state of new york tax appeals - Tax Appeals Tribunal

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amount of sales tax collected, but not remitted to the Division and the additional sales tax due,
but not collected on taxable sales during the audit period was reasonable.
The Administrative Law Judge also found reasonable the auditor’s use of the actual
purchase invoices, issued by Jon-Don for the period September 1, 1997 through August 31,
2003, to determine whether petitioner paid sales tax on its expense purchases. The
Administrative Law Judge found that petitioner failed to carry its burden of proof, and that the
Division’s determination that use tax was due on petitioner’s purchases of supplies from Jon-
Don was proper (see, Tax Law § 1132[c]).
The Administrative Law Judge observed that in addition to any amount of tax imposed,
Tax Law § 1145(a)(2) makes provision for a fraud penalty, where a taxpayer’s failure to pay
any tax to the Commissioner of Taxation and Finance within the time required by law is due to
fraud.
The Administrative Law Judge found that the Division sustained its burden of proof of
establishing that the imposition of the fraud penalty was appropriate. Based on petitioner’s
substantial underreporting of sales tax over a long and continuous period of time, petitioner’s
collection and failure to remit $18,781.73 in sales tax during the audit period and the fact that
petitioner, a registered sales tax vendor, failed to file sales tax returns, report or remit any tax
due for the entire six-year audit period.
Lastly, the Administrative Law Judge found that petitioner failed to establish reasonable
cause or an absence of willful neglect pursuant to Tax Law § 1145(a)(1)(iii).
ARGUMENTS ON EXCEPTION
Petitioner, on exception, takes issue with so much of the determination of the
Administrative Law Judge that finds petitioner has failed to carry its burden of showing