to stepchildren between whom and the decedent the mutually acknowledged relation of parent and child existed, and the Legislature, by chapter 204, Laws of 1907, further amended section 221 by inserting the word "stepchild" between the words " "child" and "brother" in the line referring to transfers to any father, mother, husband, wife, child, brother, etc., the effect of which was to place a stepchild in the 1-per cent. class without reference to the relationship having commenced at or before the child's fifteenth birthday or having been continuous for ten years thereafter.

This section was further amended by chapter 310, Laws 1908, by striking out the word "stepchild " where it appeared by the amendment of 1907 above referred to, and inserting the clause, "except in the case of a stepchild" where it now appears in section 221 (supra), so that, where the mutually acknowledged relation of parent and child is now shown, and the child is also a stepchild of the decedent, the provision in reference to both parents being dead at the time the relationship commenced does not apply.

317. Rate of Tax Where Legatee Is Both Stepchild and Nephew.

While the amendment of 1907, which placed a stepchild in the 1-per cent. class (chapter 204, Laws 1907), was in force an interesting question arose in reference to the rate of tax where the relationship of the legatee to the decedent was both that of a stepchild and a nephew.

Catherine E. O. Linkletter, a resident of Nassau county, died October 13, 1907, leaving a will the first clause of which provided as follows: "I give, devise, and bequeath all my property, real, personal, or mixed, to those persons, relatives of my full blood only, who

§ 221

Stepparent and Stepchildren.

would be entitled to receive my personal estate in case of my death unmarried and intestate, and had I no relatives of the half-blood, and in the share and proportions fixed by law for the distribution of personalty in cases of intestacy, to have and to hold the same absolutely forever." In transfer tax proceedings upon her estate the proof presented to the appraiser showed that decedent's relatives of the full blood entitled to share in her estate under her will were two sisters, one brother, one niece and one nephew; that George O. Linkletter, an only child of a deceased sister Annie, was also a stepchild of the decedent, the said Catherine E. O. Linkletter, having married her brotherin-law, and claim was made that the portion of decedent's estate passing to the nephew George O. Linkletter was taxable at 1 per cent. in view of the fact that he was a stepchild of the decedent at the time of her death, and the taxing order fixed the tax on transfers to a stepchild at the lower rate. The Comptroller appealed on the ground that inasmuch as it was conceded that George O. Linkletter was one of the relatives of the full blood of the decedent and entitled to a share of her estate only by reason of his being a nephew of decedent, that he could not claim the relationship of nephew for the purpose of inheritance and the relationship of stepchild for the purpose of taxing the transfer to him at the lower rate. The surrogate affirmed the taxing order and the Comptroller appealed to the Appellate Division.

318. Stepparent and Stepchildren.

A stepparent does not necessarily stand in the relation of a parent to stepchildren, within the meaning

of the act.

N. Y. S. 23.

Specifically Exempted.

§ 221

Matter of Capron, 30 N. Y. St. R. 948, 10

Whether they do so or not depends upon the circumstances of each case.

319. Exemptions The Right to Make.

The right to make exemptions is involved in the right to select the subject of taxation and apportion the public burdens among them, and must consequently be understood to exist in the lawmaking power wherever it has not in terms been taken away. To some extent it must exist always, for the selection of the subject of taxation is of itself an exemption of what is not selected. Cooley on Taxation, 200; Bell's Gap Railroad v. Pennsylvania, 134 U. S. 232-238. The right of exemption has been applied to succession taxes. Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 299; Beers v. Glynn, 211 U. S. 477.

320. Specifically Exempted.

Chapter 169, Laws of 1892, in effect March 19th of that year first exempted transfers to any person who is a bishop, or to any religious corporation. This provision became a part of section 2 of chapter 399, Laws of 1892, in effect May 1st of that year, and was continued in section 221 of the Act of 1896, and has been retained in all the subsequent amendments of this section.

The term " specifically exempted "does not apply to the persons taxable at either the 1 per cent. or 5 per cent. rate, for the reason that if the estate is sufficiently large to equal or exceed the limitations the legacy or share passing to both classes respectively are each liable to taxation, while a legacy to a bishop

$ 221

Id.; Applies Only to Domestic Corporations.

or a religious corporation is not taxable no matter how large the estate may be. Matter of Garland, 88 App. Div. 380, 84 N. Y. S. 630; Matter of McMurray, 96 App. Div. 129, 89 N. Y. S. 71; Matter of Corbett, 171 N. Y. 516; Matter of Costello, 189 N. Y. 288.

Where a legacy is given to a legatee who is specifically exempted by the statute, the amount thereof is first to be deducted from the net estate, and the other transfers are then only subject to taxation in the event of the remaining estate reaching the taxable limitations. Matter of Corbett (supra).

321. Corporations Specifically Exempted by the Act of 1905.

Prior to the amendment of section 221 of the Transfer Tax Law by chapter 368, Laws of 1905, property devised or bequeathed to any person who is a bishop or to any religious corporation, including corporations organized exclusively for Bible or tract purposes was exempt from a transfer tax; but the exemption of property bequeathed to a charitable, benevolent, missionary, hospital, infirmary, educational, scientific, literary, library, patriotic, cemetery, or historical corporation was limited to personal property other than money or securities. The amendment of 1905 transferred to the exempt class educational, charitable, missionary, benevolent, hospital, or infirmary corporations, but the other corporations enumerated in the class entitled to the limited exemptions above mentioned were still retained in that class.

322. Exemption Applies Only to Domestic Religious Corporations.

Under the exemption applying to religious corporations, the court held, in the Matter of Balleis, 144 N. Y.

Status of Corporation.

§ 221

132, that the exemption applies only to domestic corporations, and it is believed that the exemptions by the Act of 1905, granted to the other corporations therein named, will not apply to corporations foreign to the State of New York, even though the foreign corporation within this class is exempt by law from taxation in its own State. Matter of Prime, 136 N. Y. 347.

323. Rule in Ascertaining Meaning of Statute Conferring Exemption.

The intention of the Legislature in granting exemptions from the transfer tax should be ascertained from the whole statute, and effect given, if possible, to all the language, and when a statute contains separate provisions, special and general, the latter will not be regarded as including the former, but the special provisions are in the nature of an exception to the general. Matter of Francis, 121 App. Div. 129; affd., 189 N. Y 554.

324. Status of Corporation - How Determined.

The status of a corporation is to be determined by the statute under which it is incorporated, and not by the nature of the acts it assumes to do thereunder. Matter of White, 118 App. Div. 869.

It would seem that since the amendment of 1905 placing educational, charitable, missionary, benevolent, hospital, and infirmary corporations in the exempt class, that a somewhat different rule of determining the status of corporations claiming exemptions has been established. See Matter of Mergentime, 129 App. Div. 367; affd., 195 N. Y., mem. (no opinion).