Here are the sales tax cases from the TiNY Report for the week of December 21, 2024.
Determinations
Matter of Nacmias & Sons Auto Service, LLC (Judge Behuniak, November 21, 2024); Div’s Rep. Melanie Spaulding, Esq.; Pet’s Rep. Norman Berkowitz, Esq.; Articles 28 and 29/Successor liability (Zoe Peppas).
In 2008, Petitioner entered into a purchase agreement with Coney Island Sunoco Service Station, Inc., for the purchase of business assets. However, Petitioner did not provide the Division notice of its bulk purchase of the assets. The Division determined Petitioner was a bulk sale purchaser and therefore liable for sales taxes owed by Coney Island. The Division issued a notice of determination to Petitioner in April 2010 for those taxes. Thereafter, it appears that the Division diverted many of Petitioner’s regular sales tax payments to pay-down the bulk sale liability from Coney Island Service Station. On January 27, 2021, Petitioner filed a refund claim for the tax moneys it said had been improperly diverted by the Division.
The Division denied Petitioner’s refund claim because, allegedly, (a) the refund claim was not filed within three years from the time the return was filed or two years from the time the tax was paid, and (b) the assessments related to the claim were the result of a bulk sale transaction. Petitioner then filed a petition at DTA protesting the refund denial.
Petitioners bear the burden to prove an assessment is incorrect. But a petitioner who fails to timely protest a notice of determination “may still be entitled to subsequently protest the denial of a refund of the associated liability after payment thereof.” Though Petitioner failed to timely protest the 2010 notice of determination, it timely protested the refund denial notice. However, Petitioner failed to prove when or how much of the taxes had been paid within the two years prior to the filing of Petitioner’s refund claim. Therefore, Petitioner was determined to have failed to meet its burden to prove entitlement to the claimed refund, and the Judge sustained the Division’s refund claim denial.
