(dissenting). In this case we are permitting taxation of undistributed income while recognizing that New York State does not provide for a subchapter S election for New York corporations (Tax Law, § 208, subd. 9) and, on the other hand, acknowledging that only by Virtue of the Federal election would this undistributed income be taxable. The effect is that we have, without specific authority, incorporated the more favorable element of the subchapter S election for the taxing power, without allowing a deduction to the corporation as permitted on the Federal level. The result is that this undistributed income of $8,279.97 was subjected both to the Business Franchise Tax to *34the corporation and the New York State income tax, a result only intended to occur when a distribution is made in the form of taxable income such as dividends.
The singular statutory basis for this majority result is section 612 of the Tax Law equating New York adjusted gross income with Federal adjusted gross income. Statutes dealing with taxation are to be given a practical construction and generally any doubt as to construction is resolved in favor of the taxpayer and against the taxing authority (McKinney’s Cons. Laws of N. Y., Book 1, Statutes, § 313, subds. a, c). The doubt here is apparent; subdivision 9 of section 208 states there is no subchapter S election, while section 612 appears to permit its limited use in defining adjusted gross income. This doubt should be resolved in favor of the petitioner since to -do otherwise is to indirectly, without clear statutory authority, recognize a State tax on undistributed income.
The judgment should be reversed.
Herlihy, P. J., Staley and Sweeney, JJ., concur with Greenblott, J.; Kane, J., dissents and votes to reverse in a separate opinion.
Judgment affirmed, without costs.