Court Opinion

ID: 5884274
Source: CourtListenerOpinion
Date Created: 2022-01-13 02:26:46.861237+00
Date Added: 2024-06-11T08:45:07.284552
License: Public Domain

—Mikoll, J.
Appeal from a judgment of the Supreme Court at Special Term (Cholakis, J.), entered January 9, 1985 in Albany County, which partially granted petitioners’ application, in a proceeding pursuant to CPLR article 78, to review respondent’s determination imposing a personal income tax assessment under Tax Law articles 22 and 30.
The sole issue before us is the legality of exempting from taxation that portion of a lump-sum retirement distribution paid to petitioners, which represents earnings from interest on United States Government bonds. Respondent challenges Spe*868cial Term’s determination that such an exemption should be granted on the basis that neither petitioners’ petition nor the brief before respondent contained a challenge to the assessment on these grounds. It is urged that the solitary reference to such interest by way of a footnote in the statement of facts in petitioners’ brief to respondent was insufficient to raise the issue. Petitioners’ challenge to the tax assessment proceeded before respondent on the sole basis that petitioners were entitled to report the lump-sum distribution partially as a long-term capital gain and partially as ordinary income.
Generally, matters not addressed before respondent cannot be raised for the first time in a CPLR article 78 proceeding (Matter of Freer v State Tax Commn., 98 AD2d 834). However, the record before respondent sufficiently sets out the factual basis which, if accepted by respondent, afforded it an opportunity to correct the alleged error in tax assessment. The record permits a fair judicial review of the question. We thus uphold Special Term’s determination that the issue was sufficiently preserved. We concur with its finding that the interest income generated by the bonds is exempt from State taxation under Tax Law § 612 (c) (1).
Judgment affirmed, without costs. Main, J. P., Weiss, Mikoll, Yesawich, Jr., and Harvey, JJ., concur.