§ 875. Special provisions applicable to state sales and compensating
use taxes and certain types of facilities. 1. For purposes of this
section: "state sales and use taxes" means sales and compensating use
taxes and fees imposed by article twenty-eight or twenty-eight-A of the
tax law but excluding such taxes imposed in a city by section eleven
hundred seven or eleven hundred eight of such article twenty-eight.
"IDA" means an industrial development agency established by this article
or an industrial development authority created by the public authorities
law. "Commissioner" means the commissioner of taxation and finance.

2. An IDA shall keep records of the amount of state and local sales
and use tax exemption benefits provided to each project and each agent
or project operator and shall make such records available to the
commissioner upon request. Such IDA shall also, within thirty days of
providing financial assistance to a project that includes any amount of
state sales and use tax exemption benefits, report to the commissioner
the amount of such benefits for such project, the project to which they
are being provided, together with such other information and such
specificity and detail as the commissioner may prescribe. This report
may be made in conjunction with the statement required by subdivision
nine of section eight hundred seventy-four of this title or it may be
made as a separate report, at the discretion of the commissioner. An IDA
that fails to make such records available to the commissioner or to file
such reports shall be prohibited from providing state sales and use tax
exemption benefits for any project unless and until such IDA comes into
compliance with all such requirements.

3. (a) An IDA shall include within its resolutions and project
documents establishing any project or appointing an agent or project
operator for any project the terms and conditions in this subdivision,
and every agent, project operator or other person or entity that shall
enjoy state sales and use tax exemption benefits provided by an IDA
shall agree to such terms as a condition precedent to receiving or
benefiting from such state sales and use exemptions benefits.

(b) The IDA shall recover, recapture, receive, or otherwise obtain
from an agent, project operator or other person or entity state sales
and use exemptions benefits taken or purported to be taken by any such
person to which the person is not entitled or which are in excess of the
amounts authorized or which are for property or services not authorized
or taken in cases where such agent or project operator, or other person
or entity failed to comply with a material term or condition to use
property or services in the manner required by the person's agreement
with the IDA. Such agent or project operator, or other person or entity
shall cooperate with the IDA in its efforts to recover, recapture,
receive, or otherwise obtain such state sales and use exemptions
benefits and shall promptly pay over any such amounts to the IDA that it
requests. The failure to pay over such amounts to the IDA shall be
grounds for the commissioner to assess and determine state sales and use
taxes due from the person under article twenty-eight of the tax law,
together with any relevant penalties and interest due on such amounts.

(c) If an IDA recovers, recaptures, receives, or otherwise obtains,
any amount of state sales and use tax exemption benefits from an agent,
project operator or other person or entity, the IDA shall, within thirty
days of coming into possession of such amount, remit it to the
commissioner, together with such information and report that the
commissioner deems necessary to administer payment over of such amount.
An IDA shall join the commissioner as a party in any action or
proceeding that the IDA commences to recover, recapture, obtain, or
otherwise seek the return of, state sales and use tax exemption benefits
from an agent, project operator or other person or entity.

(d) An IDA shall prepare an annual compliance report detailing its
terms and conditions described in paragraph (a) of this subdivision and
its activities and efforts to recover, recapture, receive, or otherwise
obtain state sales and use exemptions benefits described in paragraph
(b) of this subdivision, together with such other information as the
commissioner and the commissioner of economic development may require.
The report required by this subdivision shall be filed with the
commissioner, the director of the division of the budget, the
commissioner of economic development, the state comptroller, the
governing body of the municipality for whose benefit the agency was
created, and may be included with the annual financial statement
required by paragraph (b) of subdivision one of section eight hundred
fifty-nine of this title. Such report required by this subdivision shall
be filed regardless of whether the IDA is required to file such
financial statement described by such paragraph (b) of subdivision one
of section eight hundred fifty-nine. The failure to file or
substantially complete the report required by this subdivision shall be
deemed to be the failure to file or substantially complete the statement
required by such paragraph (b) of subdivision one of such section eight
hundred fifty-nine, and the consequences shall be the same as provided
in paragraph (e) of subdivision one of such section eight hundred
fifty-nine.

(e) This subdivision shall apply to any amounts of state sales and use
tax exemption benefits that an IDA recovers, recaptures, receives, or
otherwise obtains, regardless of whether the IDA or the agent, project
operator or other person or entity characterizes such benefits
recovered, recaptured, received, or otherwise obtained, as a penalty or
liquidated or contract damages or otherwise. The provisions of this
subdivision shall also apply to any interest or penalty that the IDA
imposes on any such amounts or that are imposed on such amounts by
operation of law or by judicial order or otherwise. Any such amounts or
payments that an IDA recovers, recaptures, receives, or otherwise
obtains, together with any interest or penalties thereon, shall be
deemed to be state sales and use taxes and the IDA shall receive any
such amounts or payments, whether as a result of court action or
otherwise, as trustee for and on account of the state.

4. The commissioner shall deposit and dispose of any amount of any
payments or moneys received from or paid over by an IDA or from or by
any person or entity, or received pursuant to an action or proceeding
commenced by an IDA, together with any interest or penalties thereon,
pursuant to subdivision three of this section, as state sales and use
taxes in accord with the provisions of article twenty-eight of the tax
law. The amount of any such payments or moneys, together with any
interest or penalties thereon, shall be attributed to the taxes imposed
by sections eleven hundred five and eleven hundred ten, on the one hand,
and section eleven hundred nine of the tax law, on the other hand, or to
any like taxes or fees imposed by such article, based on the proportion
that the rates of such taxes or fees bear to each other, unless there is
evidence to show that only one or the other of such taxes or fees was
imposed or received or paid over.

5. The statement that an IDA is required by subdivision nine of
section eight hundred seventy-four of this article to file with the
commissioner shall not be considered an exemption or other certificate
or document under article twenty-eight or twenty-nine of the tax law.
The IDA shall not represent to any agent, project operator, or other
person or entity that a copy of such statement may serve as a sales or
use tax exemption certificate or document. No agent or project operator
may tender a copy of such statement to any person required to collect
sales or use taxes as the basis to make any purchase exempt from tax. No
such person required to collect sales or use taxes may accept such a
statement in lieu of collecting any tax required to be collected. The
civil and criminal penalties for misuse of a copy of such statement as
an exemption certificate or document or for failure to pay or collect
tax shall be as provided in the tax law. In addition, the use by an IDA
or agent, project operator, or other person or entity of such statement,
or the IDA's recommendation of the use or tendering of such statement,
as such an exemption certificate or document shall be deemed to be,
under articles twenty-eight and thirty-seven of the tax law, the
issuance of a false or fraudulent exemption certificate or document with
intent to evade tax.

6. The commissioner is hereby authorized to audit the records,
actions, and proceedings of an IDA and of its agents and project
operators to ensure that the IDA and its agents and project operators
comply with all the requirements of this section. Any information the
commissioner finds in the course of such audit may be used by the
commissioner to assess and determine state and local taxes of the IDA's
agent or project operator.

7. In addition to any other reporting or filing requirements an IDA
has under this article or other law, an IDA shall also report and make
available on the internet, without charge, copies of its resolutions and
agreements appointing an agent or project operator or otherwise related
to any project it establishes. It shall also provide, without charge,
copies of all such reports and information to a person who asks for it
in writing or in person. The IDA may, at the request of its agent or
project operator delete from any such copies posted on the internet or
provided to a person described in the prior sentence portions of its
records that are specifically exempted from disclosure under article six
of the public officers law.

8. In consultation with the commissioner of economic development, the
commissioner of taxation and finance is hereby authorized to adopt rules
and regulations and to issue publications and other guidance
implementing the provisions of this section and of the other sections of
this article relating to any state or local tax or fee, or exemption or
exclusion therefrom, that the commissioner administers and that may be
affected by any provision of this article, and any such rules and
regulations of the commissioner shall have the same force and effect
with respect to such taxes and fees, or amounts measured in respect of
them, as if they had been adopted by the commissioner pursuant to the
authority of the tax law.

9. To the extent that a provision of this section conflicts with a
provision of any other section of this article, the provisions of this
section shall control.