N.Y. Tax Law § 5-a: Certification of registration to collect sales and compensating use taxes by certain contractors, affiliates and subcontractors

§ 5-a. Certification of registration to collect sales and compensating

use taxes by certain contractors, affiliates and subcontractors. 1. For

purposes of this section, the following terms shall have the specified

meanings:

(a) "Affiliate" means a person which directly, indirectly or

constructively

(1) controls another person;

(2) is controlled by another person; or

(3) is, along with another person, under the control of a common

parent.

"Control" means possession of the power to direct, or cause the

direction of, the management and policies of another person.

(b) "Commodities" means commodities as defined in article eleven of

the state finance law.

(c) (1) "Contract" means an agreement between a contractor and a

covered agency for the purchase by the covered agency, pursuant to

article eleven of the state finance law, of commodities or services

having a value in excess of one hundred thousand dollars.

The term "contract" shall also include a centralized contract, as

defined in article eleven of the state finance law, with a value in

excess of one hundred thousand dollars.

(2) The term "contract" shall not include:

(A) a purchase by a covered agency of commodities or services with a

value in excess of one hundred thousand dollars based upon a formal

mini-bid solicitation pursuant to a centralized contract;

(B) a grant or an intergovernmental agreement; or

(C) a purchase of commodities or services from a "preferred source,"

as such term is defined in article eleven of the state finance law.

(3) Multiple purchases of commodities or services by a covered agency

from the same contractor during a state fiscal year shall not be

aggregated for purposes of determining whether the greater than one

hundred thousand dollar threshold described in this subdivision has been

met.

(d) "Contractor" means a person awarded a contract.

(e) "Covered agency" means a "state agency" for purposes of article

eleven of the state finance law, the legislature, the judiciary, or a

public authority or public benefit corporation at least one of whose

members is appointed by the governor.

(f) "Department" means the department of taxation and finance.

(g) "Person" means an individual, partnership, limited liability

company, society, association, joint stock company, or corporation;

provided, however, that a "person" shall not include a "public

corporation" or an "education corporation," as such terms are defined in

section sixty-six of the general construction law, a not-for-profit

corporation whose contracts are subject to approval in accordance with

article eleven-B of the state finance law, a board of cooperative

educational services created pursuant to article forty of the education

law, or a soil and water conservation district created pursuant to

section five of the soil and water conservation districts law.

(h) "Sales and compensating use taxes" means state and local sales and

compensating use taxes imposed by article twenty-eight and pursuant to

the authority of article twenty-nine of this chapter, which are

administered by the commissioner.

(i) "Sales tax quarter" means a quarterly period ending on the last

day of February, May, August or November.

(j) "Services" means services as defined in article eleven of the

state finance law.

(k) "Subcontractor" means a person engaged by a contractor or another

subcontractor to perform a portion of the contractor's obligations under

a contract.

(l) "State" means the state of New York.

(m) "Taxable services" means services, the receipts from the sale of

which are taxable by article twenty-eight or article twenty-nine of this

chapter.

(n) The terms "receipts," "sale," "tangible personal property" and

"vendor" have the meanings given in article twenty-eight of this

chapter.

2. (a) Notwithstanding any provision of law to the contrary, before a

contract may take effect, the contractor must comply with the

requirements of subparagraphs one and two of this paragraph.

(1) The contractor must file a written certification with the

department, made under penalty of perjury, stating that:

(A) if the contractor made sales delivered by any means to locations

within the state of tangible personal property or taxable services

having a value in excess of three hundred thousand dollars during the

immediately preceding consecutive four sales tax quarters, the

contractor is registered for sales and compensating use tax purposes

with the department under sections eleven hundred thirty-four and twelve

hundred fifty-three of this chapter. If the contractor did not make

sales delivered by any means to locations within the state of tangible

personal property or taxable services having a value in excess of three

hundred thousand dollars during such four sales tax quarters, then the

contractor shall so certify;

(B) if any affiliate of the contractor made sales delivered by any

means to locations within the state of tangible personal property or

taxable services having a value in excess of three hundred thousand

dollars during the immediately preceding consecutive four sales tax

quarters, to the best of the contractor's knowledge, each such affiliate

is registered for sales and compensating use tax purposes with the

department under sections eleven hundred thirty-four and twelve hundred

fifty-three of this chapter. If the contractor does not have any

affiliates, or does not have any affiliates which made sales delivered

by any means to locations within the state of tangible personal property

or taxable services having a value in excess of three hundred thousand

dollars during such four sales tax quarters, then the contractor shall

so certify; and

(C) if any subcontractor made sales delivered by any means to

locations within the state of tangible personal property or taxable

services having a value in excess of three hundred thousand dollars

during the immediately preceding consecutive four sales tax quarters, to

the best of the contractor's knowledge, each such subcontractor is

registered for sales and compensating use tax purposes with the

department under sections eleven hundred thirty-four and twelve hundred

fifty-three of this chapter. If the contractor does not have any

subcontractors, or there are no subcontractors which made sales

delivered by any means to locations within the state of tangible

personal property or taxable services having a value in excess of three

hundred thousand dollars during such four sales tax quarters, then the

contractor shall so certify.

(D) The certification required by this subparagraph shall include such

additional information as the department deems necessary for the proper

administration of this section.

(E) The certification required by this subparagraph need only be filed

with the department once and, once filed, shall be deemed to satisfy the

requirements of this subparagraph for purposes of any subsequent

contract to which the contractor is a party; provided, however, that if

the contractor, or an affiliate or subcontractor, is not certified as

registered with the department for sales and compensating use tax

purposes on the contractor's original certification, and such

contractor, affiliate or subcontractor makes sales delivered by any

means to locations within the state of tangible personal property or

taxable services having a value in excess of three hundred thousand

dollars during any consecutive four sales tax quarters which follow the

sales tax quarter in which the contractor's original certification was

made, then the contractor shall, as soon as possible after such

occurrence, file an amended written certification with the department,

made under penalty of perjury, indicating that such contractor,

affiliate or subcontractor, as applicable, is registered with the

department for sales and compensating use tax purposes.

(2) The contractor shall also provide the procuring covered agency

with a written certification, made under penalty of perjury, stating

that:

(A) the contractor has filed the certification prescribed by this

section with the department, and that such certification is correct and

complete, or

(B) such certification is not required to be filed with the

department, and explaining the reasons for such determination.

(C) the certification required by this subparagraph shall be included

in the procurement record (as such term is defined in article eleven of

the state finance law), or similar documentation if the state

comptroller is not required by law to approve the contract.

(D) any question as to the accuracy of the contractor certification

described in clause (B) of this subparagraph shall be resolved by the

contracting covered agency, in consultation, as necessary, with the

state comptroller and the department.

(b) A contractor, affiliate of the contractor, or subcontractor which

registers for sales and compensating use tax purposes under sections

eleven hundred thirty-four and twelve hundred fifty-three of this

chapter in order to comply with the provisions of this subdivision shall

be a vendor and shall comply with and be subject to the provisions of

articles twenty-eight and twenty-nine of this chapter.

(c) The certification requirements prescribed by this subdivision in

order for a contract to take effect shall be in addition to any other

requirements prescribed by law relating to the formation of contracts to

which a covered agency is a party.

3. (a) If a contract has taken effect, and the terms of such contract

provide that it may be renewed upon expiration of an initial or

subsequent term, then the contractor shall, no later than the day prior

to the commencement date of the applicable renewal term, certify to the

contracting covered agency in writing, and under penalty of perjury,

that:

(1) the contractor has filed the certification prescribed by this

section with the department, and that such certification is correct and

complete, or

(2) that such certification is not required to be filed with the

department, and explains the reasons for such determination.

(3) Any question as to the accuracy of the contractor certification

described in subparagraph two of this paragraph shall be resolved by the

contracting covered agency, in consultation, as necessary, with the

state comptroller and the department.

(b) The certification required by paragraph (a) of this subdivision

shall be made a part of the procurement record (as such term is defined

in article eleven of the state finance law), or similar documentation if

the state comptroller is not required by law to approve the contract.

(c) If the contractor fails to make the certification required by

paragraph (a) of this subdivision, or if, during the term of the

contract, the department or the covered agency discovers that such

certification is false, then such failure or false certification shall

be a material breach of the contract, and the contract shall be subject

to termination if the covered agency determines that such action is in

the best interests of the state.

(d) A contractor, affiliate of the contractor, or subcontractor which

registers for sales and compensating use tax purposes under sections

eleven hundred thirty-four and twelve hundred fifty-three of this

chapter in order to comply with the provisions of paragraph (a) of this

subdivision shall be a vendor and shall comply with and be subject to

the provisions of articles twenty-eight and twenty-nine of this chapter.

4. The provisions of this section shall not apply to a contract if the

procuring covered agency and the state comptroller, or other approving

authority if the state comptroller is not required to approve the

contract, find in writing that the contract is necessary to address an

"emergency," within the meaning of article eleven of the state finance

law, or to ensure the public health, safety or welfare. Such written

finding shall explain the reasons supporting such determination.