MoFo New York Tax Insights - Volume 2, Issue 4 - April 2011

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In this issue: Tribunal Holds That Television Broadcaster Cannot Include Film in its Property Factor; Department Limits Application of Article 9-A Separate Accounting Election; Tribunal Grants State’s Motion to Reargue Residency Case; Estimated Sales Tax Assessment Annulled as Lacking a Rational Basis; Merger of Two Residential Cooperative Corporations Subject to Real Estate Transfer Tax Twice; Third Department Upholds Fraud Penalty in Sales Tax Case; Target Investment Tax Credit Carryover Available to Parent in § 338(h)(10) Election; and Insights in Brief.

Excerpt from 'Tribunal Holds...' below:

Upholding a policy first announced by the Department of Taxation and Finance in 2008, the New York State Tax Appeals Tribunal has affirmed the decision of an Administrative Law Judge that film cannot be included in the property factor, reversing years of contrary treatment in New York. Matter of Meredith Corporation, DTA No. 822396 (N.Y.S. Tax App. Trib., Mar. 10, 2011).

The dispute concerned the petitioner’s television broadcasting business, operated out of its headquarters in Des Moines, Iowa, during the tax years ended June 30, 1998, June 30, 1999, and June 30, 2000. During the course of an audit, the petitioner sought to include in its property factor payments it made to secure television programming from various third parties. The petitioner was initially advised by auditors from the Department that programming delivered on videocassette was properly included in the property factor calculation, but not programming delivered by satellite transmission. The petitioner then filed refund claims for each year, premised on including in its property factor all payments for programming.

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