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Department of Taxation and Finance

2018 Rule reviews

Pursuant to section 207 of the State Administrative Procedure Act (SAPA) the Department of Taxation and Finance intends to review the following rules during 2018, 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 7, 2018.  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

Rules adopted in 2015

TAF-48-14-00003-A—Filing Requirements for Farm Distilleries Under Article 18 of the Tax Law

This rule amended section 60.1 of Title 20 NYCRR, relating to filing requirements for farm distilleries under Article 18 of the Tax Law. Analysis of the need for the rule: The rule amended section 60.1(a) of the Alcoholic Beverage Tax Regulations to allow entities licensed by the State Liquor Authority of New York State as a farm distillery, pursuant to section 61 of the Alcoholic Beverage Control Law, to apply to file annual alcoholic beverage tax returns rather than monthly returns as previously required.  Records show that the tax liability of these farm distilleries is minimal; annual filing would reduce the burden placed upon these filers.The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis or a job impact statement. Legal basis for the rule: Tax Law sections 171, subdivision First, 429(1) and 436 (not subdivided).

Rules adopted in 2013

TAF-37-12-00005-A—Combined Reports

This rule amended Parts 3, 6, and 21 of Title 20 NYCRR; and added Part 33 to Title 20 NYCRR, relating to combined reports. Analysis of the need for the rule: This rule updated certain provisions of 20 NYCRR and codified Department interpretation regarding combined reports.  The rule also made technical amendments relating to the filing of combined reports by Real Estate Investment Trusts (REITs) and Regulated Investment Companies (RICs).  The notice of proposed rulemaking included a regulatory flexibility analysis and a rural area flexibility analysis. Legal basis for the rule: Tax Law sections 171, subdivision First, 1096(a), 1468 and 1519.

TAF-48-12-00008-A—Tax Return Filing for Licensed Farm Breweries

This rule amended section 60.1 of Title 20 NYCRR regarding tax return filings for licensed farm breweries. Analysis of the need for the rule: The rule allowed licensed farm breweries to file annual beer tax returns in lieu of monthly returns, reducing the filing burden on such taxpayers. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis or a job impact statement. Legal basis for the rule: Tax Law sections 171, subdivision First, 429(1), and 436 (not subdivided).

TAF-38-13-00008-A—Tax Return Preparers

This rule added Part 2600; repealed section 158.12(1)(iv); and amended section 158.12(1)(v)-(ix) of Title 20 NYCRR regarding tax return preparers. Analysis of the need for the rule: The rule regulates the tax return preparer industry. The purpose of the rule is to advance tax administration, elevate the professionalism of the tax return preparation industry, and protect NYS taxpayers. The rule imposes educational and testing requirements, and provides minimum standards of conduct for registered tax return preparers. The rule further provides for sanctions for failure to satisfy these requirements, or for deviation from the conduct standards. The rule imposes minimal educational and testing requirements, as well as basic standards of conduct. A beginning commercial tax return preparer must initially complete 16 credit hours of annual continuing professional education (“CPE”) and pass a one-time competency exam; after satisfying this requirement for one year, he or she must complete only 4 hours of CPE annually. Experienced tax return preparers are required to complete 4 hours of CPE annually and pass the one-time competency exam. These requirements balance the need to protect taxpayers against the need to avoid imposing undue burdens on tax return preparers. The notice of proposed rulemaking included a regulatory flexibility analysis and a rural area flexibility analysis. Legal basis for the rule: Tax Law sections 32, 171, subdivision First, 697(a); and Section 4 of Part VV of Chapter 59 of the Laws of 2009. 

TAF-39-13-00007-A—Mailing of Certain Excise Tax Documents

This rule amended sections 68.3, 68.4, 73.1 and 417.2 of Title 20 NYCRR regarding mailing of certain excise tax documents.  Analysis of the need for the rule: This rule eliminated references to the mailing of certain excise tax publications and documents by the Department.  This allowed the Department to disseminate these documents by more efficient methods, such as the Internet and electronic mail, thereby reducing its printing and mailing costs. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis or a job impact statement. Legal basis for the rule:  Tax Law sections 171, subdivision First; 436 (not subdivided) and 475 (not subdivided).

TAF-39-13-00008-A—Offers in Compromise

This rule amended Parts 5000 and 5005, and section 4000.4; and repealed section 7-4.5 of Title 20 NYCRR regarding offers in compromise. Analysis of the need for the rule: This rule reflects the amendments made by Chapter 469 of the Laws of 2011 and defines what constitutes undue economic hardship in the context of offers in compromise. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis or a job impact statement. Legal basis for the rule: Tax Law sections 171, subdivisions First, Fifteenth and Eighteenth-a and 1096(a); and Chapter 469 of the Laws of 2011.

TAF-39-13-00009-A—Service of Process on the Department

This rule amended section 2391.3(a) of 20 NYCRR to eliminate the option to personally serve the Department with process at its district offices. Analysis of the need for the rule: This rule eliminated the option of personally serving the Department with legal process at its district offices, thereby making it possible for the Department to streamline departmental operations by discontinuing all walk-in services previously available at district offices, including receipt of process. Taxpayers retained the options of serving the Department personally at its principal office in Albany, NY, or by first class or certified mail. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis or a job impact statement. Legal basis for the rule: Tax Law section 171, subdivision First; and Civil Practice Law and Rules, section 307

Rules adopted in 2012

TAF-07-12-00007-A—Continuing Education Training for Assessors and County Directors

This rule amended sections 188-2.8, 188-2.9, 188-4.8 and 188-4.9 of Title 9 NYCRR to reduce the required continuing education training for assessors and county directors of real property tax service agencies. Analysis of the need for the rule: Under Real Property Tax Law (RPTL), sections 310(5)(b) and 1550(3)(b), respectively, the Commissioner has responsibility for administering the continuing education training program for assessors and county real property tax service agencies. From its inception in 1983, the continuing education credit hour requirement ranged from 9 to 12 credit hours per year. In 1990, the continuing education credit requirement was changed substantially to mandate 24 hours, rather than a required average number of credit hours per year. To provide mandate relief to the assessors and county directors of real property tax service agencies who must earn continuing education, the rule returned to a requirement of 12 credits rather than 24, to ensure that a reasonable level of education was maintained without imposing an excessive burden. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis or a job impact statement. Legal basis for the rule: Real Property Tax Law sections 202(1), 310(5), 318 and 1530.

Rules adopted in 2008

TAF-10-08-00004-A—Supplemental Schedule for Distributors of Tobacco Products to Account for Roll Your Own Cigarette Tobacco in New York State

This rule added section 89.4 to Title 20 NYCRR of the Tobacco Products Tax Regulations to codify in regulation the reporting requirements for distributors of tobacco products that import, cause to be imported, or manufacture roll-your-own cigarette tobacco to file a schedule to account for any roll-your-own (RYO) cigarette tobacco imported or caused to be imported into New York State, or manufactured in New York State.  Analysis of the need for the rule: New York State’s Public Health Law Article 13-G constitutes the State’s “Qualifying Statute” under the Master Settlement Agreement (MSA). It provides that each tobacco product manufacturer selling cigarettes or RYO cigarette tobacco in New York must either: (a) join the MSA and make the annual payments required by that agreement; or (b) make annual escrow deposits based upon the amount of its products sold each year in New York. Chapter 272 of the Laws of 2006 amended the Public Health Law in relation to enforcement of the MSA to require non-participating manufacturers to include RYO cigarette tobacco in determining their annual escrow payments. This rule required tobacco distributors to complete a schedule reporting information on roll-your-own cigarette tobacco manufactured in the State or imported into the State to assist in the enforcement of the Public Health Law. The notice of proposed rulemaking included a regulatory flexibility analysis and a rural area flexibility analysis. Legal basis for the rule: Tax Law sections 171, subdivisions First and Fourteenth and 475 (not subdivided); Public Health Law, section 1399-oo, subdivision (10).

TAF-24-08-00006-A—Increased Rate of Excise Tax on Cigarettes

This rule amended sections 70.1, 80.2 and Parts 74 and 82; renumbered section 79.3 to section 79.4; and added new section 79.3 to Title 20 NYCRR of the Cigarette Tax Regulations to reflect the statutory increase in the rate of New York State cigarette excise tax that was effective on June 3, 2008. Analysis of the need for the rule: Chapter 57 of the Laws of 2008, Part RR-1, amended Article 20 of the Tax Law to increase the tax on cigarettes effective June 3, 2008. Part RR-1 also required all agents, wholesale dealers and retail dealers to pay the tax increase on cigarettes possessed and tax stamps in inventory as of the close of business June 2, 2008. The rule made necessary regulatory changes to implement the statutory provisions and to set the commissions allowable to cigarette agents for affixing cigarette stamps relating to the new rate of tax. The rule also updated the calculation of the basic cost of cigarettes and made other technical updates. The notice of proposed rulemaking included a regulatory flexibility analysis and a rural area flexibility analysis. Legal basis for the rule: Tax Law sections 171, subdivision First; 475 (not subdivided); 1142(1),1250 (not subdivided); and L. 2008, ch 57, part RR-1, section 4.

TAF-37-08-00005-A—Sales Tax Re-Registration of Show and Entertainment Vendors and Other Persons

This rule amended Parts 533, 539, and 540 of Title 20 NYCRR of the Sales and Use Taxes Regulations to streamline the sales tax re-registration process for show and entertainment vendors and other persons. Analysis of the need for the rule: Part LL-1 of Chapter 57 of the Laws of 2008 directed the Department to institute a sales tax re-registration program under which registered persons were required to file new certificates of registration (renewal) and obtain new certificates of authority to collect sales tax. The rule was part of the Department’s plan to streamline the sales tax re-registration process by eliminating the special certificate of authority and its specified annual term that was applicable only to show and entertainment vendors. Prior to the rule, this “Certificate of Authority for Show and Entertainment Vendors” was automatically reissued by the Department at the end of each calendar year provided the vendor had no sales tax delinquencies. The rule allows the Department to conform the process by which show and entertainment vendors’ certificates of authority are renewed to the process applicable to other registered persons. Additionally, the rule contains clarifying, technical, and conforming amendments in conjunction with this change and with Part LL-1 of Chapter 57 of the Laws of 2008. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Tax Law sections 171, subdivision First; 1134(a)(2) and (5); 1142(1) and (8); 1250 (not subdivided); and part LL-1 of Chapter 57 of the Laws of 2008.

TAF-42-08-00016-A—Definition of Resident for Personal Income Tax

This rule amended section 105.20(e)(1) of Title 20 NYCRR of the Personal Income Tax Regulations to remove provisions of the regulations providing for a “temporary stay” exception from the definition of permanent place of abode for purposes of determining whether an individual is a resident for personal income tax purposes. Analysis of the need for the rule: The elimination of the temporary stay exception from the definition of permanent place of abode provided taxpayers and the Department with more clear rules for assessing residency status for New York State personal income tax purposes. Prior to the rule, a place of abode would not be considered permanent if it was maintained only during a temporary stay, or ‘‘fixed and limited period,’’ for the accomplishment of a ‘‘particular purpose.’’ The temporary stay concept does not appear in the statute, and was difficult to apply for both taxpayers and the Department. The notice of proposed rulemaking included a regulatory flexibility analysis and a rural area flexibility analysis. Legal basis for the rule: Tax Law, sections 171, subdivision First; 697(a) and 605(b)(1).

TAF-44-08-00016-A—Taxable Sales by Certain Exempt Organizations

This rule amended sections 526.10, 529.7, 529.8, and 529.9 of Title 20 NYCRR of the Sales and Use Taxes Regulations to provide rules regarding sales tax on sales, including auction sales, by certain exempt organizations. Analysis of the need for the rule: Part KK-1 of Chapter 57 of the Laws of 2008 amended Section 1116(b)(1) of the Tax Law to expand the existing “shop or store” provision so that certain additional sales of tangible personal property and services are subject to sales tax when sold by certain organizations that are otherwise exempt from sales tax. The rule reflects the additional sales made taxable by Part KK-1, which include remote sales (e.g., sales over the Internet) of tangible personal property and certain services if made with a degree of regularity, frequency, and continuity. Because this legislation applies to remote auction sales, the rule also provided guidance regarding when both remote and traditional auction sales are considered to be made with a degree of regularity, frequency, and continuity. The notice of proposed rulemaking included a regulatory flexibility analysis and a rural area flexibility analysis. Legal basis for the rule: Tax Law sections 171, subdivision First; 1116(b)(1); 1142(1) and (8); 1250 (not subdivided); and L.2008, ch.57, part KK-1.

RPS-16-08-00006-A—Annual Charges to Railroad Companies

Analysis of the need for the rule: The rule restored the process of establishing annual charges that was unintentionally deleted in a prior rulemaking. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement.  Legal basis for the rule: Real Property Tax Law, sections 202(1)(l), 489-q, and 489-nn; and State Finance Law, section 97-jj.

Rules adopted in 2003

RPS-49-02-00014-A—Reimbursement of Local Officials

Analysis of the need for the rule: The rule provided a process for the equitable distribution of the available funds. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Real Property Tax Law sections 202(1)(l), 318, and 1530; and Chapter 53 of the Laws of 2002.

Rules adopted in 1998

TAF-49-97-00004-A—Stock Transfer Tax - Formerly Subchapter G of Chapter III

This rule amended Subchapter G of Chapter I of Title 20 NYCRR to simplify and update the Stock Transfer Tax Regulations.  Analysis of the need for the rule:  This rule removed outdated information, and consolidated and summarized the language. The rule also provided for an alternative means for brokers to submit daily reports to a clearing corporation and provided for the manner in which they could certify such records. In addition, the rule addressed the rebate of the stock transfer tax provided for in section 280-a of the Tax Law. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Tax Law section 171, subdivision First. 

TAF-01-98-00007-A—Action for Failure to Release a Lien

This rule added Part 2400 to the Title 20 NYCRR Procedural Regulations to provide taxpayers with guidance relating to actions for failure to release a lien. Analysis of the need for the rule: This rule implemented provisions of Chapter 577 of the Laws of 1997 and provides taxpayers with guidance on administrative review of a "notice of failure to release a lien". The rule also provides for the type of bond or other security which is acceptable to effectuate a release of lien. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal Basis for the rule: Tax Law sections 171, subdivision First; and 3032(a) and (d), and section 56(j) of Chapter 577 of the Laws of 1997. 

TAF-07-98-00003-A—Application of Sales Tax Exemption to Marshmallows

This rule amended section 528.2(a) of Title 20 NYCRR of the Sales and Use Taxes Regulations to delete regulatory inconsistency in the imposition of sales tax on receipts from the sales of marshmallows and marshmallow bits.  Analysis of the need for the rule: Prior to the rule, large marshmallows were considered to be candy and confectionary and were, consequently, subject to sales tax. At the same time, marshmallow bits were considered to be food used in cooking and baking and were, therefore, exempt from tax. The rule allowed marshmallows to be treated consistently as exempt from sales tax. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Tax Law sections 171, subdivision First; 1142(1); and 1250 (not subdivided).

TAF-17-98-00004-A—Credit Line Mortgage

This rule amended Part 647 of Title 20 NYCRR to reflect the statutory change that extended favorable tax treatment afforded certain residential credit line mortgages to all credit line mortgages securing a maximum principal indebtedness of less than $3 million. Analysis of the need for the rule: Prior to statutory changes made by Chapters 489 and 490 of the Laws of 1996, when a credit line mortgage of real property principally improved or to be improved by a one-to six-family owner-occupied residence or dwelling (“residential credit line mortgage”) was recorded, the mortgage recording tax was computed and paid based on the maximum principal amount secured by the mortgage. No further tax was payable on the recording or the filing of instruments evidencing advances or readvances by the lender to the borrower under a residential credit line mortgage. The rule reflected the Department’s interpretation of the statutory amendments and provided for the aggregation of certain related mortgages so the $3 million limitation could not be easily circumvented. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Tax Law sections 171, subdivision First; 253-b(3); and 263(1)(a). 

TAF-19-98-00002-A—Taxpayers Affected by Declared Disasters

This rule added Part 2401 to Title 20 NYCRR of the Procedural Regulations to provide relief for taxpayers affected by declared disasters by extending tax deadlines. It also provides a determination of taxpayers affected by declared disasters.  Analysis of the need for rule: The rule implemented the provisions of Chapter 8 of the Laws of 1998 that authorize the Commissioner of Taxation and Finance to postpone certain tax deadlines for a period up to 90 days, without imposition of penalty and interest, for taxpayers determined to be affected by a disaster declared by the President or the Governor. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Tax Law section 171, subdivisions First and Twenty-eighth.

TAF-32-98-00004-A—Social and Athletic Clubs

This rule amended Example 29 of section 527.11(b)(7) of Title 20 NYCRR of the Sales and Use Taxes Regulations to eliminate the reference to fishing and hunting clubs as examples of athletic clubs whose dues and initiation fees are subject to sales tax, and to qualify the reference to boating clubs subject to such tax. Analysis of the need for the rule: This rule was necessary to conform the regulations to current interpretation of statutory provisions concerning the taxation of dues and initiation fees paid to athletic clubs. In general, these dues and initiation fees are subject to sales tax under Section 1105(f)(2) of the Tax Law. This rule reflected a prior change in Department policy that dues and initiation fees paid to fishing and hunting clubs are no longer subject to sales tax. The rule also qualified the nature of boating clubs that are considered to be athletic clubs, i.e., those boating clubs devoted to sports and athletic activities. This was necessary to clarify that not all boating clubs fall within the purview of Section 1105(f)(2) of the Tax Law as taxable athletic clubs. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement.  Legal basis for the rule: Tax Law sections 171, subdivision First; 1142(1); and 1250 (not subdivided).

RPS-29-98-00008-A—General Administration

Analysis of the need for the rule: This rule simplified provisions of Part 185 relating to general administrative provisions of rules. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement.  Legal basis for the rule: Real Property Tax Law, section 202(1)(l); Public Officers Law, sections 87(1)(b), 94(2), and (1)(i); Environmental Conservation Law, sections 8-0113(3); and State Administrative Procedure Act , section 204. 

RPS-29-98-00009-A—Equalization Products

Analysis of the need for the rule: This rule simplified provisions of Part 186 relating to equalization products established by the Office of Real Property Tax Services. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule:  Real Property Tax Law Articles 8, 12, 18, and 19; sections 202(1)(l), 1314, and 1315. 

RPS-29-98-00010-A—Minimum Qualifications Standards, Training and Certification of Local Assessment Administration Personnel

Analysis of the need for the rule: This rule simplified provisions of Part 188 relating to qualifications, training and certification of assessors and other local assessment and administration personnel. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement.  Legal basis for the rule: Real Property Tax Law sections 202(1)(l), 310, 312, 318, 320, 322, 1530, and 1532.

RPS-29-98-00011-A—Preparation and Maintenance of Tax Maps for Real Property Tax Administration

Analysis of the need for the rule: This rule simplified provisions of Part 189 relating to tax maps for use in real property tax administration. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Real Property Tax Law, sections 202(1)(l) and 503(1)(b). 

RPS-29-98-00012-A—Requirements for Form and Preparation of Local Assessment Rolls

Analysis of the need for the rule: This rule simplified provisions of Part 190 relating to assessment rolls. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Real Property Tax Law sections 202(1)(l) and 504(1).

RPS-29-98-00013-A—Real Property Transfers

Analysis of the need for the rule: This rule simplified provisions of Part 191 relating to real property transfer reports. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule:  Real Property Tax Law sections 202, 574, 738, and 1570; and Real Property Law section 333. 

RPS-29-98-00014-A—Assessors' Reports to the State Board of Real Property Services

Analysis of the need for the rule: This rule simplified provisions of Part 193 relating to filing and content of assessors’ reports. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Real Property Tax Law sections 202 and 575. 

RPS-32-98-00007-A—Advisory Appraisals

Analysis of the need for the rule: This rule simplified provisions of Part 195 relating to advisory appraisals. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement.  Legal basis for the rule: Real Property Tax Law sections 202(1)(l), 1536, 1544, 1546, and 1548.

RPS-32-98-00008-A—Revisions of Provisions Concerning Assessment of Oil and Gas Economic Unit

Analysis of the need for the rule: This rule simplified provisions relating to assessment of oil and gas economic unit. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Real Property Tax Law sections 202 and 592.

RPS-32-98-00009-A—Establishment of Assessments and Full Values of Special Franchises

Analysis of the need for the rule: This rule simplified provisions relating to establishment of special franchise assessments and full values. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement.  Legal basis for the rule: Real Property Tax Law section 202(1)(l), and art. 6.

RPS-32-98-00010-A—Taxation of State Lands

Analysis of the need for the rule: This rule simplified provisions of Part 199 relating to taxation of State lands. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Real Property Tax Law section 202(1)(l).

RPS-32-98-00011-A—Establishment of Railroad Ceilings

Analysis of the need for the rule: This rule simplified provisions relating to railroad ceilings. The notice of proposed rulemaking did not include a regulatory flexibility analysis, a rural area flexibility analysis, or a job impact statement. Legal basis for the rule: Real Property Tax Law sections 202(1)(l), (m), 489-q, and 489-nn.

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