Tax Committee Update
May 12, 2011
Staff Contact: Ken Pokalsky
We hope you will be able to join us at our 2011 Annual Conference on State Taxation, to be held Tuesday, May 17 at the Crowne Plaza Hotel in Albany. This event is focused on helping Tax Committee members and business lobbyist better understand current legislative, regulatory and policy developments state tax law. This year's agenda features presentations by Tax Commissioner Thomas Mattox, Budget Director Robert Megna, and other key departmental and legislative representatives. The agenda also features a session on corporate tax basics for non-tax professionals. For more information, click Agenda, Registration and Sponsorship Opportunities.
The Department of Tax and Finance held the first meeting of its business Taxpayer Advisory Committee (TAC) under new Commissioner Thomas Mattox on May 3. The Business Council and a number of Council members have a seat on the TAC. The agenda included:
- An update on the Department's e-filing and tax processing initiatives; they reported that for PIT, e-filings increased to 80%. They also discussed sales tax initiatives, including their interest in proposing legislation requiring all vendors to hold sales tax receipts in segregated accounts with a “sweep feature;” raised the possibility of designating certain point of sale software as either required for use in certain instances (e.g., where vendors have had compliance issues) or as a “safe harbor” for demonstrating correction collections of sales tax; and possibility of restoring or increasing the sales tax vendor collection credit.
- A report on audit process improvements, initiated by a 2009 subcommittee of the TAC, which resulted in standardized audit work plans and document request forms for all Department audits, steps now being implementEd. (Note that this presentation is also on the agenda for next week's TBC tax conference, see note above.)
- They provided an updated organization and contact chart for the Department's Executive offices, audit division, enforcement divisions, district audit offices and taxpayer assistance contacts. This new directory is available on our web site here.
- At the Department's request, The Business Council made several recommendations for projects to be addressed through the TAC. These included:
- Improving the Department's advisory opinion process, which was criticized for both being too slow to issue AOs, and at times resulting in AOs that are based on narrow, taxpayer-specific circumstances but have an unintentionally broad effect on the Department's audit activities. The Department's prohibition on anonymous requests for AOs was also questioned.
- Improving the Department's payroll audit practices.
- Examining the availability to business taxpayers of audit and other departmental actions, and raising the possibility of improved “intervention” services to address instances where unresolved tax issues on a business taxpayer's business activities in the state, such as government procurement contracts, permits and licenses. TAC members cited efforts by other states, specifically New Jersey.
- Improving the process for issuing and expunging tax warrants. Concerns seemed to focus on long delays at the county clerk level. The Department said they routinely do expedited clearing of warrants through the office of Taxpayer Advocate. The Department also raised the issue of legislation allowing it to do income execution and wage garnishment without warrants as can the IRS.
- Simplifying the sales tax vendor renewal process.
The Department expressed interest in each of these recommendations; we are working with Department staff to identify specific next steps for each item, and to identify TAC members interested in working on specific projects. We will reach out to our Tax Committee members for input as well. Please feel free to contact me if you are interested in any of these potential TAC projects.
The Department also reported that it has been meeting with the Division of Budget on tax issues for inclusion in the FY 2013 Executive Budget, including a version of the Department's draft Article 9A/Article 32 reform and integration bill (the most recent bill draft is available here and bill summary is available here.) The Department said they were hearing increased interest from some business interests in moving forward with this legislation, and that there was at least a “50/50 chance” they would formally proposed this legislation in the next Executive Budget.
As we continue to pursue improvements in the state's real property tax assessment practices, the state issued a report this week bolstering our arguments supporting reforms. State Comptroller Tom Dinapoli released a report this week illustrating the cost of the high number of local assessing units in New York State. His report found that the state could save more than $12 million a year by improving assessment procedures and consolidating local government assessment duties. The report found that in 2009, New York's city, county, town and village assessing units spent $132 million and employed 1,350 assessors, tax directors and assessment appraisers. The report found that most states have fewer than 100 assessing units and only seven have more than 500. New York has approximately 1,110. Of those, 981 are towns and cities and two are counties. The Business Council's Tax Committee is working on a number of RPT administrative reform proposals, including moving the state toward county level assessments and adoption of uniform assessment standards for local taxing jurisdictions. We believe this will not only reduce administrative costs, but will improve the quality and accuracy of assessments, and avoid significant over-assessment of business property.
If you are interested in our Tax Committee's efforts on real property tax administrative reforms, please give me a call at your convenience.