80 A.D.2d 675 | N.Y. App. Div. | 1981
Lead Opinion
Proceedings pursuant to CPLR article 78 (transferred to this court by order of the Supreme Court at Special Term, entered in Albany County) to review determinations of the State Tax Commission, which sustained sales and use tax assessments imposed pursuant to section 1105 of the Tax Law. The petitioners, New York Life Insurance Company (hereafter New York), and Metropolitan Life Insurance Company (hereafter Metropolitan), are engaged in the business of selling health and life insurance contracts. In the furtherance of this business, they deem it necessary to solicit confidential character reports, in many instances, so as to be better informed as to the insurance risk presented by the various applicants. To this end, the petitioners utilize the services of two separate duly licensed detective agencies, Hooper-Holmes, Inc., and Retail Credit Co. (now Equifax, Inc.), whose private investigators conduct field investigations of the depth and detail necessary to provide the requested information concerning the particular applicant. The results of an investigation are reduced to writing and the original report is sent to New York or Metropolitan, as the case may be, and the agency retains a copy for its file. The copy is kept for a period of from one to three years depending upon its nature and scope. Hooper-Holmes, Inc., and Equifax are paid by the company requesting the report on a case-by-case basis. New York and Metropolitan were assessed a sales and use tax on these
In reaching this conclusion, respondent cited an example contained in its own regulations to the effect that “the report submitted by a private detective agency to (n. contd.)
Dissenting Opinion
dissents and votes to confirm in the following memorandum. Herlihy, J. (dissenting). The primary issue posed in the majority opinion is whether the respondent has made a legally erroneous interpretation of section 1105 (subd [c], par [1]) of the Tax Law. The statutory language is not susceptible of being limited to an exclusion based upon the information being personal or individual in nature. It quite explicitly requires, in addition, that such information either “not or may not be substantially incorporated in reports furnished to other persons” (Tax Law, § 1105, subd [c], par [1]; emphasis added). The record establishes that the business activity herein reviewed involved more than the mere furnishing of a report or information which is personal or individual in nature. Files are opened and kept. Information in the files is later used. In short, the information neither is nor becomes the exclusive property of the petitioners. In my opinion, the interpretation of the statute by the respondent is not so obtuse as to be unreasonable or irrational. Upon its face, the statute explicitly exempts or excludes only the furnishing of information to one person. The petitioners have not conclusively established that such a situation existed. Finally, whatever “vacillation, inconsistency and obvious doubt” respondent may have as to a proper interpretation of the statute is not relevant on the question of its correct interpretation. The 1980 declaratory ruling referred to by the majority is not presently before this court, and in view of its favorable treatment of the taxpayer it is not likely to be here. Reading the record as a whole discloses that the determinations of the respondent are supported by substantial evidence. The determinations should be confirmed.