Appellate Division Confirms N.Y.C. Tribunal Decision That HMOs Can Be Included in Combined Return

The Appellate Division, First Department, has unanimously confirmed the decision of the New York City Tax Appeals Tribunal, which held that health maintenance organizations are not "insurance corporations" for general corporation tax purposes. Therefore, the HMOs were subject to the GCT and could be forcibly included in the combined GCT returns of their parent holding company. Matter of Aetna, Inc. v. New York City Tax Appeals Trib., No. 4725 [M-45330], 2017 Slip Op. 07311 (1st Dep't, Oct. 19, 2017).

Appellate Division Upholds Application of Federal "Step Transaction" Doctrine to N.Y.C. Real Property Transfer Tax

A New York City Tribunal decision involving the real property transfer tax, holding that the Department of Finance could apply the federal "step transaction" doctrine in order to tax the transfers of minority membership interests in an entity that owned a Manhattan office building, has been confirmed by the Appellate Division, First Department. Matter of GKK 2 Herald LLC v. The City of New York Tax Appeals Trib., No. 4074 OP 82/16, 2017 Slip Op. 07102 (1st Dep't, Oct. 10, 2017). The First Department also agreed with the City Tribunal that a New York State ALJ decision under the State real estate transfer tax involving the same transaction -- which held that the transaction was not subject to the State transfer tax, and which is currently on appeal to the New York State Tax Appeals Tribunal -- involved different legal issues and had no bearing on the City case. See Matter of GKK 2 Herald LLC, DTA No. 826402 (N.Y.S. Div. of Tax Appeals, May 26, 2016).

New York City Adopts New Power of Attorney Form

The New York City Department of Finance, following the lead of the New York State Department of Taxation and Finance, has announced that it will accept a revised power of attorney form for taxpayers to appoint representatives in tax matters, as described in Finance Memorandum 17-6 "Joint State/City Power of Attorney Form" (N.Y.C. Dep't of Fin., Oct. 17, 2017). The revised power of attorney is Form POA-1 (version 6/17) and is available on both the Department of Finance and Department of Taxation and Finance websites. The major changes from the previous form are that the new form does not automatically revoke previously filed powers of attorney, and it requires a signature only from the taxpayer, so that the representatives no longer need to sign.