2008 Rule reviews

Pursuant to section 207 of the State Administrative Procedure Act (SAPA) the Department of Taxation and Finance must review all rules, with certain exceptions, adopted on or after January 1, 1997, after five years, and, thereafter, at five year intervals.  In 2008, the Department must review rules that were adopted during 2003 and 1998 to determine whether these rules should be retained as written or modified.  Accordingly, the Department intends to review the following rules during 2008, and invites written comments on the continuation or modification of these rules in order to assist the Department in the required review.  We will consider comments that are received by February 19, 2008. Any questions concerning the items listed in this rule review or comments regarding the continuation of the rules being reviewed should be referred to: Office of Counsel, Department of Taxation and Finance, W.A. Harriman Campus, Building 9, Room 200, Albany, New York 12227. Telephone: (518) 530-4153, Email address: tax.regulations@tax.ny.gov.

Agenda items

• 20 NYCRR Subchapter G of Chapter I (Stock Transfer Tax - formerly Subchapter G of Chapter III)
• 20 NYCRR Section 528.2 (Application of Sales Tax Exemption to Marshmallows)
• 20 NYCRR Part 647 (Credit Line Mortgage)
• 20 NYCRR Part 2401 (Taxpayers Affected by Declared Disasters)
• 20 NYCRR Section 527.11(b)(7) (Social and Athletic Clubs)
• 20 NYCRR Part 2400 (Action for Failure to Release a Lien)

20 NYCRR Subchapter G of Chapter I (Stock Transfer Tax - formerly Subchapter G of Chapter III)

20 NYCRR Subchapter G of Chapter I (Stock Transfer Tax - formerly Subchapter G of Chapter III) Filed January 30, 1998; published/effective February 18, 1998. Need: This rule simplified and updated the Stock Transfer Tax regulations by removing outdated information, and consolidating and summarizing the language. The rule also provided for an alternative means for brokers to submit daily reports to a clearing corporation and provided for the manner in which they could certify such records. In addition, the rule addressed the rebate of the stock transfer tax provided for in section 280-a of the Tax Law. This rule was previously reviewed as part of the Department's 2003 Rule Review published in the State Register on January 8, 2003. As a result of that review of the 1998 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on June 25, 2003. Legal Basis: Tax Law, section 171, subd. First. (TAF-49-97-00004-A)

20 NYCRR Section 528.2 (Application of Sales Tax Exemption to Marshmallows)

20 NYCRR Section 528.2 (Application of Sales Tax Exemption to Marshmallows) Filed April 14, 1998; published April 29, 1998; effective June 1, 1998. Need: This rule deleted regulatory inconsistency in the imposition of sales tax on receipts from the sales of marshmallows and marshmallow bits by allowing for the interpretation of the exemption from sales tax on food to include receipts from the sales of marshmallows of all sizes. This rule was previously reviewed as part of the Department's 2003 Rule Review published in the State Register on January 8, 2003. As a result of that review of the 1998 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on April 30, 2003. Legal Basis: Tax Law, sections 171, subd. First; 1142(1); and 1250 (not subdivided). (TAF-07-98-00003-A)

20 NYCRR Part 647 (Credit Line Mortgage)

20 NYCRR Part 647 (Credit Line Mortgage) Filed June 23, 1998; published/effective July 8, 1998. Need: This rule reflects amendments made to Article 11 of the Tax Law by Chapters 489 and 490 of the Laws of 1996 that extended favorable tax treatment afforded certain residential credit line mortgages to all credit line mortgages securing a maximum principal indebtedness of less than $3 million. This rule was previously reviewed as part of the Department's 2003 Rule Review published in the State Register on January 8, 2003. As a result of that review of the 1998 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on May 28, 2003. Legal Basis: Tax Law, sections 171, subd. First; 253-b(3); and 263(1)(a). (TAF-17-98-00004-A)

20 NYCRR Part 2401 (Taxpayers Affected by Declared Disasters)

20 NYCRR Part 2401 (Taxpayers Affected by Declared Disasters) Filed January 28, 1998; published February 18, 1998; effective January 28, 1998 (emergency adoption). Filed April 27, 1998; published May 13, 1998; effective April 27, 1998 (emergency readoption). Filed June 23, 1998; published July 8, 1998; effective June 23, 1998 (second emergency readoption). Filed July 22, 1998; published/effective August 12, 1998 (permanent adoption). Need: This rule was added to implement provisions of Chapter 8 of the Laws of 1998, which authorized the Commissioner of Taxation and Finance to postpone certain tax deadlines for a period up to 90 days, without imposition of penalty and interest, for taxpayers determined to be affected by a disaster declared by the President or the Governor. This rule was previously reviewed as part of the Department's 2003 Rule Review published in the State Register on January 8, 2003. As a result of that review of the 1998 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on April 30, 2003. Legal Basis: Tax Law, sections 171, subd. First and Twenty-eighth. (TAF-19-98-00002-A)

20 NYCRR Section 527.11(b)(7) (Social and Athletic Clubs)

20 NYCRR Section 527.11(b)(7) (Social and Athletic Clubs) Filed October 7, 1998; published/effective October 28, 1998. Need: By amending Example 29, which illustrates athletic clubs, this rule eliminated the reference to fishing and hunting clubs as examples of athletic clubs whose dues and initiation fees are subject to sales tax and qualified the reference to boating clubs subject to such tax. This rule was previously reviewed as part of the Department's 2003 Rule Review published in the State Register on January 8, 2003. As a result of that review of the 1998 rule, a Rule Review notice indicating that it would be continued without modification was published in the State Register on August 27, 2003. Legal Basis: Tax Law, sections 171, subd. First; 1142(1); and 1250 (not subdivided). (TAF-32-98-00004-A)

20 NYCRR Part 2400 (Action for Failure to Release a Lien)

20 NYCRR Part 2400 (Action for Failure to Release a Lien) Filed December 23, 1997; published January 7, 1998; effective January 1, 1998 (emergency adoption). Filed February 25, 1998; effective January 1, 1998 and applicable to damages arising on or after January 1, 1998 (permanent adoption). Need: This rule implemented provisions of Chapter 577 of the Laws of 1997 and provides taxpayers with guidance on administrative review of a "notice of failure to release a lien". The rule also provides for the type of bond or other security which is acceptable to effectuate a release of lien. This rule was previously reviewed as part of the Department's 2002 Rule Review published in the State Register on January 2, 2002 (based on the emergency adoption), and part of the Department's 2007 Rule Review published in the State Register on January 3, 2007. As a result of those reviews, Rule Review notices indicating that the rule would be continued without modification was published in the State Register on July 10, 2002, and on August 22, 2007. We are reviewing this rule again in 2008 because the rule was permanently adopted in 1998 and is more appropriately reviewed based on the date of the permanent adoption. Legal Basis: Tax Law, sections 171, subd. First; and 3032(a) and (d), and section 56(j) of Chapter 577 of the Laws of 1997. (TAF-01-98-00007-A)