New York State and Local Tax Updates July 2019

New York elevator installations not exempt from tax

July 31, 2019

The New York Supreme Court has affirmed the NY Tax Appeals Tribunal’s determination that the Division of Taxation properly assessed tax deficiencies against the taxpayers in this case. The court rejected the taxpayers’ claim that the elevators were exempt medical equipment, because they’d failed to prove that the elevators were residential disabled-accessible elevators. The record also revealed that not all the taxpayers’ elevators were installed in residences, the court noted, and they weren’t designed as prosthetic devices for specific persons. (Dkt. No. 526059)

New law gives day of rest, overtime, and more to NY farm laborers

July 31, 2019

A new law gives day of rest, overtime and other labor requirements to farm laborers in New York. Laborers may agree to work on the day of rest; however, they must be paid an overtime rate of at least 1½ times their regular rate of pay. Also, employers operating a farm are banned from requiring any farm laborer to work more than 60 hours per week. Any 24 consecutive hours of rest that’s related to weather or crop conditions will not constitute compliance with the requirement. The law also requires the NY Labor Commissioner to convene a farm laborers wage board to give recommendations about overtime work to the governor and state lawmakers. Other requirements are included in the legislation.

New York, New Jersey, and Connecticut sue IRS over the SALT charitable deduction rule

July 24, 2019

The lawsuit was filed in the U.S. District Court for the Southern District of New York. It seeks to strike down the rule, effective Aug. 12, that would prevent state taxpayers from obtaining a full federal charitable deduction when they give to charities set up by local governments and receive a state and local tax credit in return. The rule would block states and localities from setting up charitable funds to preserve the deductibility of property taxes in response to the $10,000 federal SALT deduction limitation imposed by the Tax Cuts and Jobs Act.

New York City extends tax lien sale deadline 10 days to August 1

July 24, 2019

The NYC Department of Finance says it’s extending the payment deadline to help New Yorkers who are still at risk of being included in the tax lien sale pay their charges or enter into a payment agreement. Property owners can be removed from the sale list if they resolve their property debt by 1) paying the amount owed, 2) entering into an agreement with the Department of Finance or Department of Environmental Protection, or 3) applying to receive a property tax exemption that will exclude the owner from the tax lien sale. Payments can be made online, by phone, by mail or in person at any area department agency office.

Did you claim a charitable deduction on your New York income tax returns in 2018?

July 17, 2019

The NY Department of Taxation and Finance has updated Form IT-196 and the instructions relating to itemized deductions. The change may affect some individuals who itemized deductions. Lines 16, 17 and 18 of the 2018 Form IT-196, and the related instructions on pages 3 through 5 of the 2018 Form IT-196-I, were updated to reflect changes that were part of the 2019-2020 New York State Budget. An amended return is required if the changes affect the amount of tax or refund due. Learn what was updated: Scroll down to IT-196. (Dept. of Taxation and Finance Bulletin, 7/4/19)

Sales tax rate in New York’s Westchester County increases

July 10, 2019

The state’s Department of Taxation and Finance has announced that the sales and use tax rate in the county is rising from 3% to 4%. This doesn’t include the cities of Mount Vernon, New Rochelle, White Plains and Yonkers. Taxpayers are advised that the sales tax return covering the quarter June 1, 2019, through August 31, 2019, will contain a double set of entry lines for each of the rates affected by the hike. One line is to report sales and uses occurring from June 1 through July 31. The other line is to report sales and uses occurring from August 1 through August 31.

New York Court of Appeals reverses lower court’s ruling that a taxpayer’s information services weren’t subject to tax

July 10, 2019

The New York Court of Appeals has reversed a lower court’s ruling that a taxpayer’s information services weren’t subject to tax. The taxpayer bought competitive-price audit reports from a price-checking service for grocery and retail outlets. The reports relied on information obtained from products on supermarket shelves. The NY Tax Appeals Tribunal ruled that the taxpayer’s purchases were taxable receipts and not exempt information services, because they weren’t “personal and individual in nature.” NY’s appellate division disagreed, ruling that, when there’s an ambiguity in the law about an exclusion from tax and not an exemption, the law strictly favors the taxpayer.

New York ALJ rules a large entertainment company not entitled to exclude royalties from its foreign affiliates

July 3, 2019

A New York administrative law judge (ALJ) ruled on whether a large entertainment company was entitled to exclude royalties from its foreign affiliates. The ALJ rejected the claim that the payments wouldn’t have to be added back to entire net income. It ruled that NY law’s addback and exclusion provisions work to ensure that royalty payments between related members are taxed once and don’t escape taxation altogether. The ALJ also rejected the claim that there was a violation of the third prong of the dormant commerce clause. The law’s provisions are only triggered if the royalty payments involve related parties, whether or not the payer is a NY taxpayer, it stated. (Dkt. No. 828304)

New York raises its sales tax nexus threshold

July 3, 2019

The NY legislature has upped the amount of gross receipts from the sale of items delivered into the state that trigger sales and use tax collection. As of June 23, 2019, a marketplace provider isn’t required to collect the tax if the cumulative total of the provider’s gross receipts from taxable sales of tangible personal property delivered into the state doesn’t exceed $500,000. (The threshold was previously $300,000.) This also is true if the number of sales doesn’t exceed 100. The requirement applies to all tangible personal property, including the sale of prewritten computer software that’s downloaded or remotely accessed by customers.


© 2019

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