UC-NRLF fl?E New York State Franchise Tax on Manufacturing and Mercantile Corporations Guaranty Trust Company of New York New York State Franchise Tax on Manufacturing and Mercantile Corporations Chapter 726 Laws of New York 1917 Approved June 4, 1917 Guaranty Trust Company of New York 140 Broadway Fifth Avenue Office Fifth Avenue and 43d Street London Office Paris Office 32 Lombard Street, E. C. Rue des Italians 1 & 3 COPYRIGHT, 1917 BY GUARANTY TRUST COMPANY OF NEW YORK Foreword The tax imposed on manufacturing and mercantile corporations by the Franchise Tax Law approved June 4, 1917, is a tax of three per centum on the net income of such cor- porations. The first taxable year under the law is the year beginning November 1, 1917. A report must be filed with the State Tax Commission, by every corporation subject to tax, on or before the first day of July of each year, and the tax assessed by the Tax Commission in accordance with such report is required to be paid on or before January 1, following. All of the principal features of the law have been set forth in convenient form for information and reference in the Synopsis which follows. The full text of the law is also printed in this booklet for the convenience of the reader. 36196* Synopsis of Law Imposing a Franchise Tax on Manufacturing and Mercantile Corporations Imposition of Tax Every manufacturing and mercantile cor- poration organized or doing business in the State of New York is required to pay annually in advance for the year beginning Novem- ber first, a tax of three per centum upon its net income. The tax is computed by the State Tax Commission upon the basis of the net income for the calendar or fiscal year of the corporation, next preceding, as shown by the return of the corporation filed with the United States Government under the Federal Income Tax Law* of September 8, 1916. The law became effective immediately upon its passage, on June 4, 1917, and the tax will be assessed for the year beginning November 1, 1917. * Federal Income Tax. Form 1031 Revised. [5] Corporations Subject to Tax All corporations engaged in manufacturing or mercantile pursuits, doing business within the State of New York, are subject to the franchise tax except (1) steam surface rail- road, canal, steamboat and other transporta- tion corporations which are subject to tax under Section 184 of Chapter 62, Laws 1909, and (2) corporations owning or operating elevated railroads or surface railroads which are not operated by steam, waterworks com- panies, gas companies, and electric or steam heating, lighting and power companies which are subject to tax under Sections 185 and 186 of Chapter 62, Laws 1909. Manufacturing and Mercantile Corporations Defined The law defines the term "manufacturing corporation" to mean a corporation, joint- stock company, or association principally engaged in the business of manufacturing tangible personal property for itself or for others. "Mercantile corporation" is defined as a [6] corporation, joint-stock company, or associa- tion principally engaged in the business of buying and selling tangible personal property for itself or for others. EXEMPTION FROM OTHER TAXES After June 4, 1917, corporations subject to tax under this provision are exempt from tax on personal property, including any fixtures attached to the building for the purposes of trade or manufacture and removable there- from without material injury thereto, ex- cept boilers, ventilating apparatus, eleva- tors, gas, electric and water power generating apparatus and shafting. Likewise, such cor- porations are exempt from the Capital Stock Tax imposed by Section 12 of this Chapter, and from the Franchise Tax imposed by Sec- tion 182 of this Chapter. Corporations subject to tax under this provision are not relieved, however, from any franchise taxes due on or before January 15, 1917, or from taxes on personal property or capital stock assessed in the year 1916 or in the year 1917 before the passage of this act, June 4, 1917, whether payable in that year or not. If any manufacturing or mercantile cor- poration has paid taxes on personal property or capital stock, assessed in the year 1917, such corporation shall be entitled to credit for the amount of such taxes so paid on its account for taxes first assessed against it under this law, not exceeding, however, the amount of such first assessment. Corporation Report Every corporation subject to tax is required to file with the Tax Commission of the State of New York on or before July 1 of each year, beginning in the year 1917,* a report of net income, under oath of the president, vice- president, secretary, or treasurer of the cor- poration, in form prescribed by the Tax Com- mission. The report of net income shall be on the basis of the net income of the corporation for the preceding calendar year, or, if the Federal income tax return is based on the fiscal year of the corporation, the report of net income for the purpose of assessment of the franchise tax shall likewise be based on * Time for filing report for year 1917 has been extended to August 1, 1917. [8] the fiscal year next preceding. The Tax Commission has authority, upon good cause being shown, to extend the time for filing report. Blanks for making reports will be furnished by the Tax Commission but failure to secure a blank will not release a corporation from the obligation of filing a report. Contents of Report The report to the Tax Commission shall in- clude the following: 1. The name and location of the principal place of business of the corporation; the State under the laws of which it is organized; the date of organization; the kind of business transacted. 2. The amount of net income for the pre- ceding fiscal or the preceding calendar year as shown in the last return of annual net in- come made by the corporation to the United States Treasury Department. 3. The average monthly value of its real property and tangible personal property in each city, village, or portion of a town out- side of a village within the State, and the [9] average monthly value of ^all its real property and tangible personal property wherever located. *? 4. The average montffly value of bills and accounts receivable for*(a) tangible personal property sold from the stores or stock of the corporation within ^tHe State, (b) tangible personal property manufactured or shipped from within the State, and (c) services per- formed within the State; and The average monthly total value of bills and accounts receivable for (a) tangible per- sonal property sold from the stores or stock of the corporation within and without the State, (b) tangible personal property manu- factured or shipped from within the State and other States and countries, and (c) serv- ices performed both within and without the State. 5. (a) The average total value for the fiscal or calendar year, of the stock of other corporations owned by the corporation, and (b) the proportion of the average value of the stock of such other corporations within the State of New York as allocated pursuant to [10] the provisions of the law. (See "Stock owned by Corporations," p. 14). 6. If the corporation has no real or tangible personal property within the State, the city or town within the State in which is located the office in which its principal financial con- cerns within the State are transacted. 7. Such other facts as the Tax Commission may require for the purpose of computing the tax. 8. Any corporation may omit from its re- port the statements required by paragraphs 3 to 7 above, both inclusive, by incorporating in its report a consent to be taxed upon its entire net income. Supplemental Report In addition to the above report, the Tax Com- mission may require a supplemental report containing such information and data as may be deemed necessary for the computation of the tax. Computation of Tax Base ( d on the report filed by the corporation, the tax shall be computed as follows : A. If the entire business of the corporation fill is transacted within the State of New York, the tax imposed shall be based upon the en- tire net income of the corporation as returned to the United States Treasury Department for the preceding taxable year. B. If the entire business of the corporation is not transacted within the State, the tax imposed shall be based upon that proportion of the net income of such corporation, which the aggregate of; 1. The average monthly value of the real property and tangible personal property within the State; 2. The average monthly value of bills and accounts receivable for (a) tangible personal property sold from its stores or stocks within the State, (b) tangible personal property manufactured or shipped from within the State and (c) services performed within the State; and 3. The proportion of the average value of the stocks of other corporations owned by the corporation (See "Stock owned by Cor- porations, " p. 14) bears to the aggregate of: 1. The average monthly value of all the real property and tangible personal property of the corporation wherever located; 2. The average total value of bills and ac- counts receivable for (a) tangible personal property sold from its stores or stocks within and without the State, (b) tangible personal property manufactured or shipped from within this and other States and countries, and (c) for services performed both within and without this State; and 3. The average total value of the stocks of other corporations owned by the corporation. Tangible Property The words "tangible personal property" mean corporeal personal property, such as machinery, tools, implements, goods, wares and merchandise, and do not include money, deposits in banks, shares of stock, bonds, notes, credits, or evidences of an interest in property and evidences of debt. Real prop- erty and tangible personal property shall be taken at its value where located. [131 Stock Owned by Corporations The value of share stock of another corpora- tion owned by a corporation subject to tax shall, for the purpose of allocation of assets, be apportioned in and out of the state, in accordance with the value of the physical property within and without the State rep- resenting such share stock. Audit and Statement of Tax On or before the first day of November of each year, the Tax Commission will audit and state the account of each corporation, compute the tax thereon, and notify the State Comptroller for the purpose of collection. The notice to the Comptroller will indicate the distribution of the tax collected to the several countries and subdivisions thereof as determined by the Tax Commission. Notice of Tax Notice of assessment of the tax will be sent to each corporation by mail, to the post-office address given in the report, and the record of the mailing of such notice, kept by the Tax [14] Commission, will be presumptive evidence of the giving of the notice. Payment Taxes must be paid to the State Comptroller on or before the first day of January of each year. If taxes are not paid when due, a pen- alty of ten per centum additional, and inter- est at the rate of one per centum per month, will be assessed and collected. Unpaid taxes are a lien upon the personal and real property of the corporation from the time they are due and payable. Corrections and Changes in Federal Income Tax Return If the return of net income of a corporation to the United States Treasury Department upon which the Federal Income Tax is based, is changed or corrected by the United States Commissioner of Internal Revenue, the cor- poration is required to file with the State Tax Commission, within ten days after notice of the correction, a report of net income as cor- [151 reeled or changed. If it is found that taxes in excess of the amount due by the corpora- tion have been paid, such excess will be cred- ited to the corporation or to any assignee of the corporation from which taxes are due under this law. If the corrected report shows additional taxes to be due, the corporation is required to pay the amount assessed within thirty days after notice of assessment from the Tax Commission. Revision and Readjustment An application for revision may be filed by a corporation any time within one year from the time an account is audited and stated by the State Tax Commission; and if, upon hearing, it appears that the account includes taxes illegally exacted, the tax Commission will restate and adjust the account accordingly. The determination of the Tax Commission, consequent upon an application for revision, is subject to review on certiorari by the Su- preme Court and, upon appeal from the de- cision of the Supreme Court by the Court of Appeals. [161 Penalty For Failure to Report or For False Return Any corporation failing to file a report as re- quired under the Law is liable to a fine not exceeding $5,000. Any officer of a corpora- tion who makes a fraudulent return or state- ment with intent to defeat or evade the pay- ment of the tax is liable to a fine not exceed- ing $1,000. Estimate of Net Income by Tax Commission If a corporation fails to file a report of net income as required under the law, the Tax Commission is authorized to estimate the net income and the amount of tax due, from such information as it may have in its possession, and state an account of the amount of tax due, with penalty and interest. The cor- poration will be notified of the assessment and will be given an opportunity to be heard in respect thereto. Warrant for Collection of Taxes If the tax is not paid within thirty days after it is due, and no appeal or other proceeding [171 has been taken to review the assessment, the Comptroller may issue a warrant to the sheriff of the county in which the property of the delinquent corporation is located, com- manding the sheriff to levy upon and sell such property for the payment of the taxes, penalty and interest due. The warrant will be returned and the money collected there- under will be paid to the Comptroller at the time specified in the warrant, which time shall not be less than sixty days from the date of the issue of the warrant. The warrant will be a lien upon the real and personal property of the corporation from the time an actual levy has been made. Suit for Recovery of Taxes and Forfeiture of Charter Action in the name of the State may be brought at any time by the Attorney General at the instance of the Comptroller, to recover taxes due and unpaid. If taxes remain unpaid for a period of one year and the Comptroller is satisfied that the failure to pay is intentional, action will be [18] brought by the Attorney General for the for- feiture of the charter or franchise of the cor- poration. If the failure to pay is found by the court to have been intentional, judgment will be rendered for the forfeiture of the char- ter, and for the dissolution of the corpora- tion, if it is a domestic corporation; or for the annulment of the franchise to do business in the State, if it is a foreign corporation. Deposit of Revenues The Comptroller is required to deposit to his credit all moneys collected under this law in such responsible banks or trust companies in the State as pay the highest rate of interest. Any bank or trust company receiving such deposit is required to execute an undertaking, with sureties approved by the Comptroller, for the safe keeping and prompt payment on demand of all funds held on deposit. A monthly statement of all money received from franchise taxes under the law is made by the Comptroller to the State Treasurer on the first day of each month. On or before the tenth day of each month, two-thirds of all moneys collected during the [19] preceding month must be paid into the gen- eral fund of the State treasury. The balance shall be distributed and paid to the treasurers of the several counties of the State, as pro- vided under the law. Secrecy of Reports The disclosure of any report of income or of the contents thereof by any official or em- ployee, except under judicial order, is pro- hibited. Any violation of this provision will subject the offender to a fine not exceed- ing one thousand dollars, or imprisonment not exceeding one year, or both; and if the offender is an employee of the State he will be subject to dismissal and will be incapaci- tated from holding public office for a period of five years. This provision of the law does not prohibit the publication of statistics so classified as to prevent the identification of particular re- ports nor does it prohibit the publication of lists of delinquent taxpayers. The inspection of returns for the purpose of bringing or de- fending suit is permitted to the Attorney [201 General or other legal representatives of the State. Reports shall be retained for at least three years. Limitation of Time Limitations of time of enforcing a civil remedy, provided by the code of civil proced- ure, do not apply to any proceedings taken to levy, appraise, assess, determine, or enforce the collection of any tax or penalty imposed by this law. Law Imposing Franchise Tax on Manufacturing and Mercantile Corporations Being Chapter 726, Laws of New York, 1917, Constituting Article 9 A of Chapter 62, Laws of New York, 1909 208. Definitions. 209. Franchise tax on corporations based on net income. 210. Corporations exempt from article. 211. Reports of corporations to tax commission. 212. Reports by corporations on basis of fiscal year. 213. Reports to be sworn to; forms. 214. Computation of tax. 215. Rate of tax. 216. Penalty for failure to report. 217. Powers of tax commission. 218. Revision and readjustment of accounts by tax commission. 219. Review or determination of tax commission by certiorari. 219-a. Audit and statement of tax. 219-b. Notice of tax. 219-c. When tax payable. 219-d. Corrections and changes. 219-e. Warrant for the collection of taxes. 219-f. Action for recovery of taxes; forfeiture of charter by delinquent corporations. 219-g. Deposit of revenues collected. 219-h. Disposition of revenues collected. 219-i. Secrecy required of officials; penalty for violation. 219-j. Manufacturing and mercantile corporations ex- empt from personal property tax and from the provisions of sections twelve, twenty-seven, one hundred and eighty-two and one hundred and ninety-two of the tax law. 219-k. Limitation of time. [22] 208. Definitions. As used in this article. 1. The term "corporation" includes a joint-stock company or association; 2. The words "tangible personal property" shall be taken to mean corporeal personal property, such as machin- ery, tools, implements, goods, wares and merchandise, and shall not be taken to mean money, deposits in bank, shares of stock, bonds, notes, credits or evidences of an interest in property and evidences of debt; 3. The term "manufacturing corporation" means a cor- poration principally engaged in the business of manu- facturing tangible personal property for itself or for others. 4. The term "mercantile corporation" means a corpo- ration principally engaged in the business of buying or selling tangible personal property for itself or for others. 209. Franchise tax on corporations based on net income. For the privilege of exercising its franchises in this state in a corporate or organized capacity every domestic manufacturing and every domestic mercantile corporation, and for the privilege of doing business in this state, every foreign manufacturing and every foreign mer- cantile corporation, except corporations specified in the next section, shall annually pay in advance for the year beginning November first next preceding an annual fran- chise tax, to be computed by the tax commission upon the basis of its net income for its fiscal or the calendar year next preceding, as hereinafter provided, upon which in- come such corporation is required to pay a tax to the United States. 210. Corporations exempt from article. Corpora- tions liable to a tax under section one hundred and eighty- four of this chapter, corporations owning or operating elevated railroads or surface railroads not operated by steam, or formed for supplying water or gas or for electric or steam heating, lighting or power purposes and liable to a tax under sections one hundred and eighty-five and one hundred and eighty-six of this chapter, shall be exempt from the payment of the taxes prescribed by this article. 211. Reports of corporations to tax commission, Every corporation taxable under this article as well as foreign corporations having officers, agents or representa- tives within the state shall annually on or before July first transmit to the tax commission a report in the form pre- scribed by the tax commission specifying: 1. The name [231 and location of the principal place of business of such corporation, the state under the laws of which organized, and the date thereof; the kind of business transacted. 2. The amount of its net income for its preceding fiscal or the preceding calendar year as shown in the last return of annual net income made by it to the United States treasury department. 3. The average monthly value for the fiscal or calendar year of its real property and tangible personal property hi each city, village or portion of a town outside of a village within the state, and the average monthly value of all its real property and tangible personal property wherever located. 4. The average monthly value for the fiscal or calendar year of bills and accounts receivable for (a) tangible per- sonal property sold from its stores or stocks within the state, (b) tangible personal property manufactured or shipped from within the state and (c) services performed within the state, and the average monthly total value for the fiscal year or calendar year of bills and accounts re- ceivable for (a) tangible personal property sold from its stores or stocks within and without the state, (b) tangible personal property manufactured or shipped from within the state and other states and countries, and (c) services performed both within and without the state. 5. The average total value for the fiscal or calendar year of the stock of other corporations owned by the corpora- tion, and the proportion of the average value of the stock of such other corporations within the state of New York, as allocated pursuant to section two hundred and fourteen of this chapter. 6. If the corporation has no real or tangible personal property within the state, the city, village or portion of a town outside of a village in the state in which is located the office in which its principal financial concerns within the state are transacted. 7. Such other facts as the tax commission may require for the purpose of making the computation required by this article. 8. Any corporation taxable hereunder may omit from its report the statements required by subdivisions three to seven, both inclusive, by incorporating in its report a con- sent to be taxed upon its entire net income. 212. Reports by corporation on basis of fiscal year A corporation which reports to the United States treasury department on the basis of its fiscal year, may report to the tax commission upon the same basis. 213. Reports to be sworn to; forms. Every report required by this article shall have annexed thereto the affidavit of the president, vice-president, secretary or treas- urer of the corporation to the effect that the statements contained therein are true. Blank forms of the report shall be furnished by the tax commission, on application, but failure to secure such a blank shall not release any corporation from the obligation of making a report herein required. The commission may require a further or supple- mental report under this article to contain further informa- tion and data necessary for the computation of the tax herein provided. 214. Computation of tax. If the entire business of the corporation be transacted within the state, the tax imposed by this article shall be based upon the entire net income of such corporation as returned to the United States treasury department for such fiscal or calendar year. If the entire business of such corporation be not trans- acted within the state, the tax imposed by this article shall be based upon a proportion of the net income, to be de- termined in accordance with the following rules: The proportion of the net income of the corporation upon which the tax under this article shall be based, shall be such portion of the entire net income as the aggregate of : 1. The average monthly value of the real property and tangible personal property within the state, 2. The average monthly value of bills and accounts receivable for (a) tangible personal property sold from its stores or stocks within the state, (b) tangible personal property manufactured or shipped from within the state and (c) services performed within the state, 3. The proportion of the average value of the stocks of other corporations owned by the corporation, allocated to the state as provided by this section, Bears to the aggregate of 4. The average monthly value of all the real property and tangible personal property of the corporation, wherever located, 5. The average total value of bills and accounts receiv- able for (a) tangible personal property sold from its stores or stocks within and without the state, (b) tangible personal [251 property manufactured or shipped from within this and other states and countries, and (c) services performed both within and without this state. 6. The average total value of the stocks of other corpo- rations owned by the corporation. Real property and tangible personal property shall be taken at its actual value where located. The value of share stock of another corporation owned by a corporation liable hereunder shall for] purposes of allocation of assets be apportioned in and out of the state in accordance with the value of the physical property in and out of the state representing such share stock. 215. Rate of tax. The tax imposed by this article shall be at the rate of three per centum of the net income of the corporation or portion thereof taxable within the state, determined as provided by this article. 216. Penalty for failure to report. Any corporation which fails to make any report required by this article shall be liable to a penalty of not more than five thousand dollars to be paid to the state, to be collected in a civil action, at the instance of the tax commission; and any officer of any such corporation who makes a fraudulent return or statement with intent to defeat or evade the pay- ment of the taxes prescribed by this article shall be liable to a penalty of not more than one thousand dollars, to be collected in like manner. All moneys recovered as penal- ties, for failure to report or for making fraudulent reports shall be paid to the state comptroller. 217. Powers of tax commission. The tax commission may for good cause shown extend the time within which any corporation is required to report by this article. If any report required by this article be not made as herein required, the tax commission is authorized to make an estimate of the net income of such corporation and of the amount of tax due under this article, from any informa- tion in its possession, and to order and state an account according to such estimate for the taxes, penalties and interest due the state from such corporation. If the tax imposed upon any corporation under this article is based upon an estimate as provided in this section, the tax commission shall notify such corporation of a time and place at which opportunity will be given to the corporation to be heard in respect thereof. Such notice shall be mailed to the post-office address of the corporation. All [261 the authority and powers conferred on the tax commission by the provisions of section one hundred and ninety-five of the tax law shall have full force and effect in respect of corporations which may be liable hereunder. 218. Revision and readjustment of accounts by tax commission. If an application for revision be filed with the commission by a corporation against which an account is audited and stated within one year from the time any such account shall have been audited and stated, the commission shall grant a hearing thereon and if it shall be made to appear upon any such hearing by evidence submitted to it or otherwise, that any such account included taxes or other charges which could not have been lawfully demanded, or that payment has been illegally made or exacted of any such account, the commission shall resettle the same according to law and the facts, and adjust the account for taxes accordingly, and shall send notice of its determination thereon to the corporation and state comp- troller forthwith. 219. Review of determination of tax commission by certiorari. The determination of the commission upon any application made to it by any corporation for revision and resettlement of any account, as prescribed in this article, may be reviewed in the manner prescribed by and subject to the provisions of sections one hundred and ninety-nine and two hundred of this chapter. 219-a. Audit and statement of tax. On or before the first day of November in each year the tax commission shall audit and state the account of each corporation known to be liable to a tax under this article, for its pre- ceding fiscal or the preceding calendar year, and shall compute the tax thereon and forthwith notice the same to the state comptroller for collection. The tax commission shall determine the portion of such tax to be distributed to the several counties and the amounts to be credited to the several cities or towns thereof, when the same is col- lected, and shall indicate such determination in noticing such tax to the state comptroller. If the corporation has real property or tangible personal property located in a village, or if it has no real or tangible personal property in the state but the office in which its principal financial concerns within the state are transacted is located in a village, the tax commission shall indicate such facts to the [71 state comptroller, with the name of the village in which such office or property is located. 219-b. Notice of tax, Every report required by section two hundred and eleven of this chapter shall con- tain the post-office address of the corporation and lines or spaces upon which the corporation shall enter the portion of its net income which it believes to be the basis upon which the tax shall be imposed under this article, and the amount of such tax. Notice of tax assessment shall be sent by mail to the post-office address given in the report, and the record that such notice has been sent shall be presumptive evidence of the giving of the notice and such record shall be preserved by the tax commission. 219-c. When tax payable. The tax hereby imposed shall be paid to the state comptroller on or before the first day of January of each year. If such tax be not paid on or before January first, or in the case of additional taxes, within thirty days after the bill for such additional tax has been rendered, the corporation liable to such tax shall pay to the state comptroller, in addition to the amount of such tax, ten per centum of such amount, plus one per centum for each month the tax remains unpaid. Each such tax shall be a lien upon and binding upon the real and personal property of the corporation liable to pay the same from the time when it is payable until the same is paid in full. 219-d. Corrections and changes. If the amount of the annual net income of any corporation taxable under this article as returned to the United States treasury depart- ment is changed or corrected by the commissioner of in- ternal revenue or other officer of the United States or other competent authority, such corporation, within ten days after receipt of notice of such change or correction, shall make return under oath or affirmation to the tax commis- sion of such changed or corrected net income. The tax commission shall compute the taxes which, in view of such change or correction, would be due from such corporation for the fiscal or calendar year for which such change or cor- rection is made. If from such computation it appear that such corporation shall have paid under this article an ex- cess of tax for the year for which such computation is made, the tax commission shall return a statement of the amount of such excess to the comptroller, who shall credit such cor- poration with such amount. Such credit may be assigned [28] by the corporation in whose favor it is allowed to a cor- poration liable to pay taxes under this article, and the assignee of the whole or any part of such credit on filing with the commission such assignment shall thereupon be entitled to credit upon the books of the comptroller for the amount thereof on the current account for taxes of such assignee in the same way and with the same effect as though the credit had originally been allowed in favor of such as- signee. If from such computation it appear that an ad- ditional tax is due from such corporation for such fiscal or calendar year, such corporation shall, within thirty days after notice has been given as provided in section two hundred and nineteen-b of this chapter by the tax com- mission, pay such additional tax. 219-e. Warrant for the collection of taxes. If the tax imposed by this article be not paid within thirty days after the same becomes due, unless an appeal or other pro- ceeding shall have been taken to review the same, the comptroller may issue a warrant under his hand and official seal directed to the sheriff of any county of the state com- manding him to levy upon and sell the real and personal property of the corporation owning the same, found within his county, for the payment of the amount thereof, with the added penalties, interest and the cost of executing the warrant, and to return such warrant to the comptroller and pay to him the money collected by virtue thereof by a time to be therein specified, not less than sixty days from the date of the warrant. Such warrant shall be a lien upon and shall bind the real and personal property of the cor- poration against whom it is issued from the time an actual levy shall be made by virtue thereof. The sheriff to whom any such warrant shall be directed shall proceed upon the same in all respects, with like effect, and in the same man- ner as prescribed by law in respect to executions issued against property upon judgments of a court of record, and shall be entitled to the same fees for his services in execut- ing the warrant, to be collected in the same manner. 219-f . Action for recovery of taxes; forfeiture of char- ter by delinquent corporations. Action may be brought at any time by the attorney-general at the instance of the comptroller, in the name of the state, to recover the amount of any taxes, penalties and interest due under this article. If such taxes be not paid within one year after the same be due, and the comptroller is satisfied that the failure to pay [291 the same is intentional he shall so report to the attorney- general, who shall immediately bring an action in the name of the people of the state, for the forfeiture of the charter or franchise of any corporation failing to make such payment, and if it be found that such failure was intentional, judg- ment shall be rendered in each action for the forfeiture of such charter and for its dissolution if a domestic corpora- tion and if a foreign corporation for the annulment of its franchise to do business in this state. 219-g. Deposit of revenues collected. The state comptroller shall deposit all taxes, interest and penalties collected under this article in responsible banks, banking houses or trust companies in the state which shall pay the highest rate of interest to the state for such deposit, to the credit of the state comptroller on account of the franchise tax. And every such bank, banking house or trust company shall execute and file in his office an undertaking to the state, in the sum, and with such sureties, as are required and approved by the comptroller, for the safe keeping and prompt payment on legal de- mand therefor of all such moneys held by or on de- posit in such bank, banking house or trust company, with interest thereon on daily balances at such rate as the comptroller may fix. Every such undertaking shall have indorsed thereon, or annexed thereto, the approval of the attorney-general as to its form. The state comp- troller shall on the first day of each month make a verified return to the state treasurer of all revenues received by him under this article during the preceding month, stating by whom and when paid, and shall credit himself with all pay- ments made to county treasurers since his last previous return pursuant to section two hundred and nineteen-h of this* chapter 219-h. Disposition of revenues collected. The state comptroller shall on or before the tenth day of eaeh month pay into the state treasury to the credit of the general fund two-thirds of all taxes, interest and penalties received by him under this article during the preceding month, as ap- pears from the return made by him to the state treasurer. The balance of all taxes, interest and penalties collected and received by him under this article from any corpora- tion, as appears from the return made by him to the state treasurer, shall, on or before the tenth day of April, July, October and January, for the quarter ending with the last [301 day of the preceding month, be distributed and paid by him to the treasurers of the several counties of the state and disposed of by such treasurers, in accordance with the fol- lowing rules: 1. If the corporation has no real property or tangible personal property within the state, such payment shall be made to the county treasurer of the county in which is located the office at which its principal financial concerns within the state are transacted 2. If the corporation has real property or tangible per- sonal property, as shown by its report pursuant to section two hundred and eleven, in but one city or town of the state, such payment shall be made to the county treasurer of the county in which such city or town is located; 3. If the corporation has real property or tangible per- sonal property in more than one city or town of the state, as shown by its report pursuant to section two hundred and eleven, such payment shall be made to the county treas- urers of the counties in which such cities or towns are located in the proportion that the average monthly value of the real property and tangible personal property of such corporation in the cities and towns of such county bears to the average monthly value of all its real property and tangible personal property within the state; 4. In making such payment to a county treasurer, the state comptroller shall indicate the portion thereof to be credited to any city or town within the county on account of the location therein of its principal financial office or property as determined by the preceding subdivisions, and if such principal financial office or property is located in a village shall indicate the village in which it is located; if such principal financial office or property is located in a city or in a town outside of a village, the whole of such por- tion shall be paid to such city or town as hereinafter pro- vided ; if such principal financial office or property is located in a village, there shall be paid to such village as herein- after provided so much of such portion credited to the town as the assessed valuation of the real and personal property in such village or portion thereof in such town as appears by the last preceding town assessment-roll bears to twice the total assessed valuation of the real and personal property in such town as appears by such assessment-roll; 5. As to any county wholly included within a city such [311 payment shall be made to the chamberlain or other chief fiscal officer of such city and be paid into the general fund for city purposes; 6. As to any county not wholly included within a city the county treasurer shall within ten days after the receipt thereof pay to the chief fiscal officer of a city or to the chief fiscal officer of a village or to the supervisor of a town the portion of money received by him from the state comp- troller to which such city, village or town is entitled, which shall be credited by such officer to general city, village or town purposes. 219-i. Secrecy required of officials; penalty for viola- tion. 1. Except in accordance with proper judicial order or as otherwise provided by law, it shall be unlawful for any tax commissioner, agent, clerk or other officer or employee to divulge or make known in any manner the amount of in- come or any particulars set forth or disclosed in any report under this article. Nothing herein shall be construed to prohibit the publication of statistics so classified as to pre- vent the identification of particular reports and the items thereof, or the publication of delinquent lists showing the names of taxpayers who have failed to pay their taxes at the time and in the manner provided by section two hun- dred and nineteen-c together with any relevant informa- tion which in the opinion of the comptroller may assist in the collection of such delinquent taxes; or the inspection by the attorney-general or other legal representatives of the state of the report of any corporation which shall bring action to set aside or review the tax based thereon, or against whom an action or proceeding has been instituted in accordance with the provisions of sections two hundred and sixteen or two hundred and nineteen-f of this article. Reports shall be preserved for three years, and there- after until the state tax commission orders them to be destroyed. 2. Any offense against the foregoing provision shall be punished by a fine not exceeding one thousand dollars or by imprisonment not exceeding one year, or both, at the discretion of the court and if the offender be an officer or employee of the state he shall be dismissed from office and be incapable of holding any public office in this state for a period of five years thereafter. [321 219-j. Manufacturing and mercantile corporations exempt from personal property tax and from the provisions of sections twelve, twenty-seven, one hun- dred and eighty-two and one hundred and ninety-two of the tax law. After this article takes effect manufac- turing and mercantile corporations shall not be assessed on any personal property which for the purpose of this exemption shall include such machinery and equipment affixed to the building as would not pass between grantor and grantee as a part of the premises if not specifically mentioned or referred to in the deed, or as would, if the building were vacated or sold, or the nature of the work carried on therein changed, be moved, except boilers, ven- tilating apparatus, elevators, gas, electric and water power generating apparatus and shafting. After this article takes effect manufacturing and mercantile corporations shall not be assessed or taxed upon their capital stock as provided for in section twelve of this chapter, nor shall they be required to pay the franchise tax imposed by sec- tion one hundred and eighty-two of this chapter, nor to make the reports called for in sections twenty-seven and one hundred and ninety-two of this chapter. Nothing herein shall be construed to impair the obligation to pay franchise taxes due on or before the fifteenth day of Jan- uary, nineteen hundred and seventeen, or taxes on personal Eroperty or capital stock assessed in the year nineteen undred and sixteen or in the year nineteen hundred and seventeen before this article takes effect, whether pay- able in that year or not. But if any manufacturing or mercantile corporation shall pay taxes on personal prop- erty or capital stock assessed in any tax district in the year nineteen hundred and seventeen, such corporation shall be entitled to credit for the amount of such taxes so paid on its account for taxes first assessed against it under this article by the tax commission, not exceeding, however, the amount of such first assessment. 219-k. Limitation of time. The provisions of the code of civil procedure relative to the limitation of time of enforcing a civil remedy shall not apply to any proceeding or action taken to levy, appraise, assess, determine or en- force the collection of any tax or penalty prescribed by this article. NOTE: Sec. S, Chapter 726, Laws, 1917, provides that this Act shall take effect immediately upon its passage. [S3] UNIVERSITY OF CALIFORNIA LIBRARY