Matter of Twin Bar & Grill, Inc. v. State Tax Commission, 55 N.Y.2d 1024 (1982)
Under New York Tax Law § 1147(a)(1), the presumption that a notice of sales tax determination is received can be rebutted by evidence that the notice was not, in fact, received, entitling the taxpayer to a hearing despite missing the initial deadline.
Summary
Twin Bar & Grill sought a hearing regarding a sales tax assessment after the 90-day deadline, arguing they never received the notice. The State Tax Commission contended that mailing the notice was sufficient, regardless of receipt, relying on a case concerning income tax. The Court of Appeals distinguished the income tax statute from the sales tax provision, which specifically states mailing is only “presumptive evidence” of receipt. Because the notice was returned unclaimed, the Court held Twin Bar & Grill was entitled to a hearing to challenge the assessment, as they successfully rebutted the presumption of receipt.
Facts
The State Tax Commission mailed a notice of determination of sales tax liability to Twin Bar & Grill, Inc.
The notice was returned to the Commission marked “unclaimed.”
Twin Bar & Grill claimed it never received the notice.
Twin Bar & Grill requested a hearing to contest the sales tax assessment more than 90 days after the notice was mailed.
Procedural History
The lower court ruled in favor of Twin Bar & Grill, holding they were entitled to a hearing.
The Appellate Division affirmed the lower court’s decision.
The State Tax Commission appealed to the New York Court of Appeals.
Issue(s)
Whether the mailing of a notice of sales tax determination, which is returned unclaimed, is sufficient to establish receipt and preclude a taxpayer from obtaining a hearing to contest the assessment if the request for a hearing is made more than 90 days after the mailing date.
Holding
No, because under Tax Law § 1147(a)(1), mailing is only presumptive evidence of receipt, which the taxpayer can rebut; since the notice was returned unclaimed, the taxpayer is entitled to a hearing despite the late request.
Court’s Reasoning
The Court distinguished this case from Matter of Kenning v. State Tax Comm., which concerned income tax. The sales tax provision (Tax Law, § 1147, subd [a], par [1]) states that mailing the notice “shall be presumptive evidence of the receipt of the same by the person to whom addressed.” The Court emphasized that the statute uses the term “receipt” and qualifies mailing as only “presumptive evidence.” This language, according to the Court, establishes the taxpayer’s right to rebut the presumption of receipt. Because the Commission conceded that the notice was returned marked “unclaimed” and not received by the petitioner, the lower courts were correct in holding that Twin Bar & Grill was entitled to a hearing on the sales tax assessment. The Court reasoned that the statute’s specific language regarding presumptive evidence of receipt allows taxpayers to demonstrate non-receipt and thereby preserve their right to a hearing, even if the standard 90-day deadline has passed. The practical effect is that the Tax Commission cannot rely solely on mailing a notice if it has evidence the notice was not actually received. This ensures fairness and due process in tax assessments.