Comments on the New York State bank audit fee December 27, 1990.

Comments on The New York State Bank Audit Fee

The New York Operations Budget Bill of 1990 (L. 1990, Chapter 50) authorized and directs the New York State Department of Taxation and Finance to establish and implement a system of "fees" to be imposed on corporations subject to Article 32 of the Tax Law in order to defray the cost of conducting tax audits of those corporations. Tax Executives Institute opposes the imposition of audit fees on both policy and administrative grounds, and respectfully submits the following comments in support of its recommendation that the authorization for the imposition of audit fees be rescinded.

Background

Tax Executives Institute (TEI), which was founded in New York in 1944, is the principal association of corporate tax executives in the United States and Canada. Of the Institute's 4,500 members ( who represent 2,000 companies), more than 450 belong to the Institute's New York City, Rochester, Syracuse, and Niagara Frontier Chapters. In addition, a large number of our non-New York members work for corporations that, while not headquartered in the State, have substantial operations or sales in the State. The Institute's membership represents a broad cross-section of the business community in New York and, indeed, all of North America. Among the Institute's members are several individuals who work for financial institutions, both in and out of the New York.

Because of the diversity of the Institute's membership, TEI does not take positions on parochial or industry-based issues. Rather, we dedicate outselves to educational endeavors, to promoting the uniform and equitable enforcement of the tax laws, and to minimizing the costs of tax administration and compliance to the common benefit of government and taxpayers. In the United States and Canada (at both the federal and state/provincial levels), TEI routinely meets with tax administrators to advance these principles. It is much rarer for us to submit comments to state legislators. That we have undertaken to prepare these comments, therefore, is a measure of our serious concern over the enactment of legislation authorizing and directing the imposition of fees to defray the cost of the State's conduct of tax audits.

Overview of the Tax

Audit Fee

The New York Operations Budget Bill of 1990 (L. 1990, Chapter 50) contains an appropriation of nearly $3 million to pay for services and expenses incurred after March 31, 1990, relating to conducting tax audits of...