The present law reads as follows:

License tax on foreign corporations.-Every foreign corporation, except banking corporations, fire, marine, casualty and life insurance companies, co-operative fraternal insurance companies, and building and loan associations, doing business in this state, shall pay to the state treasurer, for the use of the state, a license fee of oneeighth of one per centum for the privilege of exercising its corporate franchises or carrying on its business in such corporate or organized capacity in this state, to be computed upon the basis of the capital stock employed by it within this state, during the first year of carrying on its business in this state, which first payment shall not be less than ten dollars; and if any year thereafter any such corporation shall employ more than eight thousand dollars of its capital stock within this state on which a license fee has not been paid then a license fee at the rate of one-eighth of one per centum shall be due and payable upon any such increase. The measure of the amount of capital stock employed in this state shall be such a portion of the issued capital stock as the gross assets employed in any business within this state bear to the gross assets wherever employed in busiFor purposes of taxation, the capital of a corporation invested in the stock of another corporation shall be deemed to be assets located where the physical property represented by such stock is located. The amount of capital upon which such license fees shall be paid shall be fixed by the state tax commission, which shall have the same authority to examine the books and records in this state of such foreign corporations, and the employees thereof, as it has in the case of domestic corporations, and the comptroller shall have the same power to issue his warrant for the collection of such license fees as he now has with regard to domestic corporations. No action shall be maintained or recovery had in any of the courts in this state by such foreign corporation after thirteen months from the time of beginning such business within the state, without obtaining a receipt from the comptroller for the payment of the license fee upon the capital stock employed by it within this state during the first year of carrying on its business in this state. (Former sec. 181, Tax Law, as amended by L. 1910, ch. 340, L. 1915, ch. 317, L. 1917, ch. 490.)

ness.

Source: Ch. 240, L. 1895, without change of substance.

Recent Amendments.-The amendment of 1915 gave the assessing power to the state tax commission instead of the comptroller, but gave the state comptroller the power to collect the tax. The 1917 amendments fixed the minimum tax at $10.00 and gave the tax de

partment the power to levy a license tax on foreign corporations, irrespective of whether they had complied with the provisions of the General Corporation Law, or not. There was some question as to whether the tax department had such power.

When the license tax should be paid.-The tax should be paid at any time between the twelfth and thirteenth month after the corporation has commenced to do business in the state. People ex rel. Dutilh-Smith Co. v. Miller, 90 App. Div. 545 (1904).

Change in computing amount of capital stock.-While the basis of the tax remains the same as in the past, viz., "Capital stock employed within the state," the method of computing the tax, as in the case of a domestic corporation, has been materially changed by the amendment of 1906. (Ch. 474.) Formerly it was the amount of capital employed within the state, regardless of the share stock. People ex rel. Consolidated Ginseng Co. v. Kelsey, 182 N. Y. 526; affirming 105 App. Div. 175 (1905); People ex rel. National Enameling Co. v. Miller, 112 App. Div. 880 (1906). Now, it approximates very closely to the organization tax paid by the domestic corporation upon its incorporation, except that the tax is computed on the issued share stock and not on the authorized stock, as in the organization tax paid by domestic corporations. The use of the words "issued capital stock" in the amendment of 1906 clearly shows that the par value of the issued stock was to be the basis of taxation rather than the appraised value. People ex rel. Elliott-Fisher Co. v. Sohmer, 148 App. Div. 514 (1911). Affirmed 206 N. Y. 634.

The purpose of the legislature in passing the law authorizing the payment of a license tax by foreign corporations (Sec. 181) as evidenced by the recommendation of the Comptroller in his report for the year 1895, was to impose upon foreign corporations a tax similar to the organization tax imposed upon domestic corporations, and thus do away with any favor that the former may have enjoyed. Despite this fact the courts felt obligated to follow former decisions and to declare that the tax was not to be computed upon the par value of the stock of the foreign corpora

tion, but rather upon the amount of capital employed in the state. (See Ginseng case supra.)

The decision in this case caused the Comptroller to ask for an amendment to Section 181, and in 1906 there was added to the section the words: "The measure of the amount of capital stock employed..." etc. So the tax is now computed on par value. Elliott-Fisher Co. v. Sohmer, supra.

Foreign corporations not citizens.-Foreign corporations are not citizens within the meaning of the fourteenth amendment to the United States Constitution, guaranteeing equal privileges to citizens of other states. Nor are they citizens within the meaning of section 2, article 4, of the United States Constitution, entitling citizens of each state to all privileges and immunities of citizens of the several states, and the right of a state to exclude foreign corporations is well settled. A state may impose on a foreign corporation a tax for the privilege of doing business in the state measured by the amount of capital employed in such business within this state. People ex rel. Parke, Davis & Co. v. Roberts, 91 Hun, 158 (1895); aff'd 149 N. Y. 608, 171 U. S. 658.

The United States Supreme Court has held that a license tax imposed on a drummer or sales agent was unconstitutional. Carson v. Maryland, 120 U. S. 502 (1887); Robbins v. Shelby County Taxing District. Id. 489, but there is a distinction between a license tax on a sales agent or drummer sent here to make sales and a tax on a corporation bringing property into the state and carrying on business. People ex rel. Southern Cotton Oil Co. v. Wemple, 61 Hun, 83 (1891); aff'd 131 N. Y. 64.

When foreign corporations carry on business or employ capital in the state. In order that corporations shall be liable to pay the license tax under section 181 of the Tax Law they must (1) carry on business in the state, and (2) employ capital in such business. These are also conditions precedent before foreign corporations are liable to taxation for the annual franchise tax under section 182 of the Tax Law, and are discussed under that head.

Foreign corporations to file certificate before doing business.-Section 15 of the General Corporation Law requires every foreign stock corporation, with the exception of moneyed corporations, to file a certificate with the secretary of state, giving certain information as to business, capital and officers, before it can do business in the state. Failing to do this it subjects itself to certain disabilities, such as being unable to maintain an action in the courts of the state upon any contract made by it in the state.

If it files such certificate, however, it may be considered as prima facie evidence that it is doing business in the state, as has been held in the case of corporations assessed for local purposes. People ex rel. Armstrong Cork Co. v. Comm'rs, 157 N. Y. 159 (1898). The failure to file the certificate does not, on the other hand, imply that the corporation is not engaged in business in the state.

Failure to pay license tax bar to action.-The last paragraph of section 181 requires every foreign corporation to pay the license fee or tax within thirteen months after beginning to do business in the state. No action can be maintained in any court of the state after this time, if the fee has not been paid. The provisions of this section should not be confused with section 15 of the General Corporation Law (above referred to) requiring every foreign corporation doing business in the state to file a certificate with the secretary of state before it can maintain an action upon any contract made by it in the state. A corporation may undoubtedly be engaged in business in the state without having capital employed in such business, and while the doing of business in the state would subject it to the provisions of section 15 of the General Corporation Law, it need not pay the license fee under section 181 of the Tax Law required of a corporation engaged in business and employing its stock in the state. A number of the decisions hold that a complaint by a foreign corporation, which alleges that it is doing business in the state must also affirmatively show that it has filed a certificate under section 15 of the Corporation Law. Welsbach v. Norwich Gas. Co., 96 App.

Div. 52, affirmed without opinion, 180 N. Y. 533; Wilson McNeill Co. v. Standard Oil Co., 110 App. Div. 888; Wood & Sellick Co. v. Ball, 114 App. Div. 744 (1906); aff'd 190 N. Y. 219. The general requirements of section 15 of the General Corporation Law have been confounded with the provisions of section 181 of the Tax Law. This would seem to be so from the case of Reedy Elevator Co. v. American Grocery Co., 24 Misc. 678 (Appellate Term), holding that compliance with section 181 is a jurisdictional fact and must be set forth in an application for attachment. In Kinney v. Reid Ice Cream Co., 57 App. Div. 208, it was held that if it be shown in the pleadings that the foreign corporation has been engaged in business for more than a year, having capital employed in such business, and has not paid the license tax under section 181 of the Tax Law, a demurrer to the pleadings will lie, and that the assignee of the foreign corporation, defaulting in this respect, is in no better position than the corporation itself. The court said in this case: "We see no reason why the rule applied in the cases cited in reference to section 15 of the General Corporation Law should not apply to section 181 of Chapter 908 of the Laws of 1896." This case was followed by Halsey v. Jewett Dramatic Co., 114 App. Div. 420 (1906). The dissenting opinion in the last named case, by Judge Houghton, is valuable, in that it points out the distinction in the objects of section 15 of the General Corporation Law and section 181 of the Tax Law. While it would be necessary affirmatively to allege the filing of the certificate under the former section, it is not necessary to allege the payment of the tax under section 181 of the Tax Law, as a part of the pleading.

In the case of Wood & Sellick v. Ball, which was affirmed in 190 N. Y. 217-218, the court points out the distinction between the Welsbach case and Parmele v. Haas, 171 N. Y. 579. In the Parmele case the payment of the license fee was a condition subsequent. The corporation was permitted to carry on business in the state and after carrying on business for a certain length of time, must then pay the license tax. There was no express prohibition against doing business without paying the license tax, but