Unlawful Tax Collection Rule
Proposed Rules: Closed to Comments
Statement of Basis and Purpose of Proposed Rule
Section 2203 of Chapter 64 of the Charter of the City of New York authorizes the Commissioner to enforce laws prohibiting deceptive trade practices, and, upon notice and hearing, to impose civil penalties for the violation of such laws. Section 2203(h)(3) provides that no act or practice shall be deemed a deceptive trade practice unless it has been declared as such, and described with reasonable particularity in a law or rule promulgated by the Commissioner.
Pursuant to Title 20 of the New York City Administrative Code, the Department regulates merchants in New York City and promulgates rules and regulations to protect consumers in the marketplace. Article 28 of the New York State Tax law specifies the categories of goods and services that are subject to sales and use taxes. The proposed rule is necessary to declare that collection of sales taxes on goods and services that are not subject to such tax laws shall be a deceptive trade practice for purposes of Section 20-701 of Subchapter 1 of Chapter 5 of Title 20 of the New York City Administrative Code.
“Shall” and “must” denote mandatory requirements and may be used interchangeably in the rules of this department, unless otherwise specified or unless the context clearly indicates otherwise.
New text is underlined; deleted material is in [brackets].
Part 4 of Subchapter A of Chapter 5 of Title 6 of the Rules of the City of New York is amended by adding a new Section 5-41 to read as follows:
§5-41 Unlawful Sales Tax.
It is a deceptive trade practice for any seller to collect sales tax on the sale of any good or service that is not subject to such tax under Article 28 of the New York State Tax Law or the rules and regulations promulgated thereunder.