NY Tax L § 9 (2021)
2021 New York Laws TAX - Tax Article 1 - Short Title; Definitions; Miscellaneous 9 - Electronic Funds Transfer by Certain Taxpayers Remitting Withholding Taxes.

§   9.  Electronic  funds  transfer  by  certain  taxpayers  remitting withholding taxes. (a) Definitions. For the purposes of this section:  (1) The term "commissioner" means the  commissioner  of  taxation  and finance.  (2)  The  term  "educational  organization" means a higher educational institution which  (A) is authorized by the New York state board  of  regents  to  confer degrees, or  (B)  offers a range of registered undergraduate and graduate curricula in the liberal arts and sciences, degrees in two  or  more  professional fields and doctoral programs in at least three academic fields, or  (C)  is  authorized  by  the  New York state board of regents to offer undergraduate curricula below the  baccalaureate  level  which  normally lead to the associate degree, as  such  higher  educational institutions are described in subdivisions (k), (l) and (m) of section 50.1 of eight  New  York  codes,  rules  and regulations.  (3)  The term "electronic funds transfer" means any transfer of funds, other than a transaction originated by check, draft,  or  similar  paper instrument,   which   is   initiated  through  an  electronic  terminal, telephonic instrument or computer or  magnetic  tape  so  as  to  order, instruct  or  authorize  a  financial  institution to debit or credit an account.  (4) The term "health care provider" means any  organization  described in  article  twenty-eight  or thirty-six of the public health law, or in article thirty-one of the mental hygiene law.  (5) The term "payment of tax" means the amount of tax that is actually remitted upon the filing of a withholding tax  return,  or  is  actually remitted  for  the  purposes  of  obtaining  an extension to file such a return.  (6) The term  "reconciliation  of  withholding"  means  the  quarterly combined  withholding,  wage reporting and unemployment insurance return required to be filed for the last calendar  quarter  of  each  year,  as prescribed  by  paragraph  four of subsection (a) of section six hundred seventy-four of this chapter.  (b) General rules.  (1)  Subject  to  the  requirements  contained  in subdivisions (c) and (d) of this section, the commissioner shall require by  regulation  that  any  payment  of  tax  made  by  a taxpayer who is required, for either of the semi-annual periods ending June thirtieth or December  thirty-first,  to  deduct  and  withhold   an   aggregate   of thirty-five  thousand  dollars  or more of withholding taxes pursuant to part V of  article  twenty-two  of  this  chapter,  or  pursuant  to  an equivalent  provision  enacted  under  the  authority of article thirty, thirty-A or thirty-B of this chapter, or article two-E  of  the  general city  law,  shall  be  made, on or before the date prescribed by law, by electronic funds transfer 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 provision of law to the contrary, any such payment shall be deemed to be made on the date the payment is received by the designated depository of the  department;  provided,  however, that at the election of a taxpayer subject to the provisions of this subdivision, mailing by  the  taxpayer of  the  applicable withholding tax return and a certified check for the amount of the tax liability on or before the second business  day  prior to the applicable due date otherwise prescribed by law shall fulfill the  requirements of this section and shall be deemed to be timely payment of such tax liability and timely filing of such return.  (2)  (A)  On  or  before the thirtieth calendar day following the date regulations  implementing  the  provisions  of   this   section   become effective,  the  commissioner shall, by certified mail, notify taxpayers required to participate in the  electronic  funds  transfer  program  of their responsibilities under such program. The notice shall also specify that the first payment of tax by electronic funds transfer shall be made on  an  applicable  due  date occurring on or after thirty calendar days following receipt by the taxpayer of the notice; provided, however, that the taxpayer may select an optional applicable  due  date  occurring  no later  than sixty calendar days following receipt by the taxpayer of the notice.  (B) (i) By September first, two thousand two, the commissioner  shall, by certified mail, notify taxpayers newly required to participate in the electronic  funds  transfer  program during the July first, two thousand two through June thirtieth, two  thousand  three  program  period.  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 the taxpayer's obligation to enroll in the program within forty-five calendar days of  the  mailing  of  the  notice  unless  such taxpayer  challenges  such  determination  of  required participation by requesting a hearing within forty-five calendar days of the  mailing  of such notice. In addition, such notice shall specify that such a taxpayer shall  make  its first payment of tax by electronic funds transfer by an applicable due date in January, two thousand three.  (ii) By June first, two thousand three and  by  each  succeeding  June first, the commissioner shall, by certified mail, notify taxpayers newly required  to  participate in the electronic funds transfer program. 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 the taxpayer's right to challenge  such  determination  of required  participation  provided  a  hearing is requested within twenty calendar days of the mailing of such notice. In  addition,  such  notice shall  specify  that such a taxpayer shall make its first payment of tax by electronic funds transfer by an applicable due date occurring  on  or after  thirty  calendar  days  following  receipt by the taxpayer of the notice but no later than sixty calendar days following  receipt  by  the taxpayer of the notice.  (iii)  If  a  taxpayer  does  not  enroll  within forty-five or twenty calendar days (as the case may be) of the mailing of the notice provided for in clause (i) or (ii) of this subparagraph  or  where  a  taxpayer's challenge  to  mandatory participation is not sustained and the taxpayer has not enrolled within ten calendar 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 subdivision (h) of this section, of the opportunity for abatement of such penalty, and of the  future  penalties that may result from continued failure to enroll.  (3)  Subject  to the provisions of subdivision (f) of this section, an electronic funds transfer shall serve as a substitute for the filing  of a withholding tax return.  (c)   Special   rules  with  respect  to  health  care  providers  and educational organizations.  (1) The provisions of subdivision (b) of this section shall not  apply to health care providers.  (2)  All  of the provisions of this section shall apply to educational organizations; provided, however, that any payment of tax which is  made  by  an  educational  organization  shall  be  made  by  electronic funds transfer on  or  before  the  third  business  day  following  the  date otherwise prescribed by law; and, provided further, that at the election of  a taxpayer subject to the provisions of this subdivision, mailing by the taxpayer of the applicable withholding tax return  and  a  certified check  for  the  amount  of  the  tax  liability  on or before the first business day following the applicable due date otherwise  prescribed  by law  shall  fulfill the requirements of this section and shall be deemed to be timely payment of such tax liability and  timely  filing  of  such return.  (d)  Exemptions.  A  taxpayer  shall  be  exempt from the requirements contained in subdivision (b) of this section if such taxpayer proves  to the  satisfaction  of  the  commissioner  that  aggregate  tax withheld, pursuant to the most recent reconciliation of withholding, is less  than one hundred thousand dollars.  (e)  Voluntary  participation.  A taxpayer may file a request with the commissioner to  pay  any  tax  administered  by  such  commissioner  by electronic  funds  transfer  in  accordance  with the provisions of this section. Such request shall be in such form as  the  commissioner  shall require  and shall be granted under such conditions as the commissioner, by regulation, deems necessary.   * (f) Return substitution. An  electronic  funds  transfer  shall  not serve  as a substitute for the filing of a withholding tax return if the commissioner determines that  such  substitution  will  not  ensure  the proper receipt and crediting of a payment of tax.   * NB Expired December 31, 1992  (g)  Confidentiality.  The department shall assure the confidentiality of information supplied  by  taxpayers  in  effecting  electronic  funds transfers  in  accordance  with  the  provisions  of section six hundred ninety-seven of this chapter or  other  applicable  provisions  of  this chapter.  The provisions of article six of the public officers law shall not apply to any such information supplied by taxpayers subject  to  the requirements of this section.  (h)  Civil  penalty  for  failure to enroll. If a taxpayer required to participate in the electronic funds transfer program prescribed by  this section  fails to enroll in such program in accordance with the terms of subparagraph (B) of paragraph two of subdivision (b)  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 twenty calendar days after notification of assessment of such penalty is sent  by  the department by certified mail for program periods beginning on or after July first, two thousand two, then  such  penalty  shall  be abated.  If  such  taxpayer  continues  to fail to enroll in the program after such twenty  calendar  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. The penalty provided by  this  section  shall  be  paid  upon notice  and demand and shall be assessed, collected and paid in the same manner as  the  withholding  taxes  referred  to  in  paragraph  one  of subdivision  (b) of this section; and any reference in the provisions of part VI of article twenty-two  of  this  chapter,  which  apply  to  the administration  of and procedures with respect to the provisions of this section, shall be deemed also to refer to the penalty provided  by  this section.  (i)   Regulations.   The  commissioner  shall  promulgate  regulations necessary to implement this section, which  regulations  shall  include, but shall not be limited to, the following:  (1)  the  different  methods  of  effecting  electronic funds transfer messages available to taxpayers. Such methods shall include at least two methods in which the transfer can be effected without any charge to  the taxpayer  for  the  electronic  funds  transfer  itself, and one of such methods shall not require the taxpayer to disclose financial institution account information to the department;  (2)  the contents of an electronic funds transfer message necessary to ensure the proper receipt and crediting of a tax payment;  (3) the means by which taxpayers will be provided acknowledgements  of payments by electronic funds transfer; and  (4)  delineation of what shall constitute reasonable cause and absence of willful neglect for purposes of compliance  with  the  provisions  of this  section, including the inability of a taxpayer, for reasons beyond the taxpayer's control,  to  utilize  any  system  of  electronic  funds transfer required pursuant to this section.