Court Opinion

ID: 5819246
Source: CourtListenerOpinion
Date Created: 2022-01-12 21:03:51.129157+00
Date Added: 2024-06-11T08:43:04.732876
License: Public Domain

Herlihy, J. (dissenting).
A reading of the statute (Tax Law, art 21 [to which all statutory references hereafter refer]) and the resulting rules and regulations (20 NYCRR Art 2) which are not here challenged, suggest, indeed require, that the Tax Commission ascertain as accurately as possible, for purposes of calculating tax due under the chosen one of three alternative methods for computing tax liability (§ 503), the amount of travel on the highway within the State which shall be the basis for the tax due from the petitioner or others so situated.
In the present action the petitioner used tariff schedules and mileage used for billing purposes as records of mileage and contends that the commission is estopped from determining the "actual” mileage in imposing taxes.
There being no issue as to the amount due (see stipulation), the observation by the majority as to the exempted mileage is in no way controlling or entitled to consideration.
The majority opinion states that: "To permit the respondent to audit a taxpayer’s records using a different method than that selected by the taxpayer would compel one subject to the highway use tax to keep all of the different types of records enumerated in respondent’s regulations in order to be prepared for any one of the different auditing methods. Article 21 of the Tax Law and the applicable regulations should not be construed to impose such an unreasonable burden upon one subject to the highway use tax.” It is then concluded: "As a result, it was unfair for respondent to audit petitioner using a different method of calculating mileage than that which pe*266titioner had used during the period of the audit.” (Emphasis added.)
To so hold unnecessarily restricts the intent and purpose of the statutes and regulations and would prevent the Tax Commission from making a deficiency assessment which here the record supports. An analysis of the laws and regulations supports the interpretation of the commission.
Section 505 provides that tax returns are to be filed each month unless otherwise permitted by the respondent. In this case the issue involves monthly returns and tax payments made pursuant to section 506. Section 507 provides in part as follows: "§ 507. Records. Every carrier subject to this article and every carrier to whom a permit was issued shall keep a complete and accurate daily record which shall show the miles traveled in this state by each vehicular unit and such other information as the tax commission may require.”
Section 509 provides in part that the respondent shall have power 1. "[t]o prescribe such methods and means as * * * necessary for checking, verifying and ascertaining the number of miles traveled * * * 2. [t]o prescribe the * * * type of records to be kept by any carrier to the extent necessary to determine liability * * * 5. [t]o request * * * public officials [including the State Police] to cooperate in [enforcement] * * * and 7. [t]o make reasonable rules and regulations”. Section 510 authorizes the respondent to determine a tax due when it finds that the tax return is unsatisfactory.
The respondent has promulgated a series of regulations pursuant to its powers enumerated in section 509 in regard to this highway use tax (20 NYCRR 480.1 et seq.). (All references to regulations hereinafter are to 20 NYCRR.)
Regulation 481.4 reiterates that the tax is based on mileage and the various regulations relating to the method of determining the appropriate rate for the weight of a vehicle also recite that the rate is multiplied against the "total mileage operated within the State”. Regulation 481.12 is set forth in full in the majority decision and it clearly specifies that the mileage is to be "the actual mileage traveled by each motor vehicle”. Even the most casual reading of regulation 481.12 does not reasonably suggest that any one of the possible records would be appropriate to the exclusion of all others. In any event, the laws and regulations clearly specify that the tax is imposed on actual mileage. Coupling that knowledge with which any taxpayer is chargeable, with the language of *267regulation 481.12, prevents exclusive use by a taxpayer of any basis which does not give actual mileage.
Part 483 of the regulations governs "Records”. Section 483.1 provides that taxpayers "must maintain an accurate daily record of all operations”. Section 483.2 requires that for those taxpayers using the gross weight method of computing tax rate, a daily record containing the following information must be maintained:
"(1) The date of each trip.
"(2) The permit and vehicle numbers.
"(3) The point of origin and destination for each trip.
"(4) The number of round trips each day.
"(5) The number of miles traveled laden.
"(6) The number of miles traveled empty.
"(7) [name of owner]”. (Emphasis added.)
Subdivision (c) of regulation 483.2 requires the taxpayer using the gross weight method to maintain "such records as bills of lading, waybills, freight bills, invoices, shipping orders, dispatch sheets, records of vehicles leased, interchanged or hired, drivers’ daily logs or trip sheets”. Regulation 483.4 is quoted in part in the majority decision and upon its face it requires that taxpayers using the gross weight method must keep available records used to compute the taxable mileage. It does not in any way specify what records a taxpayer must use to compute mileage and, of course, it relates solely to a taxpayer’s election of substantiation insofar as a particular document is used by the taxpayer to compute mileage. The records which are to be kept and utilized are set forth in subdivision (c) of regulation 483.2 and these are all records which relate to the information on a daily manifest or trip record. In regard to the records referred to in regulation 483.4, regulation 483.5 requires that certain receipts be kept as records to establish the mileage exempt for travel on the New York State Thruway.
In any event, if a taxpayer uses the gross weight method and were to report mileage solely on the basis of tariff schedules and mileage used for hauling purposes, the requirement that the mileage reflect all miles traveled would be thwarted. Taxpayers reporting on the gross weight method would thereby avoid mileage not subject to direct billing to customers and not covered by tariff filings. The taxpayer seeks an exemption from the requirement of paying on actual mileage *268and assuming the regulations could legally grant such an exemption, the regulations do not admit of such a construction.
The record does exhibit some delay; however, the failure of the petitioner to use actual mileage in its daily manifest or trip records is not simply an inadvertent error requiring any action as to dispensing with penalties.
The determination should be confirmed.
Greenblott, Main and Larkin, JJ., concur with Koreman, P. J.; Herlihy, J., dissents and votes to confirm in an opinion.
Determination annulled, with costs, and matter remitted for further proceedings not inconsistent herewith.