Conde Nast Publications Inc. v. State Tax Commission
| Decision Date | 22 January 1976 |
| Citation | 378 N.Y.S.2d 132,51 A.D.2d 17 |
| Parties | In the Matter of The CONDE NAST PUBLICATIONS, INC., Petitioner, v. STATE TAX COMMISSION, Respondent. |
| Court | New York Supreme Court — Appellate Division |
Sabin, Bermant & Blau, New York City (John R. Coughlin, New York City, of counsel), for petitioner.
Louis J. Lefkowitz, Atty. Gen. (Francis V. Dow and Ruth Kessler Toch, Albany, of counsel), for respondent.
Before HERLIHY, P.J., and GREENBLOTT, KOREMAN, MAIN, and REYNOLDS, JJ.
Petitioner is a New York corporation with offices in New York, California, Illinois, Massachusetts, Ohio and Georgia, engaged in interstate commerce in the business of publishing magazines. During the years 1967, 1968, 1969 and 1970, petitioner's magazines (Vogue, Glamour, Mademoiselle, House & Garden, and Brides) were printed in Iowa and Ohio and either mailed to subscribers or distributed through an independent distributor throughout the United States. Subscriber sales were serviced in Boulder, Colorado. Advertisi was solicited throughout the United States from petitioner's offices in New York and in the other states. In computing its franchise taxes for the four years in question, petitioner included in its New York receipts the revenues corresponding to the percentage of its magazine circulation in New York State, and omitted that portion of magazine advertising revenue corresponding to the percentage of circulation outside New York. The Corporation Tax Bureau of the Department of Taxation and Finance subsequently issued notices of deficiency for all four years, and following a hearing, respondent affirmed the deficiencies and determined that all advertising revenues generated by the New York office must be included as 'receipts' under the three-factor formula provided for by section 210 (subd. (3) par. (a) subpar. (2)) of the Tax Law. The sole issue involved on this proceeding is which method of computation is the correct one.
Only that portion of a corporation's entire net income that is allocable to New York is subject to payment of a franchise tax (Tax Law § 210). In determining the New York portion of a corporation's income from business, where the corporation has a regular place of business outside the state, the statute prescribes that three factors be taken into account, namely, property, receipts, and payroll. The percentage of the taxpayer's total property that is situated in New York, the percentage of the taxpayer's total receipts that are earned in New York, and the percentage of the taxpayer's total payroll that is computed in New York are all ascertained, and an average of these three figures is then struck. The resulting figure, referred to in the statute as a business allocation percentage, is multiplied by the taxpayer's total business income to arrive at that part of the total business income that is attributable to New York.
The dispute in the present case centers around the percentage of the corporation's total receipts earned in New York, and more particularly, what portion of the corporation's advertising receipts was earned in New York. On the hearing, petitioner took the position that advertising is a service that is performed when and at the location where the advertisement is read by a potential purchaser of the advertised product, and, therefore, the percentage of advertising receipts earned in New York would be the same as the New York percentage...
To continue reading
Request your trial
-
Metromedia, Inc. v. Director, Div. of Taxation
...nor was it clearly and obviously implied. On this point, we note that the New York State courts, in Conde Nast Publications, Inc. v. State Tax Comm'n, supra, 51 A.D.2d 17, 378 N.Y.S.2d 132, and Capital Cities Communications, Inc. v. State Tax Comm'n, supra, 65 A.D.2d 25, 411 N.Y.S.2d 46, re......
-
Twin Coast Newspapers, Inc. v. State Tax Com'n
...659, 660, 421 N.Y.S.2d 423, mot. for lv. to app. den. 48 N.Y.2d 612, 425 N.Y.S.2d 1027, 401 N.E.2d 920; Matter of Conde Nast Pub. v. State Tax Comm., 51 A.D.2d 17, 378 N.Y.S.2d 132, app. dsmd. 39 N.Y.2d 942, 386 N.Y.S.2d 1029, 352 N.E.2d In sum, we find respondent's determination denying ex......
-
McGraw-Hill, Inc. v. State Tax Com'n
...as the origin formula. This interpretation of the Tax Law had been previously approved by this court in Matter of Conde Nast Publ. v. State Tax Commn., 51 A.D.2d 17, 378 N.Y.S.2d 132, appeal dismissed 39 N.Y.2d 942, 386 N.Y.S.2d 1029, 352 N.E.2d 897. Accordingly, the Audit Division issued a......
-
Tanico v. McGuire
...The interpretation of its own rules by the administrative agency is entitled to deference (Matter of Conde Nast Publications v. State Tax Commission, 51 A.D.2d 17, 378 N.Y.S.2d 132, app. dismissed, 39 N.Y.2d 942, 386 N.Y.S.2d 1029, 352 N.E.2d 897). It violates no constitutional or other rig......