Opinion
Decided June 2, 1988
Appeal from the Appellate Division of the Supreme Court in the Second Judicial Department, Alfred S. Robbins, J.
Carl S. Levine and Kenneth L. Robinson for appellant.
James J. Seward for respondent.
MEMORANDUM.
The order of the Appellate Division should be affirmed, with costs.
The issue in this action for breach of contract is whether defendant Village is contractually obligated to reimburse plaintiff for certain gross receipt taxes plaintiff paid to the Tax Commission pursuant to Tax Law § 300 (c) and § 301 (a). At the time plaintiff and defendant contracted for the sale of oil, no gross receipts tax was applicable to the transaction. Approximately four weeks into the contract, the Legislature amended the Tax Law to subject plaintiff to a gross receipts tax on this transaction (L 1983, ch 400, § 8 [eff July 1, 1983]). Both parties agree that the contract was silent with regard to the payment of such tax.
It is settled that a supplier could lawfully "pass through" this gross receipt tax burden to a municipal purchaser (see, Manhattan Queens Fuel Corp. v County of Nassau, 68 N.Y.2d 833, affg on opn at 113 A.D.2d 595). The Appellate Division correctly held that, although it could have, plaintiff did not under the contract at issue pass through this new tax burden to defendant. Plaintiff does not claim impracticability or impossibility of performance, but merely claims that the cost of its performance under the contract has increased due to the change in the Tax Law. There is no basis for plaintiff's claim that defendant is contractually bound to assume this tax burden. Plaintiff, being the party legally obligated to pay the gross receipts tax, must bear the burden of its increased cost in the performance of the contract.
Chief Judge WACHTLER and Judges SIMONS, KAYE, ALEXANDER, TITONE, HANCOCK, JR., and BELLACOSA concur.
On review of submissions pursuant to section 500.4 of the Rules of the Court of Appeals (22 N.Y.CRR 500.4), order affirmed, with costs, in a memorandum.