Current through Register Vol. 46, No. 12, March 20, 2024
General Municipal Law, § 874(8) and Public Authorities
Law, §§ 1964-a(9) and 2327(9)
(a)
Definitions.
For purposes of this section, the following terms shall
have the following meanings unless the context clearly requires
otherwise.
(1)
Industrial
development agency or authority means a public benefit corporation
established pursuant to the authority of article 18-A of the General Municipal
Law or title 11 or 15 of article 8 of the Public Authorities Law.
(2)
Agent of an industrial
development agency or authority means a person who is appointed by
such agency or authority to act for and represent such agency or authority in
respect of a project. Such term does not include the officers or employees of
an industrial development agency or authority, in their role as such officers
or employees.
(3)
Project shall have the same meaning as is found in section
854(4) of the General
Municipal Law or section 1951(5) or 2302(5) of the Public Authorities Law, as
the case may be.
(4)
Project operator means the industrial, manufacturing,
commercial or other enterprise appointed by the industrial development agency
or authority to use, occupy or operate a project undertaken by the industrial
development agency or authority. Such term does not include either mere tenants
of the project operator or persons appointed as agent by the project
operator.
(5)
Bonds shall have the same meaning as is found in section
854(2) of the General
Municipal Law or section 1951(4) or 2302(4) of the Public Authorities Law, as
the case may be.
(b)
(1) In addition to any other return or report
required to be filed pursuant to this Subchapter, every agent or project
operator is required to file annually a report with the department for each
project of which it is the agent or project operator, other than projects for
which an industrial development agency or authority, through the issuance of
its bonds, execution of leases or passage of an inducement or bond resolution,
has authorized assistance prior to July 21, 1993. The report is required to be
filed by the agent or project operator; that is, the individual or entity
authorized directly by the industrial development agency or authority to make
tax exempt purchases for the project on behalf of the industrial development
agency or authority. Tenants of the agent or project operator and persons
appointed as agent by the agent or project operator are not the persons
required to file such report.
(2)
For purposes of this section, the report required to be filed shall include the
value of all sales and compensating use tax exemptions claimed (whether availed
of at the time of purchase or use or by refund or credit) under the authority
of section
874 of the General Municipal Law or section
1963 or 2326 of the Public Authorities Law, as the case may be, by or on behalf
of the agent or project operator, as well as by or on behalf of its agents,
including without limitation, consultants or subcontractors.
(3) Such reports are required to be filed
annually on a calendar year basis by the last day of February of the next
succeeding year. However, the report for calendar year 1994 shall cover the
period October 19, 1993, through December 31, 1994, and must be filed by
September 30, 1995.
(4)
(i) The agent or project operator must file a
separate report for each project on the form prescribed for such filing by the
department and include the following information:
(a) name, address and employer identification
number of such agent or project operator;
(b) name and address of the industrial
development agency or authority;
(c) name, address and identification number
of the project, as designated by the industrial development agency or authority
or the agent or project operator;
(d) type of project (e.g.,
manufacturing, power generating, warehouse, retail, etc.);
(e) commencement date of project, including
the dates of any bond or inducement resolution, execution of any lease, and
bond issuance;
(f) date
construction began;
(g) completion
date of construction phase of project;
(h) ending date of project;
(i) the total amount of New York State and
local sales and compensating use taxes exempted on purchases and uses of
tangible personal property and/or services (whether at the time of purchase or
use or by refund or credit) by or on behalf of the agent or project operator,
the general contractor, and any subcontractors, consultants or other agents, as
a result of the project's tax exempt status pursuant to section
874 of the General Municipal Law or section
1963 or 2326 of the Public Authorities Law, as the case may be;
(j) the signature of the agent or project
operator or its authorized representative; and
(k) any additional information which may be
requested.
(ii) In
addition to the information required in the report, the agent or project
operator may submit with the report the name, address and employer
identification number of any general contractor and any subcontractor or other
agent on the project.
(5) In addition to the records required to be
kept by Part 533 of this Title and section
1135 of the Tax Law, every agent or project
operator of an industrial development agency or authority must maintain the
following records and information for each project on which it is the agent or
project operator:
(i) the name, address, and
employer identification number of any general contractor, subcontractor,
consultant or other agent on the project;
(ii) the total amounts of New York State and
local sales and compensating use taxes exempted on purchases and uses of
tangible personal property and/or services (whether at the time of purchase or
use or by refund or credit) by or on behalf of the general contractor with
respect to such project, and each subcontractor, consultant or other agent on
the project, respectively, as a result of such project's tax exempt status
pursuant to section
874 of the General Municipal Law or section
1963 or 2326 of the Public Authorities Law, as the case may be; and
(iii) such other records and information as
is necessary to substantiate the information required to be included on any
report required to be filed pursuant to this Part.
(6)
(i) All
records required to be kept and copies of all reports required to be filed by
this Part shall be preserved for a period of three years from the due date of
the annual report to which they relate or the date of filing, if later, and
longer than three years if their contents are material in any action or
proceeding then pending before the Department of Taxation and Finance or in a
judicial proceeding or action. Such records shall be available for inspection
and examination at any time upon demand by the commissioner or the
commissioner's duly authorized agent or employee. The contents of such records
may be required to be reported to the department in connection with the annual
report. Failure by an agent or project operator to furnish such information,
upon request by the department, with its annual report required to be filed
under this Part, may subject the agent or project operator to the penalty
provisions provided in subdivision (c) of this section.
(ii) See Part 2402 of this Title for taxpayer
record retention formats.
(7) The annual reports should be mailed to
the New York State Department of Taxation and Finance, Attn: IDA Unit, W.A.
Harriman Campus, Albany, NY 12227.
Example:
K Associates, a manufacturing company, is appointed agent
by an industrial development agency for purposes of constructing and equipping
a project consisting of a manufacturing facility. The industrial development
agency issues a letter to K Associates authorizing it to make purchases exempt
from sales and use taxes for the project as agent of the industrial development
agency. In order to complete the project under the terms of the contract, K
Associates hires a general contractor and various subcontractors to work on the
project. K Associates, as agent for the industrial development authority, must
maintain records and receive information from the general contractor and any
subcontractor, consultant and any other agent, sufficient to compute the total
amounts of sales and compensating use tax exemptions claimed with respect to
the project by the general contractor and each of the subcontractors,
consultants and any other agents of K Associates, whether taken at the time of
purchase or use, or by refund or credit. K Associates must also determine the
amount of exemptions it claims relating to its own purchases and uses for the
project for the year. K Associates must report the total amount on the annual
report required to be filed with the department. The general contractor,
subcontractors, consultants and other agents which work on the project are not
required to file an annual report with the department under this Part. In order
for K Associates to complete the report required by this Part properly, its
general contractor, subcontractors, consultants and other agents must inform K
Associates of the total amount of the sales and compensating use tax exemptions
to which they are entitled with respect to the project, and K Associates must
maintain records and furnish to the department upon request, the name, address,
employer identification number and total amounts of the sales and compensating
use tax exemptions claimed by such general contractor and by each
subcontractor, consultant and other agent on the project.
(c)
Failure to file
penalty.
Where an agent or project operator fails to file a report
required by this section, or files a report which is not substantially
complete, such agent or project operator may be subject to the removal of
authority to act as agent or project operator for the industrial development
agency or authority pursuant to section
874(8) of the General
Municipal Law or section 1963-a(9) or 2327(9) of the Public Authorities Law, as
the case may be.
(d)
Notification of failure to file.
(1) If, within 30 days of the due date for
the report, an agent or project operator has failed to file a report in the
manner required by this section or has filed a report which is not
substantially complete, the department shall notify such agent or project
operator of its noncompliance with this section.
(2) If the agent or project operator fails to
file the required report within 30 days of the date of the department's notice
described in paragraph (1) of this subdivision, the department shall notify the
agent or project operator and the appropriate industrial development agency or
authority that continued failure to file the required report within 60 days of
the date of the notice provided in this paragraph will result in the removal of
the authority of the agent or project operator to act as agent or project
operator for the agency or authority. The department shall mail a copy of such
notice to the appropriate industrial development agency or authority.
(3) If the department has not received the
required report within 60 days of the date of the notice described in paragraph
(2) of this subdivision, the authority of the agent or project operator to act
as agent or project operator for the industrial development agency or authority
shall terminate as of such 60th day. The department shall, upon expiration of
such 60 days, mail by certified mail to the agent or project operator a notice
of removal of authority to act as agent or project operator for the industrial
development agency or authority. Such notification must:
(i) state the effective date of such removal
of authority;
(ii) state the basis
for removal of authority to act as agent or project operator; and
(iii) advise the person whose authority as
agent or project operator has been removed that the report required by this
section must be filed before such person's authority as agent or project
operator can be restored.
The department shall also mail a copy of the notice of
removal of authority described in this paragraph to the appropriate industrial
development agency or authority, the New York State Department of Economic
Development and the State Comptroller.
(e)
Effect under the Tax Law of
removal of authority to act as an agent or project operator.
(1) Any person whose authority to act as an
agent or project operator has been removed, as well as any agent of such person
(including contractors, subcontractors and consultants), is not entitled to the
sales and compensating use and other tax exemptions provided pursuant to
section
874 of the General Municipal Law or section
1963 or 2326 of the Public Authorities Law, as the case may be.
(2) Any loss of authority for a person to act
as agent or project operator shall remain in effect until the department
restores such person's eligibility to act as an agent or project
operator.
(3) A person whose
authority to act as an agent or project operator has been removed will not be
eligible to act as an agent or project operator until all reports required
under this section are properly completed and filed, to the satisfaction of the
department. Any notice of restoration of authority to act as an agent or
project operator shall be mailed to the same parties as the notice of removal
of authority was mailed, and such restoration shall be effective upon mailing
by the department.
(4) Any person
whose authority to act as agent or project operator has been removed shall be
liable for, and any agent of such person (including contractors, subcontractors
and consultants) may be liable for, any sales and compensating use taxes, as
well as any other taxes imposed by or pursuant to the authority of the Tax Law,
together with any penalty or interest, which accrued during the time such
removal of authority was in effect, and shall not be entitled to any refund or
credit of any such tax, penalty or interest. Accordingly, the person whose
authority to act as agent or project operator has been removed should promptly
notify its contractors, subcontractors, consultants and other agents of its
loss of authority as an industrial development agency or authority agent or
project operator, as the case may be.
Example:
K Associates, appointed as agent for an industrial
development authority, is properly notified by the department of the removal of
its authority to act as agent of the industrial development authority, due to
the agent's failure to file the annual report. The effective date of such
removal of authority is July 1st. On October 31st of the same year, K
Associates submits the delinquent report (properly completed) and requests the
department to restore its authority to act as agent for the industrial
development authority. During the period of removal of authority to act as
agent, K Associates is not entitled to any sales and use tax exemptions for the
project and must pay any tax due on purchases and uses of property or services
made for the project during such period. Additionally, such removal of K
Associates' authority to act as agent likewise applies to any of its
contractors, subcontractors, consultants and other agents.
Upon the department's restoration of K Associates'
authority to act as agent, K Associates and all its contractors,
subcontractors, consultants and other agents are then authorized again to make
purchases for the project exempt from sales and compensating use taxes,
provided that K Associates remains the appointed agent of the industrial
development agency. However, neither K Associates nor any of its contractors,
subcontractors, consultants or other agents are entitled to any refund or
credit of sales and compensating use taxes required to be paid or due on
purchases and uses of property or services made during the four month period
from July 1st through October 31st when the authority of K Associates to act as
agent was removed.
