TATE OF NEW YORK DIVISION OF TAX APPEALS In the Matter

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audit period. Since the revised computations of additional taxable sales and additional tax due
for the audit period were based upon sales data obtained during the 12-hour observation
conducted on February 7, 2008, petitioners maintain that the amount of food stamp sales made on
that date should be used to compute the sales tax credit for exempt food stamp sales allowed for
the audit period. They further maintain that the corporation’s checking account statement for the
period January 16, 2008 through February 13, 2008 clearly shows that $42.09 in food stamp
sales, via the USDA’s third-party direct depositor, Efunds Corp., were collected on February 7,
2008. Given the Division’s investigators failure to note taxable and nontaxable sales paid by
food stamps in their ledger sheets, and in the interest of justice, petitioners claim that the entire
$42.09 should be considered daily exempt food stamp sales and the sales tax credit for exempt
food stamp sales should be recomputed accordingly. They further claim that the use of $42.09
would “rightly place the burden on auditors conducting observations to properly calculate and
account for food stamp sales,” and prevent the manipulation of data where a taxpayer lacks
sufficient records and is unable to prove with exactness the extent of the auditor’s error.
Contrary to petitioners’ claim, it was 88-02 Deli Grocery’s responsibility to maintain
records of food stamp sales on the date of the observation. 20 NYCRR 533.2(d)(7) required 88­
02 Deli Grocery to maintain records of food stamp sales as follows:
Records. In addition to the records required to be kept pursuant to this section,
retail food stores and other participants approved for participation in the federal
food stamp program are required to keep and make available to the department
upon request the following:
* * *
(ii) records of receipts indicating whether payment is by food stamps; and
(iii) true and complete copies of redemption certificates, validated by the
bank; or true and complete copies of bank deposit slips or receipts showing the