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New York State & Local Tax Update: September 2015

Posted 12:00 PM by

New York State & Local Tax Updates

New York Issues Bulletin on Sales Tax Sourcing Rules and Where Delivery Occurs

The New York State Department of Taxation and Finance (NY DOTF) issued a sales and use tax bulletin on the rules governing where the delivery of property or services occurs, as well as the resulting sales tax consequences. The bulletin discusses general delivery rules, delivery to a purchaser's designee, delivery by a common carrier and delivery as a gift at the purchaser's direction. See TB-ST-155 for more information.

New York Affirms LLC Members Responsible for Sales Taxes

The New York State Division of Tax Appeals/Tax Appeals Tribunal affirmed a lower court's holding that the taxpayers were properly assessed sales and use taxes in their capacity as “persons required to collect the tax” on behalf of a LLC. The taxpayers argued they were improperly assessed sales and use tax because the laws pertaining to LLCs provide that a member cannot be held accountable for the LLC's liabilities “solely by reason of being such a member.”

The court rejected that contention, holding that the definition of persons required to collect the tax includes members of an LLC. The court also noted the LLC liability limitation was not intended to extend to a member's responsible person liability. See In the Matter of the Petitions of Eugene Boissiere and Jason Krystal

New York Issues Advisory Opinion on Installation of Built-in Appliances

In Advisory Opinion TSB-A-15(18)S, the NY DOFT concluded that built-in appliances sold on an installed basis, as part of a capital improvement, were not subject to sales tax when sold. Rather, the installer is responsible for sales and use tax on its purchase price of the appliance. 

New York City Rules on Deductibility of Payments to Employee-Partners

The New York City Tax Appeals Tribunal has affirmed an Administrative Law Judge decision that the taxpayer cannot deduct the portion of its payment to a general partner representing compensation – for the services of employee-partners – for purposes of the New York City unincorporated business tax.

The employee-partners were not merely employees of the general partner but were also individual partners in the taxpayer. Therefore, because the payment is to a partner for services, New York City Administrative Code §11-507(3), on its face, denies a deduction for the entire amount of the payment. See In the Matter of Tocqueville Asset Management L.P.

New Jersey Issues Nexus Guidelines

The New Jersey Division of Taxation has issued Technical Tax Bulletins TB-78 and TB-79, outlining the general nexus creating activities for sales and use tax and corporate income tax, respectively.

About the Author
Donna Niesen is a partner in Katz, Sapper & Miller’s State and Local Tax Group. Donna helps keep clients up-to-date on the multitude of tax rules and requirements in all 50 states. She guides them in the right direction as they address the complex issues that emerge on both the state and local levels. Connect with her on LinkedIn.

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