N.Y. Tax Law § 283 — Registration of distributors

§ 283. Registration of distributors. 1. The department of taxation and\nfinance, upon the application of a person, shall register such person as\na distributor under this article except as provided in subdivisions two\nand five of this section. The application shall be in a form and contain\nsuch data as the department of taxation and finance shall prescribe. No\nperson, unless so registered, shall import or cause any motor fuel to be\nimported into the state, for use, distribution, storage or sale within\nthe state or shall produce, refine, manufacture or compound motor fuel\nwithin the state. No distributor, unless so registered, shall make any\nsale, transfer, use or other disposition of motor fuel within the state,\nexcept a sale, transfer, use or other disposition, if any, as to which\nthe state cannot impose such condition by reason of the United States\nconstitution and of laws of the United States enacted pursuant thereto.\n 2. Where a person files an application for registration under this\nsection and in considering such application the commissioner ascertains\nthat (a) any tax imposed under this chapter or any related statute as\ndefined in section eighteen hundred of this chapter has been finally\ndetermined to be due from such applicant or from any officer, director\nor partner of such applicant, shareholder directly or indirectly owning\nmore than ten percent of the number of shares of stock of such applicant\n(where such applicant is a corporation) entitling the holder thereof to\nvote for the election of directors or trustees, or any shareholder or\nemployee of such applicant under a duty to file a return under or\npursuant to the authority of this article or pay the taxes imposed by or\npursuant to the authority of this article on behalf of such applicant,\nand has not been paid in full, (b) a liability for the penalty provided\nfor under subdivision two of section two hundred eighty-nine-b of this\nchapter has been finally determined to be due from an officer, director,\nshareholder directly or indirectly owning more than ten percent of the\nnumber of shares of stock of such applicant (where such applicant is a\ncorporation) entitling the holder thereof to vote for the election of\ndirectors or trustees, employee or partner of such applicant or a\nshareholder of such applicant under a duty to file a return under or\npursuant to the authority of this article or pay the taxes imposed by or\npursuant to the authority of this article on behalf of such applicant,\nand has not been paid in full, (c) such applicant has been convicted of\na crime provided for in this chapter or has been convicted under the tax\nlaws or penal laws of any other state, or a political subdivision of\nthis state or such other state, or of the United States of a criminal\noffense which, if committed and prosecuted in this state, would\nconstitute a similar crime under this chapter, within the preceding five\nyears, (d) an officer, director or partner of such applicant, a\nshareholder directly or indirectly owning more than ten percent of the\nnumber of shares of stock of such applicant (where such applicant is a\ncorporation) entitling the holder thereof to vote for the election of\ndirectors or trustees, or an employee or shareholder of such applicant\nwho, as such employee or shareholder, is under a duty to file a return\nunder or pursuant to the authority of this article or pay the taxes\nimposed by or pursuant to the authority of this article on behalf of\nsuch applicant, has been convicted of a crime provided for in this\nchapter or has been convicted under the tax laws or penal laws of any\nother state, or a political subdivision of this state or such other\nstate, or of the United States of a criminal offense which, if committed\nand prosecuted in this state, would constitute a similar crime under\nthis chapter, within the preceding five years, or an employee of such\napplicant was, in his capacity as a person under a duty to file a return\nunder or pursuant to the authority of this article or pay the taxes\nimposed by or pursuant to the authority of this article on behalf of any\nperson, convicted of a crime provided for in this chapter or has been\nconvicted under the tax laws or penal laws of any other state, or a\npolitical subdivision of this state or such other state, or of the\nUnited States of a criminal offense which, if committed and prosecuted\nin this state, would constitute a similar crime under this chapter,\nwithin the preceding five years, (e) such applicant, or an officer,\ndirector or partner of such applicant, shareholder directly or\nindirectly owning more than ten percent of the number of shares of stock\nof such applicant (where such applicant is a corporation) entitling the\nholder thereof to vote for the election of directors or trustees, or\nemployee or shareholder of such applicant under a duty to file a return\nunder or pursuant to the authority of this article or to pay the taxes\nimposed by or pursuant to the authority of this article on behalf of\nsuch applicant, who was an officer, director or partner of another\nperson, or who directly or indirectly owned more than ten percent of the\nnumber of shares of stock of another person (where such other person is\na corporation) entitling the holder thereof to vote for the election of\ndirectors or trustees, or who was an employee or shareholder of another\nperson under a duty to file a return under or pursuant to the authority\nof this article or pay the taxes imposed by or pursuant to the authority\nof this article on behalf of such other person at the time any tax\nimposed under this chapter or any related statute as defined in section\neighteen hundred of this chapter was finally determined to be due, from\nsuch other person and where such tax has not been paid in full, or at\nthe time such other person was convicted of a crime provided for in this\nchapter or has been convicted under the tax laws or penal laws of any\nother state, or a political subdivision of this state or such other\nstate, or of the United States of a criminal offense which, if committed\nand prosecuted in this state, would constitute a similar crime under\nthis chapter, within the preceding five years, or at the time the\nregistration of such other person was cancelled or suspended pursuant to\nsubdivision four of this section within the preceding five years, or at\nthe time such other person committed any of the acts or omissions which\nare, or was convicted as, specified in subdivision four of this section\nwithin the preceding five years, provided, however, where an applicant\nor such officer, director, partner, shareholder or employee of such\napplicant was only an employee of another person, the applicable\nexamination of tax payment history of such other person shall be limited\nto the taxes imposed by this article or by or pursuant to article\ntwenty-eight or twenty-nine of this chapter with respect to motor fuel\nand the applicable examination of prior criminal convictions shall be\nlimited to those which relate to motor fuel, (f) the registration of\nsuch applicant or of an officer, director or partner of such applicant,\nshareholder directly or indirectly owning more than ten percent of the\nnumber of shares of stock of such applicant (where such applicant is a\ncorporation) entitling the holder thereof to vote for the election of\ndirectors or trustees, or employee or shareholder of such applicant\nunder a duty to file a return under or pursuant to the authority of this\narticle or to pay the taxes imposed by or pursuant to the authority of\nthis article on behalf of such applicant has been cancelled or suspended\npursuant to subdivision four of this section within the preceding five\nyears, or (g) the applicant, an officer, director or partner of the\napplicant, a shareholder directly or indirectly owning more than ten\npercent of the number of shares of stock of such applicant (where such\napplicant is a corporation) entitling the holder thereof to vote for the\nelection of directors or trustees, or an employee or shareholder of such\napplicant under a duty to file a return under or pursuant to the\nauthority of this article or to pay the taxes imposed by or pursuant to\nthe authority of this article on behalf of the applicant, has committed\nany of the acts or omissions which are, or was convicted as, specified\nin subdivision four of this section within the preceding five years, the\ncommissioner may refuse to register such applicant.\n 3. The tax commission shall require a distributor to file with the\ndepartment of taxation and finance a bond issued by a surety company\napproved by the superintendent of financial services as to solvency and\nresponsibility and authorized to transact business in this state or\nother security acceptable to the tax commission, in such amount as the\ntax commission may fix, in an amount determined in accordance with rules\nand regulations prescribed by it, to secure the payment of any sums due\nfrom such distributor (i) pursuant to this article and (ii) pursuant to\narticles twenty-eight and twenty-nine of this chapter with respect to\nsales and uses of motor fuel. The tax commission shall require that such\na bond or other security be filed before a distributor is registered,\nand the amount thereof may be increased at any time when in its judgment\nthe same is necessary as a protection to the revenues under this article\nand articles twenty-eight and twenty-nine of this chapter. If securities\nare deposited as security under this subdivision, such securities shall\nbe kept in the joint custody of the comptroller and the commissioner of\ntaxation and finance and may be sold by the tax commission if it becomes\nnecessary so to do in order to recover any sums due from such\ndistributor (i) pursuant to this article and (ii) pursuant to articles\ntwenty-eight and twenty-nine of this chapter with respect to sales and\nuses of motor fuel, but no such sale shall be had until after such\ndistributor shall have had opportunity to litigate the validity of any\ntax if it elects so to do. Upon any such sale the surplus, if any, above\nthe sums due (i) under this article and (ii) pursuant to articles\ntwenty-eight and twenty-nine of this chapter with respect to sales and\nuses of motor fuel shall be returned to such distributor. The\ndepartment, when authorized by the distributor, shall furnish\ninformation regarding the distributor's registration and any other\ninformation which the distributor authorizes it to disclose.\n 4. The registration of any distributor may be cancelled or suspended\nby the commissioner where a registrant, or an officer, director,\nshareholder, employee or partner of the registrant who as such officer,\ndirector, shareholder, employee or partner is under a duty to act for\nsuch registrant or any shareholder directly or indirectly owning more\nthan ten percent of the number of shares of stock of the registrant\n(where such registrant is a corporation) entitling the holder thereof to\nvote for the election of directors or trustees of such registrant, fails\nto file a bond or other security when required or when the amount\nthereof is increased, or fails to continue to maintain in full force and\neffect at all times the required bond or other security filed with the\ncommissioner, or fails to comply with any of the provisions of this\narticle or article twenty-eight of this chapter with respect to motor\nfuel or any rule or regulation adopted pursuant to this article or\narticle twenty-eight of this chapter with respect to motor fuel by the\ndepartment of taxation and finance or by the commissioner, or knowingly\naids and abets another person in violating any of the provisions of such\narticles or of any such rule or regulation with respect to motor fuel,\nor transfers its registration as a distributor without the prior written\napproval of the commissioner. A registration may also be cancelled or\nsuspended if the commissioner determines that a registrant or an\nofficer, director, shareholder, employee or partner of the registrant\nwho as such officer, director, shareholder, employee or partner is under\na duty to act for such registrant or any shareholder directly or\nindirectly owning more than ten percent of the number of shares of stock\nof the registrant (where such registrant is a corporation) entitling the\nholder thereof to vote for the election of directors or trustees of such\nregistrant:\n (i) commits fraud or deceit in his operations as a distributor or has\ncommitted fraud or deceit in procuring his registration;\n (ii) has been convicted in a court of competent jurisdiction, either\nwithin or without the state, of a felony, within the meaning of\nsubdivision eight of this section, bearing on such distributor's duties\nand obligations under this chapter;\n (iii) has knowingly aided and abetted a person who is not registered\nas a distributor in the importation, production, refining, manufacture\nor compounding of motor fuel;\n (iv) has impersonated any person represented to be a distributor under\nthis article but not in fact registered under this section; or\n (v) has knowingly aided and abetted the distribution of motor fuel\nimported, caused to be imported, produced, refined, manufactured or\ncompounded by a distributor who is not registered by the department of\ntaxation and finance.\n A registration may also be cancelled or suspended if the commissioner\ndetermines that a registrant or an officer, director, shareholder,\nemployee or partner of the registrant who as such officer, director,\nshareholder, employee or partner is under a duty to act for such\nregistrant or any shareholder directly or indirectly owning more than\nten percent of the number of shares of stock of the registrant (where\nsuch registrant is a corporation) entitling the holder thereof to vote\nfor the election of directors or trustees of such registrant, was an\nofficer, director, shareholder, employee or partner of another person\nwho as such officer, director, shareholder, employee or partner was\nunder a duty to act for such other person or was a shareholder directly\nor indirectly owning more than ten percent of the number of shares of\nstock of such other person (where such other person is a corporation)\nentitling the holder thereof to vote for the election of directors or\ntrustees of such other person at the time such other person committed\nany of the acts or omissions which are, or was convicted as, specified\nin this subdivision within the preceding five years.\n 5. A registration shall not be cancelled or suspended nor shall an\napplication for registration be refused unless the registrant or\napplicant has had an opportunity for a hearing, provided, however, that\nan application for registration may be denied without a prior hearing.\nProvided, further, a registration may be cancelled or suspended without\na prior hearing, for failure to file a return within ten days of the\ndate prescribed for filing a return under this article or article\ntwenty-eight of this chapter with respect to sales and uses of motor\nfuel, or for nonpayment of any taxes due pursuant to this article or\narticle twenty-eight or twenty-nine of this chapter with respect to\nsales and uses of motor fuel if the registrant shall have failed to file\nsuch return or pay such taxes within ten days after the date the demand\ntherefor is sent by registered or certified mail to the address of the\ndistributor given in his application for registration, or an address\nsubstituted therefor as provided in this subdivision. A registration may\nbe cancelled or suspended prior to a hearing for the failure to continue\nto maintain in full force and effect at all times the required bond or\nother security filed with the tax commission. Provided, however, if a\nsurety bond is cancelled prior to expiration, the tax commission, after\nconsidering all the relevant circumstances, may make such other\narrangements and require the filing of such other bond or other security\nas it deems appropriate. Provided, further, a registration may be\ncancelled or suspended prior to a hearing for the transfer of such\nregistration without the prior written approval of the state tax\ncommission. A distributor shall immediately inform the department, in\nwriting, of any change in its address and, if the distributor is a\ncorporation or partnership, the distributor shall immediately inform the\ndepartment, in writing, of any change in its officers, directors or\npartners or their residence addresses as shown in its application for\nregistration.\n 6. (a) A notice of proposed cancellation or suspension of registration\nor refusal to register shall be given to the person registered pursuant\nto this article or to a person applying for such registration in the\nmanner prescribed for a notice of determination of tax and all the\nprovisions of this article applicable to a notice of determination under\nsection two hundred eighty-eight of this chapter, including, but not\nlimited to, those provisions authorizing the commissioner to make a\nredetermination on the commissioner's own motion, shall apply to a\nnotice issued pursuant to this subdivision, insofar as such provisions\ncan be made applicable to the notice authorized by this subdivision,\nwith such modifications as may be necessary in order to adapt the\nlanguage of such provisions to the notice authorized by this\nsubdivision. In the case of a person applying to register, a notice of\nproposed refusal to register shall be issued promptly after application\nfor registration is received by the commissioner. Upon timely\napplication therefor, a hearing shall be scheduled in the division of\ntax appeals, and within three months from such application for hearing\n(determined with regard to any postponements of any scheduled hearing or\nconference or other delay made at the request of the applicant) the\nadministrative law judge shall render a determination either upholding\nthe commissioner's refusal to register or ordering the commissioner to\nregister the applicant. Within fifteen days after the giving of notice\nof the administrative law judge's determination, the applicant or the\ncommissioner may take exception to the determination. If an exception is\ntaken, the tax appeals tribunal, within seventy-five days from the date\nof notice to the tribunal that exception is being taken to an\nadministrative law judge's determination, shall issue a decision either\naffirming or reversing such determination. If the administrative law\njudge renders a determination ordering the commissioner to register the\napplicant and the commissioner takes exception to such determination,\nthe commissioner shall not be required to register such applicant unless\nand until the tax appeals tribunal issues a decision affirming such\ndetermination. The applicant shall not be registered until there has\nbeen filed a bond or other security in the required amount. Such notice\nof proposed cancellation or suspension or of proposed refusal to\nregister must be given to such person within five years from the date of\nthe act or omission referred to in subdivision two or four of this\nsection, except that in the case of acts involving falsity or fraud,\nsuch notice may be issued at any time. All of such notices of proposed\ncancellation or suspension or of proposed refusal to register shall\ncontain a statement advising the person to whom it is issued that the\ncancellation, suspension or refusal to register may be challenged\nthrough a hearing process and that the petition for such challenge must\nbe filed with the division of tax appeals within ninety days after the\ngiving of such notice. Where a registration is cancelled or suspended\nprior to a hearing, the cancellation or suspension may be challenged\nthrough the hearing process provided the petition for such challenge is\nfiled within ninety days after the giving of notice of such cancellation\nor suspension.\n (b) Notwithstanding any other provision to the contrary:\n (i) In the event that the commissioner determines that an increase in\nthe amount of the bond or other security filed by a registrant is\nrequired to secure the liability of such registrant, such bond increase\nor other security increase must be filed by such registrant within\nthirty days from the day the notice and demand therefor has been given\nby the commissioner. If the registrant fails to (A) file such increase\nin the amount of bond or other security within such period or (B) make\ntimely application for a hearing with particular respect to the amount\nof the increase of such bond or other security, the commissioner shall\ncancel or suspend the registration of such registrant.\n (ii) The registrant may apply to the division of tax appeals for a\nhearing to review an increase in the amount of the bond or other\nsecurity required to be filed by making application therefor within\nseven days of the day that the notice and demand for an increase is\ngiven by the commissioner, provided, the division of tax appeals may, by\nregulation, for the causes stated therein, extend such period to a\nperiod not exceeding fifteen days from the day such notice and demand is\ngiven. If the registrant timely applies for a hearing to review the\nincrease, such hearing shall be held, unless extended by the division of\ntax appeals for good cause, no less than seven days and no more than ten\ndays after the application for a hearing is received by the division of\ntax appeals. Within fifteen days of the receipt of the application for a\nhearing, unless extended by the division of tax appeals, the\nadministrative law judge shall render a determination with respect to\nthe increase in the amount of the bond or other security and, if the\namount of such bond or other security is determined to be due, such\nincrease shall be filed within seven days from the day the\nadministrative law judge gives notice of the determination, or, if\nlater, thirty days from the day the notice and demand for the increase\nhad been given by the commissioner. Notwithstanding that the registrant\ntakes exception to the administrative law judge's determination that an\nincreased bond or other security is due, if the increased bond or other\nsecurity is not filed within such time, the commissioner shall cancel or\nsuspend the registration of the registrant. Where the administrative law\njudge determines that an increased bond or other security is not due but\nsuch determination is reversed by the tax appeals tribunal, if the\nincreased bond or other security is not filed within seven days from the\nday the tax appeals tribunal gives notice of its decision\nnotwithstanding any judicial review of such decision of the tax appeals\ntribunal, the commissioner shall cancel or suspend the registration of\nthe registrant.\n 7. Temporary restraining order and permanent injunction against\nunlawful importation and forfeiture of unlawfully imported or produced\nmotor fuel or diesel motor fuel. (a) Whenever evidence is furnished by\nthe commissioner to any justice of the supreme court, in court or at\nchambers, showing that any person not registered as a distributor as\nrequired by this article has imported motor fuel or diesel motor fuel\ninto this state or caused motor fuel or diesel motor fuel to be imported\ninto this state or has produced, refined, manufactured or compounded\nmotor fuel or diesel motor fuel, such justice may make a temporary order\nwithout notice prohibiting such person and his agents from selling,\ntransferring or otherwise disposing of any such fuel or any fuel and\nalso prohibiting all other persons in possession of or having control\nover the same from selling, releasing, transferring or otherwise\ndisposing of any motor fuel or diesel motor fuel imported, produced,\nrefined, manufactured, compounded, sold or transferred by such person\nnot so registered pending a hearing for a preliminary injunction.\n (b) Upon granting a temporary order, the court shall direct that a\nhearing be held at the earliest possible time upon such notice and\nservice as the court shall direct and at the same time, if such action\nhas not yet been commenced, the commissioner shall commence an action in\nsupreme court for a permanent injunction and forfeiture of motor fuel or\ndiesel motor fuel pursuant to paragraph (c) of this subdivision. Where,\nafter such opportunity for a hearing, the court determines that there is\na substantial probability that the commissioner will prevail in such\naction, the court shall grant a preliminary injunction restraining the\nsale, release, transfer or other disposition of fuel subject to the\ntemporary order.\n (c) (1) If it is established by clear and convincing evidence that\nmotor fuel or diesel motor fuel was imported, caused to be imported,\nproduced, refined, manufactured or compounded by any person not\nregistered as a distributor as required by this article, the court shall\ngrant a judgment (i) permanently enjoining such person and his agents\nfrom selling, transferring or otherwise disposing of any such fuel or\nany fuel within this state and (ii) declaring the forfeiture of any fuel\nthat was so imported, caused to be imported, produced, refined,\nmanufactured, or compounded by such person.\n (2) With respect to motor fuel or diesel motor fuel that was imported,\ncaused to be imported, produced, refined, manufactured or compounded, by\na person not registered as a distributor as required by this article or\nthat was unlawfully sold or transferred by such person, if it is\nestablished by clear and convincing evidence that any other person in\npossession of or having control over such fuel was not a purchaser or\ntransferee in good faith of such fuel with respect to the fact that such\nfuel was so imported, caused to be imported, produced, refined,\nmanufactured, or compounded by a person not registered as a distributor\nas required by this article or that such fuel was so unlawfully sold or\ntransferred by such person, the court shall grant a judgment (i)\npermanently enjoining such other person and his or her agents from\nselling, releasing, transferring or otherwise disposing of any such fuel\nand (ii) declaring the forfeiture of such fuel in the possession or\nunder the control of such other person.\n (d) The commissioner may, at any time subsequent to the granting of\nthe temporary order pursuant to paragraph (a) of this subdivision, in\nhis or her sole discretion consent to a sale of motor fuel or diesel\nmotor fuel subject to such temporary order which is in the possession or\nunder the control of a person other than the person or the agent of the\nperson who imported, caused to be imported, produced, refined,\nmanufactured, compounded or unlawfully sold or transferred such fuel. As\na condition of granting permission to a sale of motor fuel or diesel\nmotor fuel pursuant to this subdivision, the commissioner shall require\nthe payment of all taxes, penalties and interest imposed by and pursuant\nto the authority of this chapter with respect to such fuel.\n (e) (1) At any time during the pendency of an action under this\nsection, the motor fuel or diesel motor fuel subject to a temporary,\npreliminary or permanent order hereunder may be released from the scope\nof such order if there is given an undertaking, in an amount equal to\nthe market value of such fuel plus state excise and sales taxes and\nfederal excise taxes, to the effect that there will be paid to the\ncommissioner the amount of the market value of such fuel and such taxes\nin the event that such fuel is adjudged forfeited.\n (2) Any person enjoined by a temporary order or a preliminary\ninjunction issued pursuant to this subdivision may move at any time, on\nnotice, to vacate or modify it.\n (f) The procedures of the civil practice law and rules applicable to\ntemporary restraining orders, preliminary injunctions and permanent\ninjunctions not inconsistent with this subdivision shall apply to\ntemporary orders, preliminary injunctions and permanent injunctions\nissued under this subdivision and any provision of this subdivision\nwhich is not in accord with the constitutional mandate of such\nprocedures of the civil practice law and rules shall be deemed to be\nmodified as necessary to accord with such a mandate. The procedural\nprovisions set forth in paragraph three of subdivision (d) and in\nsubdivision (j) of section eighteen hundred forty-eight of this chapter\nshall apply to the forfeiture proceedings under this subdivision and, in\nrespect to a declaration of forfeiture under this subdivision, the court\nshall direct the commissioner to sell or otherwise dispose of such\nforfeited motor fuel or diesel motor fuel on such conditions the\ncommissioner deems most advantageous and just under the circumstances.\nThe commissioner shall not be required to file any undertaking in\nconnection with an action pursuant to this subdivision.\n 8. (a) For the purposes of this section, in determining whether any\nperson has been convicted of a felony, the provisions of this\nsubdivision shall apply; provided, however if any such conviction be\nsubsequently set aside or reversed upon appeal and the accused acquitted\nor discharged, the registration which has been cancelled or suspended as\na result of such conviction shall be restored.\n (b) A conviction of a felony shall include the conviction of a felony\nby any court in this state or by any court of the United States or by\nany court of any other state of the United States; provided, however,\nthat if a crime of which a person is convicted by any court of the\nUnited States or any other state is a felony in the jurisdiction in\nwhich the conviction is had but is not a felony in the state of New\nYork, then the conviction shall not be deemed a conviction of a felony\nfor the purpose of this article. In the event that a crime of which a\nperson is convicted by any court of the United States or by any court of\nany other state is not a felony in the jurisdiction in which the\nconviction is had but is a felony in the state of New York, then the\nconviction shall be deemed a conviction of a felony for the purposes of\nthis article.\n (c) If a person convicted of a felony or crime deemed hereby to be a\nfelony is subsequently pardoned by the governor of the state where such\nconviction was had, or by the president of the United States, or shall\nreceive a certificate of relief from disabilities or a certificate of\ngood conduct pursuant to article twenty-three of the correction law for\nthe purpose of removing the disability under this section because of\nsuch conviction, the tax commission may, in its discretion, on\napplication of such person and compliance with subdivision two of this\nsection, and on the submission to it of satisfactory evidence of good\nmoral character and suitability, again register such person as a\ndistributor under this article.\n 9. (a) The registration granted to a distributor by the state tax\ncommission shall be personal to the person to whom it is granted. The\ntransfer of such registration without the prior written approval of the\nstate tax commission is invalid and such transfer without approval shall\nbe grounds for the immediate cancellation or suspension of the\nregistration of the registrant. The tax commission shall establish by\nrule or regulation a specific procedure for the review of an application\nfor registration in these instances where there has been a proposed\ntransfer of registration, and the tax commission in making its\ndetermination with respect to such approval shall review such\napplication in such instance as any other application for registration\nunder this section and shall make its determination in accordance with\nthe criteria set forth in this section. Provided further, the state tax\ncommission shall issue a determination with respect to such application\nwhere there has been a proposed transfer of registration within\nseventy-five days after the day of the receipt of a properly completed\napplication containing such information as the said tax commission may\nrequire. If the tax commission fails to issue a determination within\nsuch time, the tax commission shall be required to register such\nproposed transferee.\n (b) For the purposes of this subdivision, a registration shall be\nconsidered to be transferred where, among other things, there is any\naddition or substitution of a partner of the registrant or the\nacquisition by any person of such shares of stock of the registrant\n(where such registrant is a corporation) so that such person becomes the\nowner of more than ten percent of the number of shares of stock of such\nregistrant entitling the holder thereof to vote for the election of\ndirectors or trustees. Provided, however, where stock of the registrant\nor a partnership interest in the registrant or, where the registrant is\na sole proprietorship, the interest of the decedent therein along with\nthe registration, is transferred pursuant to bequest or inheritance to\n(A) an ancestor of the decedent, (B) the spouse of the decedent, (C) a\nlineal descendent of the decedent, of the descendent's spouse, or of a\nparent of the decedent, or (D) the spouse of any lineal descendent\ndescribed in (C) hereof, such transfer shall not, in and of itself, be\ngrounds for cancellation or suspension. Provided, however, within ninety\ndays of the death of the decedent in such instance, the registrant, the\npersonal representative of the decedent's estate or such person\ndescribed in subparagraphs (A), (B), (C) or (D) of this paragraph must\nsubmit a revised application for registration as a distributor. The\nstate tax commission may then cancel or suspend the registration because\nof the existence of grounds to do so specified in this section for\nrefusal or denial of an application for registration or for cancellation\nor suspension of a registration. The failure to submit a revised\napplication for registration within such ninety day period shall be\ngrounds for immediate cancellation or suspension of the registration.\n 10. For purposes of this section, where reference is made to\nownership, directly or indirectly, of more than ten percent of the\nshares of stock of the applicant or another person entitling the holder\nthereof to vote for the election of directors or trustees, in the case\nof an applicant or another person which at the relevant time has four or\nfewer shareholders holding shares entitling the holders thereof to vote\nfor the election of directors or trustees, twenty-five percent or more\nshall be substituted as the applicable percentage in such references to\nownership, directly or indirectly, of voting stock.\n