Last week, another great domicile case was issued by New York’s Division of Tax Appeals. The case, entitled Matter of Patrick, chronicled a movie-esque love affair between long-lost high school sweethearts and—more importantly for our purposes—another win for a taxpayer in a change-of-domicile case.
The New York State Department of Taxation and Finance has issued a new sales tax ruling on the taxability of club dues at a social club. In an advisory opinion released May 24, tax department held that fees charged to nonmembers for club-sponsored activities are not subject to tax merely as a result of the club’s relationship to its members and that the nature of each activity should determine its taxability. The ruling was also written up in a recent Tax Notes article, in which yours truly was quoted.
Last week the Tax Department published another advisory opinion on a “software as a service” issue, continuing the trend of rulings on software sales “in the cloud.” A few years ago, I wrote an article on sales tax issues in the cloud-computing context generally, and we have also covered New York cases where the issue has come up. In this most recent opinion, the taxpayer asked whether charges for its “video generating services” were subject to sales tax. And not surprisingly, the Department concluded that the sales were taxable, continuing its trend of taxing almost everything that moves in the cloud.
Many people experience sticker shock with respect to sales tax and other government-imposed fees (i.e., title fees) when it comes time to purchase or lease a new vehicle.
The New York State Department of Taxation and Finance has been drafting new Corporation Franchise Tax Regulations to incorporate the changes made by the corporate tax reform legislation that went into effect in 2015.
The newest draft regulations address net operating losses carried forward from pre-2015 tax years. In order to preserve the value of unused NOLs that arose prior to 2015, New York has created a prior net operating loss conversion (PNOLC) subtraction pool that can be applied against apportioned income in post-2015 tax years.
During the past several years, we have seen a continuing trend in New York personal income tax audits involving the examination of federal tax issues. The New York State Tax Department, overall, has one of the more sophisticated and aggressive personal income tax audit groups in the country. For years, as I have outlined in numerous blogs and articles, the Tax Department’s residency audit program has been second to none. But as we have seen, the Tax Department focuses more on flow-through entity issues. We also have seen the expansion of an interesting phenomenon: federal tax audits being conducted by New York tax auditors.
The New York State Department of Taxation and Finance has launched its new “Quick Pay” app. It’s a new, free service that allows taxpayers to pay their tax bills or debts from an audit or case that’s gone to collections directly from their bank accounts. Though billed as an “app,” it’s not something you can download on your phone. It’s just an “app” (or “application”) that you can access on the State’s website. But the State calls it an “app,” probably because it just sounds way cooler.
Taxpayers made more than 2,600 payments worth $2.5 million in the first four weeks after Quick Pay was launched on March 24. This only applies for individuals, though. Corporations, etc. can’t pay through this app.
Here’s a note on an interesting development in the ongoing litigation between the Tax Department and Sprint. For background, Sprint has been embroiled in the false claims action brought by New York State as a result of allegations that Sprint knowingly under-collected sales tax on bundled charges to New York cellular customers. When the case was brought several years ago, it was the first big false claims case brought by the State under the new False Claims regime that included tax violations under its realm. Sprint unsuccessfully tried to dismiss the lawsuit altogether, but a couple of years ago New York’s Court of Appeals held that the action could continue.
Since the new corporate tax reform went into effect on January 1, 2015, the New York State Department of Taxation and Finance has been providing “general guidance” -- answers to frequently asked questions (FAQs) -- on topics of interest to taxpayers. Recently, the Tax Department clarified two administrative issues with combined filing under the new regime and issued an FAQ with respect to the proper completion of the apportionment schedule on the return.
The New York State Department of Taxation and Finance has announced the Second Annual New York State Tax Summit to be held June 2 at the Empire State Plaza in Albany, New York.