MoFo New York Tax Insights

Volume 8, Issue 8

08/04/2017
Newsletter

Our August 2017 issue of New York Tax Insights covers these recent developments:

Sale of Security Services to Property Manager for NYC Housing Authority Held Exempt from Sales Tax
The sale of security services by a vendor to a property manager that managed various apartment buildings for the New York City Housing Authority (“NYCHA”) was held by the New York State Division of Tax Appeals to be exempt from sales tax both because the property manager was acting as an agent for the NYCHA and because such purchases were sales for resale.  The fact that the service contract referred to the property manager as an independent contractor did not preclude a finding of an agency relationship

Tribunal Remands Sales Tax Appeal for Determination of Whether It Has Jurisdiction to Rule on Substantive Issues
In a case involving whether the purchaser of a business could be held responsible for sales tax owed by the seller under the Bulk Sales rules, the New York State Tax Appeals Tribunal unilaterally raised the question of whether the petition had been timely filed.  Although the question was not addressed in the decision of the Administrative Law Judge or by either of the parties on appeal, the Tribunal noted that, based on filing dates, the appeal appeared to be untimely, and remanded the case in order to develop the record as to whether the Division of Tax Appeals has jurisdiction to hear the case.

ALJ Cancels Penalties for Possession of Unstamped Cigarettes
An employee of a Native American-owned cigarette wholesaler was found to qualify for the exemption from penalties for possessing or transporting unstamped cigarettes under a provision that exempted from penalties common or contract carriers lawfully engaged in transporting unstamped cigarettes, including employees acting within the scope of their employment.  The New York State Division of Tax Appeals concluded that since the statutory exemption language was clear, the plain meaning of the statutory exemption must be used, notwithstanding that tax exemptions are strictly construed.

Department Issues Guidance Explaining New Tax on Ridesharing Services
In conjunction with new legislation authorizing ridesharing services—which previously could pick up riders only in New York City—to operate anywhere in New York State, a new state tax assessment of 4% of the gross trip fare has been imposed.  The New York State Department of Taxation and Finance has now issued guidance explaining the new statewide tax and the filing requirements imposed on ridesharing companies. 

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