Government Affairs Albany UpdateJune 9, 2006
Legislation was introduced this week in the Senate (S.8084, Johnson) that will cause taxpayers — both individual and business — to PAY dearly for disputed amounts of tax liability. S.8084 — a Department of Taxation & Finance departmental bill — would force taxpayers to defend yet another costly and timely appeal by the Department of Taxation & Finance on tax issues already defended multiple times by an aggrieved taxpayer.
At issue here is whether a taxpayer — who, as determined by the independent Tax Appeals Tribunal, already correctly has: one) collected tax; two) paid tax; three) completed and filed a return; four) maintained correct bookkeeping records and additional supporting material; five) complied with an audit conducted by the Department of Taxation & Finance; six) defended her or his position in proceedings before the Department's Bureau of Conciliation & Mediation; seven) defended that position before an Administrative Law Judge; and, eight) defended that position yet again before the New York Tax Appeals Tribunal — should be subjected to the costly expense and loss of time inherently necessary in re-defending those hard-earned decisions before the Appellate Division because S.8084 gives the Department of Taxation & Finance the right to so force the taxpayer. The Department has properly never been given this potent power — neither with taxpayer victories in the Tax Appeals Tribunal nor its predecessor, the State Tax Commission.
S.8084 would work an especially egregious hardship on the small business and individual taxpayer. A legal defense charge for representing a taxpayer through the Appellate Division is very costly and can be ill-afforded by small businesses and individuals. Actual legal fees for such representation have been upwards of $45,000.
Moreover, the threat of potentially having to defend a Tribunal decision on an appeal taken by the Department to the Appellate Division would significantly and unnecessarily add to a taxpayer's costs in the Division of Tax Appeals itself. Currently, a taxpayer can decide upon entering the tax appeals system that should he or she lose at the Tribunal level, an appeal would not be taken. Consequently, the taxpayer need not retain an attorney (in addition to their accountant) for representation for the purpose of building an adequate record within the Division of Tax Appeals for potential review within the court system. Bestowing a heretofore non-existent right of appeal to the Department denies the taxpayer that ability of control over judicial appeal and, in turn, inherently forces the taxpayer to purchase the costly and redundant representation services of a tax attorney from day one of the Division of Tax Appeals process.
Taxpayers and their accountants who disagree with the Department of Taxation & Finance's bill should contact their respective Senator, Senate Finance Committee Chairman Owen Johnson, and Senate Majority Leader Joseph Bruno -- all of whom can be reached at 518/455-2800 -- and express their views.
Empire State Development is promoting its new Manufacturing Assistance Program. Under this program, manufacturers can receive state grants of up to $1 million to support investments in new equipment or facilities. Eligible businesses are manufacturers with between 100 and 1,000 employees; and that export at least 30 percent of their output beyond the immediate region, or supply at least 30 percent of their production to a prime manufacture that exports beyond the region. Eligible projects must have investments of at least $2 million directed at improving productivity and/or competitiveness, such as new equipment, buildings and infrastructure improvements, improved manufacturing processes, improved efficiency, and/or pollution prevention. Participants are required to maintain at least 85 percent of their current employment for a five-year period.
For more information, please contact Empire State Development at 800-STATE NY. The program director is Jeffrey Boyce, Assistant Deputy Commissioner for Manufacturing Services, phone (518) 292-5340.
The Business Council has made debt reform as one of its end-of-session priorities, and has come out in support of A.11515 and A.11516 (Morelle). This legislation, which largely reflects the comprehensive reform package proposed earlier this year by Comptroller Hevesi, contains the following key provisions:
- it limits the state's debt to 5 percent of personal income, and - starting immediately - limiting debt issuance to 95 percent of the previous year's level. These caps will apply to all "state funded debt," which includes all debt for which the state makes direct or indirect payments.
- it precludes the issuance of state debt for purposes other than funding capital projects, and precludes issuance of debt with a maturity period of more than 30 years.
- it requires that a portion of any end-of-fiscal year cash surplus be devoted to state debt reduction.
The bill has twenty-four co-sponsors, including DeStito, Canestrari, Weprin, Lavelle, DelMonte, Gianaris, Reilly, Lupardo, Benedetto, Benjamin, Boyland, Carroza, A. Cohen, Fields, Galef, Hevesi, Hoyt, Koon, Lavine, Magee, Mayerson, Robinson, Sweeney, and Zebrowski.
The bill is expected to be introduced in the Senate within the next several days.
The Business Council urges members to contact their Senate representatives to urge them to introduce, sponsor, and support passage of this key reform measure; to contact Assembly sponsors to congratulate them on their support; and to contact your Assembly members to urge passage before close of the 2006 session.