NY Tax L § 10 (2021)
2021 New York Laws TAX - Tax Article 1 - Short Title; Definitions; Miscellaneous 10 - Electronic Funds Transfer by Certain Taxpayers Remitting Sales and Compensating Use Taxes, Prepaid Sales and Compensating Use Taxes on Motor Fuel And

§  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.