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Department of Taxation and Finance

2021 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 2021 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 March 7, 2021. 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 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: The 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.  item 

TAF-48-12-00008-A—Tax Return Filings 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: Farm breweries, like micro-brewers licensed under Alcoholic Beverage Control Law sections 51 and 56, are restricted to producing no more than 60,000 barrels of beer annually. Section 60.1 of the regulations allows micro-brewers and restaurant brewers to file annual beer tax returns rather than the monthly returns that would otherwise be required. This rule amended section 60.1 of the regulations to allow persons registered as farm breweries pursuant to Alcoholic Beverage Control Law section 51-a to also 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).  item 

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 was 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. 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.  item 

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: The 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).  item 

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: The 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.  item 

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: The 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.  item 

Rules adopted in 2011

TAF-02-11-00011-A—Assistance Program to Encourage Local Governments to Reassess on a Cyclical Basis

This rule added a new Subpart 201-3 to Part 201 of Title 9 NYCRR, regarding an assistance program to encourage local governments to perform real property tax reassessments on a cyclical basis. Analysis of the need for the rule: Chapter 56 of the Laws of 2010, Part Y, amended Real Property Tax Law section 1573 to restructure the State’s assistance program to encourage local governments to conduct reassessments and maintain real property assessments by updating the assessment rolls on a regular basis. This rule provided guidelines to implement the statutorily authorized assistance to local governments to encourage a cycle of reassessments through voluntary participation in the assistance program. Legal basis for the rule: Real Property Tax Law, sections 201(1), 202(1)(k), and 1573(1)(a); and L. 2010, ch. 56, parts W and Y.  item 

TAF-10-11-00002-A—Bureau of Conciliation and Mediation Services Procedures

This rule amended Part 4000 of Title 20 NYCRR regarding Bureau of Conciliation and Mediation Services procedures to reflect current statutory provisions. Analysis of the need for the rule: The rule reflected statutory provisions relating to filing of certain petitions and made other minor technical amendments. The rule also allowed the Department to expand the manner in which taxpayers may request a conciliation conference, such as by allowing requests in an electronic format. It also referenced mailing rules relating to designated delivery services and made other minor technical amendments. Legal basis for the rule: Tax Law, sections 170(3-a) and 171, subdivision First.  item 

Rules adopted in 2006

TAF-52-05-00018-A—Timely Electronic Filing and Electronic Paying

This rule amended sections 2399.1, 2399.2(a)(1) and (d), added sections 2399.2(e) and (f) and amended the titles of Part 2399 and sections 2399.2 and 2399.3 of Title 20 NYCRR regarding timely electronic filing and electronic paying. Analysis of the need for the rule: The rule updated the Department's Procedural Regulations concerning the timeliness of documents and payments that are filed and remitted by electronic means. Legal basis for the rule: Tax Law, section 171, subds. First and Fourteenth.  item 

TAF-34-06-00005-A—Taxation of Corporate Partners

This rule amended section 1-2.6 and Parts 3 and 4 of Title 20 NYCRR regarding taxation of corporate partners. Analysis of the need for the rule: The rule provided guidance with regard to the computation of the business corporation franchise tax imposed by Article 9-A of the Tax Law for corporations that are partners in partnerships or that are members of limited liability companies that are treated as partnerships under Article 9-A. Legal basis for the rule: Tax Law, sections 171, subd. First and 1096(a).  item 

TAF-43-06-00006-A—New York Reportable Transactions

This rule added Part 2500 to Title 20 NYCRR regarding New York reportable transactions. Analysis of the need for the rule: The Department's Procedural Regulations were amended to add a new Part 2500 to provide a definition of a New York reportable transaction and the disclosure requirements for participation in a New York reportable transaction. Under Part 2500, a New York reportable transaction is a transaction that has the potential to be a tax avoidance transaction under articles 9, 9-A, 22, 32, or 33 of the Tax Law. Legal basis for the rule: Tax Law, sections 25(a)(3), 171; subd. First, 697(a); and 1096(a).  item 

TAF-43-06-00007-A—New York Source Income of Nonresidents and Part-Year Residents from Stock Options

This rule amended Parts 132 and154 of Title 20 NYCRR regarding New York source income of nonresidents and part-year residents from stock options, stock appreciation rights and restricted stock to provide allocation rules. Analysis of the need for the rule: The rule complied with the statutory directive of Tax Law sections 631(g) and 638(c), as amended by Chapter 62 of the Laws of 2006, requiring the Department to propose regulations within 180 days of enactment to provide allocation rules for certain nonresidents and part-year residents who were granted stock options, stock appreciation rights or restricted stock. Legal basis for the rule: Tax Law, sections 171, subd. First, 631(g), 638(c) and 697(a) and L. 2006, ch. 62, part N, section 3.  item 

RPS-27-06-00006-A—Training Requirements for New York City Assessors

This rule added Subpart 188-8 to Title 9 NYCRR regarding training requirements for New York City assessors. Analysis of the need for the rule: The rule implemented the program of training, certification and minimum qualification standards for New York City Assessors that was established by Chapter 139 of the Laws of 2005. Legal basis for the rule: Real Property Tax Law sections 202(1)(l) and 350-364 and L.2005, ch.139.  item 

RPS-38-06-00001-A—Real Property System (RPS) License Fees

This rule amended section 190-3.2 of Title 9 NYCRR regarding License fees for users of the Real Property System (RPS). Analysis of the need for the rule: The rule revised the annual license fees payable by users of RPS. Legal basis for the rule: Real Property Tax Law section 202(1)(l) and State Finance Law section 97-kk.  item 

Rules adopted in 2001

TAF-23-01-00043-A—Taxpayer Record Retention Formats

This rule amended sections 39.1, 51.2(f), 54.2, 56.1, 61.3, 68.4(e), 75.5(c), 158.3, 158.4, 267.3, 413.4, 417.1, 417.2(e), 418.1, 483.1, 483.5, 533.2, 538.4, 542.1, and added Part 2402 to Title 20 NYCRR regarding taxpayer record retention formats. Analysis of the need for the rule: The Department’s Procedural Regulations were amended to add a new Part 2402 to ensure timely compliance with the record retention and electronic record‑keeping provisions of the state Electronic Signatures and Records Act (State Technology Law, section 301 et seq.) and the federal Electronic Signatures in Global and National Commerce Act (15 USCS, section 7001 et seq.). Part 2402 provides for the voluntary use of electronic records by taxpayers and prescribes general standards applicable to the retention of electronic records that ensure that taxpayers who exercise this option are complying with their responsibilities under the Tax Law and under other applicable laws that are administered by the Commissioner. Conforming amendments were also made to sections 39.1, 51.2(f), 54.2, 56.1, 61.3, 68.4(e), 75.5(c), 158.3, 158.4, 267.3, 413.4, 417.1, 417.2(e), 418.1, 483.1, 483.5, 533.2, 538.4, and 542.1 of the regulations. Legal basis for the rule: Tax Law section 171, subds. First and Fourteenth.  item  

TAF-17-01-00002-A—Tax Rates 

This rule amended Part 530 of Title 20 NYCRR regarding tax rates and bracket schedules contained in the sales and use tax regulations. Analysis of the need for the rule: The regulation was amended to repeal the tax rates and bracket schedules which indicated the amount of sales tax to be collected for various amounts of sales prices and tax rates, and replace them with standard methodology for rounding the amount of sales tax to be collected to the nearest penny. Legal basis for the rule: Tax Law sections 171, subd. First; 1132(b); 1142(1) and (8); and 1250 (not subdivided).  item 

TAF-26-01-00017-A—The flags of the United States of America and the State of New York

This rule amended section 528.12(b)(1) and repealed section 528.12(c) of Title 20 NYCRR regarding flags of the United States of America and New York State. Analysis of the need for the rule: The regulation was amended to update the definition of the term “flag” and, accordingly, to exempt from State and local sales and use taxes flags that are made from materials in addition to cloth and those accessories that are used solely for the display of the flag and are sold with the flag for a single charge. Legal basis for the rule: Tax Law sections 171, subd. First, 1142(1) and (8) and 1250 (not subdivided).  item 

RPS-08-01-00004-A—Procedures for Market Value Surveys

This rule amended Parts 186 and 191 of Title 9 NYCRR regarding procedures for determining State equalization rates with the goal of providing for more accurate and timely measurements of relative municipal full value for use in calculating the rates. Analysis of the need for the rule: The rule made various revisions to the procedures for determining State equalization rates with the goal of providing for more accurate and timely measurements of relative municipal full value for use in calculating the rates. Legal basis for the rule: Real Property Tax Law sections 202(1)(l) and 1202.  item 

RPS-43-01-00007-A—Reports by Special Franchise Owners and Review of Special Franchise Complaints

This rule amended Part 197 of Title 9 NYCRR regarding reporting requirements to which special franchise owners were subject and provided a more specific and consistent structure for the filing of complaints. Analysis of the need for the rule: The rule simplified the reporting requirements to which special franchise owners were subject and provided a more specific and consistent structure for the filing of complaints. Legal basis for the rule: Real Property Tax Law sections 202(1)(l), 600, 604 and 612.  item 

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