Opinion
March 21, 1991
Appeal from the Supreme Court, New York County [Jacqueline W. Silbermann, J.].
New York Laws of 1966 (ch. 772, § 1) authorizes "any city having a population of one million or more * * * to adopt and amend local laws imposing * * * taxes on * * * financial corporations". Section 12 (1) of the Model Local Law, immediately following the enabling statute (1966 McKinney's Session Laws of NY, at 974), expressly states that a "[t]ax based on net income" be imposed "[f]or the privilege of doing business in the city". The New York City Banking Corporation Tax Law (Administrative Code of City of New York § 11-639 [a] [formerly § R46-37.1 [a]) tracks the language of the enabling legislation's Model Local Law. While it does not employ the words "franchise tax", it functions as such a tax nonetheless, and equivalent language is found in the section, namely, "[f]or the privilege of doing business in the city in a corporate or organized capacity". (See, Woodside Sav. Loan Assn. v Gallman, 73 Misc.2d 357 [Sup Ct, N Y County 1972], affd on opn of Korn, J., at Special Term 34 N.Y.2d 674.) Even though measured by income, the New York City Banking Corporation tax is not to be viewed as a tax on income. (See, First Am. Natl. Bank v Olsen, 751 S.W.2d 417, 422 [Tenn 1987].) For that reason, it is exempt from the provisions of 31 U.S.C. § 3124 (a) (formerly 31 U.S.C. § 742; Rev Stat § 3701).
Entitled, "City Corporate Business and City Unincorporated Business Income Tax".
31 U.S.C. § 3124 (a) does not limit the States' taxing authority so that only one such tax can be imposed; a number of acceptable forms of taxation can be imposed concurrently within the exception of the federal immunity statute. (See, First Am. Natl. Bank v Olsen, supra.)
Concur — Carro, J.P., Ellerin, Wallach, Kupferman and Kassal, JJ.