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Department of Taxation and Finance

2022 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 2022. Part W of Chapter 56 of the Laws of 2010 transferred various responsibilities relating to real property tax administration from the State Board of Real Property Services and the Office of Real Property Services to the Commissioner of Taxation and Finance.  As a result, in 2012 the rules for real property tax administration were renumbered and moved by consensus rule from Chapter I of Subtitle F of Title 9 NYCRR to Title 20 NYCRR, which contains the rules of the Commissioner of Taxation and Finance, as a new Chapter XVI, Real Property Tax Administration.  Rules under review herein that were adopted prior to the transfer reference Title 9 NYCRR.

The Department invites written comments on the continuation or modification of these rules to assist it in the required review. We will consider comments that are received by March 7, 2022. 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 2017

TAF-48-16-00003-A—Division of Taxation and Finance Powers of Attorney

This rule amended sections 2370.5(b)(3), 2371.5(c)(2) and 2390.1(c)(3) and (g)(1); and repealed section 2390.1(f) and (g)(2) of Title 20 NYCRR. Analysis of the need for the rule:   The rule was necessary to simplify and expedite the process for filing powers of attorney with the Department.  It eliminated the requirement that a notarized power of attorney accompany certain records requests and the requirement that the Department’s Power of Attorney form be notarized or witnessed in certain circumstances, allowing the Department to add some power of attorney functionality to its Online Services Accounts.  The rule also centralized processing of powers of attorney to increase efficiency and eliminated the automatic revocation of previously filed powers of attorney, enabling taxpayers to retain multiple powers of attorney simultaneously unless they affirmatively revoked previously filed powers of attorney. 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, subd. First.

TAF-51-16-00002-A—Metropolitan Transportation Business Tax Surcharge

This rule amended Part 9 of Title 20 NYCRR to add a new subdivision (d) to section 9-1.2. Analysis of the need for the rule:  This rule added new subdivision (d) to section 9-1.2 of Part 9 to establish the metropolitan transportation business tax surcharge rate for tax year 2018.  Subdivision (d) complies with Tax Law section 209-B(1)(f), which requires the Commissioner to set the rate for taxable years beginning on or after January 1, 2018, and before January 1, 2019, and follows subdivision (c), which set the rate for taxable years beginning on or after January 1, 2017, and before January 1, 2018. The rate set under subdivision (c) was 28.3 percent of the tax imposed under Tax Law section 209.  Subdivision (d) provided a rate of 28.6 percent of the tax imposed under Tax Law section 209. 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, subd. First; and L. 2014, c.59, part A, section 7.

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:  From its inception in 1983, the continuing education credit hour requirement ranged from 9 to 12 credit hours per year.  In 1990, the requirement was changed substantially to mandate 24 credit 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 credits, this rule returned to a requirement of 12 credits rather than 24, thereby ensuring that a reasonable level of education was maintained without imposing an excessive burden. Legal basis for the rule:  Real Property Tax Law sections 202(1), 310(5), 318 and 1530.

Rules adopted in 2007

TAF-52-06-00008-A—Security Training Tax Credit

This rule added Subparts 5-4 and 20-7 and section 106.3 to Title 20 NYCRR regarding the security training tax credit. Analysis of the need for the rule: This rule was necessary to provide a credit proration rule where a qualified security officer is not employed for a full year, satisfying the requirements of Tax Law section 26(a), as added by Chapter 537 of the Laws of 2005.  The Department developed these amendments in consultation with the State Office of Homeland Security (now Department of Homeland Security and Emergency Services), which is responsible for certifying eligibility for this credit.  The rule provides guidance to the State Office of Homeland Security when it administers and issues certificates of tax credit to eligible taxpayers.  Under the amendments, the credit is prorated by the number of hours worked divided by 1,750 hours, representing a full year.  The 1,750 hours is based upon a 35-hour work week multiplied by 50 weeks.  The 35-hour work week is derived from existing interpretation of the concept of “full time employment” applicable to other credits. Legal basis for the rule: Tax Law, sections 26(a); 697(a); 171, subd. First; and 1096(a). 

TAF-43-07-00015-A—Repurchase Agreements and Securities Lending Agreements held by Registered Securities Brokers and Dealers

This rule amended sections 3-3.2, 4-4.3, and 6-2.7, renumbered section 4-4.7 to section 4-4.8 and added new section 4-4.7 to Title 20 NYCRR regarding repurchase agreements and securities lending agreements held by registered securities brokers and dealers. Analysis of the need for the rule: This rule provided that repurchase agreements and securities lending agreements held by registered securities brokers or dealers may not be considered investment capital so that the income and expenses from these agreements must be included in the computation of business income for such taxpayers. Legal basis for the rule: Tax Law, sections 171, subd. First; and 1096(a).

TAF-43-07-00003-A—Tobacco Products Wholesale Dealers’ Informational Returns

This rule amended sections 89.1 and 89.3 of Title 20 NYCRR regarding increased rate of tobacco products tax imposed by Article 20 of the Tax Law.  Analysis of the need for the rule:  This rule required licensed wholesale dealers that are not also distributors of tobacco products to file new monthly informational returns detailing their purchases, sales, and prices of such products.  Prior to adoption of the rule, both tobacco products distributors and retail dealers were required to provide the Department with certain information regarding their purchases and/or sales of tobacco products, but tobacco products wholesale dealers that were not also distributors were not required to report such information.  The new return enabled the Department to better track product through the distribution chain, thereby enhancing its ability to reconcile information about tobacco products ultimately received and sold by retail dealers and ensure better compliance with the tobacco products excise tax.  Legal basis for the rule: Tax Law sections 171, subd. First; 474(4); and 475 (not subdivided).

RPS-40-06-00007-A—Annual Reports of Railroad Companies, regarding the filing schedule for annual reporting of railroad companies

This rule amended Subpart 200-2 and sections 200-6.1, 200-6.5 and 200-6.6, and repealed Subparts 200-7 and 200-8 of Title 9 NYCRR. Analysis of the need for the rule: This rule revised the schedule for filing annual reports with the State Board of Real Property Services.  The rule refined the process for calculating railroad valuation ceilings, eliminated certain obsolete provisions and complied with valuation date changes required by L.2004, c.733. Legal basis for the rule: Real Property Tax Law, sections 202(1)(1), 489-q, 489-nn; L.2004, c.733. 

RPS-40-06-00008-A—Annual Reports of Special Franchise Owners

This rule amended Subpart 197-2 and sections 197-4.2(a) and (b) and 197-4.3(a) of Title 9 NYCRR regarding annual reports of special franchise owners. Analysis of the need for the rule: This rule revised the schedule for filing annual reports with the State Board of Real Property Services.  The rule changed the valuation date for special franchise property to comply with the requirements of L.2004, c.733, which required certain additional conforming amendments.  The rule also made certain technical updates and eliminated obsolete provisions.  Legal basis for the rule: Real Property Tax Law, sections 202(1)(1) and 604; L.2004. c.733. 

RPS-21-07-00002-A—License Fees

This rule amended section 190-3.2(c)(2) of Title 9 NYCRR, regarding license fees.  Analysis of the need for the rule: This rule lowered the annual license fee charged to school districts that subscribe to the Real Property System developed by the State Board of Real Property Services, thereby achieving the goal of charging school districts the lowest license fee.  Legal basis for the rule: State Finance Law, section 97-kk and Real Property Tax Law, section 202(1)(1). 

RPS-21-07-00003-A—Training for Assessors and County Directors

This rule amended Part 188 of Title 9 NYCRR, regarding training for assessors and county directors. Analysis of the need for the rule: This rule revised the basic course of training prescribed for assessors and directors of county real property tax service agencies by the State Board of Real Property Services.  The rule requires assessors to take an ethics course every four or six years, depending on their statutory terms. Legal basis for the rule: Real Property Tax Law, sections 202(1)(1), 310(5), 318 and 1532.

Rules adopted in 2002

TAF-49-01-00002-A—Empire Zone Wage Tax Credit

This rule repealed Subparts 5-9, 20-4 and 32-2 and section 106.8 and added new Subparts 5-9, 20-4 and 32-2 and section 106.8 to Title 20 NYCRR, regarding business corporation franchise tax, franchise tax on banking corporations, franchise taxes on insurance corporations and New York State personal income tax. Analysis of the need for the rule: This rule eliminated obsolete and redundant material and areas of the Franchise Tax on Banking Corporations, Franchise Taxes on Insurance Corporations and New York State Personal Income Tax regulations, relating to the Empire Zone (EZ) Wage Tax Credit, that paralleled provisions in the Business Corporation Franchise Tax regulations.  In addition, the rule contained amendments to reflect existing Department policy regarding the EZ Wage Tax Credit.  Legal basis for the rule: Tax Law, sections 171, subd. First; 697(a); and 1096(a). 

TAF-13-02-00008-A—Clothing Alterations

This rule amended sections 527.4(b) and (c) and 527.5(b)(3) of Title 20 NYCRR regarding clothing alterations. Analysis of the need for the rule: This rule provided that reasonable charges for alterations to all items of clothing are treated as tailoring, a service that is specifically excluded from New York State and local sales and compensating use taxes.  Prior to these amendments, the exclusion from tax depended upon who altered the clothing (e.g., an independent tailor or the clothing retailer) and whether the clothing itself was new, used, taxable, or exempt from tax. The rule also made technical corrections to the subject sections of the regulations. Legal basis for the rule: Tax Law sections 171, subd. First; 1142(1) and (8); and 1250 (not subdivided). 

TAF-27-02-00006-A—Tobacco Products Tax

This rule amended sections 89.1 and 89.3 of Title 20 NYCRR regarding the increased rate of tobacco products tax imposed by Article 20 of the Tax Law. Analysis of the need for the rule: This rule reflected the statutory increase in the rate of tobacco products excise tax that was effective July 2, 2002 and implemented the floor tax on tobacco products in inventory as of the close of business on July 1, 2002.  Legal basis for the rule: Tax Law sections 171, subd. First,471-b, 471-c, 472, 473-a and 475 (not subdivided); and L. 2002, c.85. 

TAF-37-02-00005-A—Increased Rate of New York City Excise Tax on Cigarettes

This rule amended Parts 74, 80, and 82 of Title 20 NYCRR regarding increased rate of New York City excise tax on cigarettes. Analysis of the need for the rule: This rule amended the Cigarette Tax regulations and the Cigarette Marketing Standards regulations to reflect the statutory increase in the rate of New York City excise tax on cigarettes effective on June 30, 2002.  The rule also ensured that the commissions paid by New York State to licensed cigarette agents were preserved notwithstanding the New York City tax rate increase and more realistically reflected the basic cost of cigarettes in the cigarette marketing standards illustrations. Legal basis for the rule: Tax Law sections 171, subd. First and 475 (not subdivided); L. 2002, c.93; and New York City Local Law 10, enacted June 30, 2002. 

RPS-08-02-00009-A—State Equalization Program

This rule amended Subpart 186-15 of Title 9 NYCRR, regarding state equalization program. Analysis of the need for the rule: This rule enhanced the procedures relating to complaints against tentative State equalization rates filed by municipalities. Legal basis for the rule: Real Property Tax Law, sections 202(1)(1), 1202, 1204, 1206, 1208 and 1210.  

RPS-08-02-00008-A—Payment of Maintenance Aid 

This rule amended section 201-1.1 of Title 9 NYCRR. Analysis of the need for the rule: This rule provided for the payment of State maintenance aid to local assessing units as part of a voluntary financial incentive program designed to improve the quality of local assessments.  Legal basis for the rule: Real Property Tax Law, sections 202(1)(1), 1202, 1204, 1206, 1208, 1210 and 1573. 

RPS-26-02-00013-A—Tax Maps

This rule amended Part 189 of Title 9 NYCRR, regarding tax maps. Analysis of the need for the rule: This rule relaxed submission and approval requirements for converting traditional tax maps into a digital data format. Legal basis for the rule: Real Property Tax Law, sections 202(1)(1) and 503(1)(b). 

Rules adopted in 1997

TAF-45-96-00002-A—Group Nonresident Income Tax Returns

This rule amended Part 151 and sections 161.3(c) and 185.3(k) of Title 20 NYCRR regarding group New York State nonresident personal income tax returns. Analysis of the need for the rule: This rule expanded the privilege of filing group nonresident income tax returns to more partnerships, clarified the Department’s policy allowing certain limited liability partnerships and limited liability companies to file group returns and allowed nonresident athletes to elect to be included on a group individual nonresident income tax return.  These provisions were again amended in 1998 to further expand the privilege of filing group returns to other groups. Legal basis for the rule: Tax Law sections 171, subd. First; 697(a), 651, 658(a) and 658(c). 

TAF-02-97-00001-A—CT-4 Filing Rules

This rule amended section 6-3.1 of Title 20 NYCRR regarding Form CT-4 filing requirements. Analysis of the need for the rule: This rule eliminated certain restrictions on who may file Form CT-4, General Business Corporation Franchise Tax Return (short form), thereby increasing the number of taxpayers eligible to file the short form.  Legal basis for the rule: Tax Law sections 171, subd. First, 211.1 and 1096(a). 

TAF-12-97-00014-A—Farming and Commercial Horse Boarding

This rule amended section 528.7 of Title 20 NYCRR regarding exemption from sales and use taxes of farmers’ personal protective equipment and materials used in farm silo foundations. Analysis of the need for the rule: This rule originally provided that personal protective equipment purchased by farmers for use directly and predominantly in farm production and construction materials that become integral component parts of the foundations of farm silos were exempt from sales and compensating use taxes. The rule also made clarifying amendments to section 528.7. The rule was previously reviewed as part of the Department’s 2002 Rule Review published in the State Register on January 2, 2002. As a result of that review, substantial changes to section 528.7 of the regulations were adopted based on statutory changes in 1999 and 2000, which significantly broadened the subject exemptions from tax.  (See TAF‑10‑04‑00025‑A; filed April 29, 2004; published May19, 2004; effective May 19, 2004.) However, two of the amendments that were made in 1997 were continued without modification, specifically the cross‑reference added to section 528.7(c) and the clarifying amendment made to section 528.7(c)(1)(iii). Therefore, only these two amendments from the 1997 rule were subject to review in 2007, and every five years thereafter. Legal basis for the rule: Tax Law sections 171, subd. First; 1115(a)(6); 1142(1); and 1250 (not subdivided). 

TAF-18-97-00008-A—Filing of Sales and Use Tax Returns

This rule amended sections 533.3(d) and (g) and 561.13(b) of Title 20 NYCRR regarding annual sales tax filing threshold and due date of annual sales tax returns. Analysis of the need for the rule: This rule allowed vendors with ranges of annual sales and use tax liabilities of $250 to $3,000 to file annual, rather than quarterly, sales and use tax returns. The rule also made technical corrections to sections 533.3 and 561.13. The rule was previously reviewed as part of the Department’s 2002 Rule Review published in the State Register on January 2, 2002. As a result of that review of the 1997 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on August 21, 2002.  The rule was again reviewed as part of the Department’s 2007 Rule Review published in the State Register on January 3, 2007.  As a result of that review of the 1997 rule, amendments to sections 533.3(d) and (g) of the regulations were adopted to delete obsolete information and to better reflect the current policies of the Department concerning the administration of its annual filing program. (See TAF-40-07-00004-A; filed December 11, 2007; published December 26, 2007; effective December 26, 2007.)  However, other amendments that were made in 1997 were continued without modification, specifically those concerning the filing benefits and the filing period codified in the regulations.  (See TAF‑40-07-00004-P, Statement of Reasoned Justification for Modification of the Rule; published October 3, 2007.)  Therefore, the 1997 amendments related to the filing benefits and the filing period remain valid and are subject to five-year review from 1997 forward.  Legal basis for the rule: Tax Law, sections 171, subd. First; 1136(a), (b), and (c); 1142(1); 1250 (not subdivided); and 1251(c). 

TAF-22-97-00001-A—Power of Attorney

This rule repealed Part 2390 and Appendix 6, added new Part 2390 and amended section 4000.2(b) of Title 20 NYCRR regarding powers of attorney and representation before the Bureau of Conciliation and Mediation Services. Analysis of the need for the rule: Part 2390 generally provided practical requirements as to when a power of attorney is required by the Division of Taxation, and as to the form and content of a power of attorney. New Part 2390 updated the power of attorney provisions to reflect the establishment of the independent Division of Tax Appeals, to allow submission of copies of powers of attorney and to generally afford greater discretion and flexibility in dealing with agency relationships.  Section 4000.2(b) was amended to reflect that an agent who is enrolled to practice before the Internal Revenue Service may act as a representative in a conciliation conference proceeding. The rule was reviewed every five years and continued without modification until 2017, when the Division adopted a rule amending sections 2390.1(c)(3) and (g)(1) and repealing section 2390.1(f) and (g)(2) (See TAF-48-16-00003-A, listed in this Rule Review under Rules Adopted In 2017).  The 2017 amendments simplified and expedited the process for filing powers of attorney.  The remaining provisions of Part 2390 remain subject to review every five years from 1997 forward. Legal basis for the rule: Tax Law sections 171, subd. First; and 170.3-a(d). 

TAF-34-97-00003-A—Service of Process

This rule added a new Part 2391 to Title 20 NYCRR, concerning service of process on the commissioner or the Department. Analysis of the need for the rule: This rule added new provisions to provide information to any person commencing an action or proceeding involving the commissioner or Department (except the Division of Tax Appeals or the Tax Appeals Tribunal) by setting forth the procedure for service of process on the commissioner or Department.  Section 2391.3(a) was amended in 2013 to eliminate the option to personally serve the Department at its district offices, as part of the discontinuance of walk-in services in those offices.  The remaining provisions of Part 2391 remain subject to review every five years from 1997 forward. Legal basis for the rule: Tax Law, section 171, subd. First; Civil Practice Law and Rules, section 307. 

TAF-34-97-00004-A—Elimination of Unnecessary Provisions of Art. 1 of the Personal Income Tax Regulations (entitled “General”)

This rule amended Article 1 of Subchapter A of Chapter II of Title 20 NYCRR to eliminate unnecessary provisions of Art. 1 of the Personal Income Tax Regulations (entitled “General”). Analysis of the need for the rule: This rule repealed certain provisions that were unnecessary because the provisions repeated statutory material that did not require additional interpretation by regulation.  Approximately 30 pages of unnecessary regulations were eliminated, while retaining and recodifying necessary provisions. Legal basis for the rule: Tax Law, sections 171, subd. First, 697(a), 601(e), and 606(b) and (e). 

TAF-38-97-00004-A—Repeal of Parallel Credit Provisions

This rule amended Subparts 5-7, 5-8 and 5-10, repealed and added new sections 106.5, 106.7, 106.9, Subparts 20-2 and 32-1 to Title 20 NYCRR, regarding the Business Corporation Franchise Tax, Franchise Tax on Banking Corporations, Franchise Taxes on Insurance Companies and New York State Personal Income Tax. Analysis of the need for the rule: This rule eliminated certain unnecessary corporation tax, bank tax, insurance tax and personal income tax regulations relating to credits, which were considered redundant.  Additionally, the amendments updated the regulations to reflect legislative changes in the Empire Zone Investment Tax Credit, the Empire Zone Capital Credit, and the Special Mortgage Recording Tax Credit. Legal basis for the rule:  Tax Law sections 171, subd. First, 657(a), and 697(a). 

RPS-48-96-00024-A—Procedures for Conducting Market Value Surveys

This rule amended Subparts 186-1 and 186-2 and added new Subpart 191-4 to Title 9 NYCRR, regarding procedures for conducting market value surveys.  Analysis of the need for the rule: This rule provided for increased reliance upon sales and local valuation data in the computation of State equalization rates by the State Board of Real Property Services.  This rule was previously reviewed as part of the 2002 Rule Review of the State Board of Real Property Services.  Legal basis for the rule: Real Property Tax Law, sections 202(1)(1), 1200. 

RPS-10-97-00020-A—Minimum Qualifications of Appointed Assessors and County Directors

This rule amended Subparts 188-2 and 188-4 of Title 9 NYCRR, regarding minimum qualifications of Appointed Assessors and County Directors.  Analysis of the need for the rule: This rule modified the procedures by which Appointed Assessors and County Directors of Real Property Tax Services obtain approval of their qualifications from the State Board of Real Property Services. Legal basis for the rule: Real Property Tax Law, sections 202(1)(1), 312, 1530. 

RPS-12-97-00004-A—Assessing Special Franchises and Establishing Railroad Ceilings

This rule repealed sections 197-5.3, 197-5.4 and 200-7.5 and added new sections 197-5.4 and 200-7.5 to Title 9 NYCRR, regarding assessing special franchises and establishing railroad ceilings. Analysis of the need for the rule: This rule revised the procedures relating to the determination of annual charges for special franchise assessments and railroad ceilings established by the State Board of Real Property Services.  Legal basis for the rule: Real Property Tax Law, sections 202(1)(1), 489-q, 489-nn and 606; State Finance Law section 97-jj. 

RPS-11-97-00030-A—Training for Assessors

This rule amended sections 188-2.9, 188-2.11, 188-2.12, 188-2.16 and 188-7.3 of Title 9 NYCRR, regarding training for assessors. Analysis of the need for the rule: This rule revised the basic course of training for Assessors, as prescribed by the State Board of Real Property Services.  The rule also addressed reimbursement for basic training costs. Legal basis for the rule: Real Property Tax Law, sections 202(1)(1), 318(4). 

RPS-39-97-00003-A—State Equalization Program

This rule amended Part 186 of Title 9 NYCRR, regarding the state equalization program. Analysis of the need for the rule: This rule related to the use of local valuation data in the computation of State equalization rates by the State Board of Real Property Services and generally clarified the framework for the establishment of equalization rates and the review of complaints. Legal basis for the rule: Real Property Tax Law, sections 202(1)(1), 1200. 

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