N.Y. General Municipal Law § 875: Special provisions applicable to state sales and compensating use taxes and certain types of facilities

§ 875. Special provisions applicable to state sales and compensating

use taxes and certain types of facilities. 1. For purposes of this

section: "state sales and use taxes" means sales and compensating use

taxes and fees imposed by article twenty-eight or twenty-eight-A of the

tax law but excluding such taxes imposed in a city by section eleven

hundred seven or eleven hundred eight of such article twenty-eight.

"IDA" means an industrial development agency established by this article

or an industrial development authority created by the public authorities

law. "Commissioner" means the commissioner of taxation and finance.

2. An IDA shall keep records of the amount of state and local sales

and use tax exemption benefits provided to each project and each agent

or project operator and shall make such records available to the

commissioner upon request. Such IDA shall also, within thirty days of

providing financial assistance to a project that includes any amount of

state sales and use tax exemption benefits, report to the commissioner

the amount of such benefits for such project, the project to which they

are being provided, together with such other information and such

specificity and detail as the commissioner may prescribe. This report

may be made in conjunction with the statement required by subdivision

nine of section eight hundred seventy-four of this title or it may be

made as a separate report, at the discretion of the commissioner. An IDA

that fails to make such records available to the commissioner or to file

such reports shall be prohibited from providing state sales and use tax

exemption benefits for any project unless and until such IDA comes into

compliance with all such requirements.

3. (a) An IDA shall include within its resolutions and project

documents establishing any project or appointing an agent or project

operator for any project the terms and conditions in this subdivision,

and every agent, project operator or other person or entity that shall

enjoy state sales and use tax exemption benefits provided by an IDA

shall agree to such terms as a condition precedent to receiving or

benefiting from such state sales and use exemptions benefits.

(b) The IDA shall recover, recapture, receive, or otherwise obtain

from an agent, project operator or other person or entity state sales

and use exemptions benefits taken or purported to be taken by any such

person to which the person is not entitled or which are in excess of the

amounts authorized or which are for property or services not authorized

or taken in cases where such agent or project operator, or other person

or entity failed to comply with a material term or condition to use

property or services in the manner required by the person's agreement

with the IDA. Such agent or project operator, or other person or entity

shall cooperate with the IDA in its efforts to recover, recapture,

receive, or otherwise obtain such state sales and use exemptions

benefits and shall promptly pay over any such amounts to the IDA that it

requests. The failure to pay over such amounts to the IDA shall be

grounds for the commissioner to assess and determine state sales and use

taxes due from the person under article twenty-eight of the tax law,

together with any relevant penalties and interest due on such amounts.

(c) If an IDA recovers, recaptures, receives, or otherwise obtains,

any amount of state sales and use tax exemption benefits from an agent,

project operator or other person or entity, the IDA shall, within thirty

days of coming into possession of such amount, remit it to the

commissioner, together with such information and report that the

commissioner deems necessary to administer payment over of such amount.

An IDA shall join the commissioner as a party in any action or

proceeding that the IDA commences to recover, recapture, obtain, or

otherwise seek the return of, state sales and use tax exemption benefits

from an agent, project operator or other person or entity.

(d) An IDA shall prepare an annual compliance report detailing its

terms and conditions described in paragraph (a) of this subdivision and

its activities and efforts to recover, recapture, receive, or otherwise

obtain state sales and use exemptions benefits described in paragraph

(b) of this subdivision, together with such other information as the

commissioner and the commissioner of economic development may require.

The report required by this subdivision shall be filed with the

commissioner, the director of the division of the budget, the

commissioner of economic development, the state comptroller, the

governing body of the municipality for whose benefit the agency was

created, and may be included with the annual financial statement

required by paragraph (b) of subdivision one of section eight hundred

fifty-nine of this title. Such report required by this subdivision shall

be filed regardless of whether the IDA is required to file such

financial statement described by such paragraph (b) of subdivision one

of section eight hundred fifty-nine. The failure to file or

substantially complete the report required by this subdivision shall be

deemed to be the failure to file or substantially complete the statement

required by such paragraph (b) of subdivision one of such section eight

hundred fifty-nine, and the consequences shall be the same as provided

in paragraph (e) of subdivision one of such section eight hundred

fifty-nine.

(e) This subdivision shall apply to any amounts of state sales and use

tax exemption benefits that an IDA recovers, recaptures, receives, or

otherwise obtains, regardless of whether the IDA or the agent, project

operator or other person or entity characterizes such benefits

recovered, recaptured, received, or otherwise obtained, as a penalty or

liquidated or contract damages or otherwise. The provisions of this

subdivision shall also apply to any interest or penalty that the IDA

imposes on any such amounts or that are imposed on such amounts by

operation of law or by judicial order or otherwise. Any such amounts or

payments that an IDA recovers, recaptures, receives, or otherwise

obtains, together with any interest or penalties thereon, shall be

deemed to be state sales and use taxes and the IDA shall receive any

such amounts or payments, whether as a result of court action or

otherwise, as trustee for and on account of the state.

4. The commissioner shall deposit and dispose of any amount of any

payments or moneys received from or paid over by an IDA or from or by

any person or entity, or received pursuant to an action or proceeding

commenced by an IDA, together with any interest or penalties thereon,

pursuant to subdivision three of this section, as state sales and use

taxes in accord with the provisions of article twenty-eight of the tax

law. The amount of any such payments or moneys, together with any

interest or penalties thereon, shall be attributed to the taxes imposed

by sections eleven hundred five and eleven hundred ten, on the one hand,

and section eleven hundred nine of the tax law, on the other hand, or to

any like taxes or fees imposed by such article, based on the proportion

that the rates of such taxes or fees bear to each other, unless there is

evidence to show that only one or the other of such taxes or fees was

imposed or received or paid over.

5. The statement that an IDA is required by subdivision nine of

section eight hundred seventy-four of this article to file with the

commissioner shall not be considered an exemption or other certificate

or document under article twenty-eight or twenty-nine of the tax law.

The IDA shall not represent to any agent, project operator, or other

person or entity that a copy of such statement may serve as a sales or

use tax exemption certificate or document. No agent or project operator

may tender a copy of such statement to any person required to collect

sales or use taxes as the basis to make any purchase exempt from tax. No

such person required to collect sales or use taxes may accept such a

statement in lieu of collecting any tax required to be collected. The

civil and criminal penalties for misuse of a copy of such statement as

an exemption certificate or document or for failure to pay or collect

tax shall be as provided in the tax law. In addition, the use by an IDA

or agent, project operator, or other person or entity of such statement,

or the IDA's recommendation of the use or tendering of such statement,

as such an exemption certificate or document shall be deemed to be,

under articles twenty-eight and thirty-seven of the tax law, the

issuance of a false or fraudulent exemption certificate or document with

intent to evade tax.

6. The commissioner is hereby authorized to audit the records,

actions, and proceedings of an IDA and of its agents and project

operators to ensure that the IDA and its agents and project operators

comply with all the requirements of this section. Any information the

commissioner finds in the course of such audit may be used by the

commissioner to assess and determine state and local taxes of the IDA's

agent or project operator.

7. In addition to any other reporting or filing requirements an IDA

has under this article or other law, an IDA shall also report and make

available on the internet, without charge, copies of its resolutions and

agreements appointing an agent or project operator or otherwise related

to any project it establishes. It shall also provide, without charge,

copies of all such reports and information to a person who asks for it

in writing or in person. The IDA may, at the request of its agent or

project operator delete from any such copies posted on the internet or

provided to a person described in the prior sentence portions of its

records that are specifically exempted from disclosure under article six

of the public officers law.

8. In consultation with the commissioner of economic development, the

commissioner of taxation and finance is hereby authorized to adopt rules

and regulations and to issue publications and other guidance

implementing the provisions of this section and of the other sections of

this article relating to any state or local tax or fee, or exemption or

exclusion therefrom, that the commissioner administers and that may be

affected by any provision of this article, and any such rules and

regulations of the commissioner shall have the same force and effect

with respect to such taxes and fees, or amounts measured in respect of

them, as if they had been adopted by the commissioner pursuant to the

authority of the tax law.

9. To the extent that a provision of this section conflicts with a

provision of any other section of this article, the provisions of this

section shall control.