New York Consolidated Laws, Tax Law - TAX § 1703. Information returns relating to payments made in settlement of payment card and third party network transactions

1. (a) Every payment settlement entity, third party settlement organization, electronic payment facilitator or other third party acting on behalf of a payment settlement entity, all as defined in section 6050W of the internal revenue code  1 and referred to herein as “a reporting entity,” required to file information returns pursuant to that section shall, within thirty days of the filing thereof, file with the department in such form and manner as prescribed by the commissioner either (i) a duplicate of all such information returns or (ii) a duplicate of such information returns related to participating payees, as defined in section 6050W of the internal revenue code , with a New York state address or New York state taxpayers.  The commissioner may require that such returns be filed electronically.

(b) To facilitate accurate reporting by the entities required to file information returns pursuant to this section, the department shall provide a list or database of New York state taxpayers no later than forty-five days prior to the information reporting deadline, in such form and manner as prescribed by the commissioner.  The information included in such list or database shall not be used by a reporting entity for any purpose other than producing and filing information returns pursuant to this section.

(c) Any information received by the department on an information return filed pursuant to this section, concerning a person who is not subject to tax in New York, or is not subject to any requirement imposed by or pursuant to the authority of this chapter, may not be used by the department.  The department shall not redisclose any information received on an information return filed pursuant to this section, except that it may disclose to the commissioner of finance of the city of New York, for the purpose of the administration of laws relating to taxes or charges collected by the commissioner of finance of the city of New York, information received on such returns concerning any person or entity with a New York city address or that is a New York city taxpayer or that is required to pay New York city taxes and/or charges or that is subject to any reporting requirement pursuant to New York city tax laws.

2. (a) Any reporting entity failing to file an information return required pursuant to subdivision one of this section within the time prescribed will be subject to a penalty of fifty dollars for each failure, if failure is for not more than one month, with an additional fifty dollars for each month or fraction thereof during which each failure continues.  However, the total amount of penalty imposed on a reporting entity may not exceed two hundred fifty thousand dollars annually.

(b) The commissioner may waive all or any portion of any penalty imposed by this subdivision with respect to any violation if (i) the commissioner determines that the failure to timely file a return, was due to reasonable cause and not due to willful neglect, or (ii) rescinding the penalty would promote compliance with the requirements of this chapter and effective tax administration.

1 26 USCA § 6050W.

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