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State and Local Tax Blog

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Taxes in New York (TiNY) is a blog by the Hodgson Russ LLP State and Local Tax Practice Group. The weekly reports are intended to go out within 24 hours of the Division of Tax Appeals’ (DTA) publication of 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.  

TiNY Report for January 25, 2018 (covering DTA cases issued January 18)

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Two ALJ determinations and one Tribunal decision this week.

ALJ DETERMINATIONS

Matter of Doherty; Judge: Law; Division’s Rep: David Gannon; Taxpayer’s Reps: Tim Noonan and Drew Wright; Articles 28 and 29.  Hodgson Russ attorneys represented Petitioner in this case.  Judge Law determined that Petitioner’s “haunted attractions” were “places of amusement”, the entry fees for which were subject to sales tax.  The attractions were housed in a single building which included a common area (for which no entry fee was charged) and five separately-themed, self-contained attractions for which there was an access fee.  Petitioner equated the attractions to rides in an amusement park.  Under Fairland Amusements v. State Tax Commn. (3d Dept. 1985), once one has paid to enter an amusement park (which is a place of amusement), the individual charges to ride the rides or play the games in the amusement park are not subject to tax.  So petitioner did not collect sales tax on the charges to enter the attractions.  Judge Law determined that the more apt analogies were private dance rooms and private “peep-show” booths in adult entertainment facilities, the entry fees for which were found taxable in Matter of HDV Manhattan (3d Dep’t 2017) and Matter of 1605 Book Center (Ct. of Apps. 1994), respectively. 

Matter of Forsdadt; Judge: Russo; Division’s Rep: Anita Luckina; Taxpayer’s Rep: Robert Lisch; Articles 28 And 29.  This timeliness case involved whether Petitioner filed a timely BCMS challenge to two Notices of Estimated Determination (dated November 15, 2007) and four Notices of Determination (dated February 17, 2009).  The BCMS requests were filed December 1, 2016, and were dismissed as untimely two weeks later. A timely petition followed. 

In response to the Division’s motion for summary determination, Judge Russo found that the Division proved both its standard mailing practices and that they were followed when the Division mailed the two Notices of Estimated Determination to Petitioner’s last known address on November 15, 2007.  However, some inconsistencies recognized by the Judge in the Certified Mailing Record (changed dates, not all of the pages in the CMR for February 17, 2009 included as an attachment to one of the Division’s affidavits) resulted in a lack of adequate proof that the standard process laid out in the Division’s affidavit was followed when the four Notices of Determination were mailed. The Judge granted the Division’s motion with respect to the Notices of Estimated Determination and denied the motion (without prejudice to renew) with respect to the Notices of Determination.

TRIBUNAL DECISION

Matter of Uddin; Division’s Rep: Michael Hall; Taxpayer’s Rep: Arthur Morrison; Articles 28 and 29.  The Tribunal affirmed the ALJ’s Determination (why not an Order?) dismissing the case following the DTA’s issuance of a Notice of Intent to Dismiss.  The Division satisfactorily proved its standard mailing practices and that they were followed when it mailed Petitioner’s Notice to his last known address about a year before Petitioner filed his petition.  Petitioner argued that the time limit to file his petition should have been tolled because the Division failed to mail his representative a copy of the notice.  However, the Tribunal found no evidence in the record confirming that Petitioner had a representative at the time the notice was issued.  Petitioner also argued that he should be treated as having filed his petition timely because the timely filing of a protest by the underlying business should abrogate the need for all alleged responsible officers (such as himself) to file separate petitions.  Unfortunately, there was no evidence in the record indicating that the underlying business had filed a timely petition.  So…Petitioner lost on all fronts.

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