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Department of Taxation and Finance

2019 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 2019, 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 17, 2019.  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 2016

TAF-13-16-00005-A—Metropolitan Transportation Business Tax Surcharge

This rule amended Title 20 NYCRR to add a new Part 9 to provide the metropolitan transportation business tax rate for tax year 2016, pursuant to Tax Law section 209-B(1)(f), which requires the Commissioner to annually adjust the rate of the metropolitan transportation business tax surcharge for taxable years beginning on or after January 1, 2016. Analysis of the need for the rule: This rule implemented section 209-B(1)(f) of the Tax Law, added by Chapter 59 of the Laws of 2014. 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, subd. First 209-B(1)(f). 

TAF-21-16-00006-A—Production of Daily Inventory Records to the Department of Taxation and Finance

This rule amended section 533.2(e) of Title 20 NYCRR to require that those already required to maintain daily inventory records relating to underground storage facilities provide them to the Department, upon request. Analysis of the need for the rule: The rule requires that every person subject to the inventory monitoring for underground storage facilities requirements in New York State Department of Environmental Conservation Regulation 6 NYCRR 613 that must already maintain daily inventory records for each tank (or battery of tanks if they are interconnected) must also provide or make available those records upon request by the New York State Department of Taxation and Finance. This rule furthers the administration of the tax law by providing the department with accurate, detailed information, to ensure that the appropriate amount of tax is remitted in connection with the purchase and sale of petroleum products. The rule imposes no additional burdens on regulated parties in that it merely requires them to produce records they are already required to maintain under Department of Environmental Conservation regulations. 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, subd. First and 1135(d).

TAF-21-16-00002-A—Computation of Property Percentage of the Apportionment Factor for Personal Income Tax

This rule amended sections 132.15(d), 262.2(a), (b) and (c) of Title 20 NYCRR to clarify that the property percentage includes rented tangible personal property in the apportionment factor. Analysis of the need for the rule: The purpose of these amendments is to clarify that the property percentage includes tangible personal property rented to the taxpayer, when apportioning and allocating income from a business carried on partly within and partly without New York State. The previous regulations explicitly discussed the computation of the property factor with regard to rented real property, but were silent on the treatment of rented tangible personal property. Because of this omission, there was a potential for some confusion as to the treatment of rented tangible personal property. The purpose of this rule was to avoid such confusion. 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, subd. First, 631(c), 697(a) and 1332(a); Code of the City of Yonkers, sections 15-108 and 15-118.

Rules adopted in 2009

TAF-07-09-00010-A—Communications of the Division of Taxation of the Department of Taxation and Finance

This rule amended Parts 2375 and 2376 of Title 20 NYCRR of the Communications of the Division of Taxation of the Department of Taxation and Finance Regulations to reflect policy changes concerning communications of the Division of Taxation. Analysis of the need for the rule: The rule needed to be updated to recognize alternative methods of disseminating communications of the department, including use of the department’s Web site and online tax information, as well as electronic mail. The procedures for review and issuance of advisory opinions were streamlined to improve timeliness and protect taxpayer confidentiality. Opinions of Counsel, which were discretionary and similar in many respects to technical memoranda (TSB-Ms) were discontinued to avoid unnecessary duplication. 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, subds. First and Twenty-fourth; 1142(1); and 1250 (not subdivided).

TAF-07-09-00012-A—Filing Requirements for Certain Wine Distributors Registered Under Article 18 of the Tax Law

This rule amended section 60.1 of Title 20 NYCRR of the Alcoholic Beverage Tax Regulations to allow certain wine distributors to file annual rather than monthly alcoholic beverage returns. Analysis of the need for the rule: This rule reduced the tax filing burden for certain New York State farm wineries, micro-wineries, and out-of-state direct wine shippers as records showed that the tax liability of these wine distributors was minimal. 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, subd. First; 429(1); and 436 (not subdivided).

TAF-07-09-00011-A—Consumer Bill of Rights Regarding Tax Preparers

This rule added Part 2398 to the Title 20 NYCRR Procedural Regulations in compliance with a statutory requirement that the department produce and make available an informational flier called a Consumer Bill of Rights Regarding Tax Preparers. Analysis of the need for the rule: This rule implemented provisions of section 372 of the General Business Law, added by Chapter 432 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: General Business Law, section 372.

TAF-43-09-00023-A—Permanent Place of Abode

This rule amended section 105.20(e)(1) of the Title 20 NYCRR Personal Income Tax Regulations to except dwellings maintained by full-time undergraduate students from the definition of permanent place of abode. Analysis of the need for the rule: In 2008, the regulations were amended to eliminate the “temporary stay” concept from the definition of “permanent place of abode”.  Removing the temporary stay concept from the regulations rendered many college students (e.g., those living in apartments) previously not taxed as residents subject to personal income tax as statutory residents.  Students living in traditional dormitories were never subject to tax as statutory residents because dormitories lack the facilities to be deemed permanent places of abode under the regulations.  The rule eliminated this distinction. 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, subd. First; 697(a) and 605(b)(1).

RPS-37-08-00002-A—Agricultural Assessment Program Definitions

This rule amended former section 194.1 of Title 9 NYCRR to conform the definitions applicable to the agricultural assessment program with the provisions of Agricultural and Markets Law, Article 25-AA. Analysis of the need for the rule: The Agricultural and Markets Law was amended to revise the eligibility requirements for receiving agricultural assessments. This rule updated the regulations to reflect the statutory changes and facilitated a more accurate and complete understanding of the agricultural assessment program by assessors and the farm community. 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 Agricultural and Markets Law 307.

RPS-45-08-00019-A—Certification and Training Rules for Certain New York City (NYC) Assessors

This rule amended former Subpart 188-8 of Title 9 NYCRR to reflect the provisions of Chapter 252 of the Laws of 2007 relating to training and certificates for certain New York City Assessors. Analysis of the need for the rule:  The rule reflected the extended time to obtain certification and added flexibility to the training program to incorporate assessors whose functions involve adjudication rather than just appraisal. 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, Art. 3, Title 3 and Section 202(1)(l).

Rules adopted in 2004

TAF-10-04-00025-A—Farming and Commercial Horse Boarding Operations

This rule updated sections 528.7 and 528.22 of Title 20 NYCRR of the Sales and Use Taxes Regulations to reflect current Tax Law as it pertains to farming and commercial horse boarding operations. Analysis of the need for the rule: Chapter 407 of the Laws of 1999 and Chapters 63 and 472 of the Laws of 2000 amended Tax Law §1115(a)(6) and related provisions to substantially broaden the sales tax exemptions for farming and commercial horse boarding operations. This rule was necessary to update the regulations by deleting dated information and by incorporating the legislative objectives of the 1999 and 2000 Tax Law amendments. 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, subd. First; 1101(b)(19) and (20); 1105(c)(3)(vi) and (5)(iii); 1115(a)(6), (15), and (16) and (c)(2); 1142(1) and (8); and 1250 (not subdivided).

TAF-45-03-00004-A—Registration of Wholesale Dealers of Cigarettes

The rule amended the Cigarette Tax Regulations and the Cigarette Marketing Standards regulations of Title 20 NYCRR to require a licensed wholesale dealer of cigarettes that also sells cigarettes at retail to be registered as a retail dealer of cigarettes. Analysis of the need for the rule: The rule provides separate authorities for each activity: a wholesale dealer’s license for sales of cigarettes for resale and a retail dealer’s certificate of registration for each separate retail location where cigarettes are sold to consumers. As a result, a wholesale dealer that also sells cigarettes at retail became subject to the appropriate penalties applicable to its retail activity. In addition, wholesale dealers that also sell cigarettes at retail locations are now subject to the suspension and revocation of their dealers’ certificate of registration for sales to minors. The notice of proposed rulemaking included a regulatory flexibility analysis. Legal basis for the rule: Tax Law, sections 171, subd. First, 475 (not subdivided), 482-a, and 488.

TAF-06-04-00001-A—Personal Income Tax Estimated Payments

This rule amended 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. Analysis of the need for the rule: The rule complies with the statutory requirements of section 663 of the Tax 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 l71, subdivision First; 663, and 697(a).

TAF-52-03-00024-A—Personal Income Tax Deductions

This rule amended the personal income tax regulations to update provisions concerning the deductions subtracted by a resident individual from New York adjusted gross income in arriving at the New York taxable income of a resident individual. Analysis of the need for the rule: The rule reflects 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. 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 697(a).

TAF-45-03-00003-A—Taxation of Foreign Corporations Participating in a Trade Show

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 reflected various statutory provisions and included nonsubstantive technical changes. Analysis of the need for the rule: The rule provides a bright-line nexus test for foreign corporations participating in trade shows in New York State. 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, subd. First, and 1096(a).

RPS-05-04-00005-A—Assessors Reports and State Equalization Rates

This rule amended former Parts 186 and 193 of Title 9 NYCRR to revise the assessors’ reports requirements, the definition of isolated properties for equalization studies and the standard for establishing special segment equalization rates. Analysis of the need for the rule: The rule reduced information required to be submitted by local governments and achieved certain efficiencies. 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), 575, 1200 and 1314(2).

RPS-06-04-00003-A—Annual License Fees

This rule amended former section 190-3.2 of Title 9 NYCRR relating to the annual license fee for users of the Real Property System (RPS). Analysis of the need for the rule: The schedule of annual fees paid by users of the Real Property System (RPS) was revised based on costs to support the RPS system. 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); State Finance Law, Section 97-kk.

RPS-06-04-00004-A—State Advisory Appraisals

This rule amended former Subpart 195-2 of Title 9 NYCRR to simplify the program of state advisory appraisals. Analysis of the need for the rule: The rule simplified the process conducting annual programs, shortened the times for providing requests and information, and clarified that communications may be electronic if the parties so agree. 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 1544.

RPS-09-04-00005-A—Calculation of Railroad Ceilings

This rule added former Part 200-3 to Title 9 NYCRR to establish standards for railroads to receive depreciation in the calculation of their ceilings for local real property taxation. Analysis of the need for the rule: The rule provided the process for applying for increased depreciation as well as the standards for granting the depreciation as required by Real Property Tax Law section 489-g and 489-ii. 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-g(8) and 489-ii(9).

RPS-36-04-00002-A—State Assistance for Annual Assessment Programs

This rule added former section 201-2.3(f) to Title 9 NYCRR to set the filing requirements for six-year plans. Analysis of the need for the rule: Requiring the submission of the plan sufficiently in advance of the filing of the tentative assessment roll enabled staff to analyze the plan and recommend changes to the assessing unit at a time when deficiencies could still be corrected. 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 1573(1)(a).

Rules adopted in 1999

TAF-06-99-00018-A—Employee Meals and Lodging

This rule amended sections 527.8(j) and 527.9(g) of Title 20 NYCRR of the Sales and Use Taxes Regulations to delete complex requirements regarding employee meals and lodging that were no longer applicable. Analysis of the need for the rule: This rule was necessary to simplify the regulations and to bring them up to date to reflect the Department’s current policy with respect to employee meals and lodging.  The rule eliminated from the regulations complex requirements that were no longer applicable and 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. 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, subd. First; 1142(1); and 1250 (not subdivided).

TAF-22-99-00001-A—Sales and Use Taxes Regulations - Part 525 (General)

This rule amended Part 525 of Title 20 NYCRR of the Sales and Use Taxes Regulations concerning general sales and compensating use tax provisions. Analysis of the need for the rule: This rule was necessary to update and simplify the “general” provisions in Part 525 by deleting text that merely repeated the statute or that was superfluous, unnecessarily complex, or no longer applicable.  The rule also cited pertinent sections of the Tax Law applicable to sales and use taxes. 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, subd. First; 1142(1) and (8); and 1250 (not subdivided).

 TAF-22-099-00002-A—Abatement of Penalties

The rule added Part 2392 to Title 20 NYCRR of the Procedural Regulations to consolidate and modify the grounds to establish reasonable cause. Analysis of the rule: The rule expanded the application of reasonable cause to various other penalties imposed by the Tax Law that allowed for abatement upon a showing of reasonable cause and an absence of willful neglect. Consolidating these provisions as a single source facilitated the process of obtaining information regarding the various grounds for reasonable cause. The rule created a broad, uniform reference applicable to various taxes by including penalties that were not previously covered by the regulations and tax articles that have penalties that are jointly administered. The rule expanded what constitutes reasonable cause. 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, 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-17-99-00005-A—Offers in Compromise of Fixed and Finally Determined Tax Liabilities

This rule added Part 5005 to Title 20 NYCRR of the Compromises Regulations to codify the department’s policy in relation to offers in compromise of fixed and finally determined tax liabilities allowed under section 171 (Fifteenth) of the Tax Law. Analysis of the need for the rule: The rule provided written guidance to taxpayers with respect to the grounds for an offer in compromise, the procedure for submission of an offer, the procedure for review and acceptance or rejection of an offer and the criteria for rejection of an offer. 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, subds. First and Fifteenth.

TAF-16-99-00002-A—Conforming the Due Dates of Short Period Returns

This regulation conformed 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. Analysis of the need for the rule: The rule eased the burden on taxpayers required to file certain short period reports by conforming the due dates of those short period reports to those required for Federal income tax purposes. 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, subd. First; 211.1; 1096(a); and 1462(a).

TAF-22-99-00004-A—Allocation for Business Corporations

This rule amended Part 4 of Title 20 NYCRR 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. Analysis of the need for the rule: This rule provided taxpayers using the regulations with current information about tax policies and procedures to assist them in complying with 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, sections 171, subd. First; 210; 210(3)(a), (1), (2), (2)(B), (6), (7)(A), (8); 210(8); and 1096(a).

TAF-28-99-00014-A—Pension and Annuity Exclusion

This rule amended the Personal Income Tax regulations to extend 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. Analysis of the need for the rule: The rule ensured equitable treatment with respect to the $20,000 exclusion for pension and annuity payments for beneficiaries, whether the decedent had died before or after reaching the age of 59 ½. 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; 612(c)(3-a); and 697(a).

RPS-08-99-00015-A—Inventory Standards of Property Characteristics

This rule amended former Subparts 190-1 and 192-3 of Title 9 NYCRR to establish a comprehensive list of inventory standards. Analysis of the need for the rule: The rule established a list of property characteristics by property class to be used uniformly by all assessors throughout the State.  It addresses the issue of incomplete inventory kept by assessors. 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)(e), 202(1)(g), 202(1)(l), 500 and 501.

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