In Matter of Backman v. Bates (279 App. Div. 1115) this court held that an economist's personal services in the field of business and commerce were subject to the tax.Summary of this case from Booz v. Bragalini
May 7, 1952.
Present — Foster, P.J., Heffernan, Brewster, Bergan and Coon, JJ.
This is a proceeding under article 78 of the Civil Practice Act to review a determination of the State Tax Commission imposing unincorporated business tax under article 16-A of the Tax Law upon a portion of petitioner's income for the year 1944. The petitioner is a professor of economics at New York University and has been a member of the faculty for many years. He has four degrees from New York University, namely: Bachelor of Commercial Science, Master of Arts, Master of Business Administration and Doctor of Commercial Science. However, none of these is a degree in economics and petitioner concedes that he earned them "with specializing in the field of economics". In addition to teaching at the university, the record discloses that he is frequently retained as a professional economist by private industry to act as a consultant and adviser. The State Tax Commission asserts that petitioner's fees for personal services as an economist are subject to the tax under section 386 Tax of the Tax Law, as the rendition of such services do not constitute the practice of a profession. The commission, however, agrees with petitioner that his compensation from other sources as a faculty member of the New York University, editorial writer for the New York Times, economic editor of Trust and Estates Magazine and from miscellaneous writings is not subject to the tax. The petitioner, in his testimony, has stressed the services which he rendered as an economic consultant. In giving examples of his work he said he prepared the entire economic case for all the American railroads for presentation to the President's Fact Finding Board in 1946. He has outlined in his testimony services which he rendered as a technical adviser to various concerns. He also testified that he has done consulting work for private industry regarding economic problems with broad economic questions. In attempting to distinguish his work from that done in the financial field, petitioner thought that "selling a service" such as sending out market letters was a business but that his own activities of consulting and advising "on an individual basis" was not. The record discloses that petitioner's service deals with the conduct of business itself rather than the application of some separately developed art or science in the needs and uses of business. The State Tax Commission held that petitioner's activities are carried on in the field of business and commerce itself and do not constitute the practice of some separate profession. We think the evidence sustains that determination. Determination unanimously confirmed, with $50 costs and disbursements.