Since the principles discussed in Matter of United Air Lines v. Joseph (282 App. Div. 48) decided simultaneously herewith, are also involved in this case, the discussion will not be repeated. It will be assumed however that the previous discussion is considered the ground for what follows here.
This case involves the imposition of the New York City gross receipts tax (Administrative Code, ch. 41, tit. RR; ch. 46, tit. B) on an apportioned basis on the revenues of United Piece Dye Works. Dye Works resists the payment on the ground that its revenues are derived exclusively from interstate activity. The years 1946, 1947 and 1948 are in question.
Dye Works is a New Jersey corporation. It prints and dyes greige goods and “ sizes ” yarns in the skein. It renders the service to others who own the goods. It has no plants in New York State or city. It has two plants in New Jersey and one in California. The greige goods come from mills in New England and elsewhere directly to the Dye Works’ plant in New Jersey, and, after processing, are reshipped at the instructions of Dye Works’ customers. The reshipments are in part to New York City, or to places outside New York State. The bulk of the direct customers of Dye Works are in New York City. In fact, 95% of the total billings of Dye Works were to customers having offices in New York City. Orders for processing are received only in New Jersey and California, and are there accepted or rejected.
*62In addition to the fact that most of its customers have offices in New York City, Dye Works has a four or five-story building in New York City, from which it services its accounts by advice, sales promotion, advertising, and claim handling. Reshipment of processed goods into New York City is done by Dye Works.
On these facts the city claims the right to impose an apportioned gross receipts tax for the privilege of doing business in New York City. The city requires allocation of receipts from customers in New York City, regardless of where delivered, and from finished materials delivered in New York City. Into the apportionment formula there is then built a minimum which results in one third of the allocable receipts being taxed. . The contention is that Dye Works renders a service rather than sells merchandise, and that the service is a continuous unitary operation, in which the activities in and out of the New York office are an integral and principal part. Hence, it is argued that the receipts must be apportioned in order to render the local activities taxable.
We do not think so. The activities of Dye Works are exclusively in interstate commerce, and the incidental services rendered in New York City are insubstantial insofar as they do not directly relate to Dye Works’ interstate operations. Almost entirely the services rendered in New York City are directly promotional or otherwise incidental to Dye Works’ interstate operations.
At the Lodi, New Jersey, plant, Dye Works employs over 1,100 persons, occupies 507,000 square feet of floor space, does the processing here involved, and makes the contracts. The New York office, employing thirteen persons, is devoted to soliciting and to promoting Dye Works’ services. It has been held many times and the city so concedes that, where one is in one State, the mere selling of merchandise or services in another State does not subject one to tax jurisdiction in the other State. (McLeod v. Dilworth Go., 322 U. S. 327; Memphis Steam Laundry v. Stone, 342 U. S. 389.) It is an attenuated refinement to argue that the advice and promotion that Dye Works engages in in New York City to attract customers for its customers in New York City is a local activity separate and distinct from its interstate operations. It is still selling. If anything, it is a less tangible activity in a State than the direct selling that has been repeatedly held not to subject one to local taxation.
*63The distinction made by the city between the sale of goods and the rendition of service does not advance our understanding of the activity. Services, like goods, must be sold. Sales of goods, like sales of service, may entail promotion by advice, technical assistance, and specialized adaptation to the customers’ needs. Indeed, the goods sold may require processing, or the processing of goods may require the addition of materials. In fact, the dyeing process here involves the agency of dyes that are lost and added to the goods in the process. Consequently we cannot distinguish the cases that apply to the sales of goods in interstate commerce from the fact complex in this case. Dyeing and promotion services are no more continuous with each other than are manufacturing or trade and promotion services.
The city in urging its view relies on Cheney Brothers Co. v. Massachusetts (246 U. S. 147) with respect to the decision as to the Northwest Consolidated Milling Company (at p. 155). It is sufficient to note that the facts there were quite different. There the salesmen for the Minnesota concern effected sales, i.e. contracts, in Massachusetts between the mills’ customers in Massachusetts and their customers, in order to stimulate business for the distant concern. In other words, the Minnesota concern undertook to supply for its Massachusetts customers a service in Massachusetts that as to its Massachusetts customers was local on any theory. The only basis for claiming that it was interstate was that the service was provided by the out-of-State firm, but in the State. The only similarity between the service in the Cheney case and the service supplied by Dye Works is that they have the same purpose, more sales for the out-of-State concern, but otherwise there is no similarity in the nature, quality or extent of the service rendered.
The city also relies on Norton Co. v. Dept. of Revenue (340 U. S. 534). That case on its facts clearly involved intermingled intrastate and interstate transactions. Some of the sales in Illinois were made from stock in Illinois, on contracts made and performed in Illinois. Indeed, the taxpayer, as the city points out, conceded that it owed a tax for the intrastate receipts. The taxpayer lost out as to all its Illinois revenues, because as the court plainly pointed out, it had failed to assume the burden of showing the proper basis for allocation. That is not the instant problem. Dye Works had not mingled intrastate with interstate transactions, in the sense of effecting completely parallel and similar transactions, except that some are intrastate and others are interstate.
*64Rather we have here the type of situation that existed in Hans Rees’ Sons v. No. Carolina (283 U. S. 123). In the Hans Rees’ case a North Carolina manufacturer bought its raw materials elsewhere and sold the finished products through the New York office. Only the manufacturing was done in North Carolina. North Carolina sought to tax 66% to 85% of the income. It was held that North Carolina could tax only the allocable income from the manufacturing part of the business, described as unitary, because its profits obviously arose from purchases (outside North Carolina), manufacturing (inside North Carolina), and sales (outside North Carolina). Manufacturing is traditionally deemed localized and therefore subject to local tax. But the sales that escaped North Carolina’s tax were not “ selling activities ”, but income from sales contracts made in New York. The court found that the out-of-State operations, purchases of hides and sales of processed hides, aggregated the bulk of taxpayer’s income.
In order for the city to come within the holding of the Hans Rees’ case, it must show more than solicitation and promotion in New York City. To subdivide promotion activity in order to uncover some special atoms of local application does not change the fact that Dye Works’ New York activities do not extend beyond “ drumming ” up business.
As in the United Air Lines case (282 App. Div. 48, supra), decided herewith, it is important to note that we are not saying that Dye Works is not taxable in New York City under any circumstances, or that it is free from all varieties of local taxes. But we are saying that the city may not impose a privilege tax on Dye Works for the privilege of carrying on in New' York City what is exclusively interstate commerce. (Spector Motor Service v. O’Connor, 340 U. S. 602; Joseph v. Carter & Weekes Co., 330 U. S. 422; Puget Sound Co. v. Tax Commission, 302 U. S. 90; Matter of Seeth v. Joseph, 276 App. Div. 188.)
Without dwelling on it, we would like to point out that in this case there is real danger of multiple tax burden from both New York and New Jersey, if the city’s contentions were to prevail. See Department of Treasury v. Mfg. Co. (313 U. S. 252) where an enameling plant in Indiana, processing stoves and refrigerators for out-of-State owners, was held to be subject to Indiana gross income tax without deduction, the enameling process being considered a business localized in Indiana.
Accordingly, the determination of the city comptroller assessing the apportioned tax on receipts should be annulled and a *65refund directed of the taxes paid for the years 1947 and 1948. With respect to the taxes paid for the year 1946 the determination should be confirmed, the taxpayer having failed to make timely or proper protest.