People ex rel. De La Vergne Machine Co. v. Law

Headnote

Tax—franchise tax — entire stock of corporation owned by Federal government and plant used in manufacture of war material —• when taxable status determined — validity of franchise tax for year during part of which government was owner.

Matter of De La Vergne Machine Co. v. State Tax Comm., 211 App. Div. 227 , affirmed.

Appeal from an order of the Appellate Division of the Supreme Court in the third judicial department, entered January 13, 1925, which annulled, on certiorari, a determination of the State Tax Commission imposing a franchise tax, under article 9-A of the Tax Law, upon the relator for the year commencing November 1, 1919, and ending October 31, 1920. The Federal government was the owner of all of the stock of the relator from November 7, 1917, until January 6, 1920, and used its plant for the manufacture of materials used in the construction of torpedo boat destroyers. The Appellate Division held that the taxable status of the company was determinable

on November 1, 1919, and that the tax imposed had a manifest tendency to retard, impede and burden the 'activities of the United States in the progress of the war and otherwise to interfere with the execution of power constitutionally committed by Congress to the Federal government and was, therefore, void.