In re Flatbush Gum Co.
| Decision Date | 05 November 1934 |
| Docket Number | No. 41.,41. |
| Citation | 73 F.2d 283 |
| Parties | In re FLATBUSH GUM CO., Inc. PEOPLE OF STATE OF NEW YORK v. ARNOLD. |
| Court | U.S. Court of Appeals — Second Circuit |
John J. Bennett, Jr., Atty. Gen., of New York, Henry Epstein, Sol. Gen., of New York City, and Robert P. Beyer, Asst. Atty. Gen., for the People of the State of New York.
Harold H. Levin, of New York City (Harold H. Levin and Louis W. Arnold, Jr., both of New York City, of counsel), for trustee.
Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
The Flatbush Gum Company, Inc., was adjudicated a bankrupt in the District Court for the Eastern District of New York. A receiver was duly appointed who, pursuant to an order of the court, sold the bankrupt's tangible personal property at auction. The business was not continued by the receiver, and the sale was an essential step in liquidation. After it was made, the state of New York demanded that the receiver file a return and pay a tax claimed to be imposed by the New York State Sales Tax Law. This demand was not complied with, and later the trustee in bankruptcy filed a petition in the District Court for the purpose of obtaining an order in the bankruptcy proceedings barring the tax claim on the ground that the sale made by the receiver was not taxable under the state law. The District Court, holding that the sale was not covered by the statute and doubting the validity of a state sales tax imposed upon a sale in liquidation by a receiver in bankruptcy, ordered the claim barred and the state appealed.
The pertinent provisions of the New York State Tax Law (Consol. Laws, c. 60) provide:
While the scope of the statute as construed by the New York Court of Appeals would be binding upon us (People of State of Michigan v. Michigan Trust Co., 286 U. S. 334, 52 S. Ct. 512, 76 L. Ed. 1136), in the absence of such a decision it becomes our duty to determine whether the statute imposes a tax upon such a sale as the one made by this receiver.
Were the language used in section 391 to be taken to impose a tax upon every sale at retail and a "sale at retail" to be any sale of tangible personal property not for the purpose of resale by the purchaser, every such sale in New York by order of a federal court would be subjected to a state tax; and the rather baffling question of what is, or what is not, the imposition of a state tax upon an instrumentality of the government of the United States would be an issue. That question, however, need not be decided. The statute imposes the duty to make a return and pay...
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California State Board of Equalization v. Sierra Summit, Inc
...other courts reasonably concluded that the State could not tax the operations of the bankruptcy trustee. See, e.g., In re Flatbush Gum Co., 73 F.2d 283 (CA2 1934), cert. denied sub nom. New York v. Arnold, 294 U.S. 713, 55 S.Ct. 509, 79 L.Ed. 1247 (1935). In James v. Dravo Contracting Co., ......
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In re West Coast Cabinet Works
... ... 11 It found occasion in the Jersawit decision to refer to a previous opinion rendered by it in Re Flatbush Gum Co., 2 Cir., 1934, 12 73 F.2d 283, certiorari denied, People of State of New York v. Arnold, 294 U.S. 713, 55 S.Ct. 509, 79 L.Ed. 1247, and stated the latter case dealt with a tax levied by the State of New York upon the privilege of selling tangible personal property at retail. The seller in ... ...
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In re Bush Terminal Co.
...tax must be expressed in the statute. Smietanka v. First Trust & Savings Bank, 257 U.S. 602, 42 S.Ct. 223, 66 L.Ed. 391; In re Flatbush Gum Co., 2 Cir., 73 F.2d 283. Order ...