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People ex Rel. Retsof Mining Company v. Graves

Appellate Division of the Supreme Court of New York, Third Department
Nov 23, 1938
255 App. Div. 921 (N.Y. App. Div. 1938)

Opinion

November 23, 1938.

Appeal from State Tax Commission.

Present — Hill, P.J., McNamee, Crapser, Bliss and Heffernan, JJ.


Article 9-A of the Tax Law imposes an annual franchise tax upon corporations measured by entire net income. Subdivision 3 of section 208 of that article (as amd. by Laws of 1935, chap. 745) provides: "The term `entire net income' means total net income from all sources, without deduction of * * * (6) interest on indebtedness to stockholders or shareholders, or members of their immediate families, except interest on moneys borrowed for ordinary expenses of the corporation. * * *." The relator is a New York corporation engaged in the business of mining salt in Livingston county, N.Y. It is a wholly owned subsidiary of the International Salt Company, a New Jersey corporation. The International Salt Company owned all of the capital stock of the relator and it pledged that stock, with other property, to the Chemical Bank and Trust Company as trustee as security for an issue of International Salt Company's bonds. The indenture provided that the salt company was "to retain all the authority, powers, rights and privileges belonging or incident to the stock and bonds hereby pledged * * * or to the ownership thereof." They provided that unless or until there was a default that all securities pledged should remain in the name of the salt company. Under the facts in the case and the statute above quoted, the International Salt Company was a stockholder of the relator. The statute is not unconstitutional so far as the relator is concerned. The final determination of the State Tax Commission should be confirmed, with fifty dollars costs and disbursements. Determination unanimously confirmed, with fifty dollars costs and disbursements.


Summaries of

People ex Rel. Retsof Mining Company v. Graves

Appellate Division of the Supreme Court of New York, Third Department
Nov 23, 1938
255 App. Div. 921 (N.Y. App. Div. 1938)
Case details for

People ex Rel. Retsof Mining Company v. Graves

Case Details

Full title:THE PEOPLE OF THE STATE OF NEW YORK ex rel. RETSOF MINING COMPANY…

Court:Appellate Division of the Supreme Court of New York, Third Department

Date published: Nov 23, 1938

Citations

255 App. Div. 921 (N.Y. App. Div. 1938)

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