Seifer v. State Tax Commission , 396 N.Y.S.2d 493 ( 1977 )

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 assessed unincorporated business taxes, penalties and interest against petitioner pursuant to article 23 of the Tax Law. The sole issue is whether petitioner, in the year 1970, was an independent contractor or an employee and thus not subject to the unincorporated business tax. In 1970 petitioner was an officer and minority stockholder in each of six corporations, five of which were involved in the ownership and operation of a motel. Petitioner had no office and he performed services at the various motels at times of his own choosing; he had no superior who directed his activites or to whom he reported; he planned his own activities and made up his own schedule; while he was reimbursed for air travel by each corporation he visited, he was not reimbursed for other business expenses; none of the six corporations withheld Federal or State income taxes on payments to petitioner during 1970 nor did any motel deduct social security on these payments and, further, petitioner did not receive health, vacation or pension benefits from any of the corporations. These are indicia of an entrepreneur, not an employee (Matter of Feld v Gallman, 41 AD2d 882). Next petitioner failed to establish any relationship between the time devoted to each corporation and the amount of payments received from each (Matter of Naroff v Tully, 55 AD2d 755). Petitioner failed to sustain the burden of proving that he was entitled to the "employee” exemption under subdivision (b) of section 703 of the Tax Law (Matter of Koner v Procaccino, 39 NY2d 258, mot for rearg den 39 NY2d 943; Matter of Grace v New York State Tax Comm., 37 NY2d 193, mot for rearg den 37 NY2d 816). Since respondent’s determination that petitioner was an independent contractor during the year 1970 is supported by substantial evidence and is not arbitrary or capricious, it must be upheld (Matter of Koner v Procaccino, supra; Matter of Great Lakes Dredge & Dock Co. v Department of Taxation & Fin. of State of N. Y, 39 NY2d 75, cert den 429 US 832). Determination confirmed, and petition dismissed, without costs. Greenblott, J. P., Sweeney, Kane, Mahoney and Main, JJ., concur.