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New York Tax Law Section 10 - Electronic Funds Transfer By Certain Taxpayers Remitting Sales And Compensating Use Taxes, Prepaid Sales And Compensating Use Taxes On Motor Fuel AndLegal Research Home > New York Lawyer > Tax > New York Tax Law Section 10 - Electronic Funds Transfer By Certain Taxpayers Remitting Sales And Compensating Use Taxes, Prepaid Sales And Compensating Use Taxes On Motor Fuel And Sponsored Links
§ 10. Electronic funds transfer by certain taxpayers remitting sales
and compensating use taxes, prepaid sales and compensating use taxes on
motor fuel and diesel motor fuel, and motor fuel and petroleum business
taxes. (a) Definitions. For purposes of this section:
(1) The term "commissioner" means the commissioner of taxation and
finance.
(2) The term "electronic funds transfer" has the meaning prescribed in
paragraph three of subdivision (a) of section nine of this chapter.
(3) The term "federal employer identification number" means the number
assigned in accordance with section six thousand one hundred nine of the
United States internal revenue code of nineteen hundred eighty-six, and
amendments thereto, and regulations promulgated thereunder.
(4) The term "separate New York state employer identification number"
means a number assigned by the department which is either a suffix to
the federal employer identification number or an identifying number
unrelated to the federal employer identification number.
(5) The term "payment of tax" means a payment or payment over of the
taxes described in subparagraphs (A), (B) and (C) of paragraph one of
subdivision (b) of this section.
(6) The term "taxpayer" means the person required to make a payment of
tax.
(b) Participation rules. (1) General. Notwithstanding any other
provision of law to the contrary, if, on or after June first of any
year, during the June first through May thirty-first period which
immediately precedes the previous June first through May thirty-first
period, a taxpayer was liable for
(A) more than five hundred thousand dollars of state and local sales
and compensating use taxes imposed by article twenty-eight and pursuant
to the authority of article twenty-nine of this chapter where such taxes
are administered by the commissioner, or
(B) more than five million dollars of prepaid state and local sales
and compensating use taxes on motor fuel and diesel motor fuel imposed
pursuant to section eleven hundred two of this chapter, or
(C) more than five million dollars of the total of the tax on gasoline
and similar motor fuel and the tax on petroleum businesses imposed by
and pursuant to the authority of articles twelve-A and thirteen-A of
this chapter,
then such taxpayer shall make payments of the taxes for which such
dollar threshold was met by electronic funds transfer or certified check
in accordance with the provisions of subdivision (c) of this section.
(2) Special transitional rule. Notwithstanding the provisions of
paragraph one of this subdivision, for purposes of determining whether a
taxpayer described in subparagraph (C) of such paragraph shall be
required to initially participate in the program prescribed by this
section, if such taxpayer was liable for more than three million seven
hundred fifty thousand dollars in total article twelve-A and thirteen-A
taxes during the September first, nineteen hundred ninety through May
thirty-first, nineteen hundred ninety-one period, then such taxpayer
shall make payments of tax by electronic funds transfer or certified
check in accordance with the provisions of this section.
(3) Disaggregation. Every taxpayer who is identified by either its own
federal employer identification number or its own separate New York
state employer identification number shall be treated as a separate
taxpayer for purposes of determining whether the dollar thresholds
specified in paragraph one or two of this subdivision have been met. A
taxpayer seeking a separate New York state employer identification
number for a branch or division may apply to the commissioner for such a
number. The commissioner, at his or her discretion, may assign such
number upon a showing by the taxpayer of a legitimate business purpose
for such request.
(4) Hardship. (A) If a taxpayer having liability described in
subparagraph (A) of paragraph one of this subdivision can demonstrate to
the satisfaction of the commissioner that (i) for the two most recent
consecutive quarters, the state and local sales and compensating use
taxes properly payable by such taxpayer are less than fifty percent of
the state and local sales and compensating use taxes properly payable by
such taxpayer for the comparable two quarters of the preceding year and
(ii) the sum of such taxpayer's state and local sales and compensating
use tax liability for such most recent consecutive quarters together
with the product of the state and local sales and compensating use taxes
properly payable by such taxpayer for the two consecutive quarters
immediately preceding the quarters referred to in clause (i) of this
subparagraph multiplied by the percentage arrived at under such clause
is less than two hundred fifty thousand dollars in amount, then such
taxpayer shall not be required to participate in the program prescribed
by this section for the remaining quarters of the sales tax year ending
on the next May thirty-first and for the immediately succeeding four
sales tax quarters.
(B) If a taxpayer having liability described in subparagraph (B) or
(C) of paragraph one of this subdivision can demonstrate to the
satisfaction of the commissioner that (i) for the most recent six-month
period, (I) the prepaid state and local sales and compensating use taxes
on motor fuel and diesel motor fuel or (II) the total article twelve-A
and thirteen-A taxes, as the case may be, properly payable by such
taxpayer are less than fifty percent of such applicable taxes described
in subclause (I) or (II), as the case may be, properly payable by such
taxpayer for the comparable six-month period of the preceding year and
(ii) the sum of such taxpayer's liability for such applicable taxes for
the most recent six months together with the product of such applicable
taxes properly payable by such taxpayer for the six-month period
immediately preceding the six-month period referred to in clause (i) of
this subparagraph multiplied by the percentage arrived at under such
clause is less than two and one-half million dollars in amount, then
such taxpayer shall not be required to participate in the program
prescribed by this section for the remaining months of the period ending
on the next May thirty-first and for the immediately succeeding twelve
months.
(D) If a taxpayer required to remit state and local sales and
compensating use taxes by electronic funds transfer or certified check
pursuant to the provisions of this section can demonstrate to the
satisfaction of the commissioner that (i) such taxpayer's liability for
state and local sales and compensating use taxes was less than four
million dollars during the period described in paragraph one of this
subdivision, and (ii) in any two sales tax quarters within the most
recent four consecutive sales tax quarters, such taxpayer was a
materialman within the meaning of section two of the lien law, primarily
engaged in furnishing building materials to contractors, subcontractors
or repairmen for the improvement of real property improved or to be
improved with a residential dwelling unit, and authorized by such law to
file a mechanic's lien upon such real property and improvement, then
such taxpayer need not remit state and local sales and compensating use
taxes by electronic funds transfer or certified check for the remainder
of the program period in accordance with the timing requirements of
subdivision (c) of this section, but may instead remit such taxes by
electronic funds transfer or certified check at the same time that
payment is required to be made for part-quarterly and quarterly returns
required to be filed under article twenty-eight and pursuant to the
authority of article twenty-nine of this chapter, in the amount required
under or pursuant to such articles at such time. The due date prescribed
by this subparagraph shall be deemed to be the applicable due date for
purposes of this section for taxpayers qualifying under this
subparagraph. The provisions of this section shall apply to taxpayers
qualifying under this subparagraph, except to the extent that any such
provision is either inconsistent with a provision of this subparagraph
or is not relevant to this subparagraph.
(c) Payment rules. (1) Payment by electronic funds transfer or
certified check. On or before the third business day following the
twenty-second day of each calendar month:
(A) a taxpayer having liability described in subparagraph (A) of
paragraph one of subdivision (b) of this section shall, notwithstanding
any provision of this chapter to the contrary, remit by electronic funds
transfer or certified check: (i) either (I) seventy-five percent of
one-third of the state and local sales and compensating use taxes
properly payable by such taxpayer for the comparable quarter of the
preceding year; or
(II) such taxpayer's total liability for state and local sales and
compensating use taxes during the period ending on such twenty-second
day of the month, provided, however, that in such instance no penalty or
interest shall be payable pursuant to paragraph two of subdivision (g)
of this section if such taxpayer timely remits a payment of tax in an
amount not less than ninety percent of the taxes as finally determined
to be due and payable for such period; and
(ii) (I) for payments of tax due in the month of January, February,
April, May, July, August, October or November, such taxpayer's remaining
liability, if any, for state and local sales and compensating use taxes
for the immediately preceding calendar month; or
(II) for payments of tax due in the month of March, June, September or
December, such taxpayer's remaining liability, if any, for state and
local sales and compensating use taxes for the immediately preceding
sales tax quarter;
(B) a taxpayer having liability described in subparagraph (B) of
paragraph one of subdivision (b) of this section shall remit by
electronic funds transfer or certified check either:
(i) three-fourths of the prepaid state and local sales and
compensating use taxes on motor fuel and diesel motor fuel properly
payable by such taxpayer for the comparable month of the preceding year;
or
(ii) its total liability for prepaid state and local sales and
compensating use taxes on motor fuel and diesel motor fuel during the
period ending on such twenty-second day of the month, provided, however,
that in such instance no penalty or interest shall be payable pursuant
to paragraph two of subdivision (g) of this section if such taxpayer
timely remits a payment of tax in an amount not less than ninety percent
of the taxes as finally determined to be due and payable for such
period;
(C) a taxpayer having liability described in subparagraph (C) of
paragraph one of subdivision (b) of this section shall remit by
electronic funds transfer or certified check either:
(i) three-fourths of the total article twelve-A and article thirteen-A
taxes properly payable by such taxpayer for the comparable month of the
preceding year; or
(ii) its total liability for such taxes during the period ending on
such twenty-second day of the month, provided, however, that in such
instance no penalty or interest shall be payable pursuant to paragraph
two of subdivision (g) of this section if such taxpayer timely remits a
payment of tax in an amount not less than ninety percent of the taxes as
finally determined to be due and payable for such period.
(2) Filing obligations and payment of remaining liabilities. (A) A
taxpayer having liability described in subparagraph (A) of paragraph one
of subdivision (b) of this section shall, notwithstanding any provision
of this chapter to the contrary, file only the quarterly returns
required under article twenty-eight and pursuant to the authority of
article twenty-nine of this chapter for each of the periods for which
such returns are filed under and pursuant to the authority of such
articles; provided, however, that for those months for which a return is
not required to be filed pursuant to the provisions of this
subparagraph, the making of a payment of tax by electronic funds
transfer or certified check covering any period shall be deemed to
constitute the filing of a return for purposes of subdivision (b) of
section eleven hundred forty-seven of this chapter with respect to such
period.
(B) A taxpayer having liability described in subparagraph (B) of
paragraph one of subdivision (b) of this section shall file the returns
required under section eleven hundred two of this chapter and shall pay
to the commissioner the amounts required to be paid with such returns,
less the amounts remitted by electronic funds transfer or certified
check under this section, for each of the periods for which such returns
are filed under such section.
(C) A taxpayer having liability described in subparagraph (C) of
paragraph one of subdivision (b) of this section shall file the returns
required under and pursuant to the authority of articles twelve-A and
thirteen-A of this chapter and shall pay to the commissioner the amounts
required to be paid with such returns, less the amounts remitted by
electronic funds transfer or certified check under this section, for
each of the periods for which such returns are filed under and pursuant
to the authority of such articles.
(3) Payment date; payment by certified check. Payment of tax by
electronic funds transfer or certified check shall be made to a bank,
banking house or trust company designated by the commissioner. The
commissioner shall designate only such banks, banking houses or trust
companies as are or shall be designated by the comptroller as
depositories pursuant to section one hundred seventy-one-a of this
chapter, as added by chapter sixty-nine of the laws of nineteen hundred
seventy-eight. Notwithstanding any other provision of law to the
contrary, any electronic funds transfer shall be deemed to be made on
the date payment is received by the depository of the department,
provided, however, that at the election of a taxpayer subject to the
provisions of this section, mailing by the taxpayer of a certified check
for the amount of the tax liability on or before the second business day
prior to the applicable due date prescribed by paragraph one of this
subdivision shall fulfill the requirements with respect to payments of
tax by electronic funds transfer prescribed by this section and shall be
deemed to be timely payment of such tax liability.
(4) Special payment rule. If a taxpayer is liable for payment of taxes
described in two or more of subparagraphs (A), (B) and (C) of paragraph
one of subdivision (b) of this section, then such taxpayer shall make
separate payment by electronic funds transfer or certified check of the
taxes described in each of such subparagraphs.
(d) Enrollment and initial payment; duration of participation. Within
forty-five days after each June first, the commissioner shall notify by
certified or registered mail all taxpayers required to participate in
the program prescribed by this section. Such notice shall contain
language advising the taxpayer of the enrollment procedure and of the
consequences of failure to enroll in such program, as well as of a
taxpayer's right to challenge such determination of required
participation provided a hearing is requested within forty days of the
mailing of such notice. If a taxpayer does not enroll within forty days
of the mailing of such certified or registered notice of required
participation or where a taxpayer's challenge is not sustained and the
taxpayer has not enrolled within ten days of notification thereof, the
commissioner shall mail another notice, in addition to making other
reasonable attempts, to inform the taxpayer of the civil penalty that
has been assessed pursuant to paragraph one of subdivision (g) of this
section, of the opportunity for abatement of such penalty, and of the
future penalties that may result from continued failure to enroll and
failure to pay by electronic funds transfer or certified check or to
file; provided, however, that for the program period beginning December
first, nineteen hundred ninety-two through August thirty-first, nineteen
hundred ninety-three, the thirty-day period referred to in this sentence
shall be read as forty-five days. A taxpayer shall make its first
payment of tax by electronic funds transfer or certified check on or
before the applicable due date prescribed by subdivision (c) of this
section for the month of December in nineteen hundred ninety-two, the
month of September in nineteen hundred ninety-three and the month of
September for any year thereafter. Unless otherwise provided by this
section, such taxpayer shall continue to make payments of tax by
electronic funds transfer or certified check in accordance with the
provisions of this section through the succeeding month of August and
shall continue to make such payments of tax for each succeeding
September-to-August period where such taxpayer meets the criteria of
subdivision (b) of this section and is properly notified by the
commissioner pursuant to the enrollment provisions of this subdivision.
Provided, however, that:
(1) A taxpayer described in subparagraph (A) of paragraph one of
subdivision (b) of this section who is newly required to participate in
the program for the September first, nineteen hundred ninety-four
through August thirty-first, nineteen hundred ninety-five period shall
have forty-five days to enroll in the program and shall make its first
payment of tax by electronic funds transfer or certified check on or
before the applicable due date prescribed by subdivision (c) of this
section for the month of December in nineteen hundred ninety-four; and
(2) A taxpayer described in subparagraph (A) of paragraph one of
subdivision (b) of this section who is newly required to participate in
the program for the September first, nineteen hundred ninety-five
through August thirty-first, nineteen hundred ninety-six period shall
make its first payment of tax by electronic funds transfer or certified
check on or before the applicable due date prescribed by subdivision (c)
of this section for the month of December in nineteen hundred
ninety-five.
(e) Voluntary participation. A taxpayer who is not required to
participate in the program prescribed by this section but who is
required to remit any of the taxes specified in subparagraph (A), (B) or
(C) of paragraph one of subdivision (b) of this section may file a
request with the commissioner to remit any of such taxes by electronic
funds transfer or certified check in accordance with the provisions of
this section. Such request shall be in a form as the commissioner shall
require and shall be granted under such conditions as the commissioner
in his or her discretion shall deem necessary.
(f) Confidentiality. The department shall assure the confidentiality
of information supplied by taxpayers in effecting payments of tax
pursuant to this section in accordance with the provisions of sections
three hundred fourteen and eleven hundred forty-six of this chapter and
any other applicable provisions of law. The provisions of article six of
the public officers law shall not apply to any such information supplied
by taxpayers subject to this section.
(g) Civil penalties and interest. (1) Failure to enroll. If a taxpayer
required to participate in the program prescribed by this section fails
to enroll in such program in accordance with the terms set forth in
subdivision (d) of this section, such taxpayer shall pay a penalty equal
to five thousand dollars; provided, however, that if such taxpayer
enrolls in the program within thirty days after notification of
assessment of such penalty is sent by the department by certified or
registered mail return receipt requested, then such penalty shall be
abated. If such taxpayer continues to fail to enroll in the program
after such thirty-day period, the taxpayer shall pay an additional
penalty of five hundred dollars if the failure is for not more than one
month, with an additional five hundred dollars for each additional month
or fraction thereof during which such failure continues.
(2) Failure to pay or late payment. (A) A taxpayer required or
approved to participate in the program prescribed by this section who
fails to make a payment of tax by electronic funds transfer or certified
check on or before the applicable due date prescribed by subdivision (c)
of this section, or who fails to pay any tax required to be remitted on
or before such applicable due date shall, in the case of the taxes
imposed pursuant to article twenty-eight and pursuant to the authority
of article twenty-nine of this chapter, be liable for penalty and
interest as prescribed by subparagraphs (i) and (ii) of paragraph one of
subdivision (a) of section eleven hundred forty-five of this chapter,
and in the case of the taxes imposed by and pursuant to the authority of
articles twelve-A and thirteen-A of this chapter, be liable for penalty
and interest as prescribed by paragraphs (a) and (b) of subdivision one
of section two hundred eighty-nine-b of this chapter.
(B) Notwithstanding any provision of law to the contrary, if a
taxpayer described in subparagraph (B) or (C) of paragraph one of
subdivision (b) of this section fails to make a payment of tax by
electronic funds transfer or certified check on or before the applicable
due date prescribed by subdivision (c) of this section or fails to pay
any tax required to be remitted on or before such applicable due date,
as prescribed by subparagraph (A) of this paragraph, and also fails to
pay or pay over to the commissioner the amounts required to be paid or
paid over with the applicable return described in paragraph two of
subdivision (c) of this section due the twentieth day of the following
month, then penalty and interest for such additional failure, as
provided by subparagraphs (i) and (ii) of paragraph one of subdivision
(a) of section eleven hundred forty-five of this chapter or paragraphs
(a) and (b) of subdivision one of section two hundred eighty-nine-b of
this chapter, as the case may be, shall be computed on the amount equal
to the difference between the total of the amount of tax due or
determined to be due with such return and the total of the amount of tax
required to be paid by electronic funds transfer or certified check on
or before the applicable due date prescribed by subdivision (c) of this
section for the preceding month.
(3) Failure to file required returns. A taxpayer required or approved
to participate in the program prescribed by this section who complies
with the payment requirements of subdivision (c) of this section
(including the payment of remaining liabilities described in paragraph
two of such subdivision), but who fails to file any return required
pursuant to article twelve-A, thirteen-A, twenty-eight or twenty-nine of
this chapter, as the case may be, for the period for which such payments
were timely and fully paid or paid over, shall be liable for a penalty
equal to five hundred dollars.
(h) Administration. Except as otherwise provided in this section, the
provisions of part IV of article twenty-eight of this chapter shall
apply to the administration of and procedures with respect to the
provisions of this section relating to the taxes described by
subparagraph (A) of paragraph one of subdivision (b) of this section,
the provisions of section eleven hundred two of this chapter relating to
the administration of and procedures with respect to such section shall
apply to the administration of and procedures with respect to the
provisions of this section relating to the taxes described by
subparagraph (B) of such paragraph one, and the provisions of article
twelve-A relating to the administration of and procedures with respect
to such article shall apply to the provisions of this section relating
to the taxes described in subparagraph (C) of such paragraph one.
(i) Regulations. The commissioner shall have the authority to
promulgate regulations in order to implement the provisions of this
section.
Last modified: September 7, 2006 |