City of New York v. Feiring, No. 863

CourtUnited States Supreme Court
Writing for the CourtSTONE
Citation313 U.S. 283,61 S.Ct. 1028,85 L.Ed. 1333
Docket NumberNo. 863
Decision Date26 May 1941
PartiesCITY OF NEW YORK v. FEIRING

313 U.S. 283
61 S.Ct. 1028
85 L.Ed. 1333
CITY OF NEW YORK

v.

FEIRING.

No. 863.
Argued May 7, 1941.
Decided May 26, 1941.

Page 284

Messrs. Paxton Blair, William C. Chanler, Sol Charles Levine, and Morris L. Heath, all of New York City, for petitioner.

Mr. Benjamin Siegel, of New York City, for respondent.

Mr. Justice STONE delivered the opinion of the Court.

The question is whether the obligation imposed upon sellers by a New York City sales tax (No. 20, published as No. 21, Local Laws of New York City, 1934, p. 143, as amended, No. 24, published as No. 25, Local Laws of New York City, 1934, p. 164), to pay a tax laid upon receipts from sales of personal property and collectible alternatively from the buyer or the seller is a 'tax' entitled to priority of payment in bankruptcy under § 64 of the Bankruptcy Act, 11 U.S.C.A. § 104.

Petitioner, New York City, filed its claim against the estate of the bankrupt for taxes on sales of tangible property by the bankrupt during the five years following January 10, 1934. In the proceeding before the referee it appeared that the bankrupt had failed to collect most of the taxes from its buyers as required by the applicable law, and that the sole issue was with respect to the right of the City to priority of payment of the City's claim over those of general creditors. The District Court set aside the referee's order allowing the priority and the Court of Appeals for the Second Circuit affirmed, In re National Stu ios, Inc., 118 F.2d 329, 330, holding that the sum claimed was not a tax, but that the 'bankrupt was liable to the city as a taxpayer who owes a tax or as a tax collector who owes as a debt the amount of taxes collected or to be collected'. We granted certiorari, 313 U.S. 552, 61 S.Ct. 843, 85 L.Ed. —-, April 14, 1941, because of the suggested failure of the court below to follow our decision in New York City v. Goldstein, 299 U.S. 522, 57 S.Ct. 321, 81 L.Ed. 384, reversing Matter of Lazaroff, 2 Cir., 84 F.2d 982, and of the asserted conflict in principle of the decision below with that of the Court of Appeals for the Tenth Circuit in Barbee, Trustee v. Oklahoma Tax Commission, 10 Cir., 103 F.2d 114.

Page 285

Section 64 of the Bankruptcy Act, as amended June 22, 1938, 52 Stat. 840, 874, 11 U.S.C.A. § 104, awards priority of payment, in bankruptcy, to 'taxes legally due and owing by the bankrupt to the United States or any State or any subdivision thereof * * *.' Whether the present obligation is a 'tax' entitled to priority within the meaning of the statute is a federal question. New Jersey v. Anderson, 203 U.S. 483, 491, 27 S.Ct. 137, 139, 51 L.Ed. 284; cf. Burnet v. Harmel, 287 U.S. 103, 110, 53 S.Ct. 74, 77, 77 L.Ed. 199; Palmer v. Bender, 287 U.S. 551, 555, 53 S.Ct. 225, 226, 77 L.Ed. 489; cf. United States v. Pelzer, 312 U.S. 399, 61 S.Ct. 659, 85 L.Ed. —-, decided March 3, 1941. Intended to be nationwide in its application, nothing in the language of § 64 or its legislative history suggests that its incidence is to be controlled or varied by the particular characterization by local law of the state's demand. Hence we look to the terms and purposes of the Bankruptcy Act as establishing the criteria upon the basis of which the priority is to be allowed.

As was pointed out in New Jersey v. Anderson, supra, 203 U.S. 491, 27 S.Ct. 139, 51 L.Ed. 284, the priority commanded by § 64 extends to those pecuniary burdens laid upon individuals or their property, regardless of their consent, for the purpose of defraying the expenses of government or of undertakings authorized by it. The particular demand for which the City now claims priority of payment as a tax is created and defined by state enactment. We turn to its provisions and to the decisions of the state courts in interpreting them, not to learn whether they have denominated the obligation a 'tax' but to ascertain whether its...

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160 practice notes
  • In re West Coast Cabinet Works, No. 44249-W
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • 4 Agosto 1950
    ...taxation to those "conducting any business" was passed by the same Congress in June, 1934. 11 We have noted City of New York v. Feiring, 313 U.S. 283, 61 S.Ct. 1028, 85 L.Ed. 1333, decided in 1941, holding said tax is a tax imposed upon the seller as well as the buyer, holding it a pecuniar......
  • In re Sandia Tobacco Mfrs., Inc., Case No. 16-12335-j11
    • United States
    • U.S. Bankruptcy Court — District of New Mexico
    • 12 Octubre 2018
    ...their consent, for the purpose of defraying the expenses of government or of undertakings authorized by it." City of New York v. Feiring, 313 U.S. 283, 285 (1941); see also In re Farmers Frozen Food Co. 221 F. Supp. 385, 387 (N.D. Cal. 1963), aff'd sub nom; Dungan v. Dep't of Agric., State ......
  • United Mine Workers of Am. Combined Benefit Fund v. Walter Energy, Inc., Case No.: 2:16-cv-00064-RDP
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • 8 Marzo 2016
    ...consent, for the purpose of defraying the expenses of the government or of undertakings authorized by it.” City of New York v. Feiring , 313 U.S. 283, 285, 61 S.Ct. 1028, 85 L.Ed. 1333 (1941). “It is true that Congress cannot change whether an exaction is a tax or a [premium] for constituti......
  • Leckie Smokeless Coal Co., In re, Nos. 96-1708
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • 29 Octubre 1996
    ...for the purpose of defraying the expenses of government or of undertakings authorized by it.' ") (quoting City of New York v. Feiring, 313 U.S. 283, 285, 61 S.Ct. 1028, 1029, 85 L.Ed. 1333 (1941)). Applying that four-part test, the Second Circuit in LTV Steel Co. held that Coal Act premiums......
  • Request a trial to view additional results
159 cases
  • In re West Coast Cabinet Works, No. 44249-W
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • 4 Agosto 1950
    ...taxation to those "conducting any business" was passed by the same Congress in June, 1934. 11 We have noted City of New York v. Feiring, 313 U.S. 283, 61 S.Ct. 1028, 85 L.Ed. 1333, decided in 1941, holding said tax is a tax imposed upon the seller as well as the buyer, holding it a pecuniar......
  • In re Sandia Tobacco Mfrs., Inc., Case No. 16-12335-j11
    • United States
    • U.S. Bankruptcy Court — District of New Mexico
    • 12 Octubre 2018
    ...their consent, for the purpose of defraying the expenses of government or of undertakings authorized by it." City of New York v. Feiring, 313 U.S. 283, 285 (1941); see also In re Farmers Frozen Food Co. 221 F. Supp. 385, 387 (N.D. Cal. 1963), aff'd sub nom; Dungan v. Dep't of Agric., State ......
  • United Mine Workers of Am. Combined Benefit Fund v. Walter Energy, Inc., Case No.: 2:16-cv-00064-RDP
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • 8 Marzo 2016
    ...consent, for the purpose of defraying the expenses of the government or of undertakings authorized by it.” City of New York v. Feiring , 313 U.S. 283, 285, 61 S.Ct. 1028, 85 L.Ed. 1333 (1941). “It is true that Congress cannot change whether an exaction is a tax or a [premium] for constituti......
  • Leckie Smokeless Coal Co., In re, Nos. 96-1708
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • 29 Octubre 1996
    ...for the purpose of defraying the expenses of government or of undertakings authorized by it.' ") (quoting City of New York v. Feiring, 313 U.S. 283, 285, 61 S.Ct. 1028, 1029, 85 L.Ed. 1333 (1941)). Applying that four-part test, the Second Circuit in LTV Steel Co. held that Coal Act premiums......
  • Request a trial to view additional results
1 firm's commentaries
  • Bankruptcy And IRC Section 4980H
    • United States
    • Mondaq United States
    • 1 Abril 2022
    ...be clearly a penalty it cannot be converted into a tax by the simple expedient of calling it such."); City of New York v. Feiring, 313 U.S. 283, 285 (1941) (determining whether a "tax" was entitled to priority treatment under '64 of the Bankruptcy Act of 1938); United States v. New York, 31......

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