People ex rel. Chalmers v. State Tax Commission

Headnote

Tax —■ when franchise tax properly assessed against railroad corporation the property of which was leased to another railroad corporation.

People ex rel. Kalbach v. State Tax Commission, 189 App. Div. 347 , affirmed.

Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the third judicial department, entered March 2, 1920, which confirmed, on certiorari, a determination of the state tax commission refusing to revise or ré-adjust a franchise tax assessed against the relator under section 185 of the Tax Law, for the period from November 13, 1908, to June 30, 1916. The question presented was whether the assessment was properly made under the first subdivision of section 185 of the Tax Law, or whether it should have been made under the second subdivision of said section, which provides a special rule for the taxation of the franchise of a railroad corporation, the property of which is leased to another railroad corporation. The Appellate Division held that “ as between the state and the relator the lease by the Second Avenue Railroad Company to the Metropolitan Street Railway Company is ineffectual to relieve the relator from the payment of the tax. During the period in question the Metropolitan Railway Company did not exercise the corporate franchise or operate the

Second Avenue Railroad Company, but the relator’s predecessors did, and it was their duty to pay the tax imposed for that privilege.”