*911 During 1933 and 1934 the petitioner was engaged as supervising architect for the board of education of the city of Jersey City, New Jersey. His services to the board of education did not require any specific amount of time and he was free to accept and did accept concurrent employment as a practicing architect. Held, that the petitioner was not an officer or employee of the State of New Jersey or a political subdivision thereof and that he is not relieved from tax on his compensation for such services by the Public Salary Tax Act of 1939, approved April 12, 1939.
*12 These proceedings, consolidated for hearing, involve income tax deficiencies of $6,006.56 for 1933 and $1,524.65 for 1934. The petitioner alleges that the respondent erred in the determination of a deficiency for 1933 by adding to his gross income $6,500 received for services as supervising architect for the board of education of Jersey City, New Jersey, and $3,257 for the year 1934 received from the same source. Counsel are agreed that the correct amounts received by the petitioner*912 are $4,607.08 in 1933 and $4,419.84 in 1934. They are further agreed that if the petitioner is liable to income tax in respect of those amounts the deficiencies determined shall be recomputed upon that basis.
FINDINGS OF FACT.
1. The petitioner is a resident of Jersey City, New Jersey.
2. In 1900 the petitioner was an architect practicing his profession with offices in Jersey City. On October 25, 1900, the following resolutions were adopted at a regular meeting of the board of education of Jersey City:
Resolved, That a supervising architect be appointed by this Board;
Resolved, That the supervising architect shall be required to prepare plans and specifications for new school buildings and the furniture thereof, including such detail and working plans as may be necessary to supervise the work of construction, to inspect all the schools of the city, to make recommendations as to their repair and renovation to prepare plans and specifications for such repairs whenever necessary and to supervise all repairs; provided, that all plans and specifications be approved by this Board before becoming effective; to perform such other duties connected with the construction renovation*913 and repair of school buildings as the Board or its committees may require; to make a monthly report of the work performed by him, and to make other reports as to the condition of the buildings as he may deem necessary or advisable or as the Board of Education may require.
* * *
Resolved, That John T. Rowland, Jr., be and he is hereby appointed supervising architect to this Board, at an annual salary of three thousand dollars, payable in monthly installments of two hundred and fifty dollars, this appointment to take effect November 1, 1900; provided, however, that said John T. Rowland, Jr., shall have no claims against the Mayor and Aldermen of Jersey City under this resolution until the Board of Finance shall make proper appropriation to meet said salary.
3. The petitioner accepted employment pursuant to the above resolutions and took the oath of office required to be taken by all persons employed by the board of education of Jersey City. Pursuant to such resolutions the petitioner has acted as supervising architect for the board of education to the present time. As supervising architect the petitioner's activities relate to structural matters involving school *13 *914 buildings. The board of education is interested in having these buildings kept safe for school children and it is petitioner's function to see that they are so kept from a structural point of view. In this work he has supervision over a number of inspectors. It is often necessary for him to use his independent judgment and discretion in performing his official duties. As to a considerable portion of his work the board of education does not learn of it until after it has been completed and the petitioner has made his report. In important matters the petitioner may submit the problem to the board with his recommendation. Since his services and activities are of an expert nature and of such a character that the board of education is not qualified to perform them, that body, as a rule, accepts his recommendations. A substantial portion of the petitioner's activities consists of giving advice to the board on construction problems. He attends the meetings of the board of education, at which time he submits reports to it. Ordinary repair work and ordinary care of the buildings and equipment are taken care of, not by the petitioner, but by the supervisor of buildings and equipment, *915 who is the head of a separate department. New installations, such as heating apparatus, etc., are made under the petitioner's supervision.
4. Several years ago the petitioner requested the board to relieve him of some of his work which he did not have time for and to reduce his compensation accordingly. This was done and a new department was created in the school system to take over such work.
5. Pension fund payments are deducted from petitioner's compensation.
6. The amount of time that the petitioner spends on his work for the board of education varies. Some days he devotes not more than half an hour to it, while on other days he devotes his entire time to such work. He does not observe a regular working day in connection with this work but devotes to it only the number of hours required.
7. During the calendar years 1934 and 1935 the petitioner's basic compensation was $6,500 per year, but due to a government retrenchment policy the amounts he received in 1933 and 1934 were $4,607.08 and $4,419.84, respectively.
8. At all times the petitioner was at liberty to accept outside employment and he has done much architectural work for others than the board of*916 education of Jersey City. He has been architect for more than half of the school buildings in Jersey City. He maintains a large office for the practice of his profession and employs many draftsmen and a secretary.
*14 9. The petitioner's gross and net incomes from the operation of his architectural business, as shown by his income tax returns for the years 1931 to 1934, inclusive, were as follows:
| Year | Gross income | Labor | Salaries | Net business | Compensation |
| income | for services | ||||
| to school | |||||
| system | |||||
| 1931 | $127,964.26 | $50,035.00 | $5,134.00 | $60,710.34 | 1 $6,500.00 |
| 1932 | 113,343.46 | 35,665.00 | 66,595.59 | 1 6,500.00 | |
| 1933 | 35,851.37 | 18,274.50 | 10,635.75 | 4,607.08 | |
| 1934 | 102,457.23 | 28,847.00 | 17,235.50 | 48,200.00 | 4,419.84 |
10. When the petitioner has office work to do in connection with his school activities he does it in his own private office. City employees come to that office to discuss matters with him. Architectural*917 drawings and plans necessary for carrying on this work are made in petitioner's own office, with the assistance of petitioner's own employees. Stenographic and clerical services necessary in carrying on the school work are performed in petitioner's private office by his own employees. Such assistance as petitioner's employees render to him in carrying on the school work is under his direction and control. The board of education never dictates or interferes with any of such matters.
11. The petitioner was not an officer or employee of the board of education of the city of Jersey City, New Jersey, during the taxable years and his compensation as supervising architect was received for services performed as an independent contractor.
OPINION.
SMITH: In the light of the opinions of the United States Supreme Court in , and , there can be no question but that the petitioner's compensation received from the city of Jersey City, New Jersey, as supervising architect, is subject to tax, although the petitioner may be relieved from the burden of the tax by the*918 Public Salary Tax Act of 1939, approved April 12, 1939. That act provides for the abatement, credit, or refund of the income tax assessed or collected from officers and employees of a state or political subdivision thereof for years prior to 1938 in certain cases. The relief granted, however, applies only to "compensation for personal service as an officer or employee of a State, or any political subdivision thereof, or any agency or instrumentality of any one or more of the foregoing." (Title II, § 201.) The question for consideration by the Board at the present time is therefore whether the petitioner was an "officer or employee" within the meaning of that act.
*15 In the report of the Senate Finance Committee on the Public Salary Tax Act it is stated:
Title II [Public Salary Tax Act of 1939] applies only to State and local officers and employees and not to other persons having dealings with State and local governments, since the taxability of the compensation of such other persons has long been recognized. Such persons are generally held to be independent contractors for purposes of Federal income taxation. Their liability for such tax has been clearly established*919 since the case of , and they are not officers and employees within the meaning of this bill.
In , it is stated as follows:
An office is a public station conferred by the appointment of government. The term embraces the idea of tenure, duration, emolument and duties fixed by law. Where an office is created, the law usually fixes its incidents, including its term, its duties and its compensation. * * * The term "officer" is one inseparably connected with an office; but there was no office of sewage or water supply expert or sanitary engineer, to which either of the plaintiffs was appointed. The contracts with them, although entered into by authority of law and prescribing their duties, could not operate to create an office or give to plaintiffs the status of officers. * * * There were lacking in each instance the essential elements of a public station, permanent in character, created by law, whose incidents and duties were prescribed by law. * * *
In 1900, just prior to the petitioner's designation as supervising architect, an amendment was made*920 to the school laws of New Jersey as they then existed, reading as follows:
Hereafter Boards of Education in cities of the first class shall have power and authority by the vote of a majority of its members, to appoint its superintendents of erection and repairs for said Board, prescribe their duties, determine their compensation and fix their terms of office, not to exceed five years, and by a like vote may remove them during their term for cause.
In the revision of 1903, see Compiled Statutes, 1910, page 4741, section 50, is the following paragraph:
Every such board shall have the supervision, control and management of the public schools and public school property in its district, and shall keep such property insured. It shall appoint a person to be its secretary, and may appoint a superintendent of schools, a business manager and other officers, agents and employees as may be needed, and may fix their compensation and terms of employment, but no such appointee, officer, agent or employee, other than the secretary, shall be a member of said board. [P.L. 1903 (2d. sp. sess.) p. 21.]
There has just been completed a complete new revision of the school law of the State of*921 New Jersey, known as Title #18, chapter 6, section 18, of the Revised Statutes of 1937. The pertinent provisions of the revision of 1937 read:
The board shall have the supervision, control, and management of the public schools and public school property in its district, and shall keep such property insured. [Rev. of 1937-18:6-18.]
The board shall appoint a person to be its secretary, and may appoint a superintendent of schools, a business manager, and other officers, agents, and *26 employees as may be needed, and may fix their compensation and terms of employment, but no such appointee, officer, agent, or employee, other than the secretary, shall be a member of the board. [Rev. of 1937, 18:6-27.]
The office of "business manager" which the Court of Errors and Appeals of New Jersey has found synonymous with the title "supervising architect" in Jersey City, is defined pretty generally in sections 70, 71, and 72 of the Compiled Statutes of 1910, beginning at page 4745. The sections applicable read as follows:
§ 70. Whenever a business manager shall be appointed it shall be by a majority vote of all the members of the board of education.
He shall receive such*922 salary as said board shall determine. He shall, before entering upon the duties of his office, execute and deliver to the board of education a bond in a sum to be fixed by said board, but not less than two thousand dollars, with surety or sureties to be approved by said board, conditioned for the faithful performance of the duties of his office. Said board may accept the bond or undertaking of a trust company, surety or indemnity company and may pay the annual premium or fee therefor as a current expense of said board. Said business manager may, by a majority vote of all the members of the board of education, be removed from office. He shall have a seat in said board, and the right to speak on all matters relating to his department, but shall not have the right to vote. [P.L. 1903 (2d sp. sess.) p. 25.]
71. The business manager shall have charge and care of the public school buildings, and all other property belonging to the school district. He may appoint and remove clerks in his office, but the number and salaries of such clerks shall be determined by the board of education. [P.L. 1903 (2d sp. sess.) p. 26.]
72. All plans and specifications for the erection, improvement*923 or repair of public school houses shall be drawn by or under the supervision of the business manager, if there be one, and shall be approved by the board of education. Said business manager, if there be one, shall supervise the construction and repair of all school-buildings, and shall report monthly to the board of education the progress of the work; provided, that repairs not exceeding the sum of one hundred dollars may be ordered by the business manager, and repairs not exceeding the sum of five hundred dollars may be ordered by the committee of the board having charge of the repair of school property, without the previous order of the board and without advertisement. The business manager, if there be one, shall superintend all advertisements for bids and the letting of all contracts. He shall inspect all work done and materials or supplies furnished under contract, and shall, subject to the approval of the board of education, condemn any work and reject any material or supplies which, in his judgment, do not conform to the specifications contained in the contract therefor, and shall perform such other duties as may be required by the board of education. [P.L. 1903 (2d sp. *924 sess.) p. 26.]
These provisions are now found in Title 18, chapter 6, sections 45, 46, and 47, of the Revised Statutes of 1937.
There can be no question as to the power of the Board to have made the appointment of Rowland. Incidentally, Jersey City is one of the two cities of the first class in New Jersey, which is fixed by population and statute. Jersey City was a city of the first class in 1900 at the time of the appointment of Rowland.
*17 The case of , was decided by the New Jersey Court of Errors and Appeals in 1916. In this case it appeared that "the plaintiff furnished certain work and materials to the City at the request of one John T. Rowland, Jr., supervising architect of said City." The evidence showed that Rowland had been permitted to order work and materials for a number of years and that the city had paid for same. It was shown that the work was done in an emergency before the board could meet to pass upon it. The plaintiff showed that he had been doing such work and furnishing such materials for a number of years and had also been paid. The lower court found for the plaintiff*925 and, on appeal, the Court of Errors and Appeals affirmed. At page 277 the court said:
In the case under discussion, the School Law of the state, session of 1903, found in Pamph. L. 1904, p. 5, section 47; 4 Comp. Stat. p. 4740 et seq., provides that the board of education in a city school district such as Jersey City is vested with the power of making contracts in and by its corporate name, and by section 50 every such board shall have the supervision, control and management of the public schools and public school property in its district. It may appoint a superintendent of schools, a business manager and other officers, agents and employes as may be needed. Section 52 provides the board may at any time order repairs to school buildings to an amount not exceeding $500, may authorize the purchase of supplies to an amount not exceeding $250, without advertisement. Section 72 provides for a business manager, who shall supervise, if there be one, the construction and repair of all school buildings, and shall report monthly to the board of education the progress of the work; that repairs not exceeding the sum of $100 may be ordered by the business manager; and repairs not exceeding*926 the sum of $500 may be ordered by the committee of the board having charge of the repair of school property, without the previous order of the board and without advertisement. In this statute, as will be seen, there is express authority for the appointment of an agent - a business manager. The term is immaterial. A supervising architect or vice principal might just as well be called an agent or business manager. There is also the recognition by the legislature of the fact that the board of education probably could not act in many cases without appointing such agents, since the very necessity of some cases requires that such a board should act through agents.
Although the above cited case stands for the proposition that the petitioner was at least an agent of the board of education of Jersey City, there is no evidence in these proceedings that the petitioner was "business manager" for the board or that he was an officer thereof.
It has been testified that Rowland took an oath of office. Nothing has been found in the New Jersey Statutes to indicate that he was required by law to do so. It was testified that every person employed by the board of education was required to take*927 an oath of office. We do not think that this had the effect of establishing every employee an officer within the meaning of the law. It is well established that the taking of an oath or the giving of a bond does not make one ipso facto an officer. ; *18 certiorari denied, ; ; ; . We are of the opinion that petitioner was not an officer of the State of New Jersey or a political subdivision thereof.
The next question for consideration is whether the petitioner was an employee of the board of education. An important consideration in the determination of this question is whether the board of education exercised the detailed control and direction over what the petitioner did and now he did it that characterizes the employer-employee relationship. See *928 ; certiorari denied, ; .
In , it was said:
Nor do the facts stated in the bill of exceptions establish that the plaintiffs were "employees" within the meaning of the statute. So far as appears, they were in the position of independent contractors. The record does not reveal to what extent, if at all, their services were subject to the direction or control of the public boards or officers engaging them. In each instance the performance of their contract involved the use of judgment and discretion on their part and they were required to use their best professional skill to bring about the desired result. This permitted to them liberty of action which excludes the idea that control or right of control by the employer which characterizes the relation of employer and employee and differentiates the employee or servant from the independent contractor. * * *
In *929 , the question was presented as to whether an attorney who had agreed to act as counsel for a bridge district for a specified yearly compensation was an employee of the bridge district. The court held that he was not, citing numerous authorities therefor.
In , it was held (syllabus) as follows:
The services of the plaintiff were engaged by the board of local improvements, an adjunct of the municipal government of the city of Chicago, as a building expert in connection with the valuation of buildings affected by certain local improvements in widening and opening streets. His service was not regular and continuous, but was for a particular transaction or transactions. Held, that the plaintiff's relation was that of an independent contractor, and not that of an officer or employee of the city, and that compensation received for his service was taxable income.
See ; *930 ; .
In , the facts were that Byers was counsel for the board of waterworks trustees of the city of Des Moines at a salary of $2,500 per annum. It was held that he was not an *19 employee of the municipality, but an independent contractor. The court, in referring to the fact that during a long period Byers was a lawyer engaged in the practice of his profession in the city of Des Moines, said:
* * * We think this is sufficient to establish that he was free to engage, and was engaged, in other business for other clients; that he was a free professional agent as to the nature of his services and the advice that he would give. Nowhere in the record is it revealed to what extent, if at all, his services were subject to the control of the board of trustees. Furthermore, we are of opinion that an attorney who is engaged in this manner, who has not contracted to give to such a client his entire and exclusive services, does not thereby become an officer or employee in the sense of this statute. It is our judgment*931 that Mr. Byers did not become such an employee of this political subdivision of the state of Iowa, and that the compensation which he received for services was therefore not exempt from income taxes.
In ; certiorari denied, , the court held that the compensation paid to the chief engineer of a joint bridge commission created by the State of New Jersey and the Commonwealth of Pennsylvania was not immune from taxation. The court said:
The performance of the duties of the respondent's engagement here involved the use of his judgment and discretion; in fact it was using such that constituted the services for which he received compensation. The result to be accomplished by his engagement was through his best professional efforts. * * *
To the same effect see ; petition for review denied (C.C.A., 5th Cir.), ; certiorari denied, . The court further said in *932 : "In the cases where the taxpayer was free to and did accept concurrent employment, the courts have generally regarded the taxpayer as an independent contractor."
In , the Board held that counsel for the board of education of Elizabeth, New Jersey, was an "employee" of the board and exempt from tax. Our decision in that case was not appealed to the courts.
In , the Board held that Ewart's compensation received by him as counsel for 10 municipalities of New Jersey was taxable upon the ground that he was an independent contractor. In , the Board held that Emerson was a township attorney appointed to the statutory office pursuant to statute and that his compensation was exempt from taxation, since it was received for the performance of ordinary duties as a township attorney. Both of these cases were appealed to the Circuit Court of Appeals for the Third Circuit, which, on July 22, 1938, affirmed our decision in the Ewart case, *933 , but *20 reversed our decision in the Emerson case, , upon the ground that Emerson was an independent contractor whose compensation was taxable. A petition for certiorari in the Emerson case was denied by the Supreme Court, . Although the facts in the proceeding at bar bear a close resemblance to those in the case of , the Board is of the opinion that its decision in that case is not decisive of the present proceeding in the light of the decision of the Circuit Court of Appeals for the Third Circuit in
During the taxable years the petitioner served the board of education of Jersey City as "supervising architect." The title aptly describes his position. While attending to such duties he was free to and did accept other employment than that of supervising architect. His services to the board of education of Jersey City were not prescribed by law or definitely defined. At the hearing of this proceeding the petitioner was asked:
At the time you were appointed, was there any statement made to you as to*934 the duties you would have to perform?
A. No. I think that as I worked along, that I had a general knowledge of what I was to do. Really, I created the work that I did in taking care of the schools.
From a careful study of all of the evidence, the Board reaches the conclusion that the petitioner was not an officer or employee of the board of education of the city of Jersey City, New Jersey, but was an independent contractor. The petitioner is not therefore relieved from tax upon his compensation as supervising architect for the years 1933 and 1934.
Judgments will be entered under Rule 50.
Footnotes
1. The "official compensation" of $6,500 is shown for 1931 and 1932, although it may be that this figure should be reduced because of the reduction occasioned by retrenchment. ↩