptroller by eliminating the taxes, penalty and interest based on the sums paid by petitioner to pencillers, letterers and inkers, who made drawings for reproduction in petitioner’s magazines, upon the ground that the sums so paid were payments for intangible personal services or intangible production rights, and not for tangible personal property or for the processing, fabrication or printing of tangible personal property. The work performed involved services to which the relation of the tangible art boards was merely incidental, and the intangible right to reproduce copyrightable intangible literary property produced by those services. (Matter of Frissell v. McGoldrick, 300 N. Y. 370; Stampers Arrival of Buyers v. City of New York, 296 N. Y. 574; Booth v. City of New York, 296 N. Y. 573; Howitt v. Street & Smith Pubs., 276 N. Y. 345; Bun & Bradstreet v. City of New York, 276 N. Y. 198.) The so-called fabrication amendment is not applicable to drawings or to manuscripts. Nor is that amendment applicable to services, unless such services, regardless of their value, are rendered to a physical object that is embellished or improved by the services. (Administrative Code, § N41-1.0, subd. 7.)
Where the transaction is the rendition of services for compensation, it is immaterial that the services are evidenced by a document or writing, or represented on a piece of paper or pasteboard. This case does not involve so much a transfer of a physical object, however much embellished or processed, as it does the performance of services — drawing or lettering services, at that — which incidentally, and yet of necessity, must be represented on a physical object. No one would seriously contend that a testator’s will written on paper, or a statistical graph drawn on paper, is the subject of a taxable transfer. Yet, like the will or the graph, all we have here is a rendering of drawing and lettering services which, of necessity, must be represented on art board or any other convenient, but wholly incidental, medium. Moreover, it is only accidental that the services in *444question were rendered by a free-lance contractor outside the taxpayer’s shop, rather than by an employee inside the shop. Petitioner, in my view, is entitled to the return of $6,190.11, paid on the claim for taxes, penalty and interest with respect to payments made to the pencillers, letterers and inkers.
Callahan, Botein and Rabin, JJ., concur in Per Curiam opinion; Cohn, J. P., dissents and votes to modify in opinion, in which Breitel, J., concurs.
Determination confirmed, with $20 costs and disbursements to respondents and the petition dismissed.