Taxes in New York (TiNY) is a blog by the Hodgson Russ LLP State and Local Tax Practice Group members Chris Doyle, Peter Calleri, and Zoe Peppas. The weekly reports are intended to go out every Tuesday after the New York State Division of Tax Appeals (DTA) publishes new ALJ Determinations and Tribunal Decisions. In addition to the weekly reports, TiNY may provide analysis of and commentary on other developments in the world of New York tax law.

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“It’s quiet. Too quiet.” This adage was first attributed to “The Lucky Texan” (1934), a western starring John Wayne, Barbara Sheldon, and Gabby Hayes. It is oft-repeated in movies (e.g., Shrek 2, Galaxy Quest, Sleepy Hollow) and television (Band of Brothers, Better Call Saul, The Wire).

It appears frequently. But the bit of dialogue including the trope that is most in-line with the ethos here at TiNY is:

“It sure is quiet out there.” “Yeah, too quiet.” “Looks like I picked the wrong week to quit sniffing glue.” (Airplane, 1980 – link here.)

Anyway, I was in the TiNY editorial offices on July 5, and it was quiet, too quiet. But quiet can be good, and in this case, it gave me some uninterrupted time to get caught up on a bunch of cases that were posted in June and were awaiting TiNY consideration.

There are five cases to summarize this week. Most address issues you’ve seen before. But, Matter of Vance touches on New York’s temporary de-coupling from the CARES Act and other post-March 1, 2020, Internal Revenue Code Amendments. I expect we’re going to see many cases in the future that discuss de-coupling issues since they are numerous, complex, and may produce anomalous results.

Next week we have a taxpayer victory on a sales tax issue to report. We know about it now because it was one of our cases. But, unfortunately, TiNY’s 13 or so loyal readers will need to wait until the next edition of TiNY.

We’ve enjoyed the steady flow of cases from the DTA of late. One of the reasons we write TiNY is that we are interested in how the judges and the Commissioners on the Tribunal view the cases. We have the most fun when we posit alternative views to get our readers to think critically about the cases and not simply accept them because the judges say this is how the law is supposed to work. It is less fun for us when we agree with the Judges since we don’t think we are bringing value to our twelve or so loyal readers to just report the news without providing insightful commentary. “We agree” is not insightful. 

The decision and determination this week are not fun (for us, anyway). The order has a little entertainment value.

Your TiNY editor-in-chief took some time away over the long weekend and that led to the late posting of this week’s TiNY Report. The delay gave us some time to reflect on Hodgson Russ’s slick replacement website. When we commented favorably on the new site to our marketing personnel, we were told this interesting tidbit: When the old site was converted to the new site, spell check was automatically run. And 99% of the flagged words were found in the TiNY blog. Further investigation disclosed that sometimes the authors of TiNY make up words (The shock! The horror!). And I was reminded (not for the first time) that Hodgson Russ blogs are informational and need to accurately recount legal developments without the use of humor, sarcasm, or hyperbole. Hodgson Russ blogs are not to entertain, they are to inform. They are not a linguistic playground on which the authors might vent pent-up frustrations brought about by years of straight-jacketed legal writing. And they should never besmirch the language of Shakespeare by creating words.

Right. If you feel that way, perhaps you should read TiNY’s disclaimer.

This week we’re covering four determinations for your consideration. Two of them—Maragh and Somers—are worth a listen-to. The other two are songs that you liked a little when they first came out but now detest because they have been overplayed on your favorite radio station.

Those of us on the West Coast of New York are enjoying summerlike conditions this week. We rarely get temperatures in the 80s consistently in May because the prevailing southwesterly winds blow across 250 miles of 50-degree Lake Erie water before reaching our editorial offices. Usually that results in a chill. But this week we have been treated to several days of unseasonable warmth as we roll into the holiday weekend. It would be perfect weather to stand outside of Key Bank Center and watch the Sabres play in the Eastern Conference Finals on a portable Jumbotron. But they would need to make the playoffs first. Maybe next year?

And as I wrote the revised version of the second-to-last sentence in the above paragraph, I paused to consider whether it was most appropriate to use the plural or singular verb form when referring to the Sabres hockey team. The same goes for the Bills, Giants, Jets, etc. When one uses a team name that ends in “s” to refer to the team (and not the individuals making up the team), isn’t the team name a singular proper noun? Shouldn’t it be “The Sabres was victorious in its last game” and not “The Sabres were victorious in their last game?” I notice that every journalist I read treats team names ending in “s” as plural. In fact, it seems like team names are always treated as plural (e.g., “The Minnesota Wild are on a losing streak.”). But that doesn’t make sense to me. “Team” is a single noun, right?

And this grammar conundrum, constant readers, is an indication of the lengths one will go to avoid entering one’s time charges and editing TiNY.

To our three Canadian subscribers: The TiNY editorial staff hopes you enjoyed your Victoria Day long weekend and expressed appropriate homage to the long-reigning (63-plus years, second only to Queen Elizabeth!) and now long-departed Queen. As per Ray Davies: “Canada to India, Australia to Cornwall, Singapore to Hong Kong, From the West to the East, From the rich to the poor, Victoria loved them all.”

There are three determinations to report on this week.

Wow, wow, WOW! Some meaty, substantive tax law issues are addressed in this week’s DTA output of two Tribunal decisions, two ALJ determinations, and one ALJ order. PALs, and successors, and SaaS, oh my. And ALJ Law establishes (chronological) order in his court. Enjoy.

The Rangers and the Knicks are in the second round of their respective playoffs. That doesn’t seem to happen very often. The internet says the last year this occurred was 2013. But we’ve had a total eclipse of the sun this year, so maybe both teams being in round two simultaneously is another sign of the forthcoming apocalypse.

In a similar vein, the firm has an office in Toronto, and I visit that city frequently and very much enjoy my time there. I was thus somewhat verklempt when the Bruins knocked the Maple Leafs out of the playoffs last week. I did watch some of that series, and it was a good one, going the distance. There’s not a lot on television that is more compelling to me than a game seven in the Stanley Cup playoffs.

We’re reporting on a decision, two ALJ determinations and a bonus New York City ALJ determination this week.

Before getting into the cases, let us acknowledge that the better-late-than-never politicos in Albany have passed the 2024-25 New York State Program Budget and it has already been signed by the Governor. The Governor stuck to her “no increased tax rates on the wealthy” position even in the face of strong head winds produced by the leadership in the Assembly and Senate. Good for her. Look: She understands that New York can impose higher taxes on the wealthy, but that New York can’t compel the wealthy to pay those taxes when they may be avoided by moving to Florida, Tennessee, or Texas. And she understands it is relatively easy for the wealthy to move to states where they can pay less.  So much less than a few years’ worth of tax savings for a moderately high-income person is enough to buy a really nice house in south Florida. Thank goodness there are still some in Albany who consider taxation a pragmatic endeavor.

There are two Determinations and two Orders this week. Of the three timies, two were resolved against the Division, which is statistically unusual. The other case involves the State’s dubious sales tax acceleration rule for motor vehicle leases. This case shows another instance in which New York is unjustly enriched by the lease rule which, in operation, results in New York collecting sales tax on lease payments even when the vehicle is registered outside of the State for extended periods during the lease. That’s just wrong.

And this week TiNY continues on its mission to disprove the adage that “sarcasm is the lowest form of wit” by offering a pun that would fit easily under the belly of even the most gravity-bound sarcastic comment.    

Eclipse mania was dampened at TiNY’s editorial offices by the presence of clouds. In Western New York, we were supposed to enjoy a spectacular view of the totality for several minutes.  But after two days of nothing but clear skies, the clouds moved in to darken the skies before the eclipse could darken the skies. And then, two hours after the event, bright sunny skies again. So, yeah, another situation in which Western New York approached the pinnacle only to be beaten down in the last moment. Add “cloud-obscured” to “thirteen seconds,” “wide right,” and “no goal.”

Two orders and one determination this week. The two orders are atypical timies. The determination is a typical timy.   

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