N.Y.
Tax Law Section 10
Electronic funds transfer by certain taxpayers remitting sales and compensating use taxes, prepaid sales and compensating use taxes on mo...
(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 § 9 (Electronic funds transfer by certain taxpayers remitting withholding taxes)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 § 1102 (Prepayment of sales tax on motor fuel and diesel motor fuel)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 Lien Law § 2 (Definitions)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 § 1147 (Notices and limitations of time)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 § 171-A (Deposit and disposition of revenue)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 § 1145 (Penalties and interest)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 § 289-B (Penalties and interest)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 § 1145 (Penalties and interest)section eleven hundred forty-five of this chapter or paragraphs (a) and (b) of subdivision one of § 289-B (Penalties and interest)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 28 (Sales and Compensating Use Taxes)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 § 1102 (Prepayment of sales tax on motor fuel and diesel motor fuel)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.
Source:
Section 10 — Electronic funds transfer by certain taxpayers remitting sales and compensating use taxes, prepaid sales and compensating use taxes on mo..., https://www.nysenate.gov/legislation/laws/TAX/10 (updated Sep. 22, 2014; accessed Dec. 21, 2024).
