N.Y. Comp. Codes R. & Regs. tit. 20 § 533.4

Current through Register Vol. 46, No. 50, December 11, 2024

Section 533.4 - Payment of tax

Tax Law, §§ 1137, 1146(c)

(a)Time of payment.

(1) Any tax imposed by article 28 or pursuant to the authority of article 29 of the Tax Law which is administered by the Department of Taxation and Finance is due and payable to the Department of Taxation and Finance on or before the date set for the filing of the return for the reporting period, without regard to whether a return is filed and whether the return filed is correct or complete. The amount of sales tax so payable is due and payable whether or not it has been collected by the vendor from the purchaser.

(2) Any vendor who ceases to do business within this State must, within 20 days of the cessation of business, make a final return and payment of the sales and compensating use taxes due.

Cross-reference:

For final return, see section 533.3(e) of this Part. For proceedings to recover tax and article 78 proceedings of the CPLR, see Part 535 of this Title.

(b)Amounts payable.

(1) All persons who are required to collect any sales tax, except for the tax imposed by subdivision (b) of section 1105 of the Tax Law (relating to the tax on utility and similar services and referred to in section 527.2 of this Title), must at the time of filing a return pay to the Department of Taxation and Finance the total of the following:

(i) four percent of the total receipts, amusement charges, and rents subject to tax under article 28 of the Tax Law described in Part 527 of this Title (excluding receipts from the sale of utility and similar services described in section 527.2 of this Title). Where a local tax is imposed on any receipts, amusement charges and rents, pursuant to the authority of article 29 of the Tax Law, such tax shall be an additional percentage equal to the rate of local tax imposed;

(ii) all taxes imposed by section 1110 of the Tax Law (described in Part 531 of this Title) or, pursuant to the authority of article 29 of the Tax Law, upon such person's use of property or services;

(iii) all moneys collected by such person purportedly as tax imposed by article 28 or, pursuant to the authority of article 29 of the Tax Law, with respect to any receipt, amusement charge and rent not subject to tax; and

(iv) all moneys collected with respect to any receipt, amusement charge and rent subject to tax, purportedly in accordance with a schedule prescribed by the Department of Taxation and Finance but actually in excess of the amount stated in such schedule as the amount to be collected.

(2) All persons who are required to collect any tax imposed by subdivision (b) of section 1105 of the Tax Law (relating to the tax on utility and similar services and described in section 527.2 of this Title) must, at the time of filing a return required in section 533.3 of this Part pay to the Department of Taxation and Finance the total of the following:

(i) taxes imposed on all receipts subject to tax under section 1105(b) of the Tax Law and described in section 527.2 of this Title and imposed pursuant to the authority of article 29 of the Tax Law; and

(ii) all moneys collected by such person:

(a) purportedly as tax imposed by article 28 or pursuant to the authority of article 29 of the Tax Law with respect to any tax imposed by section 1105(b) of the Tax Law;

(b) all moneys collected with respect to any receipt purportedly in accordance with a schedule prescribed by the Department of Taxation and Finance but actually in excess of the amount stated in such schedules as the amount to be collected.

(3) Payment of tax on casual sales. Any person who, although not required to register as a vendor, is otherwise required to collect or pay sales tax on casual sales must pay over to the Department of Taxation and Finance, within 20 days of the date of the sale if the sale occurred in New York State, the amount provided for in paragraph (1) of this subdivision. If a sale to a resident of New York occurred outside New York State, then the tax must be paid over to the Department of Taxation and Finance by the New York resident as provided in section 531.6 of this Title.

(4) Persons who file a short-form monthly return are required, for the first two months of a sales tax quarter, to pay the amount shown to be due on the return as computed in accordance with section 1136(a)(ii) of the Tax Law and as described in section 533.3 of this Part.

(c)Other security.

(1)

(i) Where the Department of Taxation and Finance, in its discretion, deems it necessary to protect any revenue to be obtained under article 28 and pursuant to the authority of article 29 of the Tax Law, it may require any person required to collect such taxes, to file or deposit and maintain with it a bond, issued by a surety company authorized to transact business in this State and approved by the Superintendent of Insurance of this State as to solvency and responsibility, or such other acceptable security enumerated in paragraph (3) of this subdivision. Such bond or acceptable security shall be in such amount as the department may fix to secure the payment or payment over of any tax, penalties or interest due, or which may become due, from such person under article 28 or pursuant to article 29 of the Tax Law. A bond or acceptable security may be required to be filed or deposited with the department before a person is registered or at any time thereafter and such bond or security is subject to being increased at any time it is deemed necessary as a protection to the revenues under articles 28 and 29 of the Tax Law.

(ii) The filing of a bond or deposit of acceptable security or an increase to the amounts thereof may be required from a person required to collect tax where:

(a) the person has been delinquent in the filing of returns or in the payment of the tax;

(b) the person has filed improper returns;

(c) the person maintains no records or maintains records which are inadequate or incomplete;

(d) the person does not charge the tax in accordance with the Tax Law; or

(e) under such other circumstances wherever the Department of Taxation and Finance deems such action necessary to protect the tax revenues to be obtained.

(iii)

(a) A person who contemplates operating a business for a short period of time, on a temporary basis or at a temporary location may also be required to file such a bond or deposit such security. Upon the posting of the bond or deposit of acceptable security and the receipt of a properly executed application for a certificate of authority, the department will issue to such person a certificate of authority to collect the tax.

(b) A person shall be deemed to be operating a business for a short period of time, on a temporary basis or at a temporary location where:

(1) the person intends to conduct the business for a period of less than one year;

(2) the term of the lease for the business premises is for a period of less than one year;

(3) under the terms of the lease for the business premises, the person may terminate the lease at will; or

(4) the person conducts the business as a concessionaire at a location where a special event is being celebrated for the duration of said event; or at a park, beach, amusement resort or similar place for a limited period of time, generally for the summer season or any other period of the year.

(iv) The bond will be cancelled and the accepted security will be returned to the depositor when, upon termination of the business, the person required to collect the tax furnishes to the Department of Taxation and Finance proof that all returns due have been filed for the periods during which such person was engaged in business, all the taxes required to be paid have been paid and such person's certificate of authority has been surrendered; or whenever the person demonstrates to the satisfaction of the department that a bond or security is not necessary to secure the payment of any tax, penalties or interest due, or which may become due, from such person under article 28 or pursuant to article 29 of the Tax Law.

(2) In the event that the Department of Taxation and Finance determines that such a person is required to file a bond, or deposit acceptable security or increase the amounts thereof, it shall give notice specifying the amount of the bond or security required. Such person must then file a bond, deposit acceptable security or increase the amounts of such bond or security within 30 days after the giving of the notice, unless within five days after the giving of such notice the person shall request, in writing, a hearing in the Division of Tax Appeals, at which time the necessity, propriety and amount of the bond or security shall be determined. Such determination shall be final, and complied with within 30 days after the giving of the notice of the determination. (See Part 3000 of this Title for hearing procedures in the Division of Tax Appeals; also see Part 4000 of this Title for conciliation proceedings in the Bureau of Conciliation and Mediation Services of the Division of Taxation.)

(3)

(i) In lieu of the bond referred to in paragraphs (1) and (2) of this subdivision, a person required to collect any tax imposed by or pursuant to articles 28 and 29 of the Tax Law may deposit with the Department of Taxation and Finance other security, approved by the department, in such amounts as it may require. Among the kinds of security which may be acceptable are the following:

(a) certificated United States Treasury Bonds;

(b) certificated bonds of New York State;

(c) certificated bonds of any political subdivision of New York State having general governmental powers and in connection with which the credit of the political subdivision is pledged for the payment of the interest and principal due on such bonds;

(d) financial institution passbooks and certificates of deposit;

(e) irrevocable standby letters of credit made payable to the New York State Department of Taxation and Finance; and

(f) any other forms of security acceptable to the Department of Taxation and Finance.

(ii)

(a) Bonds offered as collateral under this paragraph must be certificated and may be either bearer or registered bonds, having maturity dates at least five years subsequent to the date of deposit with the Department of Taxation and Finance. The amount of the bonds will generally be based on the fair market value, not to exceed par value on maturity, determined as of the date of deposit. If such bonds are of the coupon type, the interest coupons must be attached. Certificated registered bonds offered as collateral must be in the name of the person required to collect the tax and must be accompanied by a properly executed assignment or power of attorney with respect to such bonds in such form as the Department of Taxation and Finance may require.

(b) Any interest accruing on bonds offered as collateral under this paragraph shall belong to such person.

(iii)

(a) Financial institution passbooks and certificates of deposit offered as collateral under this paragraph must represent money on deposit with a financial institution approved by the Department of Taxation and Finance. Certificates of deposit must have maturity dates at least one year subsequent to the date of deposit with the Department of Taxation and Finance. Additionally, financial institution passbooks and certificates of deposit offered under this paragraph must be:

(1) prepared in the name of the person required to collect the tax;

(2) accompanied by a signed undated withdrawal slip;

(3) accompanied by a properly completed letter of transmittal in such form as the Department of Taxation and Finance may require, advising that the proceeds of such passbook accounts or certificates of deposit may be withdrawn by the department and applied against any liability of such person pursuant to articles 28 and 29 of the Tax Law; provided, however, that any interest accruing on such accounts or certificates shall belong to such person; and

(4) accompanied by a letter prepared on the letterhead of the financial institution and signed by an officer of such financial institution:

(i) identifying the passbooks or certificates of deposit by account number and confirming that withdrawal of principal from the passbook or certificate of deposit offered as collateral will not be permitted without written consent from the New York State Department of Taxation and Finance; and

(ii) stating that any right of setoff which the financial institution may possess against the person required to collect the tax resulting from a defaulted obligation of such person shall be subservient to the interest of the Department of Taxation and Finance in the passbook or certificate of deposit offered as collateral.

(b) Any interest accruing on passbooks or certificates offered as collateral under this paragraph shall belong to such person.

(iv) Standby letters of credit offered as collateral under this paragraph must:

(a) be irrevocable for such period of time as the Department of Taxation and Finance shall determine;

(b) be made payable to the New York State Department of Taxation and Finance;

(c) be issued or confirmed by a bank approved by the Department of Taxation and Finance; and

(d) contain such other payment terms as are acceptable to the Department of Taxation and Finance.

(v) Any security deposited with the Department of Taxation and Finance pursuant to this paragraph must have a fair market value at least equal to the amount of any bond required pursuant to paragraph (1) of this subdivision. Fair market value greater than the par value of the security on maturity will not be recognized. Accepted marketable securities deposited as security under this paragraph shall be kept in the custody of the Commissioner of Taxation and Finance and may be sold by the Department of Taxation and Finance, should it become necessary to do so in order to recover any sums due from the person required to collect the tax pursuant to articles 28 and 29 of the Tax Law. No such sale shall be had until after such person has had an opportunity to litigate the validity of any tax at issue, in the manner set forth in section 1138 of the Tax Law, if such person elects to do so. Upon any such sale of securities, the surplus, if any, above the sums due under articles 28 and 29 of the Tax Law, shall be returned to such person.

(4) Any person willfully failing to file a bond, deposit acceptable security or increase the amounts thereof, as required by the Department of Taxation and Finance may be subject to the criminal penalties prescribed by section 1817 of the Tax Law and the Penal Law.

(d)Trust accounts.

(1) If a person has failed to:

(i) collect the tax;

(ii) truthfully account for the tax;

(iii) pay over the tax; or

(iv) file returns of the tax as required by article 28 or pursuant to the authority of article 29; the department is empowered to require that person to establish a trust account.

If the department finds in writing that the financial condition of such a person may impair his ability to pay over the tax, the department may give notice requiring this person to establish such a trust account for the deposit of any taxes collected or collectible after the giving of such notice.

(2) A trust account, when required to be established, must meet the following requirements:

(i) it must be opened in a banking institution which is located within New York State;

(ii) such institution's deposits must be insured by an agency of the federal government;

(iii) it must be a separate account, in trust for and payable only to the Department of Taxation and Finance; and

(iv) deposits of tax must be kept in the account until payment over to the Department of Taxation and Finance.

(3) A person required to make deposits of sales tax to a trust account is required to continue to do so until a notice of cancellation is given by the department.

(4) Any person willfully failing to comply with a notice of the department requiring the collection and deposit of taxes in a separate account, in trust for and payable to the Department of Taxation and Finance, may be subject to the penalty provisions of section 1817 of article 37 of the Tax Law.

Cross-reference:

See section 539.5 of this Title for additional information on bonds and trust accounts.

(e)Payment to banks.

Notwithstanding the secrecy provisions of subdivision (a) of section 1146 of the Tax Law, the department, in its discretion, may require or permit any or all persons liable for any tax or required to collect any tax imposed by article 28, and pursuant to the authority of article 29 of the Tax Law, to make payment to banks, banking houses or trust companies designated by the department, and to file returns with such banks, banking houses or trust companies as agents of the department, in lieu of paying such tax directly to the Department of Taxation and Finance. The department may designate only such banks, banking houses or trust companies as are already designated as depositories by the Comptroller of the State of New York.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 533.4