2023 New York Laws › TAX - Tax › Article 26 - Estate Tax › Part 4 - Procedure and Administration › 997 - Extensions of Time for Payment of Estate Tax Where Estate Consists Largely of Interest in Closely Held Businesses.

§  997.  Extensions  of  time  for  payment of estate tax where estate
consists largely of interest in closely held businesses. The  provisions
of section 6166 of the internal revenue code shall apply to this section
to the same extent as if such section of such code were contained in and
made part of this section (whether or not a federal estate tax return is
required to be filed) except as provided herein:
(a)  The  phrase  "adjusted  gross  estate" shall be read as "adjusted
federal gross estate determined without reference to paragraphs (1), (2)
and (3) of subsection (a) of section nine hundred  fifty-four"  of  this
article.
(b)  The  phrase "section 2001" shall be read as "section nine hundred
fifty-two or section nine hundred sixty" of this article.
(c) The phrase "the date prescribed by section 6151(a) for payment  of
the  tax"  shall be read as "the date prescribed by this article for the
payment of the tax (without regard to any extension of time)".
(d) The term "secretary" shall be read as  "commissioner  of  taxation
and finance".
(e)  Election.  The  election  under this section shall not be allowed
unless a similar election was made  and  allowed  with  respect  to  the
federal  estate  tax return required to be filed under the provisions of
the internal revenue code. If such election was made for the purposes of
the federal estate tax, the time for  making  the  election  under  this
article  shall  be the same as is required under the federal estate tax.
Where no federal estate tax return is required to be filed, the election
with respect to the tax imposed under this  article  shall  be  made  no
later  than  the date prescribed for the filing of the return under this
article (including extensions thereof) or any  time  thereafter  as  the
commissioner of taxation and finance may by regulation prescribe.
(f) The commissioner of taxation and finance may, at any time, require
a  bond  to  be  filed  with him, which bond has been issued by a surety
company approved by the  superintendent  of  financial  services  as  to
solvency  and responsibility and authorized to transact business in this
state or other security acceptable to such commissioner,  in  an  amount
not  exceeding  twice the amount for which the time for payment has been
extended under this section, to secure the payment of the estate tax and
interest, the time for payment of which has  been  extended  under  this
section.
(g)  If  an  acceleration  of  payment  occurs with respect to the tax
imposed by this article, the extension of time for payment  of  the  tax
imposed  by  this article shall cease to apply and any unpaid portion of
the tax payable in installments shall be paid  upon  notice  and  demand
from  the commissioner of taxation and finance. If any such acceleration
of payment is avoided by a payment within six months  of  the  due  date
thereof,  then  the  provisions  of  subsection (j) of this section with
respect to a two percent rate  of  interest  shall  not  apply  to  said
payment  and there is imposed a penalty of five percent of the amount of
such payment multiplied by the number of months, or  fractions  thereof,
after  the  due  date  of  the  payment and before payment is made. Such
acceleration of payment shall occur if:
(1) any installment of estate tax imposed by this article is not  paid
on  or before the date fixed for its payment (including any extension of
time for the payment of such installment), or
(2) the executor has been notified by the commissioner of taxation and
finance that a bond or other security is required, but no such  bond  or
other  security  has  been  filed  within  thirty  days from the date of
mailing of such notification, or
(3) an acceleration of  payment  has  occurred  with  respect  to  the
election by the executor to pay part or all of the federal estate tax in

installments  or,  where  no federal estate tax return is required to be
filed, an  acceleration  of  payment  has  occurred  by  virtue  of  the
provisions  of  subsection  (g)  of section 6166 of the internal revenue
code.
(h) The commissioner of taxation and finance may, for reasonable cause
and  if  his interests would not be jeopardized thereby, extend the time
for payment of any  part  of  any  installment  under  this  subsection,
including  any  part  of  a deficiency prorated to any installment under
this subsection, for a reasonable period (1) not in excess of ten  years
from the date prescribed for the filing of the return under this article
(without  regard  to  any  extension of time to file) or (2) if the date
prescribed for such filing is earlier than  the  date  which  is  twelve
months after the due date of the last installment, such later date.
(i)  If  the  time  for payment of any amount of tax has been extended
under this subsection, interest shall be paid annually together with the
installment of tax on any unpaid portion of such amount  (including  the
amount  of  any deficiency), at the rate prescribed in subsection (b) of
section nine  hundred  seventy-six  of  this  article  with  respect  to
extensions  of time for payment of estate tax (other than the extensions
of time provided for in this section) or as otherwise  provided  for  in
subsection (j) of this section.
(j)  If  the  time  for payment of any amount of tax has been extended
under this section, the provisions  of  section  6166  of  the  internal
revenue  code  applicable  to  the  payment  of interest are modified as
follows:
(1) Interest on the two percent portion of such amount shall  be  paid
at  the rate of two percent per annum. For purposes of this section, the
amount of any deficiency which is prorated to installments payable under
this  section,  shall  be  treated  as  an  amount  of  tax  payable  in
installments under such section.
(2)  For  purposes  of  this paragraph, the term "two percent portion"
means the lesser of fifty-four thousand dollars or the amount of the tax
imposed by this article which is extended as provided in this section.
(3) If the amount of tax imposed by this  article  which  is  extended
exceeds the two percent portion, any payment of a portion of such amount
shall,  for  purposes  of  computing  interest  for  periods  after such
payment, be treated as reducing the two percent  portion  by  an  amount
which  bears  the same ratio to the amount of such payment as the amount
of the two percent portion (determined without regard to this paragraph)
bears to the amount of tax which is extended.
(4) Interest on any  portion  of  the  amount  of  tax  which  is  not
includible in the two percent portion of such amount shall be payable at
the rate provided for in subsection (i) of this section.
(5)  (A)  Interest  payable on any unpaid portion of the amount of tax
due attributable to the first five years after the date  prescribed  for
payment of the tax shall be paid annually;
(B)  interest  payable  on  any  unpaid  portion of such amount of tax
attributable to any period after the five year  period  referred  to  in
subparagraph  (A)  of  this paragraph shall be paid annually at the same
time as and as part of, each installment payment of the tax;
(C) in the case of a deficiency to which  subsection  (e)  of  section
6166  of the internal revenue code applies is determined after the close
of the five  year  period  referred  to  in  subparagraph  (A)  of  this
paragraph,  interest attributable to such five year period, and interest
assigned under subparagraph (B) of this paragraph  to  any  installment,
the  date  of payment of which has arrived on or before the date of such
determination,  shall  be  paid  upon  notice  and   demand   from   the
commissioner of taxation and finance; and
(D)  if  the  executor  has selected a period shorter than five years,
such shorter period shall be substituted for five years in subparagraphs
(A), (B) and (C) of this paragraph. Any period of time selected for  the
purposes of the tax under this article shall in no event be greater than
the period of time selected for the purpose of the estate tax imposed by
the internal revenue code.
(k)  The  lien  of  the  tax  provided  for  in  section  nine hundred
eighty-two of this article shall be applicable to the same extent as  if
no  election  had been made to extend the time for payment of estate tax
under this section.