Avon Products, Inc. v. State Tax Com'n of State of N.Y.
| Decision Date | 30 December 1982 |
| Citation | 90 A.D.2d 393,458 N.Y.S.2d 278 |
| Parties | In the Matter of AVON PRODUCTS, INC., Petitioner, v. STATE TAX COMMISSION OF the STATE OF NEW YORK, Respondent. |
| Court | New York Supreme Court — Appellate Division |
Breed, Abbott & Morgan, New York City (Edward H. Hein, New York City, of counsel), for petitioner.
Robert Abrams, Atty. Gen., Albany (Francis V. Dow, Asst. Atty. Gen., Albany, of counsel), for respondent.
Before KANE, J.P., and YESAWICH, WEISS and LEVINE, JJ.
In 1971 and 1972 petitioner made various investments including the purchase of bankers' acceptances issued by foreign banks. The income therefrom was reported as investment income for franchise tax purposes. New York tax authorities determined that this income constituted income from business capital rather than investment capital and found petitioner liable for additional franchise taxes for the years in question. In denying petitioner's claims for refunds, respondent held that income from bankers' acceptances should be treated as income from business capital in that bankers' acceptances are specifically excluded from investment capital as that term is defined in subdivision 5 of section 208 of the Tax Law. This article 78 proceeding ensued.
The New York State Franchise Tax (Tax Law, art. 9-A) requires corporations doing business in this State to pay a franchise tax upon the basis of that portion of their entire net income allocated to New York (Tax Law, § 209, subd. 1). The franchise tax, in this case, was measured by the total of business capital and investment capital allocated within the State . The allocation of income to investment capital rather than to business capital results in potentially less tax liability (compare Tax Law, § 210, subd. 3, par. [b] with Tax Law, § 210, subd. 3, par. [a] ). Subdivision 5 of section 208 of the Tax Law defines investment capital as follows:
The term "investment capital" means investments in stocks, bonds and other securities, corporate and governmental, not held for sale to customers in the regular course of business, exclusive of subsidiary capital and stock issued by the taxpayer, provided, however, that, in the discretion of the tax commission, there shall be deducted from investment capital any liabilities payable by their terms on demand or within one year from the date incurred, other than loans or advances outstanding for more than a year as of any date during the year covered by the report, which are attributable to investment capital (emphasis added).
Respondent, relying upon 20 NYCRR 3.31(c), which defines "other securities" as used in subdivision 5 of section 208 of the Tax Law (), contends that bankers' acceptances are in effect "bills of exchange [or] other commercial instruments" and that bankers' acceptances, therefore, are excluded from the category of "other securities." In support of this contention, respondent relies on the definition of...
To continue reading
Request your trial
-
All Seasons Resorts, Inc. v. Abrams
...function of [the ASR membership], to search for substance over form with emphasis on economic reality" (Matter of Avon Prods. v. State Tax Commn., 90 A.D.2d 393, 395, 458 N.Y.S.2d 278), to see if it displays the characteristics of "securities" in the general sense of the term as used in sec......
-
Xerox Corp. v. N.Y. State Tax Appeals Tribunal
...Harvester Co. v. State Tax Commn., 58 A.D.2d 125, 127, 396 N.Y.S.2d 82 [1977];cf. Matter of Avon Prods. v. State Tax Commn., 90 A.D.2d 393, 394–395, 458 N.Y.S.2d 278 [1982] ).3 The Tribunal [973 N.Y.S.2d 463]properly looked to securities law to aid its interpretation of the Tax Law, as cour......
-
Mobil Intern. Finance Corp. v. New York State Tax Com'n
...was simply insufficient to establish that the evidences of indebtedness constituted securities, citing Matter of Avon Prods. v. State Tax Comm., 90 A.D.2d 393, 458 N.Y.S.2d 278. Generally, in reviewing administrative determinations, the construction given statutes and regulations by an agen......
-
Howard Johnson Co. v. State Tax Com'n
...(see United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 95 S.Ct. 2051, 44 L.Ed.2d 621; see, also, Matter of Avon Prods. v. State Tax Comm., 90 A.D.2d 393, 394-395, 458 N.Y.S.2d 278). It should be noted in this connection that: "In general, it may be said that any form of instrument us......