2020 New York Laws
TAX - Tax
Article 28 - Sales and Compensating Use Taxes
Part 4 - Administrative Provisions
1138 - Determination of Tax.

Universal Citation: NY Tax L § 1138 (2020)
§  1138.  Determination  of  tax. (a) (1) If a return required by this
article is not filed,  or  if  a  return  when  filed  is  incorrect  or
insufficient,  the  amount  of  tax  due  shall  be  determined  by  the
commissioner from such information as may be  available.  If  necessary,
the tax may be estimated on the basis of external indices, such as stock
on  hand,  purchases,  rental  paid, number of rooms, location, scale of
rents or charges, comparable rents or charges,  type  of  accommodations
and service, number of employees or other factors. In the case of retail
food  stores  and  other  participants approved for participation in the
federal food stamp program under or pursuant to the federal  food  stamp
act  of  nineteen  hundred  seventy-seven  (7 U.S.C. § 2011 et seq.), as
amended, whose records are incomplete or inadequate  to  determine  tax,
the  external indices upon which tax may be estimated and determined may
also  include  information  contained  in   applications,   updates   of
applications,  redemption  certificates,  returns and reports which such
retail food stores and other participants furnish to or are furnished by
the United States government or this state or their  agencies  in  order
for such retail food stores and other participants to participate in the
food stamp program or to redeem coupons issued under or pursuant to such
food  stamp act and any other available information considered relevant.
Notice of such determination shall be mailed to the  person  or  persons
liable   for  the  collection  or  payment  of  the  tax.  A  notice  of
determination shall be mailed by certified or  registered  mail  to  the
person or persons liable for the collection or payment of the tax at his
last known address in or out of this state. If such person or persons is
deceased  or  under a legal disability, a notice of determination may be
mailed to his last known address in or out of  this  state,  unless  the
department   has  received  notice  of  the  existence  of  a  fiduciary
relationship with respect to the taxpayer. After ninety  days  from  the
mailing of a notice of determination, such notice shall be an assessment
of  the  amount  of  tax  specified  in  such  notice, together with the
interest, additions to tax and penalties stated in such  notice,  except
only  for  any  such  tax  or other amounts as to which the taxpayer has
within such ninety day period applied to the division of tax appeals for
a  hearing,  or  unless  the  commissioner  of  his  own  motion   shall
redetermine  the  same. If the notice of determination is addressed to a
person outside of the United States, such period shall  be  one  hundred
fifty days instead of ninety days.

(2) Whenever such tax is estimated as provided for in this section, such notice shall contain a statement in bold face type conspicuously placed on such notice advising the taxpayer: that the amount of the tax was estimated; that the tax may be challenged through a hearing process; and that the petition for such challenge must be filed with the tax commission within ninety days.

(3) (A) The liability of a purchaser, transferee or assignee of business assets sold, transferred or assigned in bulk for the payment to the state of taxes determined to be due from the seller, transferor or assignor arising under subdivision (c) of section eleven hundred forty-one of this chapter shall be an assessment of the liability determined unless the purchaser, transferee or assignee, within ninety days after the giving of notice by the tax commission to such purchaser, transferee or assignee of the total amount of any tax or taxes which the state claims to be due from the seller, transferor or assignor, shall apply to the tax commission for a hearing or unless the tax commission, on its own motion, shall redetermine such liability. Where the tax commission determines that the amount of taxes claimed to be due from the seller, transferor or assignor is erroneous or excessive in whole or in part it shall, on behalf of the purchaser, transferee or assignee, determine the amount of tax or taxes properly due and if such amount is less than the amount of taxes for which the purchaser would have been liable in the absence of such determination it shall reduce such liability accordingly. The commission may, on its motion, abate, on behalf of the purchaser, transferee or assignee, any part of the taxes determined to be erroneous or excessive, whether or not such taxes had become finally and irrevocably fixed.

(B) The liability, pursuant to subdivision (a) of section eleven hundred thirty-three of this article, of any officer, director or employee of a corporation or of a dissolved corporation, member or employee of a partnership or employee of an individual proprietorship who as such officer, director, employee or member is under a duty to act for such corporation, partnership or individual proprietorship in complying with any requirement of this article for the tax imposed, collected or required to be collected, or for the tax required to be paid or paid over to the tax commission under this article, and the amount of such tax liability (whether or not a return is filed under this article, whether or not such return when filed is incorrect or insufficient, or where the tax shown to be due on the return filed under this article has not been paid or has not been paid in full) shall be determined by the tax commission in the manner provided for in paragraphs one and two of this subdivision. Such determination shall be an assessment of the tax and liability for the tax with respect to such person unless such person, within ninety days after the giving of notice of such determination, shall apply to the division of tax appeals for a hearing. If such determination is identical to or arises out of a previously issued determination of tax of the corporation, dissolved corporation, partnership or individual proprietorship for which such person is under a duty to act, an application filed with the division of tax appeals on behalf of the corporation, dissolved corporation, partnership or individual proprietorship shall be deemed to include any and all subsequently issued personal determinations and a separate application to the division of tax appeals for a hearing shall not be required. The tax commission may, nevertheless, of its own motion, redetermine such determination of tax or liability for tax. Where the tax commission determines or redetermines that the amount of tax claimed to be due from a vendor of tangible personal property or services, a recipient of amusement charges, or an operator of a hotel is erroneous or excessive in whole or in part, it shall redetermine the amount of tax properly due from any such person as a person required to collect tax with respect to such vendor, recipient, or operator, and if such amount is less than the amount of tax for which such person would have been liable in the absence of such determination or redetermination, it shall reduce such liability accordingly. Furthermore, the tax commission may, of its own motion, abate on behalf of any such person, any part of the tax determined to be erroneous or excessive whether or not such tax had become finally and irrevocably fixed with respect to such person but no claim for abatement may be filed by any such person. The provisions of this paragraph shall not be construed to limit in any manner the powers of the attorney general under subdivision (a) of section eleven hundred forty-one or the powers of the tax commission to issue a warrant under subdivision (b) of such section against any person whose liability has become finally and irrevocably fixed.

(C) The liability of any person as an owner of a filling station, for the penalty imposed by subparagraph (vii) of paragraph one of subdivision (a) of section eleven hundred forty-five, and the amount of such penalty shall be determined by the tax commission. Such determination shall be an assessment of the amount of and liability for penalty with respect to such person unless such person, within ninety days after the giving of notice of such determination, shall apply to the tax commission for a hearing. The tax commission may, nevertheless, of its own motion, redetermine such determination or liability for penalty. Furthermore, the tax commission may, of its own motion, abate any part of the penalty determined to be erroneous or excessive whether or not such penalty has become finally and irrevocably fixed with respect to such person but no claim for abatement may be filed by any such person. The provisions of this paragraph shall not be construed to limit in any manner the powers of the attorney general under subdivision (a) of section eleven hundred forty-one of this article or the powers of the tax commission to issue a warrant under subdivision (b) of such section against any person whose liability has become finally and irrevocably fixed.

(D) The liability of any person, as an owner of a place of business selling cigarettes at retail, for the penalty imposed by subparagraph (viii) of paragraph one of subdivision (a) of section eleven hundred forty-five of this article and the amount of such penalty shall be determined by the commissioner. Such determination shall be an assessment of the amount of and liability for such penalty with respect to such person, unless such person, within ninety days after the giving of notice of such determination, shall apply to the division of tax appeals for a hearing. The commissioner may, nevertheless, on the commissioner's own motion, redetermine such determination. Furthermore, the commissioner may, on the commissioner's own motion, abate any part of the penalty determined to be erroneous or excessive whether or not such penalty has become finally and irrevocably fixed with respect to such person; but no claim for abatement may be filed by any such person. The provisions of this paragraph shall not be construed to limit in any manner the powers of the attorney general under subdivision (a) of section eleven hundred forty-one of this article or the powers of the commissioner to issue a warrant under subdivision (b) of such section against any person whose liability has become finally and irrevocably fixed.

(E) In addition to any other liability a credit card issuer or fuel distributor may have, the commissioner shall determine any or all of the following liabilities: (1) any tax, interest or penalty liability of a credit card issuer or fuel distributor for any credit allowed or refund paid under subdivision (h) of section eleven hundred thirty-nine of this part which was erroneously, illegally or unconstitutionally allowed or paid to such credit card issuer or fuel distributor, or (2) the penalty imposed by subparagraph (ix) of paragraph one of subdivision (a) of section eleven hundred forty-five of this part. In any such instance, the commissioner shall give the credit card issuer or fuel distributor notice of such determination in the manner described in paragraph one and two of this subdivision. Such determination shall be an assessment of any such liability unless such credit card issuer or fuel distributor, within ninety days after the giving of such notice and determination, shall apply to the commissioner for a hearing. The commissioner may, nevertheless, of his or her own motion, redetermine such determination or liability for penalty. Furthermore, the commissioner may, of his or her own motion, abate any part of the penalty determined to be erroneous or excessive whether or not such penalty has become finally and irrevocably fixed with respect to such issuer or fuel distributor but no claim of abatement may be filed by such issuer or fuel distributor. The provisions of this paragraph shall not be construed to limit in any manner the powers of the attorney general under subdivision (a) of section eleven hundred forty-one of this part or the powers of the commissioner to issue a warrant under subdivision (b) of such section against any such issuer or fuel distributor whose liability has become finally and irrevocably fixed.

(4) After the hearing provided for in paragraph one or three of this subdivision, the division of tax appeals shall give notice promptly by registered or certified mail of the determination of the administrative law judge to the petitioner and to the commissioner of taxation and finance. Such determination may be reviewed by the tax appeals tribunal as provided in article forty of this chapter. The decision of the tax appeals tribunal may be reviewed as provided in section two thousand sixteen of this chapter. Such a proceeding for judicial review shall not be instituted unless the amount of any tax sought to be reviewed, with penalties and interest thereon, if any, shall be first deposited with the commissioner of taxation and finance and there shall be filed with the commissioner of taxation and finance an undertaking, issued by a surety company authorized to transact business in this state and approved by the superintendent of financial services of this state as to solvency and responsibility, in such amount as a justice of the supreme court shall approve to the effect that if such proceeding be dismissed or the tax confirmed the petitioner will pay all costs and charges which may accrue in the prosecution of the proceeding, or at the option of the petitioner such undertaking filed with the commissioner of taxation and finance may be in a sum sufficient to cover the taxes, penalties and interest thereon stated in such determination plus the costs and charges which may accrue against him in the prosecution of the proceeding, in which event the petitioner shall not be required to deposit such taxes, penalties and interest as a condition precedent to the commencement of the proceeding. The preceding sentence shall not apply to a proceeding brought to review a determination made under subparagraph (B) of paragraph three of this subdivision.

(b) If the tax commission believes that the collection of any tax will be jeopardized by delay it may determine the amount of such tax and assess the same, together with all interest and penalties provided by law, against any person liable therefor prior to the filing of his return and prior to the date when his return is required to be filed. The amount so determined shall become due and payable to the tax commission by the person against whom such a jeopardy assessment is made, as soon as notice thereof is given to him personally or by registered or certified mail. The provisions of subdivision (a) of this section shall apply to any such determination except to the extent that they may be inconsistent with the provisions of this subdivision. The tax commission may abate any jeopardy assessment if it finds that jeopardy does not exist. The collection of any jeopardy assessment may be stayed by filing with the tax commission a bond issued by a surety company authorized to transact business in this state and approved by the superintendent of financial services as to solvency and responsibility, conditioned upon payment of the amount assessed and interest thereon, or any lesser amount to which such assessment may be reduced by the tax commission or by a proceeding under article seventy-eight of the civil practice law and rules as provided in subdivision (a), such payment to be made when the assessment or any such reduction thereof shall have become final and not subject to further review. If such a bond is filed and thereafter a proceeding under article seventy-eight is commenced as provided in subdivision (a), deposit of the taxes, penalties and interest assessed shall not be required as a condition precedent to the commencement of such proceeding. Where a jeopardy assessment is made, any property seized for the collection of the tax shall not be sold (1) until expiration of the time to apply for a hearing as provided in subdivision (a) of this section, and (2) if such application is timely filed, until the expiration of four months after the tax commission has given notice of its determination to the person against whom the assessment is made; provided, however, such property may be sold at any time if such person has failed to attend a hearing of which he has been duly notified, or if he consents to the sale, or if the tax commission determines that the expenses of conservation and maintenance will greatly reduce the net proceeds, or if the property is perishable.

(c) A person liable for collection or payment of tax (whether or not a determination assessing a tax pursuant to subdivision (a) of this section has been issued) shall be entitled to have a tax due assessed prior to the ninety-day period referred to in subdivision (a) of this section, by filing with the tax commission a signed statement in writing, in such form as the tax commission shall prescribe, consenting thereto.

(d) Except as otherwise provided in subdivision (a) of this section, the provisions of this section shall not be applicable to the liability of a purchaser, transferee or assignee arising under the provisions of subdivision (c) of section eleven hundred forty-one of this chapter.

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