Clairol, Incorporated v. Kingsley
| Decision Date | 23 November 1970 |
| Citation | 57 N.J. 199,270 A.2d 702 |
| Parties | CLAIROL, INCORPORATED, a Delaware Corporation, Plaintiff-Appellant, v. William KINGSLEY, Acting Director of Division of Tax Appeals, Defendant- Respondent. |
| Court | New Jersey Supreme Court |
On appeal from the Superior Court of New Jersey, Appellate Division, whose opinion is reported at 109 N.J.Super. 22, 262 A.2d 213.
Roger C. Ward, Newark, for appellant (Pitney, Hardin & Kipp, Newark, attorneys, Roger C. Ward, Newark, of counsel).
Stephen Skillman, Asst. Atty. Gen., for respondent (George F. Kugler, Jr., Atty. Gen., attorney).
The opinion of the court was delivered
The judgment of the Appellate Division, 109 N.J.Super. 22, 262 A.2d 213, is affirmed for the reasons expressed in its opinion. Since this opinion refers to findings made by the Division of Tax Appeals but does not set forth those findings, they are appended as an addenda 1 to this opinion.
For affirmance: Chief Justice WEINTRAUB and Justices JACOBS, FRANCIS, PROCTOR, HALL, SCHETTINO and HANEMAN--7.
For reversal: None.
1 There is no real dispute of the facts. Briefly they are: Clairol, a corporation of the State of Delaware, a wholly owned subsidiary of Bristol-Myers, a corporation of the State of Delaware, manufactures and sells hair coloring preparations and (since 1965) cosmetics in many of the United States and abroad. It does not maintain a registered office or a registered agent in New Jersey, it is not authorized to do business in New Jersey, and it has no license or franchise from New Jersey or from any governmental or municipal body in New Jersey. It does not pay property taxes or any other taxes in New Jersey.
Clairol has 12 subsidiaries. Only one of them, Clairol Technical Centers, Incorporated, is authorized to do business in New Jersey. This subsidiary pays its own separate New Jersey franchise tax, and there is no interchange of personnel and no use by Clairol of its office space. The business of Clairol Technical Centers in New Jersey is to furnish technical advice to professional beauticians on what Clairol products will do and how they should be used.
It has a nationwide sales department at New York City headed by two Vice Presidents, to whom 2 national sales managers report with 9 regional managers reporting to the national sales managers and 2, 3 or 4 district managers reporting to each regional manager. Detailmen (called salesmen interchangeably) report to the district managers.
Region 1, headquartered at New York City has responsibility for New Jersey south to Atlantic City and Region 3, headquartered in Washington, D.C. (formerly at Phila.) has responsibility for the remainder of New Jersey.
The products of Clairol are manufactured at Stamford, Connecticut and warehoused at Stamford, Conn., Glendale, Cal., Dallas, Texas and Chicago, Ill. When occasion required, some of its products have been packaged under contract in New Jersey by Ivers-Lee and Clifton Private Brands and contract packagers in other parts of the country for delivery by common carrier to Stamford, Connecticut.
Clairol does not have retail outlets in New Jersey; it sells basically to (a) wholesalers who sell to local drugstores, (b) drug chains which sell to customers, (c) beauty jobbers who sell to local beauty salons, and (d) to a miscellany of other non retail customers, including food chains, rack jobbers who sell to small food markets, department stores and variety stores. Sales to beauty jobbers are separately organized in a so-called Salon Division, with particular responsibility for hair coloring and hair care products for professional use. The other sales activities are lumped together under the jurisdiction of the second pair of vice-presidents and national sales managers.
Clairol's advertising is not local to any state, but national in scope, 55% To 60% Being televised by such companies as American Broadcasting and National Broadcasting, 30% In magazines distributed nationally and 10% Or less in newspapers and by radio. Retailers are free to advertise Clairol products with partial reimbursement.
Clairol has no formal office in the state, no real estate, no office furniture, no telephone (salesmen have their own), and no bank accounts. Their detailmen carry samples, business forms and advertising media, which are company owned.
The district manager and from 5 to 14 salesmen work in New Jersey and are New Jersey residents. They work from automobiles leased by the...
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