In Matter of Metropolitan Minimart Corp and Matter of Ahmed Issa, DTA Nos. 826155 & 826156 (N.Y.S. Div. of Tax App., May 26, 2016), a New York State Administrative Law Judge held that the audit methods relied upon in a sales and use tax audit were not reasonable, that the audit therefore lacked a rational basis and that the notices of determination should be canceled. The business in question was described as a “typical New York City bodega” selling grocery items, and its records were found inadequate to permit an audit, so that resort to an external index was appropriate. However, the ALJ rejected the auditor’s reliance on a Restaurant Industry Operations Report applicable to limited service restaurants and what was described as the auditor’s “unwavering’ position that the business was similar to a Subway, noting that, unlike a Subway, the bodega accepted food stamps, did not have ovens, did not sell hot meals, and sold many grocery items. The ALJ also rejected the auditor’s use of a “utility factor” based on limited service restaurants, noting that the bodega had no energy-driven appliances, such as ovens and cook tops, making the use of the utility factor particularly unreasonable.