The CPA Journal

STATE AND LOCAL TAXATION

September 2002

New York State Tax Amnesty

By Mark H. Levin, CPA, H.J. Behrman & Company, LLP

The State of New York 2002/03 Budget Act provides for an amnesty program during the state’s 2002/03 fiscal year. The act leaves the designation of the amnesty period to the Commissioner of Taxation and Finance. According to informed sources, the amnesty period is expected to occur during the fall of 2002.

The amnesty covers all taxes or surcharges imposed, including any tax or surcharge that had been previously imposed and since repealed. These taxes include the following:

Franchise tax on transportation and transmission corporations and associations (section 183 as repealed by chapter 63 of the Laws of 2000)
Temporary metropolitan transportation business surcharge on transportation and transmission corporations and associations (section 183-a as repealed by chapter 63 of the Laws of 2000)
Additional franchise tax on transportation and transmission corporations and associations (section 184 as repealed by chapter 63 of the Laws of 2000)
Additional temporary metropolitan transportation business surcharge on transportation and transmission corporations and associations (section 184-a as repealed by chapter 63 of the Laws of 2000)
Franchise tax on water-works companies, gas companies, electric or steam heating, or lighting and power companies (section 186 as repealed by chapter 63 of the Laws of 2000)
Excise tax on telecommunications companies (section 186-e as repealed by chapter 63 of the Laws of 2000)
Privilege tax on importation of gas services for consumption (section 189 as repealed by chapter 63 of the Laws of 2000)
Temporary metropolitan transportation tax surcharge on gas importers (section 189-a as repealed by chapter 63 of the Laws of 2000)
Tax surcharge on importation of gas services for consumption (section 189-b as repealed by chapter 63 of the Laws of 2000)
Franchise tax on business corporations (Article 9-A)
Tax on gasoline and similar motor fuels (Article 12-A)
Tax on unrelated business income (Article 13)
Tax on petroleum businesses (Article 13-A)
Article 16 as repealed by chapter 267 of the Laws of 1987
Article 16-A as repealed by chapter 267 of the Laws of 1987
Tax on beverage containers (Article 18-A as repealed by chapter 389 of the Laws of 1997)
Highway use tax (Article 21)
Personal income tax (Article 22)
Article 23 as repealed by chapter 69 of the Laws of 1978
Tax on lubricating oil (Article 24 as repealed by chapter 24 of the Laws of 1994)
Estate tax (Article 26)
Gift tax (Article 26-A as repealed by chapter 389 of the Laws of 1997)
Generation-skipping transfer tax (Article 26-B)
Sales and compensating use taxes (Article 28)
Special tax on passenger car rentals (Article 28-A)
Taxes authorized for cities, counties, and school districts (Article 29)
City personal income tax (Article 30)
City income tax surcharge (Article 30-A)
City earnings tax on nonresidents (Article 30-B)
Tax on gains derived from certain real property transfers (Article 31-B repealed by chapter 309 of the Laws of 1996)
Tax on independently procured insurance (Article 33-A)
Article 2-E of the General City Law, repealed by chapter 5 of the Laws of 1999.

Amnesty under this program is available for the above taxes for periods ending (or transactions or uses occurring) on or before December 31, 2000, except with regard to tax liabilities for the above taxes that require filing returns for annual periods ending on the last day of February or quarterly periods ending on the last day of February, May, August, and November. In such a situation, the amnesty shall apply for periods ending (or transactions or uses occurring) on or before February 28, 2001.

The amnesty program will apply to any of the above taxes for any of the eligible periods with the following exceptions:

Taxpayers that received any benefit under any prior amnesty program established under chapter 170 of the Laws of 1994 or chapter 309 of the Laws of 1996, with regard to the tax for which benefit was received under any of the above previous amnesty programs
Taxpayers that are under criminal investigation
Taxpayers that have been convicted of a tax-related crime
Taxpayers that are parties to administrative proceedings within the Department of Taxation and Finance (unless the taxpayer withdraws from such proceedings)
Taxpayers with more than 500 employees.

Under the amnesty program, the Department of Taxation and Finance will abate any penalty and charge interest at a rate two percentage points below the rate it would normally charge for the tax in question.

To qualify for the amnesty program, a taxpayer must submit, along with the amnesty application, the returns for all periods and all taxes for which amnesty is sought. Full payment of any tax due plus the associated interest must be made no later than March 31, 2003, or such date as designated by the Commissioner of the Department of Taxation and Finance.

State and Local Editor:
Stewart Buxbaum, CPA
S. Buxbaum & Company P.C.

Interstate Editor:
Nicholas Nesi, CPA
BDO Seidman LLP

Contributing Editors:
Henry Goldwasser, CPA
M.R. Weiser & Co LLP

Steven M. Kaplan, CPA
Kahn, Hoffman, Nonenmacher & Hochman, LLP

Warren Weinstock, CPA
Marks Paneth & Shron, LLP

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