A foreign banking corporation, engaged in the business of buying and selling drafts and bills of exchange on its branches, and having a branch in New York City, where such drafts were drawn and paid, cannot be said, in doing this, to come within the exemption of subdivision 13, § 4 Tax Law, because the drafts and bills are not sent here to an agent for collection, but are held by the corporation itself and belong to it in its business conducted in this state. People ex rel. International Banking Co. v. Raymond, 117 App. Div. 62 (1907); distinguishing People ex rel. Bank of Montreal v. Com'rs, 59 N. Y. 40.

Deposits in savings banks; accumulations in domestic insurance companies and co-operative loan associations; premium reserve.— The deposits in any bank for savings which are due depositors, the accumulations in any domestic life insurance corporation, held for the exclusive benefit of the insured, other than real estate and stocks, now liable to taxation; the accumulations of any incorporated co-operative loan association upon the shares of such association held by any person; and personal property of any corporation, person, company or association transacting the business of fire, casualty or surety insurance in this state equal in value to the unearned premiums required by the laws of this state, or the regulations of its insurance department, to be charged as a liability. (Subd. 14, sec. 4, Tax Law; same subd. and sec. of former Tax Law, as am'd by chap. 618, L. 1901.)

Source: Ch. 456, L. 1857, sec. 4, and ch. 689, L. 1892, sec. 187, as am'd by ch. 705, L. 1894.

Premium reserve.-The effect of the amendment of 1901 exempting the "premium reserve" or fund required to be kept by insurance companies under the Insurance Law as a liability for the payment of unearned premiums, was to nullify the decision in People ex rel. National Surety Co. v. Feitner, 166 N. Y. 130 (1901) and other cases cited infra. (Chapter VI.)

Deposits. Since the enactment of Laws of 1857, chapter 456, section 4, a savings bank cannot be taxed on the deposits due from it. People ex rel. Ithaca Savings Bank v. Beers, 67 How. Pr. 219 (1883). Nor can deposits due depositors in

banks for savings be assessed to the depositors. People ex rel. Heermance v. Dederick, 158 N. Y. 414 (1899).

Surplus. It has been held that the surplus of a savings bank is exempt from local taxation, since under the Banking Law the interest in the property held by a savings bank is vested in the depositors. People ex rel. Newburgh Savings Bank v. Peck, 157 N. Y. 51 (1898). The surplus is, however, liable to state taxation under section 189 of the Tax Law.

Collections by co-operative life and casualty insurance companies.-Moneys collected in the course of the business of any corporation, association or society doing a life or casualty insurance business, or both, upon the co-operative or assessment plan, and which are to be used for the payment of assessments, or for death losses or for benefits to disabled members. (Subd. 15, sec. 4, of present and former Tax Law.)

Source: L. 1884, ch. 353, sec. 1.

Stock in corporations not liable to taxation.- The owner or holder of stock in an incorporated company liable to taxation on its capital, shall not be taxed as an individual for such stock. (Subd. 16, sec. 4, of present and former Tax Law.)

Source: 1 R. S., ch. XIII, title I, sec. 7.

Shares of stock of corporations created under the laws of this state are not taxable in the hands of stockholders. Nor are shares of stock of corporations created by other states taxable, for the presumption is that they are taxed upon their capital in the home states. Negotiable bonds being evidence of a fixed indebtedness are taxable at their actual value. People ex rel. Trowbridge v. Commissioners of Taxes, 4 Hun, 595 (1875); affirmed 62 N. Y. 630.

Part Personal Property of a domestic mutual life insurance company. The personal property in excess of $100,000 of a mutual life insurance corporation, incorporated in this state before April 10, 1849. (Subd. 17, sec. 4, of present and former Tax Law.)

Source: Ch. 469, L. 1853; ch. 83, L. 1855.

B-PROPERTY EXEMPT BECAUSE SUCH PROPERTY HAS PAID A TAX

Mortgages paying recording tax exempt under mortgage tax law from local taxation.-All mortgages on real property in New York state recorded on or after July 1, 1906, and paying the tax required by the Mortgage Tax Act shall be exempt from all local taxation except mortgages held by banks and included in the valuation of the bank stock. Mortgages on real property in the state recorded before that day may obtain this exemption by complying with the provisions of the Act.

(See Mortgage Tax Law, Ch. 729, L. 1905, as amended by Ch. 532, L. 1906, Ch. 340, L. 1907.)

"Secured Debts" paying the stamp tax required by Art. 15 exempt.- Under Article 15 of the Tax Law as added by Chapter 802 of the Laws of 1911, "secured debts" shall be exempt from taxation, provided the stamp tax of one-half percentum on the face value thereof is paid to the office of the state comptroller, as prescribed by section 330 of the Tax Law (Article 15).

THE STATUTE:

Definitions. The words "secured debts," as used in this article, shall include:

(1) Any bond, note or debt secured by mortgage of real property recorded in any state or country other than New York and not recorded in the state of New York;

(2) Any and all bonds, notes or written or printed obligations, forming part of a series of similar bonds, notes or obligations, the payment of which is secured by a mortgage or deed of trust of real or personal property, or both, which mortgage or deed of trust is recorded in some place outside of the state of New York and not recorded in the state of New York;

(3) Any and all bonds, notes or written or printed obligations, forming part of a series of similar bonds, notes or obligations, which are secured by the deposit of any valuable securities, as collateral security for the payment of such bonds, notes or obligations, under a deed of trust or collateral agreement held by a trustee;

(4) Any bonds, debentures or notes, forming part of a series of similar bonds, debentures or notes, which by their terms are not payable within one year from their date of issue and which are not issued for an amount exceeding one thousand dollars for each such bond, debenture or note, and the payment of which is not secured by the deposit or pledge of any collateral security. The term "secured debts" as used in this article shall not include securities held as collateral to secure the payment of bonds taxable under this article or under article eleven of this chapter. (Sec. 330 Tax Law, added by L. 1911, ch. 802.)

No deduction of debts against taxable secured debt.-The owner of any secured debt, on which the tax provided for in this article has not been paid, shall be assessed upon such secured debt in the taxing district in which he resides, upon the fair market value of such secured debt and no deduction for the just debts owing by him shall be allowed against the assessed value of such secured debt, as provided in section twenty-one of this chapter or elsewhere in this chapter or in any other law of this state. (Sec. 336 Tax Law, added by L. 1911, ch. 802.)

Motor vehicles paying the registration fee are exempt from

taxation.

Motor vehicles paying the registration tax.-"Fees in lieu of taxes. The registration fees imposed by this article upon motor vehicles, other than those of manufacturers and dealers and those used solely for commercial purposes, shall be in lieu of all taxes, general or local, to which motor vehicles may be subject. (Added by L. 1910, ch. 374.)"

Personal property of Trust Companies.-The personal property of trust companies taxable for state purposes under section 188 Tax Law is exempt from taxation for all other purposes under section 205 of the Tax Law. Infra, Part III.

Plank road or turnpike company.- A plank road or turnpike company is exempt from taxation, until its surplus annual receipts from tolls shall exceed seven per cent. of the first cost of the road. Jamaica B. R. R. Co. v. City of Brooklyn, 123 N. Y. 375 (1890).

(For provisions of the exemption, see section 141 of Transportation Corporation Law.)

II. PROPERTY OF STOCK CORPORATIONS EXEMPT FROM TAXATION, BY VIRTUE OF THE FEDERAL LAWS OR CONSTITUTION:

Property of the United States.-Property of the United States cannot be taxed under subdivision 1, section 4, Tax Law. Nor can federal securities under the general limitation contained in article I, section 8, United States Constitution. Weston v. Charleston, 2 Peters, 456; Home Ins. Co. v. New York, 119 U. S. 129 (1886). That the state may not tax the agencies or instruments of the federal government was firmly established by the case of McCullough v. Maryland, 4 Wheat. 316 (1819).

Under this heading United States legal tender notes or treasury notes (greenbacks) were formerly not taxable. Bank v. Supervisors, 7 Wallace 26, rev'g Bank v. Supervisors, 37 N. Y. 21 (1876), and gold or silver certificates and national bank notes came under the same limitation; but by an act of Congress passed in 1894 (28 U. S. Statutes at Large, 278) these exemptions are repealed and the states may now tax this class of property.

Patent rights.-The amount invested in patent rights is not taxable as personal property, People ex rel. N. J. Tel Co. v. Neff et al., 15 App. Div. 8 (1897), nor are patent rights as distinguished from the property produced by application of the invention within the taxing power of the state. People ex rel. Edison Elect. Illum. Co. v. Neff, 156 N. Y. 417 (1898).

Imports.-A tax imposed on exports or imports is invalid. Brown v. Maryland, 12 Wheat. 419 (1827). The taxing power of the state may begin when the original package in which the goods are imported is broken. May v. New Orleans, 178 U. S. 496. It is thus important to determine what is an "original package." In the last mentioned case, in which four judges dissented, it was held to be the box or case in which the goods were shipped.