2020 New York Laws
TAX - Tax
Article 28 - Sales and Compensating Use Taxes
Part 4 - Administrative Provisions
1133 - Liability for the Tax.

Universal Citation: NY Tax L § 1133 (2020)
§ 1133. Liability for the tax. (a) (1) Except as otherwise provided in
paragraph  two  of  this  subdivision  and  in  section  eleven  hundred
thirty-seven of this part, every person  required  to  collect  any  tax
imposed  by this article shall be personally liable for the tax imposed,
collected or required to be  collected  under  this  article.  Any  such
person  shall  have the same right in respect to collecting the tax from
his customer or in respect to nonpayment of the tax by the  customer  as
if the tax were a part of the purchase price of the property or service,
amusement  charge  or  rent, as the case may be, and payable at the same
time; provided, however, that the tax commission shall be  joined  as  a
party in any action or proceeding brought to collect the tax.

(2) Notwithstanding any other provision of this article: (i) The commissioner shall grant the relief described in subparagraph (iii) of this paragraph to a limited partner of a limited partnership (but not a partner of a limited liability partnership) or a member of a limited liability company if such limited partner or member demonstrates to the satisfaction of the commissioner that such limited partner's or member's ownership interest and the percentage of the distributive share of the profits and losses of such limited partnership or limited liability company are each less than fifty percent, and such limited partner or member was not under a duty to act for such limited partnership or limited liability company in complying with any requirement of this article. Provided, however, the commissioner may deny an application for relief to any such limited partner or member who the commissioner finds has acted on behalf of such limited partnership or limited liability company in complying with any requirement of this article or has been convicted of a crime provided in this chapter or who has a past-due liability, as such term is defined in section one hundred seventy-one-v of this chapter.

(ii) Such limited partner or member must submit an application for relief, on a form prescribed by the commissioner, and the information provided in such application must be true and complete in all material respects. Providing materially false or fraudulent information on such application shall disqualify such limited partner or member for the relief described in subparagraph (iii) of this paragraph, shall void any agreement with the commissioner with respect to such relief, and shall result in such limited partner or member bearing strict liability for the total amount of tax, interest and penalty owed by their respective limited partnership or limited liability company pursuant to this subdivision.

(iii) A limited partner of a limited partnership or member of a limited liability company, who meets the requirements set forth in this paragraph and whose application for relief is approved by the commissioner, shall be liable for the percentage of the original sales and use tax liability of their respective limited partnership or limited liability company that reflects such limited partner's or member's ownership interest of distributive share of the profits and losses of such limited partnership or limited liability company, whichever is higher. Such original liability shall include any interest accrued thereon up to and including the date of payment by such limited partner or member at the underpayment rate set by the commissioner pursuant to section eleven hundred forty-two of this part, and shall be reduced by the sum of any payments made by (A) the limited partnership or limited liability company; (B) any person required to collect tax not eligible for relief; and (C) any person required to collect tax who was eligible for relief but had not been approved for relief by the commissioner at the time such payment was made. Provided, however, such limited partner or member shall not be liable for any penalty owed by such limited partnership or limited liability company or any other partner or member of such limited partnership or limited liability company. Any payment made by a limited partner or member pursuant to the provisions of this paragraph shall not be credited against the liability of other limited partners or members of their respective limited partnership or limited liability company who are eligible for the same relief; provided, however that the sum of the amounts owed by all of the persons required to collect tax of a limited partnership or limited liability company shall not exceed the total liability of such limited partnership or limited liability company.

(b) Where any customer has failed to pay a tax imposed by this article to the person required to collect the same, then in addition to all other rights, obligations and remedies provided, such tax shall be payable by the customer directly to the tax commission and it shall be the duty of the customer to file a return with the tax commission and to pay the tax to it within twenty days of the date the tax was required to be paid.

(c) The tax commission may, whenever it deems it necessary for the proper enforcement of this article, provide by regulation that customers shall file returns and pay directly to the tax commission any tax herein imposed, at such times as returns are required to be filed and payment made by persons required to collect the tax.

(d) (1) no person required to collect any tax imposed by this article shall advertise or hold out to the public in any manner, directly or indirectly, that the tax imposed by this article is not considered as an element in the price, amusement charge or rent payable by customers. However, such person required to collect tax may advertise, hold out, or state to a retail purchaser or to the public, that such person will pay the tax imposed by section eleven hundred five of this article on behalf of a retail purchaser, subject to the following conditions:

(i) In so advertising, holding out, or stating to a retail purchaser or to the public, such person required to collect tax shall expressly state on every bill, memorandum, receipt or other statement of the price, amusement charge or rent paid or payable given to such purchaser, that such person will pay the tax imposed by section eleven hundred five of this article on behalf of such purchaser, and such person shall not indicate or imply that the transaction is exempt or excluded from any tax imposed by this article; and

(ii) Every bill, memorandum, receipt or other statement of the price, amusement charge or rent paid or payable given to such purchaser shall separately state the amount of tax due pursuant to such section eleven hundred five and that the tax was not collected from such purchaser. Such person required to collect tax shall hold such tax as trustee for and on account of the state; and

(iii) A retail purchaser, who in good faith accepts from a person required to collect any tax imposed by this article, a bill, memorandum, receipt or other statement of the price, amusement charge or rent that indicates the amount of tax due pursuant to such section eleven hundred five and that such person required to collect tax will be paying such tax on behalf of such purchaser, shall not be liable for the tax imposed by such section eleven hundred five, or any interest or penalties thereon; provided, however that nothing in this subdivision shall exempt such purchaser from any additional tax due pursuant to section eleven hundred ten of this article.

(e) Applicability of Mobile Telecommunications Sourcing Act. The provisions of sections 119(c), 120, 121 and 122 of title 4 of the United States Code as enacted and in effect on July twenty-eighth, two thousand, to the extent relevant and to the extent required by preemption, shall apply to the provisions of this article in the same manner and with the same force and effect as if the language of such sections of such title 4 of the United States Code had been incorporated in full into this article and had expressly referred to the taxes under this article, with such modifications as may be necessary in order to adapt the language of such provisions to the taxes imposed by this article.

(f) A marketplace provider is relieved of liability under this section for failure to collect the correct amount of tax to the extent that the marketplace provider can show that the error was due to incorrect or insufficient information given to the marketplace provider by the marketplace seller. Provided, however, this subdivision shall not apply if the marketplace seller and marketplace provider are affiliated within the meaning of paragraph one of subdivision (e) of section eleven hundred one of this article.

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