by the Supreme Court of New York, stated that the method by which the assessment for the year 1903 was arrived at was as follows:

"On the statement submitted to us (Schedule A) it appeared that the relator was a corporation organized under the laws of the Kingdom of Great Britain and Ireland, that it had procured a certificate authorizing it to do business in this State, that the business of the corporation proposed to be carried on within this State, stated in its application under the provisions of chapter 687 of the Laws of 1892, was importers, that the place within the State named in said application as its principal place of business was 409 West 14th street, that the company transacted business within this State at No. 409 West 14th street, in the City of New York, Borough of Manhattan, and that the company was assessed by the State Comptroller for $124,000.

"It further appeared that the relator kept a wareroom and offices in the Borough of Manhattan, to which it sent its products from Ireland in unbroken original packages to be sold, that on all these goods it paid-duties to the United States, that the proceeds of the goods were at once remitted to the main office in Dublin, after reserving the necessary amount for paying the expenses of the business conducted in the City of New York, that the value of the goods on hand, as shown in the statement, was about the average amount of the goods usually kept here for sale, that the greater part of the cash on hand and in bank was in process of transmission to the main office, that the bank account was to a very large extent kept to cover the payment of duties on the goods shipped here for sale, and that the entire amount of bills receivable resulted from the sales of imported goods in unbroken original packages, as did the cash on hand and in bank.

The amount receivable on notes and open accounts

was stated to be.

The value of goods, wares and merchandise in this

State...

$111,751.53

45,841.21

Argument for Plaintiff in Error.

208 U.S.

original packages.

The value of safes, fixtures and furniture in this
State.

Cash on hand and in bank..

Cost price of imported goods on hand in unbroken

Amount of bills and accounts payable, incurred

$ 797.68

6,122.63

45,841.21

for items included in the sales and assets enu

merated

24,053.91

"It was admitted that the amount invested in business in this State was $797.68, which was the value of the relator's safes, fixtures and furniture in this State.

"From all this evidence we determined that the relator had on the second Monday of January, 1903, established and was conducting a permanent and continuous business in this State.

"We further determined that the amount receivable on notes and open accounts, and the cash on hand and in bank, constituted capital of the relator invested in its business in this State, and that such items were properly assessable by us. We accordingly fixed the assessment against the relator for the year 1903 for capital invested in business in this State at the sum of $94,600, which amount was approximately the aggregate value of the amount receivable on notes and open accounts, the safes, fixtures and furniture in this State, and the cash on hand and in bank, less the amount of bills and accounts payable incurred for the items included in the sales and assets enumerated in said statement."

The assessment was confirmed when brought for review upon certiorari before the New York Supreme Court, which judgment was affirmed in the Appellate Division, and the latter judgment was affirmed by the Court of Appeals (184 N. Y. 275), from which judgment, upon remittitur, the judgment was rendered in the Supreme Court to which this writ of error is prosecuted.

Mr. Edmund Wetmore for plaintiff in error:

A state tax upon the proceeds received for the sale of an

208 U.S.

Argument for Plaintiff in Error.

article in original and unbroken packages, imported only for sale, and upon which duties have been paid, and where the only disposition made of said proceeds is to collect them and at once remit them to the importer abroad, after deducting the amount of duties paid and the expenses necessarily incident to said importation and sale, is a tax upon imports and a violation of the Constitution of the United States. Brown v. Maryland, 12 Wheat. 436; Fairbank v. United States, 181 U. S. 283, 295; The People v. Maring, 3 Keyes, 374, 376.

A tax upon the sale of imported goods, as above set forth, is not affected by the form of the tax, whether it is eo nomine upon the right to sell, or upon the proceeds, or upon the business of importing, or in any other form, provided it is the same in effect as if it was upon the right to sell, and must be paid by the importer in like manner as a direct duty on the article itself would be paid. Cook v. Pennsylvania, 97 U. S. 566; McCulloch v. Maryland, 4 Wheat. 436; Crandall v. State of Nevada, 6 Wall. 35; Case of the State Freight Tax, 15 Wall. 232; Western Union Tel. Co. v. Alabama, 132 U. S. 472; Fargo v. Michigan, 122 U. S. 230; Postal Telegraph Cable Co. v. Adams, 155 U. S. 688; Philadelphia Steamship Co. v. Pennsylvania, 122 U. S. 236.

The tax complained of was, in effect, levied on the goods of the plaintiff in error, and paid by the plaintiff in error for the right to sell them, and the proceeds from which the tax was deducted had not become part of the common mass of property within the State of New York, nor were they invested therein.

The proceeds of the imported goods represented by bills receivable and cash in bank were not taxable by the State, as they had not become part of the common mass of property within the State and were not invested in business there. Their identity as the proceeds of the sale of the goods in original packages was never lost. They were transmitted to the plaintiff in error as soon as they were transmissible. The plaintiff in error is a foreign resident, did no other business in the State VOL. CCVIII-2

Argument for Defendants in Error.

208 U.S.

of New York except the sale of its products in original packages and the collection and remittance of the said proceeds, and there is no proof or assertion that it had any other property in the State than said goods and proceeds outside of office furniture and fixtures. The said proceeds were not invested in the State of New York and did not constitute taxable capital invested in business in said State.

The fact that the plaintiff in error does business in New York is immaterial. Its claim is that it has received from the United States the right to sell certain goods while in their original packages, whether said sales are made in the course of that business or not, and that the State cannot impose a tax, in any form which directly impairs that right, whether the said goods are or are not capital invested in the State, and that the tax on the proceeds of said sale is a direct impair:nent of that right.

The tax cannot be sustained simply as a tax on business. Crandall v. State of Nevada, 6 Wall. 35, and cases cited supra.

The sale of the goods in the original packages is the conversion of said goods into money. The right to make that conversion is the very thing which the Constitution protects. Mere conversion of the imported goods which are an asset of the business, into an asset of another form, namely, money paid or to be paid, is not such an incorporation of the proceeds with the general property of the country as renders them subject to state taxation. People ex rel. National Sewing Machine Co. v. Feitner, N. Y. Law Journal, March 15, 1899.

The fact that part of the proceeds represented by deferred payments may be retained and expended for expenses incidental to the original sales or in payment of duties on subsequent importations because duties must be paid in advance of taking the goods out of the custom house, does not relieve the tax under consideration from its unconstitutional character.

Mr. George S. Coleman, with whom Mr. Francis K. Pendleton was on the brief, for defendants ir error:

The credits and moneys of the plaintiff in error, representing

proceeds of sales of its goods within the State of New York, constituted capital invested in business in said State under the provisions of the tax law.

From the fact of the final confirmation of the assessment in this case by the highest court of the State of New York, it will, we assume, be accepted as the law of that State, without argument or citation of other authorities, that cash in hand or in bank and bills and accounts receivable, being the proceeds of goods sold in regular course of a continuous business, constitute capital invested in such business. People ex rel. Farcy & Oppenheim Co. v. Wells, 183 N. Y. 264.

The tax imposed upon the credits and moneys representing proceeds of sales did not contravene the provisions of the Federal Constitution.

The tax imposed on the assessment in question violates none of the rules established by the highest court. The value of the imported goods in original unbroken packages was deducted from the total assets, so that there is no tax imposed on imports as such. It is not a license tax that an importer must pay before he can sell, nor a tax upon the sales made by him throughout the year. It is merely the annual tax on a part of the general mass of taxable property in the State. Brown v. Maryland, 12 Wheat. 419; Cook v. Pennsylvania, 97 U. S. 566, and Warring v. Mayor, 8 Wa'l. 10, distinguished.

MR. JUSTICE DAY, after making the foregoing statement, delivered the opinion of the court.

It is the contention of the plaintiff in error that the assessment upon $94,617.93, made upon office furniture, cash on hand and in bank and the amount receivable upon bills and accounts payable, is void, except as to the item of office furniture, because of the protection afforded by the Constitution of the United States against taxes by States upon imports.

As to the open accounts which might be included in the bills receivable, the Court of Appeals declined to pass upon the