Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 92, no. 2365]: July 12, 1913

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REAL ESTATE BUILDERS AND NEW YORK, JULY 12, 1913 A REVIEW OF RECENT STATE TAX LEGISLATION I The Secured Debt Law Stands—Excess Condemnation to be Submitted to Popular Vote Again—A Concession to Builders—Inheritance Tax Exemptions lllilillillllllWIM^^^^^ ■B'iillBIB'JK'H llBl THE special session of the Legisla¬ ture now in session will have to take up State finances and taxation. From fifteen to seventeen million dol¬ lars must be provided by legislation, or the State treasury will face a deficit. The regular session ended May 3, and the Governor has disposed of all bills. A summary of tax laws proposed and enacted, and bills vetoed, is contained in a bulletin on tax legislation just issued by Secretary A. C. Pleydell of the New York Ta.x Reform Association. Local or administrative measures not of gen¬ eral interest are not included. More than two hundred bills were introduced relating to taxation. Governor Sulzer vetoed a bill enacted at the regular session, imposing a direct State tax which would have yielded about $10,000,000. He also vetoed a bill ap¬ propriating six million dollars to meet interest payments. Both of these amounts will have to be provided for by the special session. The various special taxes yielded in the last fiscal year (1911-12) about forty million dollars, and are estimated to yield the same amount for the present fiscal year (1912-13). Last year a direct State tax of eleven million dollars was imposed, making a total revenue for 1912-13 of fifty-one million dollars, which will be sufficient to meet the ap¬ propriations made last year. This year the appropriations are about two and a half million larger, and there is an equal amount needed to meet the increased sinking fund charges (interest and prin¬ cipal), while the revenue from special taxes will probably be about the same. Secured Debt Tax. A bill to repeal this tax was introduced at the request of State Tax Commis¬ sioner Schwab and passed the Senate at the regular session. Mr. Schwab has commenced a campaign to secure the passage of this repealer at the special session. Secretary Pleydell's view of the matter is contained in the follow¬ ing paragraph: "The secured debt ta.x enacted in 1911 provides a fair revenue at a reasonable rate from a class of securities that gen¬ erally escaped assessment, but in a few instances when found by the assessor were taxed at a confiscatory rate. The law was the result of several years' work by this Association, being the de¬ velopment of a bill introduced at our request in 1904 as a companion measure to the mortgage recording tax. To re¬ peal this law would mean a return to the old farce and injustice of trying to reach bonds under the general prop¬ erty tax." A bill to extend the secured debt tax so as to include securities that cannot now be registered either under that law or the mortgage recording tax, passed both houses but was vetoed by the Governor. The following other legisla¬ tion is noted in the report: Taxation of Tangible Personal Property Two bills were introduced providing for the taxation of tanglible personal property of corporations in the district where located, without any ofifset for debt. Several hearings were given on these measures. The Tax Reform As¬ sociation opposed them as being against the well-established policy of the State, and as being unconstitutional if applied only to corporations and not to indi¬ viduals or firms. They were not re¬ ported. A bill was introduced on behalf of the State Board of Tax Commissioners greatly increasing their powers and, in eflfect, authorizing them to establish a listing system. This was opposed by the association before the Senate tax com¬ mittee and in the press. The bill was not reported. Laws Enacted. Practically all domestic corporations and some foreign corporations are af¬ fected by an amendment to the stock transfer tax which provides that "every association, company or corporation tliat shall keep or cause to be kept within the State of New York a place for the sale, transfer or delivery of its stock, shall within ten days after this act shall take effect" (July 1) file in the office of the State Comptroller a certificate giving the names of the per¬ sons conducting the business or, if a corporation, the place of business and when and where incorporated. Failure to file such certificate is a misdemeanor involving ' a penalty of from one hundred to five hundred dol¬ lars or imprisonment for not more than six months, or both. By the same section, every person, firm, company, association or corpora¬ tion engaged in whole or in part in making sales or agreements to sell shares of stock or conducting a stock brokerage business, must also register, under a similar penalty. The stock transfer tax has also been amended to provide that where shares are issued without designated monetary value, the tax shall be at the rate of 2 cents per share. Excess Condemnation, Constitutional Amendment. .\ proposed amendment of section 7 of article 1 of the Constitution was passed for the second time, and will be voted on hy the people in November. The amendment makes two additions to the section. The first provides that when private property is taken for pub¬ lic use the compensation may be ascer¬ tained "by the Supreme Court with or without a jury, but not with a referee." This is in addition to the present re¬ quirement of a jury or three commis¬ sioners, and is intended to reduce the cost of such proceedings. The second change adds the following in regard to "excess condemnation": "The legisla¬ ture may authorize cities to take more land and property than is needed for actual construction in the laying out, widening, extending or relocating parks, public places, highways or streets; pro¬ vided, however, that the additional land and property so authorized to be taken shall be no more than sufficient to form suitable building sites abutting on such park, public place, highway or street. After so much of the land and property has been appropriated for such park, public place, highway or street as is needed therefor, the remainder may Ije sold or leased." The Conference of Mayors of the cities of the State, held at Binghamton last month adopted res¬ olutions approving this amendment. The portion referring to excess con¬ demnation has been revised and the area that can be taken is limited. This change meets the chief objection to the former amendment. Amendments in general similar to the above were submitted separately at the 1911 election and carried in the City of New York, but were defeated by the adverse vote in other sections of the State. Revision of the Tax Law. The Governor approved an item in¬ troduced in the supply bill in the last days of the session, and which provides that he shall appoint a commission of five "to act with the State Board of Tax Commissioners in preparing a codifica¬ tion and revision of the tax law" and other laws relating to taxation. The Board is authorized to employ "experts and other employees" to facilitate the work, $25,000 being appropriated for ex¬ penses. Buildings Under Construction. The New York City charter has been amended to provide that "a building in course of construction, commenced since the preceding first day of October and not ready for occupany, shall not be assessed." (New section 89-a, by Ch. 324). Heretofore buildings unfinished on assessment day (October 1) were as¬ sessed at an estimate of their value as partially completed. This was a diffi¬ cult problem for the assessors and the valuation of necessity was an arbitrary estimate. This change in the law will encourage new buildings, especially where they are to replace old buildings bringing in a rental. In a city where values are as high as in New York, owners of old build¬ ings naturally hesitate when reconstruc¬ tion means not only loss of rental but a heavy outlay for taxes during rebuild¬ ing. Part of this outlay will now be saved by the exemption of the building