Proposed Changes to NYS’s Brownfield Cleanup Program Contained in the Governor’s Executive Budget

New York State’s Brownfield Cleanup Program (“BCP”) has proven to be one of the state’s most successful programs for spurring private-sector remediation and development of contaminated properties. As a quick overview, the state provides refundable tax credits that partially offset the costs of remediating and then developing brownfields in the state. By any economic measure, the program has delivered an excellent rate of return on the state’s tax-credit investment. Since the program’s inception in 2003, the numbers are compelling:

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Economic Nexus in New York

https://www.hodgsonruss.com/practices-sales-use-tax-attorneys.htmlWe’ve discussed New York’s economic nexus rules for sales tax purposes several times in this blog.  You can review these previous articles here, here and here. But, after a flurry of initial activity and confusion, now that these rules have seemingly settled, we thought it would be a good time to provide a more comprehensive recap of the state of economic nexus in New York.

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NYS Offers a GILTI Exemption and Increases its Economic Nexus Threshold

On June 20, 2019, both the NYS Assembly and Senate passed bills that made significant changes to the state’s treatment of two hot tax issues: the taxation of global intangible low-taxed income (“GILTI”), and the state’s threshold for establishing economic nexus for sales tax purposes. According to the Senate and Assembly websites, the legislation was signed into law by Governor Cuomo on June 24th.

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New York Issues Economic Nexus FAQs

The New York State Division of Taxation and Finance (the “Department”) issued information entitled “FAQs related to registration requirement for businesses with no physical presence in NYS” (“FAQs”) on May 1, 2019 to address questions concerning sales tax collection by businesses without a physical presence in New York.

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Federal Court Rules Refunded NYS Brownfield Tax Credits Are Taxable Federally

New York’s Brownfield Cleanup Program (“BCP”) is one of the more effective tax-based incentive programs offered by the state.  The BCP allows participants to remediate a contaminated piece of real property in exchange for tax credits that can total up to 50% of the qualified remediation costs incurred to clean the property, and 24% of the qualified construction costs incurred to develop the property after it has been remediated.  These tax credits can be the difference between a lucrative development and one that is economically unfeasible. 

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Online Marketplaces Must Now Collect Sales Tax in New York State

Public relations firms often advise clients to release controversial or negative news late in the day on Friday. People are less likely to pay attention to such news over the weekend and by the time Monday rolls around, the news cycle has typically moved on. That might have been what the New York State Department of Taxation and Finance had in mind when, at 4:39 PM on Friday, March 9^th, it released its first sales tax advisory opinion of the year. In TSB-A-19(1)S, the Tax Department announced for the first time that an online marketplace can be held liable for the sales tax due on transactions that the marketplace facilitated. In other words, the Tax Department can hold both the individual vendor using the marketplace infrastructure and the marketplace itself liable for tax due on sales made through the marketplace. This is a dramatic, and we anticipate controversial, change in Tax Department policy.

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New York Finally Issues Guidance on Sales Tax Economic Nexus

New York is one of the most, if not the most, aggressive states when it comes to tax enforcement.  That’s why it was a bit confusing when the New York State Department of Taxation and Finance (the “Tax Department”) remained uncharacteristically silent following the landmark Supreme Court decision in South Dakota v. Wayfair.  But that’s finally changed!  On January 15, 2019, the Tax Department issued a Notice explaining its position on economic nexus for sales tax purposes.  In this article, we’ll (1) provide a brief review of how the Wayfair case changed tax administration, (2) discuss New York’s new guidance, and (3) address some of the potential issues that are likely to arise as a result of this new guidance. 

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Some New York Highway Use Tax Registrations Are Being Improperly Targeted

The renewal period for Highway Use Tax registrations is just around the corner. The Tax Department, ever mindful of the leverage this affords, just sent out a slew of computer-generated notices that inform taxpayers with outstanding tax liabilities that the Department cannot issue them a renewed Certificate of Registration and decals until the liabilities are resolved.

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Wasn’t the U.S. Constitution Written in Just 116 Days?

On March 7, 2018, the NY Tax Department issued its first income tax advisory opinion of the year. The content of the advisory opinion, a review of the rules governing the timing of the tax credits associated with the state’s Brownfield Cleanup Program, isn’t particularly noteworthy. What struck us here at Noonan’s Notes, and made the opinion blog-worthy, is the timing of the opinion. Though the Tax Department has many functions (e.g., return design and processing, enforcement/audit, tax collection, etc.), this opinion may illustrate that additional resources should be allocated to its interpretation and education functions.

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Potential Tax Breaks for Web Designers and Software Developers

The New York State Department of Taxation and Finance issued a press release on September 26, reminding website designers and software developers of a sales tax exemption and warning them not to “miss out.”  According to the press release, no state or local sales tax will be charged on the purchase of computer system hardware when it’s used more than 50% of the time to:

• Design and develop computer software for sale;
• Provide website design and development services for sale; or
• Provide a combination of the two uses described above.

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