In an interesting move that will make the New York State Advisory Opinion process more transparent, the New York State Department of Taxation and Finance has established a new process that will allow interested parties to comment on pending Advisory Opinions. When the Department receives a request for an Advisory Opinion, the Department will post on its website a short description of the issue or issues involved in the pending Advisory Opinion. Interested parties who register for the Department’s notification system will be notified of the pending Advisory Opinion and will have a defined period of time in which to submit comments. The Department’s staff will review and consider interested parties’ submissions when drafting Advisory Opinions, which likely will help the Department avoid issuing Advisory Opinions that have unintended tax consequences.
While the Department’s new comment submission process offers some clear benefits, it could have some downside. It is unclear from a procedural standpoint whether a taxpayer who requests an Advisory Opinion will be notified of comment submissions from interested parties. Likewise, it is unclear whether a taxpayer who requests an Advisory Opinion will have an opportunity to respond to adverse comments from interested parties. In any event, it appears that the new comment submission process could increase the amount of time it takes for the Department to issue Advisory Opinions.