thoffmanjr
Member
? If you were audited in New York State within the last two years and had to pay back sales tax related to cash transactions at your in-bay automatic car wash prior to December 2005 you may be entitled to a refund.
? In 1997 the NYS Legislature passed a law that exempted coin operated car washes from the collection of sales tax. The Tax Department interpreted the law and issued a bulletin. http://www.tax.state.ny.us/pdf/memos/sales/m97_12s.pdf This bulletin clear states that cash transactions collected by coin operated or bill acceptors is exempt from the collection of sales tax.
? In 2004 we were audited and told by the NYS Tax Department that the 1997 law did not apply to our self service in-bay automatic car washes because the customer does not wash their own car. They issued a notice of determination in the amount of $108,097.88. We protested and they disagreed. We went to mediation and they disagreed. We went to the Division of Tax Appeals, presented our case in front of an Administrative Law Judge in early 2007 and won. http://www.nysdta.org/Determinations/820681.det.htm
? In 2005 the NYS Car Wash Association was able to successfully lobby our legislature to pass a clarification regarding in-bay automatic car washes: http://www.tax.state.ny.us/pdf/memos/sales/m05_15s.pdf
? Just before our court case last February the Tax Department came back and audited us again for the years between 2003 and 2005 and determined that they were owed another $100,000 or so. Our exposure is approaching $300,000 including legal fees.
? We won, but the Tax Department has exercised its right to appeal the decision. We move on to the Tax Tribunal now.
? You can file for a refund within 2 years of your audit and will likely be denied. You have 90 days to appeal their denial. Once you appeal, the case would be placed on hold while our appeal continues.
? In 1997 the NYS Legislature passed a law that exempted coin operated car washes from the collection of sales tax. The Tax Department interpreted the law and issued a bulletin. http://www.tax.state.ny.us/pdf/memos/sales/m97_12s.pdf This bulletin clear states that cash transactions collected by coin operated or bill acceptors is exempt from the collection of sales tax.
? In 2004 we were audited and told by the NYS Tax Department that the 1997 law did not apply to our self service in-bay automatic car washes because the customer does not wash their own car. They issued a notice of determination in the amount of $108,097.88. We protested and they disagreed. We went to mediation and they disagreed. We went to the Division of Tax Appeals, presented our case in front of an Administrative Law Judge in early 2007 and won. http://www.nysdta.org/Determinations/820681.det.htm
? In 2005 the NYS Car Wash Association was able to successfully lobby our legislature to pass a clarification regarding in-bay automatic car washes: http://www.tax.state.ny.us/pdf/memos/sales/m05_15s.pdf
? Just before our court case last February the Tax Department came back and audited us again for the years between 2003 and 2005 and determined that they were owed another $100,000 or so. Our exposure is approaching $300,000 including legal fees.
? We won, but the Tax Department has exercised its right to appeal the decision. We move on to the Tax Tribunal now.
? You can file for a refund within 2 years of your audit and will likely be denied. You have 90 days to appeal their denial. Once you appeal, the case would be placed on hold while our appeal continues.
