Frye v. Commissioner of Finance

95 A.D.2d 274, 466 N.Y.S.2d 3, 1983 N.Y. App. Div. LEXIS 18959
CourtAppellate Division of the Supreme Court of the State of New York
DecidedAugust 11, 1983
StatusPublished
Cited by4 cases

This text of 95 A.D.2d 274 (Frye v. Commissioner of Finance) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frye v. Commissioner of Finance, 95 A.D.2d 274, 466 N.Y.S.2d 3, 1983 N.Y. App. Div. LEXIS 18959 (N.Y. Ct. App. 1983).

Opinions

OPINION OF THE COURT

Fein, J.

Petitioner is a self-employed journalist. The nature of his employment, activities and background are adequately described in the dissent. The issue is whether the Commissioner of Finance of the City of New York abused his discretion in determining that petitioner was not a professional within the meaning of section S46-2.0 of the Administrative Code of the City of New York and therefore not exempt from the unincorporated business tax. The code [275]*275provision reads in part as follows: “(c) Professions. — The practice of law, medicine, dentistry or architecture, and the practice of any other profession in which capital is not a material income producing factor and in which more than eighty per centum of the unincorporated business gross income for the taxable year is derived from personal services actually rendered by the individual or the members of the partnership or other entity, shall not be deemed an unincorporated business.”

This exemption for professions was identical with a provision in subdivision (c) of section 703 of the Tax Law (Unincorporated Business Income Tax). The only relevant cases on the meaning of those exemptions arose under State law. It is appropriate, therefore, to consider those cases in determining the meaning of the exemption in the city law. Since petitioner seeks tax exemption from a general law imposing a tax, the burden is on him to bring himself within its ambit. As stated in Matter of Grace v New York State Tax Comm. (37 NY2d 193, 196): “An exemption from taxation ‘must clearly appear, and the party claiming it must be able to point to some provision of law plainly giving the exemption’ (People ex rel. Sav. Bank of New London v Coleman, 135 NY 231, 234; see Matter of Young v Bragalini, 3 NY2d 602, 605-606) * * * This is because an exemption is not a matter of right, but is allowed only as a matter of legislative grace (cf., e.g., Colgate v Harvey, 296 US 404, 435).”

The State Tax Commission treated the tax exemption as limited to those whose activities were analogous to those specifically named in the Tax Law. Thus, the most recent State regulations (20 NYCRR 203.11 [b] [1] [ii]) recognize the following professions as coming within the exemption, in addition to those named in the Tax Law:

Public accountancy Osteopathy

Certified shorthand reporting Pharmacy

Chiropody and Podiatry Physiotherapy

Chiropractic Certified social work

Dental hygiene Veterinary medicine and surgery

Professional engineering and Psychology

land surveying

Nursing Landscape architecture

Optometry (ophthalmic dispensing) Teaching

[276]*276Manifestly these occupations are analogous to those listed in the statute. Journalism, whatever its merits, is not.

The cases support the commissioner’s conclusion that one with a background and occupation such as petitioner’s is not engaged in a profession made exempt under the statute. Pertinent is the language of the Court of Appeals in excluding customhouse brokers from the exemption. In People ex rel. Tower v State Tax Comm. (282 NY 407, 412) the Court of Appeals stated: “We find nothing in the record to prove that the service rendered by a customhouse broker requires knowledge of an advanced type in a given field of science or learning gained by a prolonged course of specialized instruction and study. Such a requirement we regard as implicit in the term ‘professional’ when given its legal application and it is read in its context in the statute here involved..”

The evidence as set forth in the dissent and as recited by petitioner does not demonstrate that he followed a “prolonged course of specialized instruction and study” to prepare himself for his career, or indeed that such a special course of study is required of a practicing journalist.

The dissent relies upon Matter of Sundberg v Bragalini (7 AD2d 15), where a graduate electrical engineer, licensed by the State of New York as an electrical engineer, who utilized his training to sell specialized types of equipment; was held not to be entitled to the exemption. The court relied upon the definition in People ex rel. Tower v State Tax Comm. (supra, p 412) that a profession imports “knowledge of an advanced type in a given field of science or learning gained by a prolonged course of specialized instruction and study.” That standard was used to exclude the engineer. It cannot be expanded to include the journalist.

The point is well made in the most recent case interpreting the State statute (Matter of Koner v Procaccino, 39 NY2d 258, 263), where the court stated: “There is no doubt then that an artist may be a professional within the meaning of the statute. But it does not necessarily follow that all income earned by an artist qualifies for the professional exemption. The final question, in other words, is not [277]*277whether the taxpayer is an artist, but rather whether the particular activities he is engaged in constitute the ‘practice of [a] profession’ as opposed to a purely commercial or business enterprise. This often becomes a delicate question determined solely by the facts of the particular case. It is, in short, essentially a question of fact to be determined by the commission subject to very limited judicial review.’ ” As Koner holds, the scope of judicial review is limited. This is consistent with the rule laid down in Matter of Howard v Wyman (28 NY2d 434, 438): “It is well settled that the construction given statutes and regulations by the agency responsible for their administration, if not irrational or unreasonable, should be upheld * * * ‘The administrative determination is to be accepted by the courts “if it has ‘warrant in the record’ and a reasonable basis in law” [Board v Hearst Pubs., 322 US 111, 131.]’”

The principles involved in making the determination are well set forth in Matter of Rosenbloom v State Tax Comm. (44 AD2d 69, 71, mot for lv to app den 34 NY2d 518): “In determining what activity constitutes the practice of a profession consideration should be given to the following factors: (!) a long-term educational background generally associated with a degree in an advanced field of science or learning; (2) the requirement of a license which indicates sufficient qualifications have been met prior to engaging in the occupation; (3) the control of the occupation by standards of conduct, ethics and malpractice liability; and (4) the barrier to carrying on the occupation as a corporation”.

By these standards petitioner is not engaged in a profession within the meaning of the statute. He did not complete the course at a specialized school of journalism, nor obtain a degree therefrom. He does not have, nor is he required to have, a license to indicate that sufficient qualifications have been met prior to engaging in his occupation. Nor is he subject to any disciplinary body which has power to supervise his activities. There is no organized body of rules, standards of conduct or ethics to which he is required to conform. Concededly, the council referred to in the dissent did not exist at the times in question. There are no recognized standards for entry into the field of journalism, and no agency which passes upon one’s qualifications to be [278]*278a journalist.

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95 A.D.2d 274, 466 N.Y.S.2d 3, 1983 N.Y. App. Div. LEXIS 18959, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frye-v-commissioner-of-finance-nyappdiv-1983.