211 A.D. 62 | N.Y. App. Div. | 1924
Himan Jacob, the above-named decedent, died a resident of New York county on November 26, 1917, leaving a last will and testament which was duly admitted to probate in the Surrogate’s Court of New York county on January 25, 1918. The respondents herein duly qualified as executors of said will.
By said will certain contingent remainders were created. An appraiser under the Transfer Tax Law was duly appointed and filed his report, on which a taxing order was entered by the Surrogate’s Court of New York county on December 15, 1920. This order was resettled on February 14, 1922, for the reason that the original order did not specify the amount of tax which would be due on the remainders if the contingencies had happened at the date of the appraisal. As resettled, the order fixed the value of the contingent remainders at $82,342, and taxed the same against the executors for the benefit of five per cent class at $4,690.52. It also provided that of said tax the amount which would be due if the contingencies had happened at the date of the appraisal was $791.55. In addition to the tax on the contingent remainders the order fixed a tax of $782.84 on vested interests in the estate.
On May 24, 1918, the sum of $1,500 was paid as tax, which, allowing for a discount of five per cent as provided by the statute, entitled the executors to a credit of $1,578.94 on account of the tax which might thereafter be determined payable.
No further payment of tax was made, nor were any securities deposited by respondents, until April 14, 1924, when the sum of $3,898.97 was paid in cash.
The respondents seek to compel the State Tax Commission to accept the tax of $3,898.97 without interest and to receipt in full for the transfer tax imposed on the estate of the decedent.
The provisions of the Transfer Tax Law as contained in the Tax Law applicable to the question here presented are as follows:
“ § 222. Accrual and payment of tax. All taxes imposed by this article shall be due and payable at the time of the transfer, except as herein otherwise provided. Taxes upon the transfer of any estate, property or interest therein limited, conditioned, dependent or determinable upon the happening of any contingency or future event by reason of which the fair market value thereof can not be ascertained at the time of the transfer as herein provided, shall accrue and become due and payable when the persons or corporations beneficially entitled thereto shall come into actual possession or enjoyment thereof. Such tax shall be paid to the State Comptroller [Tax Commission] in a county in which the office of appraiser is salaried, and in other counties, to the county treasurer, and said State Comptroller [Tax Commission] or county treasurer shall give [furnish], and every executor, administrator or trustee shall take duplicate receipts from, him of such payment as provided in section two hundred and thirty-six.” (Since amd. by Laws of 1921, chap. 476. Words in italic have been omitted.)
Section 223, in so far as it is pertinent to the present inquiry, reads:
“ Discount and interest. If such tax is paid within six months from the accrual thereof, a discount of five per centum shall be allowed and deducted therefrom.' If such tax is not paid within eighteen months from the accrual thereof, interest shall be charged and collected thereon at the rate of ten per centum per annum from the time the tax accrued * * (Amd. by Laws of 1917, chap. 128. Since amd. by Laws of 1921, chap. 476.)
Section 230 reads, as far as is material to tne instant case: “ When property is transferred in trust or otherwise, and the rights, interest or estates of the transferees are dependent upon contingencies or conditions whereby they may be wholly or in part
Section 241 reads in part: “ Whenever the tax on a contingent remainder has been determined at the highest rate which on the happening of any of said contingencies or conditions would be possible under the provisions of this article, the State Comptroller [Tax Commission], in the counties wherein this tax is payable direct to him [it], and in all other counties the treasurer of said counties, respectively, when such tax is paid shall retain and hold to the credit of said estate so much of the tax assessed upon such contingent remainders as represents the difference between the tax at the highest rate and the tax upon such remainders which would be due if the contingencies or conditions had happened at the date of the appraisal of said estate, and the State Comptroller [Tax Commission] or the county treasurer shall deposit the amount of tax so retained in some solvent trust company or trust companies or savings banks in this State [designated by the State Comptroller], to
“ If any executor or trustee shall have deposited with the State Comptroller [Tax Commission], or the county treasurer, cash or securities, or both cash and securities, to an amount in excess of the sum necessary to pay the transfer tax upon such contingent remainders at the highest rate as aforesaid, the excess of tax so deposited shall be returned to the executor or trustee, or if any executor or trustee shall have deposited with the State Comptroller [Tax Commission], or the county treasurer, cash or securities, or both cash
Examination of these provisions of the Transfer Tax Law leads to the conclusion that it is clearly intended thereby that all transfer taxes imposed by the statute shall be due and payable at the time of the transfer; except as otherwise therein provided. The only exception to this general rule contained in the statute is that taxes upon the transfer of any estate, property or interest therein limited, conditioned, dependent or determinable upon the happening of any contingency or future event by reason of which the fair market value thereof cannot be ascertained at the time of the transfer shall accrue and become due and payable when the persons or corporations beneficially entitled thereto shall come into actual possession or enjoyment thereof. The exception does not apply in this case for the reason that the fair market value of all of the property of the decedent has been ascertained and is specified in the report of the appraiser and the taxing order. (Matter of Zborowski, 213 N. Y. 109.) In that case Judge Miller, writing for a unanimous court, said (at p. 116): “ The different statutes hereinbefore referred to contain evidence of a constant effort of the Legislature to enlarge the class of transfers immediately taxable upon the death of the transferror. The question of the Legislature’s power in that regard was set at rest by the decision of this court in Matter of Vanderbilt (172 N. Y. 69). In one aspect it may be unjust to the life tenant to tax at once the transfer, both of the life estate and of the remainder though contingent, and it may seem unwise for the State to collect taxes which it may have to refund with interest, but those considerations are solely for the Legislature, who are to judge whether they are more than offset by the greater certainty which the State thus has of receiving the tax ultimately its due under the statute. However unwise or unjust it may seem in a particular case like this for the State to collect the tax at the highest rate when in all probability the remainder will vest in a class taxable at the lowest rate, it is the duty of this court to give effect to the statute as it is written.” (Followed in Matter of Parker, 226 N. Y. 260; the extract just quoted cited with approval in Matter of Cole, 235 N. Y. 48, 53.)
In the present case, therefore, it follows under the language of the statute and the authority of the decisions quoted, that the time of the transfer of the contingent remainder in question was the death of the testator; that the tax thereon was payable immediately on such death; and that the amount of the tax then payable was at the highest possible rate which could in any event be imposed on the value of the remainders as fixed and determined. The provisions of section 223 of the Transfer Tax Law thus becoming operative, if the tax had been paid within six months from the time of decedent’s death, a discount of five per cent would
The order appealed from should, therefore, be reversed, with ten dollars costs and disbursements, and the motion denied, with fifty dollars costs.
Order reversed, with ten dollars costs and disbursements, and motion denied, with fifty dollars costs.