Landau v. Tax Appeals Tribunal of State of N.Y.

• Citation: 214 A.D.2d 857,625 N.Y.S.2d 343
• Parties: In the Matter of Robert LANDAU, Petitioner, v. TAX APPEALS TRIBUNAL OF the STATE OF NEW YORK et al., Respondents.
• Decision Date: 20 April 1995
• Court: New York Supreme Court Appellate Division

Page 343

625 N.Y.S.2d 343

214 A.D.2d 857

In the Matter of Robert LANDAU, Petitioner, v. TAX APPEALS TRIBUNAL OF the STATE OF NEW YORK et al., Respondents.

Supreme Court, Appellate Division Third Department.

April 20, 1995.

Kamerman & Soniker, P.C. (Jerome Kamerman, of counsel), New York City, for petitioner.

Dennis C. Vacco, Atty. Gen. (John McConnell, of counsel), Albany, for Com'r of Taxation and Finance of the State of N.Y., respondent.

Before MIKOLL, J.P., and MERCURE, CREW, YESAWICH and PETERS, JJ.

MERCURE, Justice.

Proceeding pursuant to CPLR article 78 (initiated in this court pursuant to Tax Law § 2016) to review a determination of respondent Tax Appeals Tribunal which sustained a sales and use tax assessment imposed under Tax Law articles 28 and 29.

The Department of Taxation and Finance conducted a sales and use tax audit of Robert Landau Associates Ltd. (hereinafter RLA) for the period December 1, 1980 through May 31, 1984. Because of RLA's undisputed failure to adequately comply with the Department's requests for various records, the Department elected to perform a test audit for a one-month representative period, thereafter reduced by agreement to a review of RLA's larger sales for the period April 4, 1983 through April 11, 1983. The Department found total sales of $503,350.35 for the test period, of which $87,417.60 or 17.38% thereof was determined to be taxable. Applied to RLA's gross billings for the audit period, that taxable ratio yielded a total tax liability of well over $1 million, which was assessed against, inter alia, petitioner, RLA's president and chief executive officer, as a person required to collect tax (see, Tax Law § 1131[1]. Except for minor adjustments, the assessment was sustained following administrative review and appeal to respondent Tax Appeals Tribunal.

Initially, we reject the contention that there was not an adequate basis for imposing personal liability against petitioner. Tax Law § 1133(a) imposes personal liability upon "every person required to collect any tax imposed by [Tax Law article 28]", defined in Tax Law § 1131(1) to encompasses "any officer, director or employee of a corporation * * * under a duty to act for such corporation * * * in complying with any requirement of [Tax Law article 28]" and including one "who is responsible for the corporation's management" (20 NYCRR 526.11[b][2]. Although not every corporate officer will be found responsible for the collection of sales tax, here the evidence showed that in his undisputed capacity as president, chief executive officer and sole stockholder of RLA, petitioner received an annual salary of $600,000, had the authority to and did hire and fire employees, had the authority to write checks and was responsible for the daily management of the corporation, thereby providing ample evidentiary support for the factual finding that petitioner was personally liable for payment of the tax (see,20 NYCRR 526.11[b][2]; Matter of Cohen v. State Tax Commn., 128 A.D.2d 1022, 513 N.Y.S.2d 564; Matter of Blodnick v. New York State Tax Commn., 124 A.D.2d 437, 507 N.Y.S.2d 536, appeal dismissed 69 N.Y.2d 822, 513 N.Y.S.2d 1027, 506 N.E.2d 537; Matter of Capoccia v. New York State Tax Commn., 105 A.D.2d 528, 481 N.Y.S.2d 476).

We are not persuaded that the liability imposed by Tax Law § 1133(a) may be evaded by simply delegating responsibility to a subordinate (see, ...