Giordano v. State Tax Commission , 52 A.D.2d 691 ( 1976 )

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 denied petitioner’s application for a redetermination and sustained a notice of deficiency of unincorporated business taxes for the years 1961 and 1962. For the years 1961 and 1962, petitioner filed New York State resident income tax returns, but did not file unincorporated business tax returns. On October 25, 1965, respondent issued a notice of deficiency and a statement of audit changes which determined petitioner’s liability for unincorporated business tax and interest for the years in question to be $1,377.85. Thereafter, petitioner filed with respondent a petition for redetermination of said deficiency, and he claims therein that he is a professional within the meaning of subdivision [c] of section 703 of the Tax Law and, therefore, exempt from the unincorporated business tax. Alternatively, he further claims that his income should be allocated as earned within and without New York State, pursuant to section 707 of the Tax Law, should it be determined that he is engaged in an unincorporated business. On both of these questions, respondent’s ultimate determination was adverse to petitioner, and this proceeding ensued. Considering initially petitioner’s alleged exemption from the unincorporated business tax as a professional, we find that respondent’s determination must be confirmed. For 1961 and 1962, petitioner’s income came from four large furniture manufacturing companies, and his services consisted primarily of the preparation of designs for various pieces of furniture from plans provided by the individual companies. Although his duties apparently required some degree of engineering, artistic and drafting skills, factors previously held by this court to be indicative of activity constituting the practice of a profession are not present here. Thus, petitioner lacks an extensive educational background of the sort which leads to an advanced degree in science or learning, and there is no licensing requirement for the job which he performs. Additionally, there has been no showing of standards of conduct, ethics or malpractice liability for his occupation, and there is no barrier to carrying on said occupation as a corporation (see Matter of Rosenbloom v State Tax Comm., 44 AD2d 69, mot for lv to app den 34 NY2d 518). Rather than being "devoted to public service in the traditionally professional sense”, petitioner sold his services to nonprofessional businesses (Matter of Koner v Procaccino, 45 AD2d 551, 553, affd 39 NY2d 258) and carried on his activities "in the field of business itself’ (Matter of Kormes v Murphy, 9 AD2d 1003, 1004, mot for lv to app den 8 NY2d 706; see, also, Matter of Niles v Murphy, 34 AD2d 862, affd 31 NY2d 848). Accordingly, he was properly denied an exemption. With regard to petitioner’s claimed entitlement to an allocation of his income pursuant to section 707 of the Tax Law, we likewise confirm respondent’s determination. During the tax years in question, petitioner worked a total of only 34 days without the State, and said work was performed in office space provided and maintained by the individual furniture manufacturing concerns and not petitioner. Such being the case, it cannot rightly be said that petitioner had a regular place of business without the State which was "systematically and regularly used by the unincorporated business entity in carrying on its business” (Matter of McMahan v State Tax Comm., 45 AD2d 624, 627, mot for lv to app den 36 NY2d 646), and, therefore, he was not entitled to an allocation. Determination confirmed, and petition dismissed, without costs. Greenblott, J. P., Mahoney, Main and Reynolds, JJ., concur; Herlihy, J. concurs in part and dissents in part in the following memorandum.