New York Codes, Rules and Regulations
Title 20 - DEPARTMENT OF TAXATION AND FINANCE
Chapter III - Fuel and Carrier Taxes
Subchapter B - Petroleum Business Tax
Part 450 - Petroleum Business Bond Or Other Security
Section 450.2 - Determination of the need for an amount of bond or other security

Universal Citation: 20 NY Comp Codes Rules and Regs ยง 450.2

Current through Register Vol. 46, No. 12, March 20, 2024

(a) Prior to the approval of an application for registration of a petroleum business or during any review of a registered petroleum business, the Tax Commission may require such petroleum business to file a bond or other security with such department. With its application for registration, and at any time subsequent to registration upon the request of the Department of Taxation and Finance, a petroleum business must submit to the Department of Taxation and Finance:

(1) a current financial statement (balance sheet showing its financial condition with footnotes) independently certified by a licensed public accountant or certified public accountant pursuant to an audit by such accountant as to the reliability of such statement and, also as to the financial condition of such petroleum business;

(2) its estimated annual tax liability pursuant to article 13-A of the Tax Law; and

(3) any other information, including a current unqualified financial statement, the department may deem necessary.

(b) In determining the amount and the need for the requirement of a bond or other security, the department will review the following:

(1) current financial statements independently certified by a licensed public accountant or certified public accountant, with particular emphasis on the net worth (total assets less total liabilities) as determined in accordance with generally accepted accounting principles;

(2) any independent information concerning an applicant's or petroleum business's nature of operation, reliability, overall financial status or history of financial solvency and stability; and

(3) its compliance record which will indicate any delinquencies in filing returns and/or payment of taxes due New York State for which the applicant or petroleum business may be responsible.

(c) Generally, if the net worth of a petroleum business is equal to or greater than one and one-half times the estimated tax liability for the current year computed on an annual basis due to New York State pursuant to article 13-A of the Tax Law, a bond or other security will not be required. Generally, if the net worth of a petroleum business is less than one and one half times the estimated tax liability for the current year computed on an annual basis due to New York State pursuant to article 13-A of the Tax Law, a bond or other security may be required for the difference between the net worth and such one and one-half times the estimated tax liability. For purposes of this calculation, net worth less than zero will not be recognized. Notwithstanding the provisions of this subdivision relating to the financial condition of the applicant or petroleum business i.e.,net worth, etc.), the amount of bond or other security may be increased or decreased or a bond or other security may be required at any time when such amount or such bond or other security is necessary as a protection to the revenues under article 13-A of the Tax Law.

(d)

(1) If an applicant or a petroleum business fails to supply a current financial statement as required by paragraph (a)(1) of this section, the applicant will not be registered or such petroleum business' registration will be cancelled. However, the Tax Commission, on petition, either through the hearing process or on the motion of the Tax Commission, may waive the requirement for a certification by a licensed public accountant or by a certified public accountant. If such requirement is waived, the Tax Commission may instead require alternative certification or require the applicant or petroleum business to file a bond or other security in such amount as it deems appropriate, regardless of the net worth or financial status of the applicant or petroleum business.

(2) If an applicant or a petroleum business fails to supply any of the information required by paragraphs (a)(2) and (3) of this section, the applicant will not be registered or such petroleum business' registration will be cancelled.

(e) The requirements of this section shall be coordinated whenever possible with the requirements of Part 414 of this Title.

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