goods of a foreign corporation kept in a New York office for sale, are capital invested, notwithstanding that the proceeds are remitted to the home office.

When foreign corporations taxable and what is "doing business" in state. The fact that a foreign corporation has been authorized to do business in the state and has an office here for the purpose of holding directors' meetings and paying dividends, keeping a sufficient bank account here to pay such dividends, does not make it "doing business" in the state, under section 7. People ex rel. Dives Pelican Co. v. Feitner, 77 App. Div. 190 (1902).

Where a foreign banking company had an agency permanently established in the city of New York to which it transmitted funds to be employed in temporary loans, subject at all times to its control and draft, it was not liable to taxation here for the funds so employed, and the exemption from taxation of foreign capital sent to agents here for investment, etc., under Laws of 1851 (Chapter 176, Section 2), was not removed by the act of 1855 (Chapter 37), which subjects non-residents doing business in this state to taxation on the moneys employed in such business. People ex rel. Bank of Montreal v. Com'rs of Taxes, 59 N. Y. 40 (1874); rev'g 1 Thomp. & C. 630. But where a foreign banking corporation having an agency in New York City is engaged in the business of selling its own drafts on its foreign branches, and of paying or collecting the drafts drawn on it by its foreign agencies, such corporation is engaged in business here, even though it has filed no certificate under the Corporation Law. Nor are the drafts sent here for collection exempt under Subd. 13, Section 4, Tax Law, when they are not in the hands of an agent for collection, but held by the corporation itself, doing business in the state. People ex rel. International Banking Co. v. Raymond, 117 App. Div. 62 (1907) distinguishing People ex rel. Bank of Montreal v. Com'rs, supra.

L

A foreign corporation maintaining a leased sales office in New York for the sale of goods made in France, keeping a bank account here, and remitting proceeds less the New York expenses to France, is taxable upon the value of the goods on hand for sale. People ex rel. Farcy & Oppenheim Co. v. Wells, 183 N. Y. 264 (1905), reversing 104 App. Div. 629.

The last named case approves People ex rel. Durand Ruel Co. v. Wells, 180 N. Y. 506 (1903), the facts in both cases being similar, and at the same time, distinguished People ex rel. Tower Co. v. Wells, supra, where the New York office was a mere conduit or agency for the shipment of goods from the home office and thence re-shipped to other states. Where a foreign corporation has an office in New York maintained partly at its own expense and partly by a local agent paid on commission, using the office for soliciting orders and the delivery of goods, after they are approved at the home office in Massachusetts, it was held, that notwithstanding the filing of the certificate under section 16, its business here was merely transient, and not taxable under section 7. People ex rel. Goetz Mfg. Co. v. Wells, 42 Misc. 86; aff'd 93 App. Div. 613, without opinion (1904).

When open accounts and bills receivable taxable.— The taxable character of open accounts and bills receivable depends upon whether the goods which they represent would have been taxable if still unsold. People ex rel. National Sewing Machine Co. v. Feitner, New York Law Journal, March 15, 1899.

When foreign insurance companies liable to taxation.— Securities other than United States stock deposited by foreign insurance company with the comptroller as security for policy holders under Laws of 1853, Chapter 463, to enable it to do business in the state, are subject to taxation. International Life Assurance Soc'y v. Com'rs of Taxes, 28 Barb. 318 (1858). So it has been held as to bonds and mortgages deposited by a for

eign insurance company with the superintendent of insurance. Smyth v. International Life Ins. Co., 35 How. Pr. 126 (1868). The fact that a foreign insurance company has ceased to issue new policies within the state, and confines its business to receiving yearly premiums and paying losses on outstanding policies does not exempt it from taxation. Ibid.

Facts establishing a continuous business.-Where the business of a foreign corporation in this state is continuous and permanent, manufacturing as well as selling its goods, the value of merchandise at the place designated by it as its principal place of business in this state is properly taxable under section 7 of Tax Law, even though a portion of the goods was manufactured without the state. People ex rel. Armstrong Cork Co. v. Barker, 157 N. Y. 159, dist'g People ex rel. Parker Mills v. Com'rs, 23 N. Y. 242.

A foreign corporation filing a certificate under section 16 of the General Corporation Law, having warerooms for goods manufactured without the state, salesrooms, a general manager and office force, traveling salesmen, selling its goods on credit in the state, the bills being paid at its New York office, was held to have established a continuous business and was taxable on its capital invested in business in this state. People ex rel. Crane Co. v. Feitner, 49 App. Div. 108, citing People ex rel. Armstrong Cork Co. v. Barker, 157 N. Y. 159; see, also, People ex rel. Sherwin-Williams Co. & Feitner (Tax of 1900), 60 App. Div. 628; aff'd 167 N. Y. 622.

Nor is it a controlling factor that the moneys were immediately remitted to the home office and the goods were not manufactured here, if all the other evidential facts point to a continuous business. People ex rel. Reversible Collar Co. v. Feitner, 31 Misc. 556 (1900).

Where a foreign corporation files a certificate under section 16 of the General Corporation Law, and maintains an office,

salesroom, storage room, keeps goods here for the purpose of sale and sells them within the state, these are all facts to be taken into account in determining whether the corporation is engaged in a continuous business and taxable in this state. People ex rel. Carey Mfg. Co. v. Com'rs, 39 Misc. 282, Sp. Term (1902).

Foreign corporation taxable on bills receivable.— A foreign corporation is taxable for local purposes on credits and bills receivable, due it for merchandise sold by it in the course of the transaction of its business in New York state. People ex rel. Yellow Pine Co. v. Barker, 23 App. Div. 524 (1897); aff'd on opinion below, 155 N. Y. 665; see, also, People ex rel. Henry McShane Mfg. Co. v. Barker, 23 App. Div. 530 (1897), aff'd 155 N. Y. 665, no opinion.

Deductions of foreign corporations; debts not to be deducted generally.- Section 7 of the Tax Law does not contemplate a deduction by non-residents of their general indebtedness from the sums invested in this state. The debts of a non-resident, it is to be assumed, will be deducted at its domicile. People ex rel. Thurber-Wyland Co. v. Barker, 141 N. Y. 118 (1894).

Debts growing out of investment deductible. (ThurberWhyland case distinguished).—While a foreign corporation engaged in business in this state may not deduct all its debts, wherever and upon whatever cause incurred, the indebtedness it has incurred in the transaction from which the purchase of the property is the result is no part of the sum it has invested in such purchase, and no assessment can be made which includes the amount of that indebtedness. People ex rel. HeckerJones-Jewell Milling Co. v. Barker, 147 N. Y. 31; rev'g 86 Hun, 148 (1895).

The deduction of indebtedness in the case of foreign corporations, therefore, proceeds on the theory of ascertaining the specific investment, which can only be determined by deducting the indebtedness arising out of the investment in the state. It has been stated (supra), that the term "actual value" when used in reference to the manner of assessing the capital stock of domestic corporations comprehended an allowance for just debts. People ex rel. Rochester Ry. Co. v. Pond, 37 App. Div. 330 (1898). And, as under the statute, non-residents are to be assessed "to the same extent" as residents, it is not unreasonable to assume that the actual value of the capital invested of a foreign corporation is the gross sum in business in the state lessened by the particular indebtedness arising out of that business. In the taxation of corporations for state purposes, an analogous, but not quite parallel, basis of arriving at the capital employed in the state is used. In that case, also, the general indebtedness cannot be deducted, but only that portion of the indebtedness which the amount of assets within the state bears to the entire assets of the company. People ex rel. Hyde & Sons v. Miller, 90 App. Div. 599 (1904).

Jurisdiction of assessors under section 7 depends on facts stated in statute.—The question as to whether persons or property are assessable under the statutes is a jurisdictional one, and is always open to inquiry when the authority to make an assessment is assailed. Under the act of 1855, Chapter 37, taxing non-residents doing business in this state, the jurisdiction of the assessors depends on the existence of the facts stated in the statute. They cannot acquire jurisdiction by determining that they have it. McLean v. Jephson, 123 N. Y. 142.

Exemptions and limitations.-For that portion of a nonresident's capital invested in business not liable to taxation by reason of exemption or constitutional limitation see Chapter II,

supra.