N.Y. Tax Law § 10 — Electronic funds transfer by certain taxpayers remitting sales and compensating use taxes, prepaid sales and compensating use taxes on mo...

§ 10. Electronic funds transfer by certain taxpayers remitting sales\nand compensating use taxes, prepaid sales and compensating use taxes on\nmotor fuel and diesel motor fuel, and motor fuel and petroleum business\ntaxes. (a) Definitions. For purposes of this section:\n (1) The term "commissioner" means the commissioner of taxation and\nfinance.\n (2) The term "electronic funds transfer" has the meaning prescribed in\nparagraph three of subdivision (a) of section nine of this chapter.\n (3) The term "federal employer identification number" means the number\nassigned in accordance with section six thousand one hundred nine of the\nUnited States internal revenue code of nineteen hundred eighty-six, and\namendments thereto, and regulations promulgated thereunder.\n (4) The term "separate New York state employer identification number"\nmeans a number assigned by the department which is either a suffix to\nthe federal employer identification number or an identifying number\nunrelated to the federal employer identification number.\n (5) The term "payment of tax" means a payment or payment over of the\ntaxes described in subparagraphs (A), (B) and (C) of paragraph one of\nsubdivision (b) of this section.\n (6) The term "taxpayer" means the person required to make a payment of\ntax.\n (b) Participation rules. (1) General. Notwithstanding any other\nprovision of law to the contrary, if, on or after June first of any\nyear, during the June first through May thirty-first period which\nimmediately precedes the previous June first through May thirty-first\nperiod, a taxpayer was liable for\n (A) more than five hundred thousand dollars of state and local sales\nand compensating use taxes imposed by article twenty-eight and pursuant\nto the authority of article twenty-nine of this chapter where such taxes\nare administered by the commissioner, or\n (B) more than five million dollars of prepaid state and local sales\nand compensating use taxes on motor fuel and diesel motor fuel imposed\npursuant to section eleven hundred two of this chapter, or\n (C) more than five million dollars of the total of the tax on gasoline\nand similar motor fuel and the tax on petroleum businesses imposed by\nand pursuant to the authority of articles twelve-A and thirteen-A of\nthis chapter, then such taxpayer shall make payments of the taxes for\nwhich such dollar threshold was met by electronic funds transfer or\ncertified check in accordance with the provisions of subdivision (c) of\nthis section.\n (2) Special transitional rule. Notwithstanding the provisions of\nparagraph one of this subdivision, for purposes of determining whether a\ntaxpayer described in subparagraph (C) of such paragraph shall be\nrequired to initially participate in the program prescribed by this\nsection, if such taxpayer was liable for more than three million seven\nhundred fifty thousand dollars in total article twelve-A and thirteen-A\ntaxes during the September first, nineteen hundred ninety through May\nthirty-first, nineteen hundred ninety-one period, then such taxpayer\nshall make payments of tax by electronic funds transfer or certified\ncheck in accordance with the provisions of this section.\n (3) Disaggregation. Every taxpayer who is identified by either its own\nfederal employer identification number or its own separate New York\nstate employer identification number shall be treated as a separate\ntaxpayer for purposes of determining whether the dollar thresholds\nspecified in paragraph one or two of this subdivision have been met. A\ntaxpayer seeking a separate New York state employer identification\nnumber for a branch or division may apply to the commissioner for such a\nnumber. The commissioner, at his or her discretion, may assign such\nnumber upon a showing by the taxpayer of a legitimate business purpose\nfor such request.\n (4) Hardship. (A) If a taxpayer having liability described in\nsubparagraph (A) of paragraph one of this subdivision can demonstrate to\nthe satisfaction of the commissioner that (i) for the two most recent\nconsecutive quarters, the state and local sales and compensating use\ntaxes properly payable by such taxpayer are less than fifty percent of\nthe state and local sales and compensating use taxes properly payable by\nsuch taxpayer for the comparable two quarters of the preceding year and\n(ii) the sum of such taxpayer's state and local sales and compensating\nuse tax liability for such most recent consecutive quarters together\nwith the product of the state and local sales and compensating use taxes\nproperly payable by such taxpayer for the two consecutive quarters\nimmediately preceding the quarters referred to in clause (i) of this\nsubparagraph multiplied by the percentage arrived at under such clause\nis less than two hundred fifty thousand dollars in amount, then such\ntaxpayer shall not be required to participate in the program prescribed\nby this section for the remaining quarters of the sales tax year ending\non the next May thirty-first and for the immediately succeeding four\nsales tax quarters.\n (B) If a taxpayer having liability described in subparagraph (B) or\n(C) of paragraph one of this subdivision can demonstrate to the\nsatisfaction of the commissioner that (i) for the most recent six-month\nperiod, (I) the prepaid state and local sales and compensating use taxes\non motor fuel and diesel motor fuel or (II) the total article twelve-A\nand thirteen-A taxes, as the case may be, properly payable by such\ntaxpayer are less than fifty percent of such applicable taxes described\nin subclause (I) or (II), as the case may be, properly payable by such\ntaxpayer for the comparable six-month period of the preceding year and\n(ii) the sum of such taxpayer's liability for such applicable taxes for\nthe most recent six months together with the product of such applicable\ntaxes properly payable by such taxpayer for the six-month period\nimmediately preceding the six-month period referred to in clause (i) of\nthis subparagraph multiplied by the percentage arrived at under such\nclause is less than two and one-half million dollars in amount, then\nsuch taxpayer shall not be required to participate in the program\nprescribed by this section for the remaining months of the period ending\non the next May thirty-first and for the immediately succeeding twelve\nmonths.\n (D) If a taxpayer required to remit state and local sales and\ncompensating use taxes by electronic funds transfer or certified check\npursuant to the provisions of this section can demonstrate to the\nsatisfaction of the commissioner that (i) such taxpayer's liability for\nstate and local sales and compensating use taxes was less than four\nmillion dollars during the period described in paragraph one of this\nsubdivision, and (ii) in any two sales tax quarters within the most\nrecent four consecutive sales tax quarters, such taxpayer was a\nmaterialman within the meaning of section two of the lien law, primarily\nengaged in furnishing building materials to contractors, subcontractors\nor repairmen for the improvement of real property improved or to be\nimproved with a residential dwelling unit, and authorized by such law to\nfile a mechanic's lien upon such real property and improvement, then\nsuch taxpayer need not remit state and local sales and compensating use\ntaxes by electronic funds transfer or certified check for the remainder\nof the program period in accordance with the timing requirements of\nsubdivision (c) of this section, but may instead remit such taxes by\nelectronic funds transfer or certified check at the same time that\npayment is required to be made for part-quarterly and quarterly returns\nrequired to be filed under article twenty-eight and pursuant to the\nauthority of article twenty-nine of this chapter, in the amount required\nunder or pursuant to such articles at such time. The due date prescribed\nby this subparagraph shall be deemed to be the applicable due date for\npurposes of this section for taxpayers qualifying under this\nsubparagraph. The provisions of this section shall apply to taxpayers\nqualifying under this subparagraph, except to the extent that any such\nprovision is either inconsistent with a provision of this subparagraph\nor is not relevant to this subparagraph.\n (c) Payment rules. (1) Payment by electronic funds transfer or\ncertified check. On or before the third business day following the\ntwenty-second day of each calendar month:\n (A) a taxpayer having liability described in subparagraph (A) of\nparagraph one of subdivision (b) of this section shall, notwithstanding\nany provision of this chapter to the contrary, remit by electronic funds\ntransfer or certified check: (i) either (I) seventy-five percent of\none-third of the state and local sales and compensating use taxes\nproperly payable by such taxpayer for the comparable quarter of the\npreceding year; or\n (II) such taxpayer's total liability for state and local sales and\ncompensating use taxes during the period ending on such twenty-second\nday of the month, provided, however, that in such instance no penalty or\ninterest shall be payable pursuant to paragraph two of subdivision (g)\nof this section if such taxpayer timely remits a payment of tax in an\namount not less than ninety percent of the taxes as finally determined\nto be due and payable for such period; and\n (ii) (I) for payments of tax due in the month of January, February,\nApril, May, July, August, October or November, such taxpayer's remaining\nliability, if any, for state and local sales and compensating use taxes\nfor the immediately preceding calendar month; or\n (II) for payments of tax due in the month of March, June, September or\nDecember, such taxpayer's remaining liability, if any, for state and\nlocal sales and compensating use taxes for the immediately preceding\nsales tax quarter;\n (B) a taxpayer having liability described in subparagraph (B) of\nparagraph one of subdivision (b) of this section shall remit by\nelectronic funds transfer or certified check either:\n (i) three-fourths of the prepaid state and local sales and\ncompensating use taxes on motor fuel and diesel motor fuel properly\npayable by such taxpayer for the comparable month of the preceding year;\nor\n (ii) its total liability for prepaid state and local sales and\ncompensating use taxes on motor fuel and diesel motor fuel during the\nperiod ending on such twenty-second day of the month, provided, however,\nthat in such instance no penalty or interest shall be payable pursuant\nto paragraph two of subdivision (g) of this section if such taxpayer\ntimely remits a payment of tax in an amount not less than ninety percent\nof the taxes as finally determined to be due and payable for such\nperiod;\n (C) a taxpayer having liability described in subparagraph (C) of\nparagraph one of subdivision (b) of this section shall remit by\nelectronic funds transfer or certified check either:\n (i) three-fourths of the total article twelve-A and article thirteen-A\ntaxes properly payable by such taxpayer for the comparable month of the\npreceding year; or\n (ii) its total liability for such taxes during the period ending on\nsuch twenty-second day of the month, provided, however, that in such\ninstance no penalty or interest shall be payable pursuant to paragraph\ntwo of subdivision (g) of this section if such taxpayer timely remits a\npayment of tax in an amount not less than ninety percent of the taxes as\nfinally determined to be due and payable for such period.\n (2) Filing obligations and payment of remaining liabilities. (A) A\ntaxpayer having liability described in subparagraph (A) of paragraph one\nof subdivision (b) of this section shall, notwithstanding any provision\nof this chapter to the contrary, file only the quarterly returns\nrequired under article twenty-eight and pursuant to the authority of\narticle twenty-nine of this chapter for each of the periods for which\nsuch returns are filed under and pursuant to the authority of such\narticles; provided, however, that for those months for which a return is\nnot required to be filed pursuant to the provisions of this\nsubparagraph, the making of a payment of tax by electronic funds\ntransfer or certified check covering any period shall be deemed to\nconstitute the filing of a return for purposes of subdivision (b) of\nsection eleven hundred forty-seven of this chapter with respect to such\nperiod.\n (B) A taxpayer having liability described in subparagraph (B) of\nparagraph one of subdivision (b) of this section shall file the returns\nrequired under section eleven hundred two of this chapter and shall pay\nto the commissioner the amounts required to be paid with such returns,\nless the amounts remitted by electronic funds transfer or certified\ncheck under this section, for each of the periods for which such returns\nare filed under such section.\n (C) A taxpayer having liability described in subparagraph (C) of\nparagraph one of subdivision (b) of this section shall file the returns\nrequired under and pursuant to the authority of articles twelve-A and\nthirteen-A of this chapter and shall pay to the commissioner the amounts\nrequired to be paid with such returns, less the amounts remitted by\nelectronic funds transfer or certified check under this section, for\neach of the periods for which such returns are filed under and pursuant\nto the authority of such articles.\n (3) Payment date; payment by certified check. Payment of tax by\nelectronic funds transfer or certified check shall be made to a bank,\nbanking house or trust company designated by the commissioner. The\ncommissioner shall designate only such banks, banking houses or trust\ncompanies as are or shall be designated by the comptroller as\ndepositories pursuant to section one hundred seventy-one-a of this\nchapter, as added by chapter sixty-nine of the laws of nineteen hundred\nseventy-eight. Notwithstanding any other provision of law to the\ncontrary, any electronic funds transfer shall be deemed to be made on\nthe date payment is received by the depository of the department,\nprovided, however, that at the election of a taxpayer subject to the\nprovisions of this section, mailing by the taxpayer of a certified check\nfor the amount of the tax liability on or before the second business day\nprior to the applicable due date prescribed by paragraph one of this\nsubdivision shall fulfill the requirements with respect to payments of\ntax by electronic funds transfer prescribed by this section and shall be\ndeemed to be timely payment of such tax liability.\n (4) Special payment rule. If a taxpayer is liable for payment of taxes\ndescribed in two or more of subparagraphs (A), (B) and (C) of paragraph\none of subdivision (b) of this section, then such taxpayer shall make\nseparate payment by electronic funds transfer or certified check of the\ntaxes described in each of such subparagraphs.\n (d) Enrollment and initial payment; duration of participation. Within\nforty-five days after each June first, the commissioner shall notify by\ncertified or registered mail all taxpayers required to participate in\nthe program prescribed by this section. Such notice shall contain\nlanguage advising the taxpayer of the enrollment procedure and of the\nconsequences of failure to enroll in such program, as well as of a\ntaxpayer's right to challenge such determination of required\nparticipation provided a hearing is requested within forty days of the\nmailing of such notice. If a taxpayer does not enroll within forty days\nof the mailing of such certified or registered notice of required\nparticipation or where a taxpayer's challenge is not sustained and the\ntaxpayer has not enrolled within ten days of notification thereof, the\ncommissioner shall mail another notice, in addition to making other\nreasonable attempts, to inform the taxpayer of the civil penalty that\nhas been assessed pursuant to paragraph one of subdivision (g) of this\nsection, of the opportunity for abatement of such penalty, and of the\nfuture penalties that may result from continued failure to enroll and\nfailure to pay by electronic funds transfer or certified check or to\nfile; provided, however, that for the program period beginning December\nfirst, nineteen hundred ninety-two through August thirty-first, nineteen\nhundred ninety-three, the thirty-day period referred to in this sentence\nshall be read as forty-five days. A taxpayer shall make its first\npayment of tax by electronic funds transfer or certified check on or\nbefore the applicable due date prescribed by subdivision (c) of this\nsection for the month of December in nineteen hundred ninety-two, the\nmonth of September in nineteen hundred ninety-three and the month of\nSeptember for any year thereafter. Unless otherwise provided by this\nsection, such taxpayer shall continue to make payments of tax by\nelectronic funds transfer or certified check in accordance with the\nprovisions of this section through the succeeding month of August and\nshall continue to make such payments of tax for each succeeding\nSeptember-to-August period where such taxpayer meets the criteria of\nsubdivision (b) of this section and is properly notified by the\ncommissioner pursuant to the enrollment provisions of this subdivision.\nProvided, however, that:\n (1) A taxpayer described in subparagraph (A) of paragraph one of\nsubdivision (b) of this section who is newly required to participate in\nthe program for the September first, nineteen hundred ninety-four\nthrough August thirty-first, nineteen hundred ninety-five period shall\nhave forty-five days to enroll in the program and shall make its first\npayment of tax by electronic funds transfer or certified check on or\nbefore the applicable due date prescribed by subdivision (c) of this\nsection for the month of December in nineteen hundred ninety-four; and\n (2) A taxpayer described in subparagraph (A) of paragraph one of\nsubdivision (b) of this section who is newly required to participate in\nthe program for the September first, nineteen hundred ninety-five\nthrough August thirty-first, nineteen hundred ninety-six period shall\nmake its first payment of tax by electronic funds transfer or certified\ncheck on or before the applicable due date prescribed by subdivision (c)\nof this section for the month of December in nineteen hundred\nninety-five.\n (e) Voluntary participation. A taxpayer who is not required to\nparticipate in the program prescribed by this section but who is\nrequired to remit any of the taxes specified in subparagraph (A), (B) or\n(C) of paragraph one of subdivision (b) of this section may file a\nrequest with the commissioner to remit any of such taxes by electronic\nfunds transfer or certified check in accordance with the provisions of\nthis section. Such request shall be in a form as the commissioner shall\nrequire and shall be granted under such conditions as the commissioner\nin his or her discretion shall deem necessary.\n (f) Confidentiality. The department shall assure the confidentiality\nof information supplied by taxpayers in effecting payments of tax\npursuant to this section in accordance with the provisions of sections\nthree hundred fourteen and eleven hundred forty-six of this chapter and\nany other applicable provisions of law. The provisions of article six of\nthe public officers law shall not apply to any such information supplied\nby taxpayers subject to this section.\n (g) Civil penalties and interest. (1) Failure to enroll. If a taxpayer\nrequired to participate in the program prescribed by this section fails\nto enroll in such program in accordance with the terms set forth in\nsubdivision (d) of this section, such taxpayer shall pay a penalty equal\nto five thousand dollars; provided, however, that if such taxpayer\nenrolls in the program within thirty days after notification of\nassessment of such penalty is sent by the department by certified or\nregistered mail return receipt requested, then such penalty shall be\nabated. If such taxpayer continues to fail to enroll in the program\nafter such thirty-day period, the taxpayer shall pay an additional\npenalty of five hundred dollars if the failure is for not more than one\nmonth, with an additional five hundred dollars for each additional month\nor fraction thereof during which such failure continues.\n (2) Failure to pay or late payment. (A) A taxpayer required or\napproved to participate in the program prescribed by this section who\nfails to make a payment of tax by electronic funds transfer or certified\ncheck on or before the applicable due date prescribed by subdivision (c)\nof this section, or who fails to pay any tax required to be remitted on\nor before such applicable due date shall, in the case of the taxes\nimposed pursuant to article twenty-eight and pursuant to the authority\nof article twenty-nine of this chapter, be liable for penalty and\ninterest as prescribed by subparagraphs (i) and (ii) of paragraph one of\nsubdivision (a) of section eleven hundred forty-five of this chapter,\nand in the case of the taxes imposed by and pursuant to the authority of\narticles twelve-A and thirteen-A of this chapter, be liable for penalty\nand interest as prescribed by paragraphs (a) and (b) of subdivision one\nof section two hundred eighty-nine-b of this chapter.\n (B) Notwithstanding any provision of law to the contrary, if a\ntaxpayer described in subparagraph (B) or (C) of paragraph one of\nsubdivision (b) of this section fails to make a payment of tax by\nelectronic funds transfer or certified check on or before the applicable\ndue date prescribed by subdivision (c) of this section or fails to pay\nany tax required to be remitted on or before such applicable due date,\nas prescribed by subparagraph (A) of this paragraph, and also fails to\npay or pay over to the commissioner the amounts required to be paid or\npaid over with the applicable return described in paragraph two of\nsubdivision (c) of this section due the twentieth day of the following\nmonth, then penalty and interest for such additional failure, as\nprovided by subparagraphs (i) and (ii) of paragraph one of subdivision\n(a) of section eleven hundred forty-five of this chapter or paragraphs\n(a) and (b) of subdivision one of section two hundred eighty-nine-b of\nthis chapter, as the case may be, shall be computed on the amount equal\nto the difference between the total of the amount of tax due or\ndetermined to be due with such return and the total of the amount of tax\nrequired to be paid by electronic funds transfer or certified check on\nor before the applicable due date prescribed by subdivision (c) of this\nsection for the preceding month.\n (3) Failure to file required returns. A taxpayer required or approved\nto participate in the program prescribed by this section who complies\nwith the payment requirements of subdivision (c) of this section\n(including the payment of remaining liabilities described in paragraph\ntwo of such subdivision), but who fails to file any return required\npursuant to article twelve-A, thirteen-A, twenty-eight or twenty-nine of\nthis chapter, as the case may be, for the period for which such payments\nwere timely and fully paid or paid over, shall be liable for a penalty\nequal to five hundred dollars.\n (h) Administration. Except as otherwise provided in this section, the\nprovisions of part IV of article twenty-eight of this chapter shall\napply to the administration of and procedures with respect to the\nprovisions of this section relating to the taxes described by\nsubparagraph (A) of paragraph one of subdivision (b) of this section,\nthe provisions of section eleven hundred two of this chapter relating to\nthe administration of and procedures with respect to such section shall\napply to the administration of and procedures with respect to the\nprovisions of this section relating to the taxes described by\nsubparagraph (B) of such paragraph one, and the provisions of article\ntwelve-A relating to the administration of and procedures with respect\nto such article shall apply to the provisions of this section relating\nto the taxes described in subparagraph (C) of such paragraph one.\n (i) Regulations. The commissioner shall have the authority to\npromulgate regulations in order to implement the provisions of this\nsection.\n