Harman v. Commissioner

*654 The respondent determined a deficiency of $34.48 in the petitioner's individual income tax for 1932. The petitioner contests the denial of immunity to an amount of $5,848.30 received for transcripts of his reporter's minutes of court proceedings in New York State.

FINDINGS OF FACT.

The petitioner was, during the year 1932, a statutory court stenographer of the Supreme Court of the State of New York, receiving a statutory salary of $4,200 paid by the state. In addition to this amount, he received $5,848.30 from the parties for transcripts of stenographic minutes. By reason of the expenses paid by petitioner for typing, etc., this amount of $5,848.30 was reduced to a net amount of $3,476.66. Of the fees received from parties, $2,037 was received from the city of New York, which was a party to some of the litigation which petitioner reported.

OPINION.

STERNHAGEN: The Commissioner*671 regarded the $4,200 salary as exempt, but included the $5,848.30 transcript charges in the petitioner's gross income and allowed him the deduction of the expenses paid in connection with it. The petitioner contends the entire amount is constitutionally immune from Federal tax. He regards himself as wholly an employee of the state, and his income of both classes as equally derived for the performance of his official statutory function, irrespective of the fact that the fees were not received from the state, but from others.

The question has never been presented for decision, although in Victor G. Marquissee,; affd., sub nom , such fees of official state court reporters were tacitly recognized as properly taxable. This, in our opinion, is the correct view. By statute in New York, the petitioner, if called upon by a party for a copy of the transcript, is required to furnish it at a charge of not more than 10 cents per folio, unless by voluntary agreement a higher charge is fixed; but such charges *655 can not be regarded strictly as compensation derived from the state or for services*672 performed for the state. The fact that they are regulated by the state makes them no less the subject of private arrangement, even though the petitioner is required, upon proper demand, to supply the transcripts. In this respect, he is in no different situation from carriers or innkeepers, who are under covtrol of the state, are required to perform services and supply materials upon demand, and are limited in the charges which they may make therefor. Whether in fact to subject this income to Federal tax operates to the detriment of the state, can not be found from the evidence in this record, cf. , nor can it be said that such inference is a priori so clear that it may be taken as a matter of law, cf. . The Commissioner's determination is sustained.

Judgment will be entered for the respondent.