§ 280-a. Rebate for stock transfer tax paid; penalty for false claims. 1. Except as otherwise provided in subdivision fifteen of this section, where a tax shall have been paid under this article a portion of the amount paid shall be allowed as a rebate and such portion shall be paid to the taxpayer but only to the extent that moneys are available for the payment of such rebates in the stock transfer incentive fund established pursuant to § 92-i of the state finance law. The portion of the amount of tax paid which is to be allowed as a rebate shall be thirty percent of the tax incurred and paid on transactions subject to the stock transfer tax occurring on and after October first, nineteen hundred seventy-nine and on or before September thirtieth, nineteen hundred eighty and sixty percent of the tax incurred and paid on such transactions occurring on and after October first, nineteen hundred eighty and on or before September thirtieth, nineteen hundred eighty-one and all of the amount of tax incurred and paid shall be allowed as a rebate on transactions subject to the stock transfer tax occurring on and after October first, nineteen hundred eighty-one.

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2. Notwithstanding the provisions of subdivision one of this section with respect to the percentages of tax allowable as rebates, the portion of the amount of stock transfer tax paid which is to be allowed as a rebate to a nonresident shall be fifty percent of the tax incurred and paid on transactions subject to stock transfer tax occurring on and after October first, nineteen hundred seventy-seven and on or before July thirty-first, nineteen hundred seventy-eight and thirty-seven and one-half percent with respect to such transactions occurring on and after August first, nineteen hundred seventy-eight and on or before September thirtieth, nineteen hundred eighty, and thereafter the portions set forth in subdivision one of this section shall be applicable.

2-a. In addition to the rebate allowable under the provisions of subdivision one of this section, the portion of the amount of stock transfer tax paid which is to be allowed as a rebate to any person, firm, company or corporation registered with the United States securities and exchange commission in accordance with subsection (b) of section fifteen of the securities exchange act of nineteen hundred thirty-four, as amended, and acting as a dealer in a transaction described in paragraph (e) of subdivision twelve of this section, other than such a person, firm, company or corporation liable to file a report or return under article nine-A of this chapter, or article twenty-three of this chapter, (as such article was in effect on or before December thirtieth, nineteen hundred eighty-two), shall be one hundred percent of the stock transfer tax incurred and paid on transactions subject to the stock transfer tax executed by such person, firm, company or corporation pursuant to the acceptance of an order placed through an intermarket linkage system developed pursuant to subsection (a) of section eleven-A of such securities exchange act under a plan submitted by one or more national securities exchanges or national securities associations registered with such securities and exchange commission occurring on and after April seventeenth, nineteen hundred seventy-eight and on or before September thirtieth, nineteen hundred seventy-nine, seventy percent of the tax incurred and paid on such a transaction occurring on and after October first, nineteen hundred seventy-nine and on or before September thirtieth, nineteen hundred eighty and forty percent of the tax incurred and paid on such a transaction occurring on and after October first, nineteen hundred eighty and on or before September thirtieth, nineteen hundred eighty-one. Notwithstanding any other provision of law, the net amount to be rebated to any such person, firm, company or corporation under this subdivision with respect to stock transfer tax allowable as rebates during each of the periods ending on September thirtieth hereinbefore set forth shall not be allowed or paid prior to the first day of the eighth month following September thirtieth of each of such periods nor until the subsequent date on which the commissioner of taxation and finance shall next determine the amount allowable as rebates pursuant to the provisions of § 92-i of the state finance law, provided, however, that the net amount to be allowed for the April seventeenth, nineteen hundred seventy-eight through September thirtieth, nineteen hundred seventy-eight period shall not be allowed or paid until the last business day of June, nineteen hundred seventy-nine.

No rebate shall be allowed under this subdivision with respect to any stock transfer tax incurred in a market making transaction occurring on or after October first, nineteen hundred eighty-one. No rebate shall be allowed or paid under this subdivision for stock transfer tax paid pursuant to section two hundred seventy-nine-a of this chapter nor shall any rebate be allowed or paid until the person, firm, company or corporation claiming the rebate complies with the rules, regulations and instructions of the state tax commission issued under this article including furnishing of a just and true book of account within the state as may be required by the state tax commission.

3. Except as provided in subdivision six of this section, rebates may be paid only upon the filing of a claim for rebate with the state tax commission. All claims for rebate shall be presented in such form and contain such information as the state tax commission, by rule, regulation or instruction, shall prescribe and shall be presented within two years after the affixing and cancelling of stock transfer tax stamps or payment of the tax otherwise than by the use of stamps.

4. Every such claim shall include a certificate by or on behalf of the party presenting the same to the effect that it is just, true and correct, that the amount of stock transfer tax stated thereon has been paid to the state and that the amount of rebate requested is actually due and owing. The state tax commission, if satisfied that the tax has actually been paid, shall rebate the same in accordance with the provisions of this section on the audit and warrant of the state comptroller on vouchers approved by the commissioner of taxation and finance.

5. The state tax commission shall grant or deny such claim in the manner provided in section two hundred eighty of this article and the remaining provisions of such section, relating to determination of tax, hearing, decision of the state tax commission, the exclusive manner of review of such decision, and the requirement of an undertaking, shall apply to the provisions of this section with the same force and effect as if the language of such section had been incorporated in full into this section and had expressly referred to the rebate under this section, except to the extent that any such provision is either inconsistent with or not relevant to this section. All of the other provisions of this article relating to refunds shall apply to the rebate of tax provided for by this section in the same manner and with the same force and effect as if the language of such provisions had been incorporated in full into this section and had expressly referred to the rebates of tax provided for under this section, except to the extent that any such provision is either inconsistent with a provision of this section or is not relevant to this section and except that the term "refund" as used in such provisions shall be read as "rebate".

6. (a) Notwithstanding the provisions of section two hundred eighty-one-a of this chapter, the tax imposed by this article may be paid, and rebates provided for in subdivisions one and two of this section shall be allowed without the filing of the claim required by subdivision three of this section, in the manner and upon the filing of the report referred to in paragraph (b) of this subdivision in the case where payment of the tax imposed by this article is made by any member of any securities exchange or any registered dealer who or which is permitted or required pursuant to the provisions of such section two hundred eighty-one-a of this chapter to pay such tax without the use of the stamps prescribed by this article.

(b) On the written report required to be made to or through a securities exchange located within this state, affiliated clearing corporation or to a qualified securities exchange, qualified clearing corporation, authorized agency or the tax commission by each such member or dealer under such section two hundred eighty-one-a, there shall also be shown the amount of the rebate of tax shown to be due thereon, which would be allowable by this section if the full amount of tax is paid with such report. The net amount required to be paid for the account of the tax commission to or through such exchange located within this state, affiliated clearing corporation or to such authorized agency and remitted to the tax commission pursuant to such section or such amount required to be paid to the tax commission shall be the amount of tax shown to be due on such written report (determined without regard to any rebate allowable under this section) less the amount of any such rebate, subject to the provisions of subdivision eight of this section. Notwithstanding the provisions of section two hundred eighty-one-a of this article, on the next-to-the-last business day of the department of taxation and finance in each of the months of September, December, March and June, each such member or dealer shall show on such report the aggregate amount of rebates shown daily on such report for the period of three full months ending on such next-to-the-last business day. On the last business day of each of such months, an amount equal to such aggregate amount shall be paid by such member or dealer for the account of the tax commission to or through such exchange located within this state, affiliated clearing corporation or authorized agency and remitted by such exchange, affiliated clearing corporation or authorized agency to the tax commission by separate check or wire transfer. The amount so remitted shall constitute the total amount of rebates provided in subdivisions one and two of this section payable in the manner described in this subdivision, which amount shall be included in the amount required to be paid from the stock transfer tax fund into the stock transfer incentive fund on each such last day pursuant to sections ninety-two-b and ninety-two-i of the state finance law; provided, however, that if such exchange located within this state, affiliated clearing corporation, qualified securities exchange, qualified clearing corporation or authorized agency shall determine that the payment by any member or dealer of any tax imposed by this article will be jeopardized by delay, it shall forthwith notify the tax commission of such condition, or if the tax commission believes that the collection of any tax will be jeopardized by delay, it may determine the amount of such tax and assess the same against any such member or dealer prior to the filing of his report and prior to the date when his report is required to be made to an exchange located within this state, affiliated clearing corporation, qualified securities exchange, qualified clearing corporation or authorized agency. The amount so determined shall become due and payable to the tax commission by the member or dealer against whom such a jeopardy assessment is made, as soon as notice thereof is given to him personally or by registered or certified mail. The provisions of section two hundred seventy-nine-a shall apply to any such determination except to the extent that they may be inconsistent with the provisions of this subdivision. The tax commission may abate any jeopardy assessment if it finds that jeopardy does not exist. The collection of any jeopardy assessment may be stayed by filing with the tax commission a bond issued by a surety company authorized to transact business in this state and approved by the superintendent of financial services as to solvency and responsibility, conditioned upon payment of the amount assessed, or any lesser amount to which such assessment may be reduced by the tax commission or by a proceeding under Article 78 of the civil practice law and rules as provided in section two hundred seventy-nine-a of this chapter such payment to be made when the assessment or any such reduction thereof shall have become final and not subject to further review. If such a bond is filed and thereafter a proceeding under Article 78 of the civil practice law and rules is commenced as provided in section two hundred seventy-nine-a, deposit of the taxes assessed shall not be required as a condition precedent to the commencement of such proceeding. Where a jeopardy assessment is made, any property seized for the collection of the tax shall not be sold (i) until expiration of the time to apply for a hearing as provided in such section, and (ii) if such application is timely filed, until the expiration of ninety days after the tax commission mailed notice of its determination to the person against whom the assessment is made; provided, however, such property may be sold at any time if such person has failed to attend a hearing of which he has been duly notified, or if he consents to the sale, or if the tax commission determines that the expenses of conservation and maintenance will greatly reduce the net proceeds, or if the property is perishable. The amount of any and all rebates of the tax imposed by this article paid pursuant to this paragraph shall be credited or caused to be credited by such exchange located within this state, affiliated clearing corporation, qualified securities exchange, qualified clearing corporation or authorized agency to or for the benefit of the taxpayer incurring liability for such tax.

(c) If a rebate is paid in the manner provided in this subdivision, no further rebate shall be allowable but any stock transfer tax paid to a member or dealer by a taxpayer otherwise entitled to rebate under this section shall be paid by such member or dealer to the taxpayer.

(d) The amounts of the rebates provided for under subdivisions one and two of this section paid in the manner provided in this subdivision shall be shown separately on all reports prescribed by the tax commission under such section and shall be evidenced by such certification as the tax commission may prescribe.

(e) The tax commission may require any such member or registered dealer to file with the department of taxation and finance a bond issued by a surety company approved by the superintendent of financial services as to solvency and responsibility and authorized to transact business in the state, in such amount as the tax commission may fix, to secure the payment of any taxes due from such member or dealer pursuant to section two hundred eighty-one-a. The tax commission may require that such a bond be filed before any tax due under this article from any such member or dealer may be reported and paid under the provisions of this subdivision, or at any time when in its judgment the same is necessary as a protection to the revenues under this article. In lieu of such bond, such member or dealer may deposit securities approved by the tax commission, in such amount as it may prescribe, which securities shall be kept in the joint custody of the comptroller and the commissioner of taxation and finance and may be sold by the tax commission if it becomes necessary so to do in order to recover any sums due from such person pursuant to this article; but no such sale shall be held until after such person shall have had opportunity to litigate the validity of any tax if it elects so to do. Upon any such sale, the surplus, if any, above the sums due under this article, shall be returned to such member or dealer.

7. If the commissioner of taxation and finance makes the determination that rebates payable exceed moneys available in the stock transfer incentive fund for paying such rebates and if any member or dealer shall advance and pay the amount of tax, imposed by this article without taking account of rebates, either for himself or for which any other taxpayer is entitled to claim a rebate pursuant to the provisions of subdivision six of this section, such member or dealer shall be entitled to a rebate for the amount of such tax advanced and paid by him on behalf of such other taxpayer in the amount of the rebate allowable to such taxpayer and in the amount of the rebate allowable to himself whenever such commissioner determines that sufficient funds are available in the stock transfer incentive fund for paying such rebate.

8. The amount of any erroneous or excessive rebate paid or allowed under this section may be determined by the state tax commission and may be recovered from such claimant in the same manner as a tax imposed under this article, provided, however, that any such determination shall be made within five years after the date of such erroneous or excessive rebate.

9. Any taxpayer, broker or dealer who or which files or causes to be filed any claim for or report of rebate permitted or required under this article which is willfully false shall be guilty of a felony.

10. If any part of any claim for or report of rebate of stock transfer tax is false or fraudulent, any person who files such claim or makes such report shall, in addition to any other penalties provided by this article, be subject to a penalty of five hundred dollars for each and every violation. The state tax commission may determine the amount of any such penalty to be due from any such person in the same manner as the tax imposed by this article, provided, however, that any such determination shall be made at any time.

11. The state tax commission shall make rules and regulations and issue instructions to effectuate the purposes of this section and to provide for payments to and from and administration of the stock transfer tax fund and the stock transfer incentive fund and shall have all the rights and powers as set forth in section two hundred seventy-six of this article to examine transactions and require records to be kept and declarations and certifications to be made and kept as may be required for such purposes. If any member or dealer described in subdivision six of this section shall violate any provision of this section or any reasonable rule, regulation or instruction made or issued pursuant thereto, such member or dealer may upon notice thereof thereafter be denied rebates by the state tax commission in accordance with rules and regulations promulgated by such commission. Provided, that nothing herein shall limit the right to file a claim for rebate under this section.

12. For the purposes of this section the following terms shall have the following meanings:

(a) A "nonresident" shall mean an individual or group of individuals jointly owning securities (but including partnerships only if organized and operating solely for the purpose of investing in securities) selling or trading or delivering or transferring on his or their own account, who is not, or no one of whom is, a resident.

(b) A "resident" means an individual who on the day upon which the tax imposed by section two hundred seventy of this chapter accrues,

(1) regardless of where he resides or is domiciled, (i) is a member of a securities exchange within this state which is registered with the securities and exchange commission of the United States; (ii) is a dealer in securities required to be registered with the attorney general of the state of New York; (iii) acts as a dealer in securities or as a broker or agent in transactions concerned with the sale, purchase, delivery or transfer of securities; or (iv) is a member of or a person employed in a managerial capacity by a firm, company, association or organization, or an officer or director of or a person employed in a managerial capacity by a corporation, which is a member organization of a securities exchange, a dealer in securities, or a dealer, broker or agent, described in clause (i), (ii) or (iii) of this subparagraph, or

(2) is domiciled in this state, unless on such day he maintained no permanent place of abode in this state, maintained a permanent place of abode elsewhere and during the one year period ending on such day spent in the aggregate, not more than thirty days of such period in this state, or

(3) is not domiciled in this state, but on such day maintained in this state, a permanent place of abode unless such abode is due solely to such individual's being in the armed forces of the United States, or

(4) regardless of where he resides, maintains a permanent place of business within this state or is employed within this state.

(c) No transaction shall be deemed to be a nonresident transaction and entitled to the rebate payable or allowable in subdivision two unless (1) the papers or documents upon or to which are required to be placed or affixed the stamps required by subdivision four of section two hundred seventy of this chapter, to denote the payment of the proper amount of the tax imposed by such section to the state tax commission, have also affixed thereto or placed thereon a declaration in the form prescribed by the tax commission signed by the person making the sale or transfer, setting forth facts to show that the transaction is made by a nonresident; or (2) in the case of transactions executed or effected within this state (or transactions executed or effected outside this state but subject to the tax imposed by this article) by any member or member organization of any securities exchange located within this state or of any qualified securities exchange which is registered with the securities and exchange commission of the United States (hereinafter in this section referred to as a "member of a securities exchange") or by any person, firm, corporation, company or association required to be registered with the attorney general of the state of New York as a dealer in securities other than upon any such exchange (hereinafter in this section referred to as a "registered dealer"), who is permitted or required pursuant to any rules and regulations promulgated by the tax commission pursuant to the provisions of section two hundred eighty-one-a of this chapter, to pay the tax imposed by this article without the use of the stamps prescribed by this article, the transaction is certified, in such form as the tax commission may prescribe, in the report required to be made to or through such exchange located within this state, or its affiliated clearing corporation or to a qualified securities exchange, qualified clearing corporation or any authorized agency by rules and regulations promulgated by the tax commission pursuant to section two hundred eighty-one-a of this chapter, as being a transaction by a nonresident. The certification in such report may be made by such member of a securities exchange or registered dealer if he either (i) has obtained from such nonresident a declaration in the form prescribed by the tax commission, or (ii) has met requirements set forth in rules and regulations promulgated by the tax commission establishing that the transaction is made by a nonresident and (iii) has not, on or after the date of obtaining such declaration or its delivery and filing, received from such nonresident either a notice of cancellation, in the form prescribed in clause (iii) of subparagraph two of paragraph (d) of this subdivision, or has no knowledge or reasonable grounds to believe that the status of such nonresident as a nonresident has changed.

(d) (1) Any person who shall knowingly make any false statement in a declaration provided for by paragraph (c) of this subdivision shall be guilty of a misdemeanor and upon conviction thereof shall be liable to a fine of not less than five hundred nor more than one thousand dollars, or be imprisoned for not more than one year, or be subject to both such fine and imprisonment, in the discretion of the court.

(2) Any person who–

(i) having executed, filed with and delivered to a member of a securities exchange or a registered dealer a declaration provided for by paragraph (c) of this subdivision;

(ii) thereafter ceases knowingly to be a nonresident;

(iii) fails to execute, file and deliver a notice of cancellation of such declaration, with and to such member or dealer; and

(iv) after ceasing to be such a nonresident and prior to the execution, filing and delivery of such notice of cancellation, with intent to cause a rebate to be made from the stock transfer incentive fund in excess of the rebate allowable to residents under subdivision one of this section, places and allows to be executed an order with such member or dealer where the sale, agreement to sell, memorandum of sale, delivery or transfer of any shares or certificates described in section two hundred seventy of this chapter is subject to the taxes imposed by this chapter; shall be guilty of a misdemeanor and upon conviction thereof shall be liable to a fine of not less than five hundred nor more than one thousand dollars, or be imprisoned for not more than one year, or be subject to both such fine and imprisonment, in the discretion of the court.

(e) The term "market making transaction" shall mean any transaction involving a sale (including a short sale) by a dealer of shares or certificates subject to the tax imposed by this article, provided such shares or certificates are sold:

(1) as stock in trade or inventory or as property held for sale in the ordinary course of such dealer's trade or business (including transfers which are part of an underwriting),

(2) in (i) a bona fide arbitrage transaction; (ii) a bona fide hedge transaction involving a long or short position in any equity security and a long or short position in a security entitling the holder to acquire or sell such equity security; or (iii) a risk arbitrage transaction in connection with a merger, acquisition, tender offer, recapitalization, reorganization, or similar transaction, or

(3) to offset a transaction made in error.

Provided, however, that, except as to clause (iii) of subparagraph two of this paragraph, the term "market making transaction" shall not include any sale of shares or certificates identified in such dealer's records as a security held for investment within the meaning of section twelve hundred thirty-six of the internal revenue code.

13. The state tax commission may provide that where a declaration has been executed, filed and delivered to a member of a securities exchange or a registered dealer under subdivision one of section two hundred seventy-a of this article and kept by such member or dealer pursuant to rules, regulations and instructions of the state tax commission, such declaration shall constitute the declaration of the nonresident under subdivision twelve of this section.

14. Where there has been a determination of the maximum amount of tax on a single qualifying sale under section two hundred seventy-e of this chapter, the foregoing provisions of this section shall not apply to such a single qualifying sale until October first, nineteen hundred seventy-nine and thereafter, provided, however, for the period beginning October first, nineteen hundred seventy-nine and ending September thirtieth, nineteen hundred eighty, the portion of the maximum amount of tax to be rebated on such single qualifying sale shall not exceed thirty percent.

15. (a) For the purpose of allowing the rebate authorized by this section to a taxpayer, other than a taxpayer regarding which subdivision six of this section is applicable, any person liable for the tax imposed by this article who or which purchases stamps issued to denote the payment of the tax imposed by this article or any agent of a taxpayer who purchases such stamps, provided such purchase was made from a fiscal agent appointed for the sale of such stamps, may claim the rebate authorized by subdivision one of this section by filing a claim in such form and containing such information as the state tax commission, by rule, regulation or instruction shall prescribe, but all such claims under this subdivision shall be presented within two years after the purchase of such stamps, provided, however, all such claims must be accompanied by the receipt for the purchase of stamps in the form approved by the tax commission. The tax commission, if satisfied that the moneys from the purchase of such stamps have been paid from the stock transfer tax fund into the stock transfer incentive fund, shall rebate the same to the person or agent who or which purchased such stamps from such fund. All of the other provisions of this section regarding rebates shall apply to the method of rebate of tax provided for by this subdivision in the same manner and with the same force and effect as if the language of such provisions had been incorporated in full into this subdivision and had expressly referred to the claim for rebate of tax provided for by this subdivision, except to the extent that any such provision is either inconsistent with a provision of this section or is not relevant to this subdivision.

(b) If a rebate is paid in the manner provided in this subdivision, no further rebate shall be allowable under this section but any stock transfer tax paid by a taxpayer otherwise entitled to rebate under this section shall be paid to such taxpayer by the claimant under this subdivision.

(c) If a rebate is paid in the manner provided by this subdivision, any refund or redemption allowable by this article shall be reduced by the amount of rebate allowed and paid pursuant to this subdivision, any other provision of this article to the contrary notwithstanding.

(d) The state tax commission shall have all the rights and powers as set forth in section two hundred seventy-six of this article to examine transactions and require records to be kept by claimant under this subdivision as if such claimant was a person required to comply with the provisions of such section two hundred seventy-six.

(e) If any person liable for the tax or any agent of the taxpayer shall violate any provision of this subdivision or any reasonable rule, regulation or instruction made or issued pursuant thereto, such person or agent may upon notice thereof thereafter be denied rebates under this subdivision by the state tax commission in accordance with rules and regulations promulgated by such commission. Provided, that nothing herein shall limit the right to file a claim for rebate under subdivision three of this section.

(f) If the commissioner of taxation and finance makes the determination that rebates payable exceed moneys available in the stock transfer incentive fund for paying such rebates and if any person liable for the tax imposed by this article or any agent of the taxpayer shall have purchased stamps to pay the amount of tax imposed by this article without charging the taxpayer or principal for the amount of the rebatable portion of the cost of such stamps allowable to such taxpayer or principal at the time of purchase of such stamps, such person liable for the tax or such agent shall be entitled to a rebate for such rebatable portion of such tax advanced and paid by him on behalf of such other taxpayer in the amount of the rebate allowable to such taxpayer and in the amount of any rebate allowable to himself whenever such commissioner determines that sufficient funds are available in the stock transfer incentive fund for paying such rebate.