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SECTION 280-A
Rebate for stock transfer tax paid; penalty for false claims
Tax (TAX) CHAPTER 60, ARTICLE 12
§ 280-a. Rebate for stock transfer tax paid; penalty for false claims.
1. Except as otherwise provided in subdivision fifteen of this section,
where a tax shall have been paid under this article a portion of the
amount paid shall be allowed as a rebate and such portion shall be paid
to the taxpayer but only to the extent that moneys are available for the
payment of such rebates in the stock transfer incentive fund established
pursuant to section ninety-two-i of the state finance law. The portion
of the amount of tax paid which is to be allowed as a rebate shall be
thirty percent of the tax incurred and paid on transactions subject to
the stock transfer tax occurring on and after October first, nineteen
hundred seventy-nine and on or before September thirtieth, nineteen
hundred eighty and sixty percent of the tax incurred and paid on such
transactions occurring on and after October first, nineteen hundred
eighty and on or before September thirtieth, nineteen hundred eighty-one
and all of the amount of tax incurred and paid shall be allowed as a
rebate on transactions subject to the stock transfer tax occurring on
and after October first, nineteen hundred eighty-one.

2. Notwithstanding the provisions of subdivision one of this section
with respect to the percentages of tax allowable as rebates, the portion
of the amount of stock transfer tax paid which is to be allowed as a
rebate to a nonresident shall be fifty percent of the tax incurred and
paid on transactions subject to stock transfer tax occurring on and
after October first, nineteen hundred seventy-seven and on or before
July thirty-first, nineteen hundred seventy-eight and thirty-seven and
one-half percent with respect to such transactions occurring on and
after August first, nineteen hundred seventy-eight and on or before
September thirtieth, nineteen hundred eighty, and thereafter the
portions set forth in subdivision one of this section shall be
applicable.

2-a. In addition to the rebate allowable under the provisions of
subdivision one of this section, the portion of the amount of stock
transfer tax paid which is to be allowed as a rebate to any person,
firm, company or corporation registered with the United States
securities and exchange commission in accordance with subsection (b) of
section fifteen of the securities exchange act of nineteen hundred
thirty-four, as amended, and acting as a dealer in a transaction
described in paragraph (e) of subdivision twelve of this section, other
than such a person, firm, company or corporation liable to file a report
or return under article nine-A of this chapter, or article twenty-three
of this chapter, (as such article was in effect on or before December
thirtieth, nineteen hundred eighty-two), shall be one hundred percent of
the stock transfer tax incurred and paid on transactions subject to the
stock transfer tax executed by such person, firm, company or corporation
pursuant to the acceptance of an order placed through an intermarket
linkage system developed pursuant to subsection (a) of section eleven-A
of such securities exchange act under a plan submitted by one or more
national securities exchanges or national securities associations
registered with such securities and exchange commission occurring on and
after April seventeenth, nineteen hundred seventy-eight and on or before
September thirtieth, nineteen hundred seventy-nine, seventy percent of
the tax incurred and paid on such a transaction occurring on and after
October first, nineteen hundred seventy-nine and on or before September
thirtieth, nineteen hundred eighty and forty percent of the tax incurred
and paid on such a transaction occurring on and after October first,
nineteen hundred eighty and on or before September thirtieth, nineteen
hundred eighty-one. Notwithstanding any other provision of law, the net
amount to be rebated to any such person, firm, company or corporation
under this subdivision with respect to stock transfer tax allowable as
rebates during each of the periods ending on September thirtieth
hereinbefore set forth shall not be allowed or paid prior to the first
day of the eighth month following September thirtieth of each of such
periods nor until the subsequent date on which the commissioner of
taxation and finance shall next determine the amount allowable as
rebates pursuant to the provisions of section ninety-two-i of the state
finance law, provided, however, that the net amount to be allowed for
the April seventeenth, nineteen hundred seventy-eight through September
thirtieth, nineteen hundred seventy-eight period shall not be allowed or
paid until the last business day of June, nineteen hundred seventy-nine.

No rebate shall be allowed under this subdivision with respect to any
stock transfer tax incurred in a market making transaction occurring on
or after October first, nineteen hundred eighty-one. No rebate shall be
allowed or paid under this subdivision for stock transfer tax paid
pursuant to section two hundred seventy-nine-a of this chapter nor shall
any rebate be allowed or paid until the person, firm, company or
corporation claiming the rebate complies with the rules, regulations and
instructions of the state tax commission issued under this article
including furnishing of a just and true book of account within the state
as may be required by the state tax commission.

3. Except as provided in subdivision six of this section, rebates may
be paid only upon the filing of a claim for rebate with the state tax
commission. All claims for rebate shall be presented in such form and
contain such information as the state tax commission, by rule,
regulation or instruction, shall prescribe and shall be presented within
two years after the affixing and cancelling of stock transfer tax stamps
or payment of the tax otherwise than by the use of stamps.

4. Every such claim shall include a certificate by or on behalf of the
party presenting the same to the effect that it is just, true and
correct, that the amount of stock transfer tax stated thereon has been
paid to the state and that the amount of rebate requested is actually
due and owing. The state tax commission, if satisfied that the tax has
actually been paid, shall rebate the same in accordance with the
provisions of this section on the audit and warrant of the state
comptroller on vouchers approved by the commissioner of taxation and
finance.

5. The state tax commission shall grant or deny such claim in the
manner provided in section two hundred eighty of this article and the
remaining provisions of such section, relating to determination of tax,
hearing, decision of the state tax commission, the exclusive manner of
review of such decision, and the requirement of an undertaking, shall
apply to the provisions of this section with the same force and effect
as if the language of such section had been incorporated in full into
this section and had expressly referred to the rebate under this
section, except to the extent that any such provision is either
inconsistent with or not relevant to this section. All of the other
provisions of this article relating to refunds shall apply to the rebate
of tax provided for by this section in the same manner and with the same
force and effect as if the language of such provisions had been
incorporated in full into this section and had expressly referred to the
rebates of tax provided for under this section, except to the extent
that any such provision is either inconsistent with a provision of this
section or is not relevant to this section and except that the term
"refund" as used in such provisions shall be read as "rebate".

6. (a) Notwithstanding the provisions of section two hundred
eighty-one-a of this chapter, the tax imposed by this article may be
paid, and rebates provided for in subdivisions one and two of this
section shall be allowed without the filing of the claim required by
subdivision three of this section, in the manner and upon the filing of
the report referred to in paragraph (b) of this subdivision in the case
where payment of the tax imposed by this article is made by any member
of any securities exchange or any registered dealer who or which is
permitted or required pursuant to the provisions of such section two
hundred eighty-one-a of this chapter to pay such tax without the use of
the stamps prescribed by this article.

(b) On the written report required to be made to or through a
securities exchange located within this state, affiliated clearing
corporation or to a qualified securities exchange, qualified clearing
corporation, authorized agency or the tax commission by each such member
or dealer under such section two hundred eighty-one-a, there shall also
be shown the amount of the rebate of tax shown to be due thereon, which
would be allowable by this section if the full amount of tax is paid
with such report. The net amount required to be paid for the account of
the tax commission to or through such exchange located within this
state, affiliated clearing corporation or to such authorized agency and
remitted to the tax commission pursuant to such section or such amount
required to be paid to the tax commission shall be the amount of tax
shown to be due on such written report (determined without regard to any
rebate allowable under this section) less the amount of any such rebate,
subject to the provisions of subdivision eight of this section.
Notwithstanding the provisions of section two hundred eighty-one-a of
this article, on the next-to-the-last business day of the department of
taxation and finance in each of the months of September, December, March
and June, each such member or dealer shall show on such report the
aggregate amount of rebates shown daily on such report for the period of
three full months ending on such next-to-the-last business day. On the
last business day of each of such months, an amount equal to such
aggregate amount shall be paid by such member or dealer for the account
of the tax commission to or through such exchange located within this
state, affiliated clearing corporation or authorized agency and remitted
by such exchange, affiliated clearing corporation or authorized agency
to the tax commission by separate check or wire transfer. The amount so
remitted shall constitute the total amount of rebates provided in
subdivisions one and two of this section payable in the manner described
in this subdivision, which amount shall be included in the amount
required to be paid from the stock transfer tax fund into the stock
transfer incentive fund on each such last day pursuant to sections
ninety-two-b and ninety-two-i of the state finance law; provided,
however, that if such exchange located within this state, affiliated
clearing corporation, qualified securities exchange, qualified clearing
corporation or authorized agency shall determine that the payment by any
member or dealer of any tax imposed by this article will be jeopardized
by delay, it shall forthwith notify the tax commission of such
condition, or if the tax commission believes that the collection of any
tax will be jeopardized by delay, it may determine the amount of such
tax and assess the same against any such member or dealer prior to the
filing of his report and prior to the date when his report is required
to be made to an exchange located within this state, affiliated clearing
corporation, qualified securities exchange, qualified clearing
corporation or authorized agency. The amount so determined shall become
due and payable to the tax commission by the member or dealer against
whom such a jeopardy assessment is made, as soon as notice thereof is
given to him personally or by registered or certified mail. The
provisions of section two hundred seventy-nine-a shall apply to any such
determination except to the extent that they may be inconsistent with
the provisions of this subdivision. The tax commission may abate any
jeopardy assessment if it finds that jeopardy does not exist. The
collection of any jeopardy assessment may be stayed by filing with the
tax commission a bond issued by a surety company authorized to transact
business in this state and approved by the superintendent of financial
services as to solvency and responsibility, conditioned upon payment of
the amount assessed, or any lesser amount to which such assessment may
be reduced by the tax commission or by a proceeding under article
seventy-eight of the civil practice law and rules as provided in section
two hundred seventy-nine-a of this chapter such payment to be made when
the assessment or any such reduction thereof shall have become final and
not subject to further review. If such a bond is filed and thereafter a
proceeding under article seventy-eight of the civil practice law and
rules is commenced as provided in section two hundred seventy-nine-a,
deposit of the taxes assessed shall not be required as a condition
precedent to the commencement of such proceeding. Where a jeopardy
assessment is made, any property seized for the collection of the tax
shall not be sold (i) until expiration of the time to apply for a
hearing as provided in such section, and (ii) if such application is
timely filed, until the expiration of ninety days after the tax
commission mailed notice of its determination to the person against whom
the assessment is made; provided, however, such property may be sold at
any time if such person has failed to attend a hearing of which he has
been duly notified, or if he consents to the sale, or if the tax
commission determines that the expenses of conservation and maintenance
will greatly reduce the net proceeds, or if the property is perishable.
The amount of any and all rebates of the tax imposed by this article
paid pursuant to this paragraph shall be credited or caused to be
credited by such exchange located within this state, affiliated clearing
corporation, qualified securities exchange, qualified clearing
corporation or authorized agency to or for the benefit of the taxpayer
incurring liability for such tax.

(c) If a rebate is paid in the manner provided in this subdivision, no
further rebate shall be allowable but any stock transfer tax paid to a
member or dealer by a taxpayer otherwise entitled to rebate under this
section shall be paid by such member or dealer to the taxpayer.

(d) The amounts of the rebates provided for under subdivisions one and
two of this section paid in the manner provided in this subdivision
shall be shown separately on all reports prescribed by the tax
commission under such section and shall be evidenced by such
certification as the tax commission may prescribe.

(e) The tax commission may require any such member or registered
dealer to file with the department of taxation and finance a bond issued
by a surety company approved by the superintendent of financial services
as to solvency and responsibility and authorized to transact business in
the state, in such amount as the tax commission may fix, to secure the
payment of any taxes due from such member or dealer pursuant to section
two hundred eighty-one-a. The tax commission may require that such a
bond be filed before any tax due under this article from any such member
or dealer may be reported and paid under the provisions of this
subdivision, or at any time when in its judgment the same is necessary
as a protection to the revenues under this article. In lieu of such
bond, such member or dealer may deposit securities approved by the tax
commission, in such amount as it may prescribe, which securities shall
be kept in the joint custody of the comptroller and the commissioner of
taxation and finance and may be sold by the tax commission if it becomes
necessary so to do in order to recover any sums due from such person
pursuant to this article; but no such sale shall be held until after
such person shall have had opportunity to litigate the validity of any
tax if it elects so to do. Upon any such sale, the surplus, if any,
above the sums due under this article, shall be returned to such member
or dealer.

7. If the commissioner of taxation and finance makes the determination
that rebates payable exceed moneys available in the stock transfer
incentive fund for paying such rebates and if any member or dealer shall
advance and pay the amount of tax, imposed by this article without
taking account of rebates, either for himself or for which any other
taxpayer is entitled to claim a rebate pursuant to the provisions of
subdivision six of this section, such member or dealer shall be entitled
to a rebate for the amount of such tax advanced and paid by him on
behalf of such other taxpayer in the amount of the rebate allowable to
such taxpayer and in the amount of the rebate allowable to himself
whenever such commissioner determines that sufficient funds are
available in the stock transfer incentive fund for paying such rebate.

8. The amount of any erroneous or excessive rebate paid or allowed
under this section may be determined by the state tax commission and may
be recovered from such claimant in the same manner as a tax imposed
under this article, provided, however, that any such determination shall
be made within five years after the date of such erroneous or excessive
rebate.

9. Any taxpayer, broker or dealer who or which files or causes to be
filed any claim for or report of rebate permitted or required under this
article which is willfully false shall be guilty of a felony.

10. If any part of any claim for or report of rebate of stock transfer
tax is false or fraudulent, any person who files such claim or makes
such report shall, in addition to any other penalties provided by this
article, be subject to a penalty of five hundred dollars for each and
every violation. The state tax commission may determine the amount of
any such penalty to be due from any such person in the same manner as
the tax imposed by this article, provided, however, that any such
determination shall be made at any time.

11. The state tax commission shall make rules and regulations and
issue instructions to effectuate the purposes of this section and to
provide for payments to and from and administration of the stock
transfer tax fund and the stock transfer incentive fund and shall have
all the rights and powers as set forth in section two hundred
seventy-six of this article to examine transactions and require records
to be kept and declarations and certifications to be made and kept as
may be required for such purposes. If any member or dealer described in
subdivision six of this section shall violate any provision of this
section or any reasonable rule, regulation or instruction made or issued
pursuant thereto, such member or dealer may upon notice thereof
thereafter be denied rebates by the state tax commission in accordance
with rules and regulations promulgated by such commission. Provided,
that nothing herein shall limit the right to file a claim for rebate
under this section.

12. For the purposes of this section the following terms shall have
the following meanings:

(a) A "nonresident" shall mean an individual or group of individuals
jointly owning securities (but including partnerships only if organized
and operating solely for the purpose of investing in securities) selling
or trading or delivering or transferring on his or their own account,
who is not, or no one of whom is, a resident.

(b) A "resident" means an individual who on the day upon which the tax
imposed by section two hundred seventy of this chapter accrues,

(1) regardless of where he resides or is domiciled, (i) is a member of
a securities exchange within this state which is registered with the
securities and exchange commission of the United States; (ii) is a
dealer in securities required to be registered with the attorney general
of the state of New York; (iii) acts as a dealer in securities or as a
broker or agent in transactions concerned with the sale, purchase,
delivery or transfer of securities; or (iv) is a member of or a person
employed in a managerial capacity by a firm, company, association or
organization, or an officer or director of or a person employed in a
managerial capacity by a corporation, which is a member organization of
a securities exchange, a dealer in securities, or a dealer, broker or
agent, described in clause (i), (ii) or (iii) of this subparagraph, or

(2) is domiciled in this state, unless on such day he maintained no
permanent place of abode in this state, maintained a permanent place of
abode elsewhere and during the one year period ending on such day spent
in the aggregate, not more than thirty days of such period in this
state, or

(3) is not domiciled in this state, but on such day maintained in this
state, a permanent place of abode unless such abode is due solely to
such individual's being in the armed forces of the United States, or

(4) regardless of where he resides, maintains a permanent place of
business within this state or is employed within this state.

(c) No transaction shall be deemed to be a nonresident transaction and
entitled to the rebate payable or allowable in subdivision two unless
(1) the papers or documents upon or to which are required to be placed
or affixed the stamps required by subdivision four of section two
hundred seventy of this chapter, to denote the payment of the proper
amount of the tax imposed by such section to the state tax commission,
have also affixed thereto or placed thereon a declaration in the form
prescribed by the tax commission signed by the person making the sale or
transfer, setting forth facts to show that the transaction is made by a
nonresident; or (2) in the case of transactions executed or effected
within this state (or transactions executed or effected outside this
state but subject to the tax imposed by this article) by any member or
member organization of any securities exchange located within this state
or of any qualified securities exchange which is registered with the
securities and exchange commission of the United States (hereinafter in
this section referred to as a "member of a securities exchange") or by
any person, firm, corporation, company or association required to be
registered with the attorney general of the state of New York as a
dealer in securities other than upon any such exchange (hereinafter in
this section referred to as a "registered dealer"), who is permitted or
required pursuant to any rules and regulations promulgated by the tax
commission pursuant to the provisions of section two hundred
eighty-one-a of this chapter, to pay the tax imposed by this article
without the use of the stamps prescribed by this article, the
transaction is certified, in such form as the tax commission may
prescribe, in the report required to be made to or through such exchange
located within this state, or its affiliated clearing corporation or to
a qualified securities exchange, qualified clearing corporation or any
authorized agency by rules and regulations promulgated by the tax
commission pursuant to section two hundred eighty-one-a of this chapter,
as being a transaction by a nonresident. The certification in such
report may be made by such member of a securities exchange or registered
dealer if he either (i) has obtained from such nonresident a declaration
in the form prescribed by the tax commission, or (ii) has met
requirements set forth in rules and regulations promulgated by the tax
commission establishing that the transaction is made by a nonresident
and (iii) has not, on or after the date of obtaining such declaration or
its delivery and filing, received from such nonresident either a notice
of cancellation, in the form prescribed in clause (iii) of subparagraph
two of paragraph (d) of this subdivision, or has no knowledge or
reasonable grounds to believe that the status of such nonresident as a
nonresident has changed.

(d) (1) Any person who shall knowingly make any false statement in a
declaration provided for by paragraph (c) of this subdivision shall be
guilty of a misdemeanor and upon conviction thereof shall be liable to a
fine of not less than five hundred nor more than one thousand dollars,
or be imprisoned for not more than one year, or be subject to both such
fine and imprisonment, in the discretion of the court.

(2) Any person who--

(i) having executed, filed with and delivered to a member of a
securities exchange or a registered dealer a declaration provided for by
paragraph (c) of this subdivision;

(ii) thereafter ceases knowingly to be a nonresident;

(iii) fails to execute, file and deliver a notice of cancellation of
such declaration, with and to such member or dealer; and

(iv) after ceasing to be such a nonresident and prior to the
execution, filing and delivery of such notice of cancellation, with
intent to cause a rebate to be made from the stock transfer incentive
fund in excess of the rebate allowable to residents under subdivision
one of this section, places and allows to be executed an order with such
member or dealer where the sale, agreement to sell, memorandum of sale,
delivery or transfer of any shares or certificates described in section
two hundred seventy of this chapter is subject to the taxes imposed by
this chapter; shall be guilty of a misdemeanor and upon conviction
thereof shall be liable to a fine of not less than five hundred nor more
than one thousand dollars, or be imprisoned for not more than one year,
or be subject to both such fine and imprisonment, in the discretion of
the court.

(e) The term "market making transaction" shall mean any transaction
involving a sale (including a short sale) by a dealer of shares or
certificates subject to the tax imposed by this article, provided such
shares or certificates are sold:

(1) as stock in trade or inventory or as property held for sale in the
ordinary course of such dealer's trade or business (including transfers
which are part of an underwriting),

(2) in (i) a bona fide arbitrage transaction; (ii) a bona fide hedge
transaction involving a long or short position in any equity security
and a long or short position in a security entitling the holder to
acquire or sell such equity security; or (iii) a risk arbitrage
transaction in connection with a merger, acquisition, tender offer,
recapitalization, reorganization, or similar transaction, or

(3) to offset a transaction made in error.

Provided, however, that, except as to clause (iii) of subparagraph two
of this paragraph, the term "market making transaction" shall not
include any sale of shares or certificates identified in such dealer's
records as a security held for investment within the meaning of section
twelve hundred thirty-six of the internal revenue code.

13. The state tax commission may provide that where a declaration has
been executed, filed and delivered to a member of a securities exchange
or a registered dealer under subdivision one of section two hundred
seventy-a of this article and kept by such member or dealer pursuant to
rules, regulations and instructions of the state tax commission, such
declaration shall constitute the declaration of the nonresident under
subdivision twelve of this section.

14. Where there has been a determination of the maximum amount of tax
on a single qualifying sale under section two hundred seventy-e of this
chapter, the foregoing provisions of this section shall not apply to
such a single qualifying sale until October first, nineteen hundred
seventy-nine and thereafter, provided, however, for the period beginning
October first, nineteen hundred seventy-nine and ending September
thirtieth, nineteen hundred eighty, the portion of the maximum amount of
tax to be rebated on such single qualifying sale shall not exceed thirty
percent.

15. (a) For the purpose of allowing the rebate authorized by this
section to a taxpayer, other than a taxpayer regarding which subdivision
six of this section is applicable, any person liable for the tax imposed
by this article who or which purchases stamps issued to denote the
payment of the tax imposed by this article or any agent of a taxpayer
who purchases such stamps, provided such purchase was made from a fiscal
agent appointed for the sale of such stamps, may claim the rebate
authorized by subdivision one of this section by filing a claim in such
form and containing such information as the state tax commission, by
rule, regulation or instruction shall prescribe, but all such claims
under this subdivision shall be presented within two years after the
purchase of such stamps, provided, however, all such claims must be
accompanied by the receipt for the purchase of stamps in the form
approved by the tax commission. The tax commission, if satisfied that
the moneys from the purchase of such stamps have been paid from the
stock transfer tax fund into the stock transfer incentive fund, shall
rebate the same to the person or agent who or which purchased such
stamps from such fund. All of the other provisions of this section
regarding rebates shall apply to the method of rebate of tax provided
for by this subdivision in the same manner and with the same force and
effect as if the language of such provisions had been incorporated in
full into this subdivision and had expressly referred to the claim for
rebate of tax provided for by this subdivision, except to the extent
that any such provision is either inconsistent with a provision of this
section or is not relevant to this subdivision.

(b) If a rebate is paid in the manner provided in this subdivision, no
further rebate shall be allowable under this section but any stock
transfer tax paid by a taxpayer otherwise entitled to rebate under this
section shall be paid to such taxpayer by the claimant under this
subdivision.

(c) If a rebate is paid in the manner provided by this subdivision,
any refund or redemption allowable by this article shall be reduced by
the amount of rebate allowed and paid pursuant to this subdivision, any
other provision of this article to the contrary notwithstanding.

(d) The state tax commission shall have all the rights and powers as
set forth in section two hundred seventy-six of this article to examine
transactions and require records to be kept by claimant under this
subdivision as if such claimant was a person required to comply with the
provisions of such section two hundred seventy-six.

(e) If any person liable for the tax or any agent of the taxpayer
shall violate any provision of this subdivision or any reasonable rule,
regulation or instruction made or issued pursuant thereto, such person
or agent may upon notice thereof thereafter be denied rebates under this
subdivision by the state tax commission in accordance with rules and
regulations promulgated by such commission. Provided, that nothing
herein shall limit the right to file a claim for rebate under
subdivision three of this section.

(f) If the commissioner of taxation and finance makes the
determination that rebates payable exceed moneys available in the stock
transfer incentive fund for paying such rebates and if any person liable
for the tax imposed by this article or any agent of the taxpayer shall
have purchased stamps to pay the amount of tax imposed by this article
without charging the taxpayer or principal for the amount of the
rebatable portion of the cost of such stamps allowable to such taxpayer
or principal at the time of purchase of such stamps, such person liable
for the tax or such agent shall be entitled to a rebate for such
rebatable portion of such tax advanced and paid by him on behalf of such
other taxpayer in the amount of the rebate allowable to such taxpayer
and in the amount of any rebate allowable to himself whenever such
commissioner determines that sufficient funds are available in the stock
transfer incentive fund for paying such rebate.