People ex rel. Manhattan Silk Co. v. Miller

Smith, P. J.:

The relator complains that the money invested in the stock of the ■ other corporation was not taxable, but was simply an investment. Inasmuch as this was one of the purposes of the corporation, however, we have held that such an investment is taxable. (People ex rel. North American Co. v. Miller, 90 App. Div. 560 ; affd., 182 N. Y. 521.) It is further contended, inasmuch as this company was not doing business for a profit, that the capital was not employed within the State. That contention is not good here, because they were doing business for a profit. They took their profits through their dividends in the corporation in which they held the stock.

A further contention is made that the indebtedness of the corporation within the State should be deducted from the capital which is held to be employed within the State. This would offset the capital within the State and leave nothing to be taxed. It may be that there are cases where the indebtedness within the State should be offset against capital employed within that State. Those are cases, however, where the indebtedness was in respect of the specific assets which are found within the State. Where the indebtedness is general, that is, is incurred generally in the business, and was not incurred in respect of any particular asset which is within the State; there is no reason why it should not be deducted from the sum of the assets of the company wheresoever they may be found, and an amount offset against the value of the assets within -this State as will be proportionate. Such seems to have been the rule of this department in People ex rel. Rees’ Sons v. Miller (90 App. Div. 591).

The determination of the Comptroller should be confirmed, with fifty dollars costs and disbursements.

Determination of the Comptroller unanimously confirmed, with fifty dollars costs and disbursements.