New York Tax Law Section 171-M - Certain New York city tax overpayments credited against outstanding debts owed to the state of New York.

171-m. Certain New York city tax overpayments credited against outstanding debts owed to the state of New York. (1) For purposes of this section:

(a) "judgment" shall mean a warrant filed with a county clerk whereby the commissioner is, in the right of the people of the state of New York, deemed to have obtained judgment against an individual, corporation, association, company, partnership, estate, trust, liquidator, fiduciary or other entity, identified in a tax warrant as the judgment debtor, for a tax or other imposition;

(b) "overpayment" shall mean overpayment of a tax administered by the commissioner of finance of the city of New York pursuant to title eleven of the administrative code of the city of New York;

(c) "taxpayer" means a judgment debtor who or which made an overpayment.

(2) Notwithstanding any law to the contrary, an overpayment may be paid by the commissioner of finance of the city of New York to the commissioner for full or partial satisfaction of a judgment against a taxpayer who or which made the overpayment. The commissioner and the commissioner of finance of the city of New York are hereby authorized to enter into a written agreement which shall set forth procedures for applying an overpayment and interest thereon for satisfaction, in part or in full, of a judgment. The commissioner of finance and the commissioner may also obtain and exchange whatever return or report information is necessary to implement the agreement.

(3) Such agreement shall include:

(a) the procedure under which the commissioner shall certify to, and notify, the commissioner of finance about an outstanding judgment, amounts remaining due thereon and the format of certification and notification;

(b) the fee, if any, for reimbursement of the commissioner of finance by the commissioner for the cost of implementing procedures authorized by this section;

(c) the procedure for transferring overpayments to the commissioner;

(d) the procedure for reimbursing the city of New York in the event an overpayment was improperly paid to the commissioner;

(e) such other matters as the parties to the agreement shall deem necessary to carry out the provisions of this section.

(4) Before notifying the commissioner of finance of a judgment for partial or full satisfaction by application of an overpayment, the commissioner shall make a reasonable attempt to notify a taxpayer at the taxpayer's last known address (i) that the judgment, clearly identified as to amount and the tax or imposition, unless paid within thirty days, will be referred to the city of New York finance department for payment by application of an overpayment; (ii) that state law permits application of certain overpayments against judgments; (iii) that the taxpayer may request a review of the proposed referral of a judgment by contacting the department at a telephone number or address disclosed in the notice; and (iv) that the taxpayer may present to the commissioner any written evidence and arguments in support of a defense to the proposed referral or may appear at a scheduled conference with the department to present oral arguments and written and oral evidence in support of such defense. Provided however, nothing herein shall be deemed to afford a taxpayer the opportunity to reargue any issue which was or could have been adjudicated in an administrative or judicial proceeding prior to filing of a warrant serving as a judgment.

(5) An overpayment shall be paid to the commissioner pursuant to this section only to the extent the commissioner of finance determines the overpayment is not subject to offset against a debt owed the city of New York or owed its instrumentalities, or subject to any other enforceable city of New York interest or right in the overpayment.

(6) The commissioner of finance shall notify each taxpayer who made an overpayment, in writing, of the amount of such overpayment and the interest thereon paid to the commissioner. Such notice shall include notification to any other person who may have filed a joint return with the taxpayer of the steps such other person may take in order to secure their proper share of the refund.

(7) From the time the commissioner of finance is notified by the commissioner of a taxpayer's liability for a judgment under the agreement provided for in this section, the city of New York shall be relieved of all liability to such taxpayer, its assigns, successors, heirs or representatives for the amount of the overpayment and interest thereon paid to the commissioner. Such taxpayer, its assigns, successors, heirs or representatives shall have no right to commence a court action or proceeding or have any other legal recourse against the city of New York to recover such overpayment or interest thereon paid to the commissioner. However, nothing herein shall be construed to preclude any legal, equitable, or administrative action by such taxpayer its assigns, successors, heirs or representatives entitled to such overpayment against the commissioner to recover that part of the overpayment or interest thereon that is greater than the amount of the judgment owed by such taxpayer on the date such overpayment is credited against a judgment.

(8) The commissioner and the commissioner of finance may promulgate such rules and regulations deemed necessary to carry out the provisions of this section.


Last modified: February 3, 2019