Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, § 472(1)
(a) In lieu of the credit bond described in
section
71.2
of this Part, an applicant or an agent may deposit with the Department of
Taxation and Finance other security, approved by the department, in such
amounts as it may require. Among the kinds of security which may be acceptable
are the following:
(1) certificated United
States Treasury bonds;
(2)
certificated bonds of New York State;
(3) certificated bonds of any political
subdivision of New York State having general governmental powers, and in
connection with which, the credit of the political subdivision is pledged for
the payment of the interest and principal due on such bonds;
(4) financial institution passbooks and
certificates of deposit;
(5)
irrevocable standby letters of credit made payable to the New York State
Department of Taxation and Finance; and
(6) any other forms of security acceptable to
the Department of Taxation and Finance.
(b)
(1)
Bonds offered as collateral under this section must be certificated and may be
either bearer or registered bonds, having maturity dates at least five years
subsequent to the date of deposit with the Department of Taxation and Finance.
The amount of the bonds will generally be based on the fair market value, not
to exceed par value on maturity, determined as of the date of deposit. If such
bonds are of the coupon type, the interest coupons must be attached.
Certificated registered bonds offered as collateral must be in the name of the
agent and must be accompanied by a properly executed assignment or power of
attorney with respect to such bonds in such form as the Department of Taxation
and Finance may require.
(2) Any
interest accruing on bonds offered as collateral under this section shall
belong to the agent.
(c)
(1) Financial institution passbooks and
certificates of deposit offered as collateral under this section must represent
money on deposit with a financial institution approved by the Department of
Taxation and Finance. Certificates of deposit must have maturity dates at least
one year subsequent to the date of deposit with the Department of Taxation and
Finance. Additionally, financial institution passbooks and certificates of
deposit offered under this section must be:
(i) prepared in the name of the
agent;
(ii) accompanied by a signed
undated withdrawal slip;
(iii)
accompanied by a properly completed letter of transmittal in such form as the
Department of Taxation and Finance may require, advising that the proceeds of
such passbook accounts or certificates of deposit may be withdrawn by the
department and applied against any liability of such agent pursuant to article
20 of the Tax Law; provided, however, that any interest accruing on such
accounts or certificates shall belong to the agent; and
(iv) accompanied by a letter prepared on the
letterhead of the financial institution and signed by an officer of such
financial institution:
(a) identifying the
passbooks or certificates of deposit by account number and confirming that
withdrawal of principal from the passbook or certificate of deposit offered as
collateral will not be permitted without written consent from the New York
State Department of Taxation and Finance; and
(b) stating that any right of setoff which
the financial institution may possess against the agent resulting from a
defaulted obligation of such agent shall be subservient to the interest of the
Department of Taxation and Finance in the passbook or certificate of deposit
offered as collateral.
(2) Any interest accruing on passbooks or
certificates offered as collateral under this section shall belong to the
agent.
(d) Standby
letters of credit offered as collateral under this section must:
(1) be irrevocable for such period of time as
the Department of Taxation and Finance shall determine;
(2) be made payable to the New York State
Department of Taxation and Finance;
(3) be issued or confirmed by a bank approved
by the Department of Taxation and Finance; and
(4) contain such other payment terms as are
acceptable to the Department of Taxation and Finance.
(e) Any security deposited with the
Department of Taxation and Finance pursuant to this section must have a fair
market value at least equal to the amount of the credit bond required pursuant
to this Part. Fair market value greater than the par value of the security on
maturity will not be recognized. Accepted marketable securities deposited as
security under this section shall be kept in the custody of the Commissioner of
Taxation and Finance and may be sold by the Department of Taxation and Finance,
should it become necessary to do so in order to recover any sums due from an
agent pursuant to article 20 of the Tax Law. No such sale shall be had until
after an agent has had an opportunity to litigate the validity of any tax at
issue, in the manner set forth in section
478 of the Tax Law, if such agent elects to
do so. Upon any such sale of securities, the surplus, if any, above the sums
due under article 20 of the Tax Law shall be returned to such agent.
