(d) work done on or in connection with one or more of certain articles or parts thereof;

irrespective of whether payment be made

(e) in cash,

(f) in board or lodging, or both,

(g) in the stock of a corporation,

(h) by promissory note or other obligation, or

(i) in property, service or otherwise.

If payment shall be made otherwise than in cash, it shall be considered and treated as payment in cash to the fair market value (determinable usually by understanding or agreement existing between the payor and the payee) of such medium, other than cash, as may be employed.

Fees for professional services are not subject to withholding unless contracted for or paid on an annual or periodical basis.

Art. 264. Year, for purposes of deducting and withholding. Deducting and withholding of personal service compensation by withholding agents shall be on the basis of a calendar year, irrespective of the basis of reporting adopted by the payee-taxpayer. Personal service compensation shall be deemed to have been paid by the withholding agent and received by the payee-taxpayer only if and to the extent actually paid or credited to the payee and thus made reducible to possession by him. Commissions and all other forms of personal service compensation determined and paid or credited to a payee-taxpayer after the close of a calendar year, shall, for the purpose of deducting and withholding the tax and of returning information with respect thereto, be treated as payments made in the calendar year when paid or credited, but for such purposes only. The approved method of accounting employed by the payee-taxpayer shall govern in so far as he may be called upon to account for such payments for income tax purposes.

Art. 265. Income not subject to deducting and withholding. Deducting and withholding from income is not required in the following cases:

(a) In respect of personal service compensation income when there shall have been filed with the withholding agent a resident's certificate on Form 101, to the effect that the person receiving the compensation is a resident of this state and setting forth his residence address within the state.

(b) If of a character other than compensation for personal services. (c) Where the personal services are rendered entirely without the state, by a non-resident, whether payment be made from within

or without the state, irrespective of the status of the withholding agent. The occasional entry into the state of a non-resident employee who performs the duties for which he is employed entirely without the state but enters the state for the purpose of reporting, receiving instructions, accounting, etc., incidental to his duties without the state, shall not be deemed to take such employee out of the class of those rendering their services entirely without the state.

(d) Where the personal services are rendered within the state, if rendered for, and delivery of payment is made without the state by, a non-resident individual or partnership having no office or place of business or paying agent within the state, or a foreign corporation that (1) is not registered in New York and (2) has no office or place of business or paying agent within the state. (Nothing in sub-paragraph "d" shall be construed to relieve the recipient from liability to make return and pay the tax on such income.)

Art. 266. Income of a non-resident for services performed partly within and partly without the state. In case a non-resident receives compensation for personal services rendered or performed partly within and partly without the state, the withholding agent shall deduct and withhold on the entire amount of compensation, as set forth in Article 1, unless the withholding agent files with the comptroller, with his return (Form 103) of sums deducted and withheld, a certificate on Form 102, setting forth

(1) that the employee is a non-resident (stating his address);

(If the withholding agent has not personal knowledge of the place of residence of the employee, he may state it upon information and belief, provided he submits with his certificate the affidavit of the employee stating such residence.) (2) that part only of the payments made were for services performed within the state, and

(3) the amount in dollars and cents of such part. If brought into question, the burden of proof will be on the withholding agent to show that no greater portion than that set forth in his affidavit of the payments made was for services performed in this state.

In apportioning such income of a non-resident, the following rules shall be observed by the withholding agent:

(a) If the non-resident is a salesman, drummer, agent or other employee through whose services receipts or remuneration inure directly to the employer, the deducting and withholding shall attach to the portion of the entire salary which the vol

ume of business transacted by the employee within the state of New York bears to the total volume of business transacted within and without the state by such employee.

(b) If the nature of the employment of the non-resident is such that receipts or remuneration for services rendered do not inure directly to the employer, as in the case of clerks, bookkeepers, laborers or other like classes of employees, the deducting and withholding shall attach to the portion of the personal service compensation income of such employee which the time employed within the state bears to the time employed both within and without the state.

(c) If it is not possible to apportion the income as above provided, because of the peculiarities of the service of the employee, the apportionment shall be made in accordance with the facts and the tax deducted and withheld accordingly. In such a case a full statement of the facts shall be made to the comptroller.

Art. 267. Form of residence certificate. Form 101, shall be used by residents of the state of New York for the purpose of claiming the benefit of such residence for income tax purposes. Withholding agents shall retain, preserve and keep available for examination and inspection by the comptroller or his authorized representative all residence certificates for a period of one year next following the close of the calendar year for which such certificates shall have been given. Blanks (Form 101) will be furnished by the comptroller on the application of withholding agents. Withholding agents may, if they choose to do so, use blanks acquired from other sources, provided, however, that the form and wording thereof shall comply exactly with Form 101.

Art. 268. Revocation and renewal of residence certificates. An employee who has filed a certificate of residence on Form 101, and who thereafter changes his residence, shall notify his employer of such change. Any employer who has reasonable ground for believing that may revoke the certificate of residence theretofore filed by such eman employee has changed his residence, after notice to the employee, and, in default of a new certificate of residence, shall deduct and withhold from the compensation of such employee for the entire calendar year, as provided in Article I.

A certificate of residence shall be effective only for the calendar year in which it is filed.

Art. 269. Deducting and withholding where residence is established. When a withholding agent shall have deducted and withheld from the personal service compensation of an employee and such employee shall thereafter, before return of the amount so withheld

is made by the withholding agent but not later than March 15 in the year following, file with the withholding agent a residence certificate on Form 101, the withholding agent shall thereupon pay over to the employee the entire amount of income so deducted and withheld for such calendar year.

Pursuant to the authority conferred by chapter 627 of the laws of 1919, the foregoing regulations (Articles Numbered 261-269 inclusive) in relation to "Deducting and Withholding at Source," are hereby made and promulgated.

(Signed) EUGENE M. TRAVIS, Comptroller.

Albany, N. Y.,

June 11, 1919.

Opinions of Attorney General on Salaries to be Taxed and on withholding.-Attention is called to the following:

Letter No. 2, of May 29, 1919, as to sources within the State, holding that it includes rent for property, and profits for commerce carried on, within the state. Whether earnings or salary paid to a nonresident are from "sources within the state" depend on the work done, rather than the person paying it. Services performed without the

state are not taxable.

Letters No. 3 and No. 4, dated May 29th, and June 2, respectively, refer to withholding agents and are covered in substance by the above regulations of the Comptroller.

Wages of mariners.-Attorney General's letter No. 7, dated June 12, 1919, holds that a mariner's wages derived from a vessel owned by a resident of the state is from a source within the state, even if the vessel never reaches a New York port.

U. S. railroad employee's wages exempt.-Attorney General's letter No. 6, dated June 10, 1919, holds that the gross income of employees of railroads, telegraphs, telephones and cables under federal control are not taxable "for the time the lines might remain in the control of the United States."

CHAPTER XXVII.

EXEMPTION OF INTANGIBLE PERSONAL PROPERTY FROM LOCAL TAXATION.

Section 352 of the Personal Income Tax Law provides: "The taxes imposed by this article are in addition to all other taxes imposed by law, except that money on hand, on deposit or at interest, bonds, notes and choses in action and shares of stock in corporations other than banks and banking associations, owned by any individual or constituting a part of a trust or estate subject to the income tax imposed by this article, and from which any income is derived, shall not after July thirty-first, nineteen hundred and nineteen, be included in the valuation of the personal property included in the assessment-rolls of the several tax districts, villages, school districts and special tax districts of the state."

It was evidently the intention of the framers of the new Personal Income Tax Law to exclude intangible property from local taxation. That would be in accord with the legislative intent to exempt corporations from taxation on personal property for local purposes in the act which was passed in 1917, Sections 210 and 219-j, Article 9-a. It was finally decided only to exempt intangible property and to leave the tangible property for taxation by the local assessors. In order that there might be no question as to the meaning of intangible property, the present act specifically describes by name, the character of intangible property to be exempted. Statutory provisions have been nullified in the past by holding money, mortgages or securities as tangible property, although generally deemed intangible. In the closing hours of the legislative session, the words "and from which any income is derived" were inserted after the enumeration of the classes of in