N.Y. Tax Law § 289-b: Penalties and interest

§ 289-b. Penalties and interest. 1. (a) A distributor or other person

who or which fails to file a return or to pay any tax within the time

required by or pursuant to this article (determined with regard to any

extension of time for filing or paying) shall be subject to a penalty of

ten per centum of the amount of tax determined to be due as provided in

this article plus one per centum of such amount for each month or

fraction thereof during which such failure continues after the

expiration of the first month after such return was required to be filed

or such tax became due, not exceeding thirty per centum in the

aggregate. Provided, however, in the case of a failure to file such

return within sixty days of the date prescribed for filing of such

return by or pursuant to this article (determined with regard to any

extension of time for filing), the penalty imposed by this paragraph

shall not be less than the lesser of one hundred dollars or one hundred

per centum of the amount required to be shown as tax on such return. For

the purpose of the preceding sentence, the amount of tax required to be

shown on the return shall be reduced by the amount of any part of the

tax which is paid on or before the date prescribed for payment of the

tax and by the amount of any credit against the tax which may be claimed

upon the return.

(b) If any amount of tax is not paid on or before the last date

prescribed in this article for payment, interest on such amount at the

underpayment rate set by the commissioner of taxation and finance

pursuant to subdivision twenty-sixth of section one hundred seventy-one

of this chapter shall be paid for the period from such last date to the

date paid, whether or not any extension of time for payment was granted.

Interest under this paragraph shall not be paid if the amount thereof is

less than one dollar.

(c) If the tax commission determines that such failure or delay was

due to reasonable cause and not due to willful neglect, it shall remit

all or part of such penalty. The tax commission shall promulgate rules

and regulations as to what constitutes reasonable cause.

(d) If the failure to pay any tax within the time required by or

pursuant to this article is due to fraud, in lieu of the penalties and

interest provided for in paragraphs (a) and (b) of this subdivision,

there shall be added to the tax (i) a penalty of two times the amount of

tax due, plus (ii) interest on such unpaid tax at the underpayment rate

set by the commissioner of taxation and finance pursuant to subdivision

twenty-sixth of section one hundred seventy-one of this chapter for the

period beginning on the last day prescribed by this article for the

payment of such tax (determined without regard to any extension of time

for paying) and ending on the day on which such tax is paid.

(e) Any owner of a filling station who shall willfully and knowingly

have in his custody, possession or under his control any motor fuel or

Diesel motor fuel on which (i) the taxes imposed by or pursuant to the

authority of this article have not been assumed or paid by a distributor

registered as such under this article or (ii) the taxes imposed by or

pursuant to the authority of this article, which taxes were required to

have been passed through to him and included in the cost to him of such

fuel, have not been included in the cost to him of such fuel shall be

liable for a penalty equal to twice the amount of tax so not assumed or

paid, or included. Such penalty shall be determined, assessed, collected

and paid in the same manner as taxes imposed by this article and all the

provisions of this article relating to determination of tax, proceedings

to recover tax, refunds (but only of monies paid in error), mailing

rules and disposition of revenue shall be deemed also to refer to the

penalty imposed by this paragraph and, for this purpose, the term "owner

of a filling station" shall be substituted for the term "distributor"

wherever appearing in such provisions. Such penalty may be determined at

any time within three years after such motor fuel or Diesel motor fuel

shall have come into the custody, possession or control of such owner of

a filling station. For purposes of this paragraph, such owner shall

willfully and knowingly have in his custody, possession or under his

control any motor fuel or Diesel motor fuel (1) on which such taxes have

not been assumed or paid by a distributor registered as such or (2) on

which such taxes are required to have been passed through to him and

have not been included in his cost when such owner has known of the

requirement that such taxes be so included and where to his knowledge

such taxes have not been so included. For purposes of this paragraph, it

shall be presumptive evidence that such owner shall willfully and

knowingly have in his custody, possession or under his control any motor

fuel or Diesel motor fuel (1) on which such taxes have not been assumed

or paid by a distributor registered as such or (2) on which such taxes

are required to have been passed through to him and have not been

included in his cost where such owner has not received the certification

required by subdivision three of section two hundred eighty-five-a or,

in the case of Diesel motor fuel, by subdivision four of section two

hundred eighty-five-b of this article at the time of delivery of such

motor fuel or Diesel motor fuel, or, in those circumstances where the

commissioner has authorized the delivery of the certification at a time

after delivery of the motor fuel or Diesel motor fuel, at the time

prescribed by the commissioner.

(e-1) In addition to any other penalties that may be imposed by law,

any of the following penalties may be imposed.

(i) Any person who fails to file an informational return under this

article on or before the prescribed date, must pay a penalty of fifteen

hundred dollars for the first violation and a penalty of three thousand

dollars for each subsequent violation, unless it can be shown that such

failure is due to reasonable cause and not willful neglect.

(ii) Any person who fails to file an informational return within sixty

days of the date prescribed for filing must pay a penalty of two

thousand dollars for the first violation and a penalty of four thousand

dollars for each subsequent violation, unless it can be shown that such

failure is due to reasonable cause and not willful neglect.

(iii) Any person who fails to file a complete informational return

must pay a penalty of fifteen hundred dollars for the first violation

and a penalty of three thousand dollars for each subsequent violation,

unless it can be shown that such failure is due to reasonable cause and

not willful neglect.

(iv) If any person makes a statement on an informational return and,

as of the time of the statement, there was no reasonable basis for that

statement, that person must pay a penalty of two thousand dollars for

the first violation and a penalty of four thousand dollars for each

subsequent violation.

(f) The penalties and interest provided for in this section shall be

determined, assessed, collected and paid in the same manner as the taxes

imposed by this article and shall be disposed of as hereinafter provided

with respect to moneys derived from the tax. Unpaid penalties and

interest under this subdivision may be recovered by the attorney-general

by action in the name of the people, and all penalties and interest due

from the same distributor may be sued for in one action. Interest under

this subdivision shall be compounded daily.

2. Any officer, director, shareholder or employee of a corporation or

of a dissolved corporation, any employee of a partnership or any

employee of an individual proprietorship, who as such officer, director,

shareholder or employee is under a duty to act for such corporation,

partnership or proprietorship in complying with any requirement of this

article, and any member of a partnership, which fails to pay the taxes

imposed by or pursuant to this article, shall, in addition to other

penalties provided by law, be liable to a penalty equal to the total

amount of the tax not paid, plus penalties and interest computed

pursuant to subdivision one of this section as if such person were a

distributor. If the tax commission determines that such failure was due

to reasonable cause and not due to willful neglect, it shall remit all

or part of such penalty imposed under this subdivision. Such penalty

shall be determined, assessed, collected and paid in the same manner as

the taxes imposed by this article and shall be disposed of as

hereinafter provided with respect to moneys derived from the tax.

3. For purposes of this chapter, the failure to do any act required by

or under the provisions of this article shall be deemed an act committed

in part at the office of the department of taxation and finance in

Albany. For purposes of this chapter, the certificate of the tax

commission to the effect that a tax has not been paid, that a return has

not been filed, or that information has not been supplied, as required

by or under the provisions of this article, or that a claim for refund

has been filed, shall be prima facie evidence that such tax has not been

paid, that such return has not been filed, that such information has not

been supplied, or that such claim has been filed.

4. Cross-reference: For criminal penalties, see article thirty-seven

of this chapter.

5. (a) Any purchaser of Diesel motor fuel who knowingly issues a false

or fraudulent exempt transaction certificate (or a similar document

which has been prescribed by the commissioner of taxation and finance)

or interdistributor sale certificate in order to claim an exemption from

the taxes imposed on Diesel motor fuel by this article by reason of an

exemption from tax provided for in paragraph (b) of subdivision three of

section two hundred eighty-two-a of this article, shall, in addition to

liability for tax or any other penalty imposed by this chapter, be

subject to a penalty of one hundred percent of the tax liability which

would have resulted if there had not been a misuse of such certificate.

(b) Any seller of Diesel motor fuel who knowingly accepts from a

purchaser a false or fraudulent exempt transaction certificate (or a

similar document which has been prescribed by the commissioner of

taxation and finance) or interdistributor sale certificate which claims

an exemption from the taxes imposed on Diesel motor fuel by this article

by reason of the exemption from tax provided for in such paragraph (b)

of subdivision three of section two hundred eighty-two-a of this article

shall, in addition to liability for tax or any other penalty imposed by

this chapter, be subject to a penalty of one hundred percent of the tax

liability which would have resulted if such certificate had not been so

accepted.