Cohen v. State Tax Com'n of State of N.Y.

• Decision Date: 26 March 1987
• Citation: 128 A.D.2d 1022,513 N.Y.S.2d 564
• Parties: In the Matter of Paul COHEN, Petitioner, v. STATE TAX COMMISSION OF the STATE OF NEW YORK, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 564

513 N.Y.S.2d 564

128 A.D.2d 1022

In the Matter of Paul COHEN, Petitioner, v. STATE TAX COMMISSION OF the STATE OF NEW YORK, Respondent.

Supreme Court, Appellate Division,

Third Department.

March 26, 1987.

Bertram Zweibon, New York City, for petitioner.

Robert Abrams, Atty. Gen. (Leslie B. Neustadt, of counsel), Albany, for respondent.

Before MAHONEY, P.J., and MAIN, CASEY, MIKOLL and HARVEY, JJ.

MAIN, Justice.

Proceeding pursuant to CPLR article 78 (transferred to this court by order of the Supreme Court, entered in Albany County) to review a determination of respondent which sustained a sales and use tax assessment imposed under Tax Law articles 28 and 29.

This CPLR article 78 proceeding involves the question of whether petitioner, a full-time attorney and vice-president and secretary of Standard Beauticians Supply, Inc. (Standard), is personally liable for payment of sales and use taxes owed by Standard as a person required to collect such taxes pursuant to Tax Law § 1133(a). Petitioner contends that the facts presented to respondent demonstrated that he was not involved in Standard's day-to-day operations, performed no duties in his capacities as vice-president and secretary, never signed checks for Standard although authorized to do so and never prepared or signed Standard's tax returns. Hence, he asserts, he could not be considered a person required to collect sales and use taxes. We disagree, and accordingly confirm respondent's determination.

On review of a determination of respondent, petitioner bears the burden of proving that the record has insufficient facts to support respondent's determination; the determination must be upheld if it has a rational basis and there is substantial evidence in support thereof (Matter of Rosenblatt v. New York State Tax Commn., 114 A.D.2d 127, 132, 498 N.Y.S.2d 529 [Mikoll, J., concurring in part and dissenting in part], revd. in part on dissenting opn. below 68 N.Y.2d 775, 506 N.Y.S.2d 675, 498 N.E.2d 148). In a case such as that presented here, a person required to collect a sales or use tax is defined as "any officer or employee of a corporation * * * who as such officer or employee is under a duty to act for such corporation in complying with any requirement of [article 28]" (Tax Law former § 1131 [1], as amended by L.1985, ch. 65, § 77). The determination of whether a person has such a duty is factual (Matter of Rosenblatt v. New York State Tax Commn., supra, p. 131, 498 N.Y.S.2d 529) and pertinent factors in making the determination include the authority to hire and fire employees, status as an officer, director or stockholder, authority to sign checks and prepare returns, responsibility for management and derivation of substantial income from the corporation (see, 20 NYCRR 526.11[b][2]; Matter of Blodnick v. New York State Tax Commn., 124 A.D.2d 437, 507...