Current through Register Vol. 46, No. 12, March 20, 2024
(a)
Where the Tax Commission, in its discretion, deems it necessary to protect the
revenue to be obtained pursuant to article 13-A of the Tax Law it may require
any person which is a petroleum business as defined in section
300(c) of the Tax Law to
file with the Department of Taxation and Finance a bond or other security. Such
bond must be issued by a surety company approved by the New York State
Superintendent of Insurance as to solvency and responsibility and authorized to
transact business in New York State. In lieu of a bond a petroleum business may
deposit with the Department of Taxation and Finance other security approved by
the Tax Commission. Among the kinds of security which will be accepted 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 pass books and certificates of deposit;
(5) irrevocable standby letters of credit
made payable to the New York State Department of Taxation and Finance;
and
(6) other forms of security
acceptable to the Department of Taxation and Finance.
(b)
(1)
Treasury State or political subdivision 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 filing with
the Department of Taxation and Finance. 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 petroleum business 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. Any interest accruing on bonds offered as collateral under this
section shall belong to the petroleum business.
(2) Financial institution passbooks and
certificates of deposit offered as collateral under this section must represent
money on deposit with a financial institution. Certificates of deposit must
have maturity dates at least one year subsequent to the date of filing 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 petroleum
business;
(ii) accompanied by a
signed undated withdrawal slip;
(iii) accompanied by a letter prepared on the
letterhead of the financial institution and signed by an officer of the
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 bank may possess against the petroleum business resulting from a defaulted
obligation of such person shall be subservient to the interest of the
Department of Taxation and Finance in the passbook or certificate of deposit
offered as collateral;
(iv) 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 obligations due it; provided, however, that any interest accruing on such
accounts or certificates shall belong to the petroleum business.
(3) Standby letters of credit
offered as collateral under this section must:
(i) be irrevocable for such period of time as
the Department of Taxation and Finance shall determine;
(ii) be made payable to the New York State
Department of Taxation and Finance;
(iii) be issued or confirmed by a bank
approved by the Department of Taxation and Finance; and
(iv) contain such other payment terms as are
acceptable to the Department of Taxation and Finance.
(c) Any security deposited must
have a fair market value at least equal to the amount required pursuant to
section
450.2
of this Part. Fair market value greater than par value on maturity will not be
recognized. Bonds of New York State and political subdivisions thereof, United
States Treasury bonds and other securities shall be kept in the joint custody
of the Comptroller and the Commissioner of Taxation and Finance. Such
securities 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 such petroleum
business pursuant to article 13-A of the Tax Law. No such sale shall be made
until a petroleum business shall have opportunity to have the validity of the
tax finally determined in the manner set forth in article 27 of the Tax Law.
Upon any such sale the surplus, if any, shall be returned to such petroleum
business.
