People Ex Rel. Adams Electric Light Co. v. Graves

The question presented is whether the transfer of a portion of a corporation’s earned surplus to its no par value capital stock account is in effect the declaration or payment of a “ dividend ” within the meaning of that term as used in section 186 of the Tax Law (Cons. Laws, ch. 60).

The petitioner is a corporation engaged in the business of selling and distributing electricity and is subject to the franchise tax imposed by section 186 of the Tax Law which required it to pay “ three per centum upon the amount of dividends declared or paid in excess of four per centum upon the actual amount of…