(dissenting). While this proceeding involves the same tax statute as the United Air Lines case decided herewith (282 App. Div. 48), the cases differ in respect to the nature of the businesses and the extent of the local activities of the taxpayers. The petitioner, United Piece Dye Works, was rendering service to converters of greige goods and yarns in dyeing their merchandise and promoting the sale of the finished product through advertising programs and media,
The problem in the imposition of a gross receipts tax arises because the taxpayer in this case has its dyeing plants in States other than New York, but carries on a large part of its connected activities in New York City.
The merchandise passes through the channels of interstate transportation before and after processing. This does not in and of itself deprive the city of the power to tax the privilege of carrying on the business of rendering service here, if the local activities of the taxpayer are substantial and separable from the commerce, and the tax is fairly apportioned (Western Live Stock v. Bureau, 303 U. S. 250).
The tax sought to be imposed is solely upon receipts from orders for the dyeing of goods taken from New York converters and with respect to goods delivered to the petitioner’s customers in New York after dyeing. The tax is imposed on only one third of such receipts. The fact that the ultimate end of all the services rendered, to its customers is the dyeing of their goods, does not make that the sole service offered by the petitioner. When the whole procedure is considered, it is reasonably clear that there is an integrated service of which the actual processing is merely a part. It is difficult to say whether the transportation of the goods between States was anything more than an incident of the service.
If the local activities of the petitioner show the rendition of service helpful in meeting business competition in New York, and such service in New York may be decisive in holding its market, I take it that the activities here are substantial (Norton Co. v. Dept. of Revenue, 340 U. S. 534). Further, these services would also seem to be separable from the interstate operations of the taxpayer, which had localized many of its activities.
*66The majority opinion refers to the local activities as mere solicitation and promotion of interstate business. They certainly extend beyond mere solicitation. Nor do I regard them to be so incidental to the interstate activities as to be merely promotional in character. The taxpayer maintains an office in New York City with a large staff of experts, who perform services essential to the success of its whole effort. No doubt, these activities are performed in this jurisdiction because 70% or more of the moneys collected from the petitioner’s customers are collected from converters located in New York City. These customers are not interested merely in changing the color of goods, but also in having the goods made up into attractive shades and readily saleable patterns. The converters come to the petitioner’s New York office for expert advice with respect to the dyeing and printing of the goods. This appears to be an important and tangible part of the whole service rendered, and for which the ultimate consideration will be paid if any dyeing of the goods takes place. In fact, a customer might avail itself of this preliminary service without initiating any interstate movement of goods.
The taxpayer also maintains an adjustment bureau in New York City, to which the New York converters come with any complaints as to the finished products. Ability to adjust these complaints locally appears to be a facility of considerable moment, which may well be a material part of the service performed for its New York customers.
Again, the advertising department of the petitioner operates from the New York office. It employs the advertising system followed by numerous manufacturers and known as national advertising, i.e., publicizing their product for the benefit of customers. The petitioner thus helps to create a market for the converters’ goods.
Concededly, a large portion of the garment manufacturers reached by this advertising are located in New York City, and there is no question that the advertising conducted by the petitioner enables the converters to effect a considerable number of local sales to the garment manufacturers. This is a local activity, which is more than solicitation of the interstate business of United (Cheney Brothers Co. v. Massachusetts, 246 U. S. 147).
Thus, we have a localized modus operandi in the furnishing of service by the petitioner, a New Jersey corporation, licensed to do its business here. It leases a large building, where it maintains extensive offices and an important part of its staff. *67There is much more than solicitation and promotion here. There is at least partial performance of the whole enterprise by activities of a local nature not directly part of the interstate commerce. Though the petitioner’s employees outside the State are more numerous than those stationed in New York, those located here are in a higher bracket than the average out-of-State workers. The latter render services in connection with the out-of-State portion of the taxpayer’s business, which, however, the city does not claim the right to tax.
The present case resembles in some respects the Norton case (supra) though there are some differences in the facts. There an occupation tax imposed by Illinois on gross receipts, but excluding interstate commerce, was involved. A Massachusetts manufacturer opened an Illinois branch office, where it kept a partial stock of materials. It made local or over-the-counter sales in Illinois. The taxpayer agreed to pay a tax on such transactions. In addition, there were sales of goods on orders sent directly to Massachusetts by Illinois customers, and these orders were filled by shipments from Massachusetts directly to the customers. These were interstate transactions, and the income therefrom was held not to be subject to local taxation. The remaining class of transactions, more resembling the present taxpayer’s local activities, comprised sales on orders, which were received from Illinois customers at the Illinois office and forwarded to Massachusetts. When these were filled, the goods were shipped in carload lots to the Illinois office of the taxpayer, where they were broken up by employees of the Norton Company and delivered to the various Illinois customers. A price saving was effected by the cheaper rates obtained for bulk transportation. The court held that this third class of transaction subjected the Massachusetts corporation to the Illinois tax, because the taxpayer had failed to show that the services rendered in Illinois were not decisive factors in establishing and holding the Illinois market. Thus, it can be seen that the rendition of services after receipt of the goods in Illinois was sufficient to afford the basis for a local occupational tax. In the instant case services were rendered both before and after the shipment of the goods, and a general advertising campaign was conducted by the petitioner from New York. These would appear to be services of a local nature warranting a local receipts tax.
This case is materially different from the precedents cited in the majority opinion.
*68In McLeod v. Dilworth (322 U. S. 327) the taxed corporation had no office in the taxing State, and Arkansas sought to impose a tax on sales made in Tennessee, where title to the goods had passed on delivery to a carrier. The mere solicitation of orders in Arkansas was held to afford no basis for taxation by that State. . -
In Memphis Steam Laundry v. Stone (342 U. S. 389) Mississippi laid a privilege tax on a Tennessee corporation soliciting laundry business in Mississippi, and which sent its trucks to pick up and return the laundry to Mississippi after laundering in Tennessee. The only activity in Mississippi was solicitation of business followed by the pick-up and redelivery of the laundry. In addition, the tax was discriminatory in that Mississippi laundries carrying on a similar local business were assessed in a smaller sum.
In Spector Motor Service v. O’Connor (340 U. S. 602) the Supreme Court was concerned with a franchise tax, which the State court had construed as taxing the privilege of doing business by a corporation engaged solely in transporting goods in interstate commerce. Whatever local operations were conducted by the taxpayer were clearly part of the interstate transportation of goods, and not distinctive and separable local activities.
The cases of Joseph v. Carter S Weekes Co. (330 U. S. 422); Puget Sound Co. v. Tax Commission (302 U. S. 90), and Matter of Seeth v. Joseph (276 App. Div. 188) all involved unapportioned taxes imposed directly on the. proceeds of interstate commerce.
In my opinion, the validity of the tax under review finds support in Hans Rees’ Sons v. No. Carolina (283 U. S. 123). The decision in that case upheld the imposition of an allocable income tax on the manufacturing end of a business, which was carried on in North Carolina, but excluded income from activities consisting of purchases and sales consummated outside the State. The case not only supports the allocable tax on the local activities, but holds that where the business is unitary in the sense that the ultimate gain is derived from an entire business, this does not mean that the activities conducted in various jurisdictions are to be regarded as component parts óf a single unit for the purpose of taxation. The decision further indicates that the State in which the manufacturing plants are located may not tax more than the local transactions, thus.reducing the danger of double taxation in a case like the present.
*69Under the circumstances, I find no occasion to discuss the propriety of the apportionment formula employed by the city in this case.
For the foregoing reasons, I accordingly dissent from the majority holding that the tax under review is unconstitutional and void in its application to the taxpayer in this case.
Dore, J. P., Cohn and Van Voorhis, JJ., concur with Breitel, J.; Callahan, J., dissents in opinion.
Determination annulled and a refund directed of the taxes paid for the years 1947 and 1948. With respect to the taxes paid for the year 1946, the determination is confirmed, the taxpayer having failed to make timely or proper protest. Settle order on notice.