Music Trade Review

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THE MUSIC TRADE REVIEW
OPERATION OF EMERSON LAW EXPLAINED BY G. W. POUND
Measure Imposing 3 Per Cent. Tax on Net Incomes of Manufacturing and Mercantile Corpora-
tions Outlined and Its Workings Shown—How the Amount Taxable Is Ascertained—Members
of the Trade in New York State Should Familiarize Themselves With Provisions of the Law
There has been considerable interest displayed from a stock of merchandise or other prop-
in music trade circles in New York State re- erty at a place of business maintained by the
garding the provisions of the Emerson Law company within the State; plus
"(3) The proportion of the average value of
(Article 9-A of the Tax Law) imposing a 3 per
cent, tax on the net income of "manufacturing" stocks of other corporations owned by the re-
and "mercantile" corporations.
Members of porting company allocated in and out of the
the trade have been considerably confused re- State in accordance with the value of the phys-
garding the scope of the bill and how it will ical property in and out of the State representing
affect their own particular businesses, and this such shares of stock, but not exceeding 10 per
confusion has been increased by the various cent, of the real and tangible personal property
amendments that have been made to the law of the reporting company segregated to the
State.
quite recently.
"(4) The average monthly value of the real
In regard to the Emerson Law, and particu-
larly the recent amendments to it, George W. property and personal property of the corpora-
Pound, general counsel of the Music Industries tion wherever located.
"(5) The average total value of bills and ac-
Chamber of Commerce, prepared for The Re-
view the following interesting memorandum counts receivable for (a) personal property
relative to the measure, what it is designed to manufactured by it within and without the State;
accomplish and its effect upon various classes (b) personal property sold by the corporation
from merchandise owned by it at the time of the
of business, wherein he states:
"The Legislature of 1918 of the State of New acceptance of the order but not manufactured
York passed several important amendments to by it; and (c) services performed both within
the 3 per cent, income tax on 'manufacturing' and without the State; based on orders received
and 'mercantile' corporations, which have been from office maintained by the corporation, ex-
cluding bills and accounts receivable on orders
approved by the Governor.
"Owing to improper printing of one of the rilled from a stock of merchandise or other prop-
bills there is some doubt as to some of the erty maintained by the company.
"(6) The average total value of stocks or
classes of corporations coming within the pur-
view of the statute. It was the intention of other corporations owned by it but not exceed-
the authors of the amendments to include all ing 10 per cent, of the aggregate real and tan-
corporations, excepting those engaged in the gible personal property of the reporting com-
owning and holding of real estate, corporations pany set up in the report.
whose principal source of income is from shares
"Under the old law where a corporation had
of stocks and bonds, and those specifically tax- no net income there was no basis for the tax,
able under other sections of the Tax Law.
but it is now provided that every domestic cor-
"In amending Section 208 of the Tax Law, poration and every foreign corporation doing
the Legislature eliminated the definition of the business in the State, excepting those specific-
terms 'manufacturing corporation' and 'mercan- ally exempted, shall be subject to a minimum tax
tile corporation,' but in amending Section 209, of not less than $10 and not less than one mill on
which provides for the franchise tax on cor- each dollar of the apportionment of the face
porations based on net income, the terms 'manu- value of the estimated capital stock apportioned
facturing' and 'mercantile' were not eliminated. to this State, which shall be determined by di-
It would seem therefore that some determina- viding the total amount of real and tangible per-
tion will have to be made as to just what are sonal property in the State by the entire amount
manufacturing and what are mercantile corpora- of the real and tangible personal property
wherever located, and multiplying the result by
tions under the law as amended.
"Substantial improvement of the law has been the face value of the issued capital stock. In
made by the amendments to Sections 211 and the case of corporations having stock without
214 providing for the repdrts of corporations par value the base of the tax shall be on such
and for the computation of the tax, respectively. portion of the paid-in capital as the real and
Where the entire business of the corporation is tangible personal property within the State bears
transacted within the State the tax is based to the entire real and tangible personal prop-
upon the entire net income for the fiscal year erty.
or calendar year as returned to the U. S. Treas-
"A new provision has been made to cover the
ury Department, subject to correction, for case of merged or consolidated corporations
fraud, evasion or error as ascertained by the which require a consolidated report and these
State Tax Commission. Where the entire busi- amendments have been made retroactive.
ness is not transacted within the State the tax is
"Corporations taxable under this law are not
based upon a proportion of the net income as the assessable locally on any personal property or
aggregate of the items 1, 2 and 3 (below) bears capital stock. Under the original law consid-
to the aggregate of items 4, 5 and 6 (below) :
erable confusion arose, owing to the making
"(1) The average monthly value of the real up of the local assessment rolls at different
property and tangible personal property within periods and under the language of this part of
the act a grave question of constitutionality
the State, plus
The amendment to Section
"(2) The average monthly value of bills and was presented.
accounts receivable for the following items: (a) 219-J seems to have cured the situation.
personal property sold by the corporation for
"This amendment excepts the personal prop-
merchandise manufactured by it within the erty (which would otherwise be exempt) for
State; (b) personal property sold by the cor- the year 1917 from the exemption provisions of
poration for merchandise owned by it and lo- this section and provides that a corporation pay-
cated within the State at the time of the ac- ing a tax on personal property locally shall be
ceptance of the order but not manufactured by entitled to a credit for the first year on the fran-
it within.the State; and (c) services performed, chise tax payable under this article only for
based on orders received at offices maintained the amount of the taxes payable for any part of
by the company within the State, excluding bills the year 1918. The tax imposed on the income
and accounts receivable arising from sales made of manufacturing and mercantile corporations
JULY 6, 1918
is a tax payable in advance for the year begin-
ning November 1, 1917. Any taxes therefore
payable by such corporations locally on per-
sonal property for the year 1917 are just and
proper and do not overlap the franchise tax.
"Inasmuch as the personal property of cer-
tain corporations in certain localities of the
vState has been omitted from the assessment roll
of 1917 by reason of the fact that the assess-
ment in such localities was not deemed to have
been made prior to June 4, 1917, the date when
the franchise tax law went into effect, and the
personal property of other corporations where
the assessment has been made prior to June 4,
1917, has been placed upon the assessment roll,
the amendment provides that such personal
property omitted from the assessment roll may
be entered upon the roll 'first prepared after this
act goes into effect.' The idea is to require the
taxation of all manufacturing and mercantile
corporations upon their personal property for
1917 without regard to when the assessment rolls
in the various localities may have been com-
pleted. The completion or non-completion of
the roll should not be controlling with respect
to the levy of personal property taxes prior to
the time the franchise tax law became operative.
"The amendment was designed to equalize and
even-up the payment of personal property taxes
among this class of corporations throughout the
State by requiring the payment of a personalty
property tax for the entire year of 1917 and giv-
ing a credit on the first payment of the fran-
chise tax for any part of the year 1918 that was
a part of the calendar or fiscal year for which
the personal property tax has been paid.
"The foregoing amendment was simply to
render constitutional the credit provisions of
the law and satisfy the constitutional provisions
as to 'equal protection.'
"Important amendments to procedure under •
this law were also enacted, as, for instance, the
provisions that no writ of certiorari to review
the determination of the Tax Commission can
be granted unless notice of application is made
within thirty (30) days after notice of the deter-
mination, and eight (8) days' notice of the appli-
cation of the writ must be given to the Commis-
sion; besides requiring a deposit of the amount
of taxes, and other charges, a bond must be
filed conditioned for the payment of all costs
and charges in the prosecution of the writ, in-
cluding costs and appeals."
DEATH OF MRS. AMELIA HOLLENBERG
Mother of Col. F. B. T. Hollenberg Passes Away
at His Home in Little Rock, Ark.
LJTTLE ROCK, ARK., June 28.—Mrs. Amelia A.
Hollenberg, widow of the late H. G. Hollen-
berg, and mother of Col. F. B. T. Hollenberg,
president of the Hollenberg Piano Co., died at
the home of her son in this city last week in
her seventy-seventh year.
Mrs. Hollenberg,
who was born in Virginia, was very active up
to the time of her death. She was a member
of the Daughters of the Revolution, and of the
Daughters of the Confederacy, as well as of
many musical, literary and philanthropic so-
cieties.
HAS NO OUTSIDE SALESMAN
WHEELING, W. VA., July 1.—The C. E. Guild
Music Co. has done away with all outside sales-
men, solicitors and agents in order to carry out
the "work or fight" orders recently issued by the
Government. The concern has lost several of
its former employes, who are now enlisted in
Government service, and it believes that by dis-
pensing with its outside solicitors it will do its
bit towards releasing workers for war industries.
WINTER & CO.
RUDOLF
PIANOS AND PLAYER-PIANOS
PIANOS AND PLAYER-PIANOS
22O SOUTHERN BOULEVARD, NEW YORK