94 A.D.2d 877 | N.Y. App. Div. | 1983
Lead Opinion
— Proceeding pursuant to CPLR article 78 (transferred to this court by order of the Supreme Court at Special Term, entered in Albany County) to review a determination of the State Tax Commission which sustained a sales and use tax assessment pursuant to articles 28 and 29 of the Tax Law. Petitioner is a Pennsylvania corporation which manufactures and sells through mail solicitation and media advertising coins, medals, and other collectibles. Since 1969, petitioner or its subsidiary, the Franklin Mint Corporation, a Delaware corporation which served until 1974 merely to protect the “Franklin Mint” name, has been authorized to do business in the State and has paid a minimal franchise tax each year. Prior to December 19, 1972, petitioner’s contacts with New York State consisted of financial dealings in New York City, the retention of “numismatic representatives” who exhibited petitioner’s products at various coin shows but did not solicit orders or make sales, and the company’s usual advertising and mail solicitation to sell its products. In mid-1970, petitioner, anticipating an increase in New York business and cognizant that it might be or become liable for the collection of State use taxes, voluntarily registered with the New York State Sales Tax Bureau as a “vendor” authorized to collect use taxes from its customers. Since that time petitioner has collected and
Dissenting Opinion
dissents and votes to annul in the following memorandum. Kane, J. P., (dissenting). I am unable to agree with the majority that petitioner’s relationship with the State of New York was sufficient to warrant imposition upon it of a use tax collection liability during the period preceding its merger with Sloves. During the audit period herein, petitioner had some contact with New York State. Petitioner contracted with representatives who made appearances at coin shows in New York State for petitioner. There is no evidence in the record about how often these representatives appeared at coin shows in New York State for petitioner. These representatives, however, did not solicit or take orders for petitioner’s products (cf. Scripto v Carson, 362 US 207) and it is not disputed that all of petitioner’s sales were made through the mail. Petitioner advertised in New York State newspapers, but such is an insufficient contact (see Miller Bros. Co. v Maryland, 347 US 340). Petitioner registered with the Sales Tax Bureau to collect sales and use taxes in 1970, but such registration would not require the collection and remittance of said taxes if the taxes were unconstitutional as applied to petitioner (cf. National Geographic v California Equalization Bd., 430 US 551; Miller Bros. Co. v Maryland, supra, pp 342-345). Franklin Mint Corporation, a Delaware corporation and wholly owned subsidiary of petitioner, was authorized to do business in New York. However, it is undisputed that this Franklin Mint Corporation existed only to protect the “Franklin Mint” name and in actuality conducted no business within New York State. This being the case, the issue distills to a consideration of whether Sloves, a wholly owned subsidiary of petitioner, which was doing business in New York, provides the requisite nexus within New York State to warrant imposition upon petitioner of a use tax collection liability. I think not. In a somewhat different, but nonetheless analogous, due process context, it is well settled that personal jurisdiction cannot be exercised
In fact, the rule enunciated in National Geographic v California Equalization Bd. (supra) has been applied in the context of due process jurisdictional constraints (see, e.g., Gold Kist v Baskin-Robbins Ice Cream Co., 623 F2d 375, 378, n 2; Wilkerson v Fortuna Corp., 554 F2d 745, 749-750, cert den 434 US 939).