People Ex Rel. American Soda Fountain Co. v. Roberts

Martin, J. The relator seeks to defeat this appeal upon the ground that the portion of its capital which was employed by it in this state was used in carrying on the business of manufacturing, and that, although it was also engaged in the business of selling in this state goods manufactured by it elsewhere, it was not liable to be assessed for a corporation tax under the statutes relating to that subject. (Laws 1880, chap. 542; Laws 1890, chap. 522.) In other words, the relator claims that so far as its capital was employed in this state in manufacture, it was exempt under the statute of 1890, and that its other business of selling goods manufactured elsewhere was interstate commerce, and, therefore, also exempt because the legislature had no power to impose a tax upon that portion of its business. There seems to be no complaint as to the amount or method *173 of making the assessment if the relator was properly taxable upon the portion of its capital employed in this state in manufacture, but its claim is. that the portion of its capital thus employed was exempt under the statute and that its business other than manufacturing was interstate commerce, and, consequently, also exempt. The statute relating to the taxation of corporations, joint stock companies and associations, so far as material to the questions involved, declares, “ Every corporation * * * (or) company * * * formed under, by or pursuant to law in this state or in any other state or country, and doing business in this state, except only * * * ” banks, insurance companies and “ manufacturing or mining corporations, or companies wholly engaged in carrying on manufacture, * * * shall be liable to and shall pay a tax, as a tax upon its franchise or business, into the state treasury annually, to be computed as follows.” The statute of 1880 was amended in 1890 (Chap. 522) by inserting the words “ wholly engaged in ” before the words “carrying on manufacture.” The obvious purpose of this amendment was to qualify and limit the exemption as it formerly existed. It is to be observed that under the statute as it existed when this tax was imposed, a corporation, foreign or domestic, exempted from taxation was only one which was “ wholly engaged in carrying on manufacture * * * within this state.” The plain reading of this statute and, consequently, its evident purpose and intent was to limit this exception to such corporations or companies only. Therefore, the only ground upon which the relator can rely for exemption from taxation in this state is that it was “ wholly engaged in manufacture.” If it was engaged in manufacturing and other business as well, it is not protected by the exception, as the words “ wholly engaged in” qualify the exemption as it previously existed, and limit it to corporations or companies whose corporate or company business is exclusively that of manufacture. (People ex rel. v. Campbell, 144 N. Y. 166; People ex rel. W. E. Co. v. Campbell, 145 N. Y. 587.) *174 Manifestly, the business of the relator in this state was not confined to manufacturing alone. By its verified petition, by the affidavit of its secretary and by his testimony given upon the hearing, it appears that it had at least two places within the state where it had capital invested and was engaged in business other than manufacture. It is, however, claimed that the other business carried on by it in this state was interstate commerce. Even if that were to be admitted, still, as the relator was engaged in business other than manufacturing, it was clearly not within the letter or spirit of the statute excepting manufacturing corporations or companies from taxation. Obviously, the relator was engaged in this state in other business than manufacturing, and, therefore, was not included within the exemption of the statute. (People ex rel. Railways N. Y . 1.) Flor does the fact that the relator’s business other than manufacturing was interstate commerce prevent the state from subjecting its business to taxation where there was no hostile discrimination against the relator in the assessment thereof. (People ex rel. Penn. R. R. Co. v. Wemple, 138 N. Y. 1.) We think that the imposition of a tax upon the relator’s capital employed in manufacturing, when it was also engaged in selling goods manufactured outside, was not in conflict with the Federal Constitution which prohibits the laying of any imposts or duties on imports or exports, and confers upon Congress the power to regulate commerce. By this statute domestic and foreign corporations are taxed alike upon their franchise or business transacted within the state, and if they are engaged in state as well as interstate business, they are taxable upon both. (People ex rel. Penn. R. R. Co. v. Wemple, supra ; People ex rel. Matheson v. Roberts, 158 N. Y. 162.) The judgment and order of the Appellate Division should be reversed and the determination of the comptroller affirmed, with costs. All concur. Judgment and order reversed, etc.