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Department of Taxation and Finance

2009 Rule reviews

Pursuant to section 207 of the State Administrative Procedure Act (SAPA) the Department of Taxation and Finance must review all rules, with certain exceptions, adopted on or after January 1, 1997, after five years, and, thereafter, at five year intervals.  In 2009, the Department must review rules that were adopted during 2004 and 1999 to determine whether these rules should be retained as written or modified.  Accordingly, the Department intends to review the following rules during 2009, and invites written comments on the continuation or modification of these rules in order to assist the Department in the required review.  We will consider comments that are received by February 23, 2009. Any questions concerning the items listed in this rule review or comments regarding the continuation of the rules being reviewed should be referred to: Office of Counsel, Department of Taxation and Finance, W.A. Harriman Campus, Building 9, Room 200, Albany, New York 12227. Telephone: (518) 530-4153, Email address: tax.regulations@tax.ny.gov.

Agenda items

20 NYCRR Sections 527.8(j) (Employee meals) and 527.9(g) (Employee lodging)

20 NYCRR Sections 527.8(j) (Employee meals) and 527.9(g) (Employee lodging) Filed March 31, 1999; published/effective April 21, 1999.  Need:  This rule deleted complex requirements of the sales and use tax regulations regarding employee meals and lodging that were no longer applicable.  The rule retained only the provisions that meals and lodging furnished by certain employers to employees are not subject to sales tax if the employers receive no cash (or other consideration) from the employees and the values of the meals and lodging are not included as income for the employees for income tax purposes.  This rule was previously reviewed as part of the Department's 2004 Rule Review published in the State Register on January 7, 2004.  As a result of that review of the 1999 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on June 30, 2004.  Legal Basis: Tax Law sections 171, subd. First; 1142(1); and 1250 (not subdivided). (TAF-06-99-00018-A)

20 NYCRR Parts 6 and 21 (Conforming the Due Dates of Short Period Returns)

20 NYCRR Parts 6 and 21 (Conforming the Due Dates of Short Period Returns) Filed June 15, 1999; published/effective June 30, 1999.  Need:  This rule amended the business corporation franchise tax and the banking corporation franchise tax regulations to conform the due dates of certain general business and banking corporations' short period reports to those required for Federal income tax purposes. Specifically, the amendments conformed the due dates of short period reports required in cases where a taxpayer became part of or ceased to be part of a Federal consolidated group or changed from one Federal consolidated group to another.  In addition, the amendments conformed the due date of a short period report required in the case of a taxpayer which was a target corporation for which an election had been made under section 338(h)(10) of the Internal Revenue Code.  This rule was previously reviewed as part of the Department's 2004 Rule Review published in the State Register on January 7, 2004.  As a result of that review of the 1999 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on July 14, 2004. Legal Basis:  Tax Law, sections 171, subd. First; 211.1; 1096(a); and 1462(a). (TAF-16-99-00002-A)

20 NYCRR Part 5005 (Compromises under Subdivision Fifteen of Section 171 of the Tax Law)

20 NYCRR Part 5005 (Compromises under Subdivision Fifteen of Section 171 of the Tax Law) Filed June 15, 1999; published/effective June 30, 1999. Need: This rule amended the regulations regarding compromises to codify the Department's policy in relation to offers in compromise of fixed and finally determined tax liabilities.  The rule provided written guidance to taxpayers with respect to the grounds for an offer, the procedure for review and acceptance or rejection of an offer, and the criteria for rejection of an offer. This rule was previously reviewed as part of the Department's 2004 Rule Review published in the State Register on January 7, 2004.  As a result of that review, changes to section 5005.1 of the regulations were adopted based on a statutory change in 2002, which expanded the Commissioner's offers in compromise authority and increased the dollar threshold of which offers in compromise require prior approval by a Supreme Court Justice. (See TAF-30-05-00004-A; filed September 16, 2005; published/effective October 5, 2005.)  The remaining amendments from the 1999 rule are subject to review in 2009.  Legal Basis: Tax Law, sections 171, subdivisions First and Fifteenth. (TAF-17-99-00005-A)

20 NYCRR Part 2392 (Reasonable Cause - Abatement of Penalties)

20 NYCRR Part 2392 (Reasonable Cause - Abatement of Penalties) Filed July 26, 1999; published/effective August 11, 1999. Need:  This rule consolidated existing regulations regarding reasonable cause into one new Part 2392 of the procedural regulations. This amendment applied to various penalties imposed by the Tax Law that allow for abatement upon a showing of reasonable cause and an absence of willful neglect.  The consolidation provided a single source for taxpayers who file under multiple tax articles to obtain information regarding reasonable cause.  In addition, the rule outlined when a taxpayer's reliance on professional advice constitutes reasonable cause; and for purposes of the delinquency penalties also allowed an honest misunderstanding of fact or law or reasonable reliance on written advice, professional advice or other facts to be applicable, under certain circumstances, in establishing reasonable cause.  This rule was previously reviewed as part of the Department's 2004 Rule Review published in the State Register on January 7, 2004.  As a result of that review, changes to section 2392.1 of the regulations were adopted to add a citation for a penalty that was added to the Tax Law after the adoption of Part 2392 and to clarify that the general provisions for reasonable cause will apply to certain penalties imposed upon participants in the Electronic Funds Transfer programs for sales tax and withholding tax.  (See TAF-45-04-00004-A; filed January 4, 2005; published/effective January 19, 2005.)  The remaining amendments from the 1999 rule are subject to review in 2009.  Legal Basis: Tax Law, sections 171, subd. First; 171-a(8); 207-b; 219-a; 289-b(1)(c); 295 (not subdivided); 315; 433(1)(c); 436 (not subdivided); 475 (not subdivided); 481(1)(a)(iii); 509(7); 512(1)(c); 528(a); 697(a); 990(a); 1007(b); 1080(a); 1096(a); 1142(1) and (8); 1145(a)(1)(iii) and (a)(6); 1165 (not subdivided); 1250 (not subdivided); 1312(a); 1332(a); 1342 (not subdivided); 1415(a); 1468 (not subdivided); 1519 (not subdivided); and 1556 (not subdivided); and General City Law, section 25-n(e). (TAF-22-99-00002-A)

20 NYCRR Part 525 (Sales and Use Tax Regulations - General)

20 NYCRR Part 525 (Sales and Use Tax Regulations - General) Filed July 26, 1999; published/effective August 11, 1999.  Need:  This rule updated and simplified the "general" provisions in Part 525 of the sales and use tax regulations by deleting text that merely repeated the statute or that was superfluous, unnecessarily complex, or no longer applicable.  his rule was previously reviewed as part of the Department's 2004 Rule Review published in the State Register on January 7, 2004.  As a result of that review of the 1999 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on April 21, 2004.  Legal Basis: Tax Law sections 171, subd. First; 1142(1) and (8); and 1250 (not subdivided). (TAF- 22-99-00001-A)

20 NYCRR Part 4 (Allocation)

20 NYCRR Part 4 (Allocation) Filed July 26, 1999; published/effective August 11, 1999.  Need: This regulation amended Part 4 of the business corporation franchise tax regulations, relating to allocation, to repeal obsolete language and references contained in various sections of this Part, to make changes necessitated by legislative amendments, and to make technical and clarifying amendments. This rule was previously reviewed as part of the Department's 2004 Rule Review published in the State Register on January 7, 2004.  As a result of that review of the 1999 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on July 21, 2004. Legal basis: Tax Law, sections 171, subd. First; 210; 210(3)(a), (1), (2), (2)(B), (6), (7)(A), (8); 210(8); and 1096(a). (TAF-22-99-00004-A)

20 NYCRR Section 112.3(c)(2)(iv)("a")(Amendments to Pension Exclusion for Beneficiaries)

20 NYCRR Section 112.3(c)(2)(iv)("a")(Amendments to Pension Exclusion for Beneficiaries).  Filed August 31, 1999, published/effective September 15, 1999. Need:  This rule extended the personal income tax pension and annuity exclusion to payments received by a beneficiary of a deceased pensioner on or after the date the decedent would have reached 59 ½ years of age. This rule was previously reviewed as part of the Department's 2004 Rule Review published in the State Register on January 7, 2004.  As a result of that review of the 1999 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on June 9, 2004.  Legal Basis:  Tax Law sections 171, subdivision First; 612(c)(3-a); and 697(a). (TAF-28-99-00014-A)

20 NYCRR Sections 1-3.2, 1-3.3 and 1-3.4 (Taxation of Foreign Corporations Participating in a Trade Show)

20 NYCRR Sections 1-3.2, 1-3.3 and 1-3.4 (Taxation of Foreign Corporations Participating in a Trade Show) Filed January 22, 2004; published/effective February 11, 2004 with the exception of the amendments relating to participation in a trade show or shows which apply to taxable years beginning on and after January 1, 2002.  Need:  This rule amended the business corporation franchise tax regulations to provide that limited participation in a trade show or shows in New York State is an activity that is deemed insufficient to subject a foreign corporation to the tax.  The amendments also reflect various statutory and nonsubstantive technical changes. Legal basis: Tax Law, sections 171, subd. First, and 1096(a). (TAF-45-03-00003-A)

20 NYCRR Parts 70, 72, 73, 74, 78, 82 and 85 (Registration of Wholesale Dealers of Cigarettes)

20 NYCRR Parts 70, 72, 73, 74, 78, 82 and 85 (Registration of Wholesale Dealers of Cigarettes) Filed January 22, 2004; published/effective February 11, 2004, except for the amendments to sections 70.2 and 72.1, which were effective March 29, 2004.  Need:  This rule amended the cigarette tax and cigarette marketing standards regulations to require a licensed wholesale dealer of cigarettes that also sells cigarettes at retail to be registered as a retail dealer of cigarettes and display its certificate of registration as a retail dealer at each retail location.  The rule also updates the regulation to reflect other statutory changes.  Legal Basis: Tax Law, sections 171, subdivision First, 475 (not subdivided), 482-a, and 488. (TAF-45-03-00004-A)

20 NYCRR Parts 113 (New York Deduction of a Resident Individual)

20 NYCRR Parts 113 (New York Deduction of a Resident Individual), 114 (New York Standard Deduction of a Resident Individual), and 115 (New York Itemized Deduction of a Resident Individual).  Filed February 24, 2004; published/effective March 10, 2004.  Need:  This rule amends the personal income tax regulations to reflect the decision of the New York State Tax Appeals Tribunal in Matter of Shorter concerning the New York State deduction (standard or itemized) used in computing the New York taxable income of a resident individual.  Legal Basis:  Tax Law sections 171, subdivision First, and 697(a). (TAF-52-03-00024-A)

20 NYCRR Part 163 (Estimated Tax Payments on Sales or Transfers of Real Property by Nonresident Taxpayers)

20 NYCRR Part 163 (Estimated Tax Payments on Sales or Transfers of Real Property by Nonresident Taxpayers) Filed March 30, 2004; published/effective April 14, 2004.  Need:  This rule amends the personal income tax regulations relating to estimated tax payments on sales or transfers of real property by nonresident taxpayers required by section 663 of the Tax Law.   Legal Basis:  Tax Law, sections l71, subdivision First; 663, and 697(a). (TAF-06-04-00001-A)

20 NYCRR Sections 528.7 and 528.22 (Farming and Commercial Horse Boarding Operations)

20 NYCRR Sections 528.7 and 528.22 (Farming and Commercial Horse Boarding Operations) Filed April 29, 2004; published/effective May 19, 2004.  Need:  This rule corrected dated sections of the sales and use tax regulations to reflect Chapter 407 of the Laws of 1999 and Chapters 63 and 472 of the Laws of 2000 as they pertained to farming and commercial horse boarding operations.  Legal Basis: Tax Law sections 171, subd. First; 1101(b)(19) and (20); 1105(c)(3)(vi) and (5)(iii); 1115(a)(6), (15), and (16); 1115(c)(2); 1142(1) and (8); and 1250 (not subdivided). (TAF-10-04-00025-A)

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