Sunshine Developers, Inc. v. Tax Com'n of State of N.Y.

Decision Date02 July 1987
Citation517 N.Y.S.2d 317,132 A.D.2d 752
PartiesIn the Matter of SUNSHINE DEVELOPERS, INC., et al., Petitioners, v. TAX COMMISSION OF the STATE OF NEW YORK, Respondent.
CourtNew York Supreme Court — Appellate Division

Simon, Uncyk & Borenkind (Eli Uncyk, of counsel), New York City, for petitioners.

Robert Abrams, Atty. Gen. (Francis V. Dow, of counsel), Albany, for respondent.

Before MAHONEY, P.J., and KANE, CASEY, WEISS and LEVINE, JJ.

MAHONEY, Presiding 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 partially sustained a sales and use tax assessment imposed under Tax Law articles 28 and 29.

Petitioner Sunshine Developers, Inc. was incorporated in Delaware in 1977 for the purpose of buying boats and chartering them to businesses for entertaining clients. Sunshine's place of business is in Fort Lee, New Jersey. Petitioner Joe Morris is the president of Sunshine. This proceeding concerns the purchase by Sunshine of two boats, a 33-foot "Egg Harbor" in 1977 and a 42-foot "Post Sport Fisherman" in 1978. The boats were purchased from sellers located in New York, but the boats were delivered outside this State. No sales tax was paid on either purchase. The boats were rented to other corporations as part of Sunshine's business. Both boats were docked primarily outside New York, but stopped and docked occasionally in New York. The boats were ultimately sold.

In October 1982, the Audit Division of the State Department of Taxation and Finance determined that sales and use tax was due on the purchase or use of the boats in New York and issued a notice of deficiency in the amount of $10,804 plus penalty and interest of $8,131. After a hearing, it was determined by respondent that, since the boats were delivered outside New York, the sales were not subject to sales tax. Further, since the "Egg Harbor" boat was brought to this State on a sporadic basis, it was not sufficiently used in this State to trigger the use tax. However, it was determined that the "Post Sport Fisherman" was moored in New York on a seasonal basis. Accordingly since the boat was used in this State, it was determined that use tax was due in connection therewith. Petitioners commenced this CPLR article 78 proceeding challenging so much of respondent's determination as upheld the use tax assessment on the Post boat. The proceeding has been transferred to this court for disposition.

The use tax statute provides:

Except to the extent that property or services have already been or will be subject to the sales tax under this article, there is hereby imposed on every person a use tax for the use within this state * * * except as otherwise exempted under this article, (A) of any tangible personal property purchased at retail (Tax Law § 1110).

The Tax Law defines "use" as:

The exercise of any right or power over tangible personal property by the purchaser thereof and includes, but is not limited to, the receiving, storage or any keeping or retention for any length of time, withdrawal from storage, any installation, any affixation to real or personal property, or any consumption of such property (Tax Law § 1101).

The statute goes on to provide an exemption for the use of property by a nonresident of this State, but provides that any person engaged in carrying on any employment, trade, business or profession in New York shall not be deemed a nonresident for purposes of this exemption (Tax Law § 1118). Thus, the issue in this case is twofold: first, whether petitioners "used" the Post boat in New York so as to be subject to use tax and, second, whether petitioners carried on a business in New York, thus failing to qualify for the nonresident exemption. While respondent properly notes that the burden is on petitioners to prove entitlement to the exemption (see, Matter of Saratoga Harness Racing...

To continue reading

Request your trial
3 cases
  • Morris v. New York State Dept. of Taxation and Finance
    • United States
    • New York Court of Appeals Court of Appeals
    • October 19, 1993
    ...Department assessed sales and use taxes against Sunshine for the purchase and use of these boats (see, Matter of Sunshine Developers v. Tax Commn., 132 A.D.2d 752, 517 N.Y.S.2d 317, lv denied 70 N.Y.2d 609, 522 N.Y.S.2d 109, 516 N.E.2d 1222). On appeal, an Administrative Law Judge (ALJ), fi......
  • Mareno v. State of N.Y. Tax Com'n
    • United States
    • New York Supreme Court — Appellate Division
    • October 20, 1988
    ...of the signature simply raised a credibility issue for respondent to resolve (see, Matter of Sunshine Developers v. Tax Commn. of State of N.Y., 132 A.D.2d 752, 754, 517 N.Y.S.2d 317, lv. denied 70 N.Y.2d 609, 522 N.Y.S.2d 109, 516 N.E.2d 1222). Respondent could further assess whether deliv......
  • Sunshine Developers, Inc. v. Tax Commission of State of New York
    • United States
    • New York Court of Appeals Court of Appeals
    • October 15, 1987
    ...of Sunshine Developers, Inc., v. Tax Commission of the State of New York NO. 954 COURT OF APPEALS OF NEW YORK OCT 15, 1987 132 A.D.2d 752, 517 N.Y.S.2d 317 MOTION FOR LEAVE TO Denied. ...
1 firm's commentaries
  • MoFo New York Tax Insights, Volume 6, Issue 11, November 2015
    • United States
    • Mondaq United States
    • November 19, 2015
    ...tax. See Matter of Sunshine Developers, TSB-H-86(84) S (N.Y.S. Tax Comm'n, Dec. 13, 1985), confirmed, Sunshine Developers v. Tax Comm'n, 132 A.D.2d 752 (N.Y. App. Div. 1987); Matter of Jamco Investments, TSB-H-86(19)S (N.Y.S. Tax Comm'n, Jan. 17, The ALJ further determined that Department r......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT