N.Y. Comp. Codes R. & Regs. tit. 20 § 539.3

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

Section 539.3 - Refusal to issue a certificate of authority

(a) The department may refuse to issue a certificate of authority to a person (applicant) who pursuant to section 539.2 of this Part files a certificate of registration for such certificate of authority if in considering such application the department ascertains that:

(1) any tax imposed under the Tax Law or any related statute has been finally determined to be due from the applicant and has not been paid in full; or

(2) a tax due under or pursuant to article 28 or 29 of the Tax Law has been finally determined to be due from an officer, director, partner, manager, member, or employee of the applicant (as such persons are described in section 539.2(h)(2) of this Part) in his/her capacity as a person required to collect tax on behalf of the applicant and has not been paid in full; or

(3) a tax due under or pursuant to article 28 or 29 of the Tax Law has been finally determined to be due from an officer, director, partner, manager, member, or employee of the applicant (as such persons are described in section 539.2(h)(2) of this Part) in his/her capacity as a person required to collect tax on behalf of any entity other than the applicant and has not been paid in full; or

(4) the applicant has been convicted of a crime under the Tax Law within one year from the date on which the certificate of registration is filed by the applicant; or

(5) an officer, director, partner, manager, member, or employee of the applicant (as such persons are described in section 539.2(h)(2) of this Part) has, in his/her capacity as a person required to collect tax on behalf of the applicant or in his/her capacity as a person required to collect tax on behalf of any other person, been convicted of a crime provided for in the Tax Law within one year from the date on which such certificate of registration was filed by the applicant; or

(6) a shareholder owning more than 50 percent of the number of shares of stock of a corporate applicant (entitling the holder thereof to vote for the election of directors or trustees) was the owner of more than 50 percent of the number of shares of stock of another corporation at the time any tax imposed under the Tax Law or any related statute was finally determined to be due from such other corporation and such tax has not been paid in full; or

(7) a shareholder owning more than 50 percent of the number of shares of stock of a corporate applicant (entitling the holder thereof to vote for the election of directors or trustees) was the owner of more than 50 percent of the number of shares of stock of another corporation at the time such other corporation was convicted of a crime under the Tax Law but only if such conviction is within one year from the date on which such certificate of registration was filed by the applicant; or

(8) a certificate of authority issued to the applicant has been revoked or suspended under section 1134(a)(4)(A) of article 28 of the Tax Law (see section 539.4 of this Part), but only if such revocation or suspension occurred within one year from the date on which such applicant filed a certificate of registration.

As used herein, the term related statute means any tax imposed by any law, ordinance or resolution enacted pursuant to the authority of the Tax Law or article two-E of the General City Law, and administered by the Department of Taxation and Finance.

(b) Notification of proposed refusal to issue a certificate of authority.

(1) In the case of a person applying for a certificate of authority pursuant to section 1134(a)(1) of article 28 of the Tax Law (see section 539.2 of this Part), a notice of proposed refusal to issue such certificate must be issued within five days after a timely and properly completed certificate of registration is received by the Department of Taxation and Finance.

(2) Such notice shall be sent by certified or registered mail to the applicant at the address on its certificate of registration filed with the department.

(3) Such notification shall:

(i) state the basis for such proposed refusal to issue a certificate of authority;

(ii) clearly notify the applicant that the impending refusal may be protested by filing an application for a hearing or a request for a conciliation conference; and

(iii) notify the applicant that the notice of proposed refusal to issue a certificate of authority shall be final unless such applicant shall have filed an application for a hearing or a request for a conciliation conference within 90 days of the date of such notice.

(c) Protest procedure.

(1) Unless the applicant files a petition for a hearing or a request for a conciliation conference within 90 days of the date of a notice of proposed refusal to issue a certificate of authority, such notice shall be final.

(2) Upon timely application, a hearing or conference will be scheduled in accordance with the procedures described in the Tax Appeals Tribunal Rules of Practice and Procedure (Part 3000 of this Title) or the Division of Taxation's Bureau of Conciliation and Mediation Services Rules of Practice and Procedure (Part 4000 of this Title).

(3)

(i) Unless within three months from an application for a hearing (determined with regard to any postponements of any scheduled hearing made at the request of the applicant) the applicant has received a determination from an Administrative Law Judge which has become final or a decision of the Tax Appeals Tribunal, if applicable, the department will issue a certificate of authority to such applicant with the condition that such certificate be returned immediately should the department's position be sustained.

(ii) Any certificate issued pursuant to the provisions of this paragraph shall be conditioned upon final adjudication in the administrative hearing process.

(a) Any certificate of authority issued pursuant to the provisions of this paragraph shall expire 30 days from the issuance of a determination of an Administrative Law Judge upholding the department's proposed notice of refusal, unless within such time the applicant files an exception to such determination requesting review thereof by the Tax Appeals Tribunal. Where no such exception is filed, such certificate of authority must be returned immediately upon expiration.

(b) Where an exception has been taken from the determination of an Administrative Law Judge seeking review thereof by the Tax Appeals Tribunal, a certificate issued pursuant to the provisions of this paragraph expires upon receipt by the applicant or its representative of a decision of the Tax Appeals Tribunal upholding the department's proposed notice of refusal regardless of whether the applicant files an appeal of such decision. For the purposes of this paragraph only, the decision of the Tax Appeals Tribunal shall be considered to have been received by the applicant on the date such decision was delivered or delivery thereof was refused. Nothing herein shall be construed to expand or otherwise affect the rights an applicant may have to appeal the decision of the Tax Appeals Tribunal or any limitations or restrictions applicable thereto.

(c) Any certificate issued pursuant to the provisions of this paragraph which does not expire pursuant to the provisions of this paragraph shall be subject to expiration pursuant to Part 540 of this Title. Any such certificate may be issued for a specified period, in which case it shall expire at the end of the specified period.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 539.3