Sec. 52.3. Optional method of payment by dealers in securities who are not members of a securities exchange

Additional statutory authority: Tax Law, § 281-a

(a) The taxes imposed by article 12 of the Tax Law on any sale or transfer of any stock or other corporate certificates executed or effected within the State of New York (other than upon a securities exchange) by any person, firm, corporation, company or association registered with the Attorney-General of the State of New York as a dealer in securities shall, if such dealer is not required to pay taxes to an authorized corporation pursuant to section 52.4 of this Part, and if such dealer so elects, be paid to the commissioner by such dealer without the use of stamps prescribed by said article 12. In the event that such dealer uses a clearing agent and also duly appoints such agent to act for him in the payment of the tax without the use of stamps, then only said agent shall remit the tax. The appointment of every such agent shall be subject to the written approval of the commissioner. An election to pay the tax without the use of stamps shall be made by a notice in writing filed by such dealer with the commissioner. Such notice shall state:

(1) that on and after a specified date the dealer will pay the tax to the commissioner without the use of stamps;

(2) the date of the dealer's registration with the Attorney-General of the State of New York as a dealer in securities; and

(3) the name and address of the agent of the dealer, if any, who will act as clearing agent and who will remit the tax on behalf of the dealer.

An election once made shall be irrevocable, except with the written consent of the commissioner, and except that if any dealer becomes an eligible member of an authorized corporation as defined in section 52.4 of this Part and is thereby required to pay taxes to such corporation, his election to pay taxes pursuant to this section shall be thereby terminated. The commissioner may at any time withdraw from any dealer the privilege of paying the tax without stamps. Written notice of the termination of the authority of any such agent shall be given immediately to the commissioner. Any stamps lawfully in the possession of a dealer at the time his election becomes effective shall be subject to redemption under the law pertaining thereto and shall not be used as part payment of the tax due from such dealer.

(b) Every dealer shall make a weekly report to the commissioner on a form prescribed by the commissioner for such purpose. In the event that the commissioner has approved the appointment of an agent to remit the tax on a dealer's behalf, then said agent shall make the said weekly report for such dealer. Where an agent acts on behalf of more than one dealer a separate report for each dealer must be made. The report shall show the daily amount of stock transfer taxes payable on all sales and transfers due for settlement within the period for which the report is filed, and such other information as the commissioner may require. Additionally, the report shall show the amount of the rebate of tax due, as provided for in section 280-a(6) of the Tax Law. Such report shall be mailed or delivered to the appropriate address as indicated on the form. The report shall be due not later than the second business day of the week following that for which the report is made. Every dealer shall remit to the commissioner quarterly any taxes due, in accordance with the provisions of paragraph (6) of subdivision (b) of section 280-a of the Tax Law. Checks payable to the commissioner may be used in making remittances.

(c) Every dealer executing or effecting a sale or transfer where the tax will be paid without the use of stamps shall impress, by rubber stamp, on the memorandum of sale for each transaction a dated certification stating that the applicable tax will be paid directly to the commissioner and bearing the facsimile signature of such dealer. If the dealer employs a clearing agent for its transactions, such certification shall instead include the statement that the applicable tax will be paid directly to the commissioner for the account of the dealer and shall bear the facsimile signatures of both the dealer and its clearing agent.

Such rubber stamp shall be kept in the possession of the dealer or agent (if applicable) and used only by such person or such person's authorized representative.

(d) A certificate of stock or other corporate certificate which is presented for transfer shall, if the tax will be paid other than by the use of stamps, be accompanied by a memorandum of sale bearing the stamped statement described in subdivision (c) of this section, or there shall be impressed upon it, by rubber stamp, a certification stating the number of shares transferred and that the applicable tax on such shares will be paid directly to the commissioner. Such certification shall bear the printed name of the dealer and the facsimile signature of such dealer. If the dealer employs a clearing agent for its transactions, such certification shall also bear the facsimile signature of the dealer's clearing agent. Such rubber stamp shall be kept in the possession of the dealer or agent (if applicable) and used only by such person or such person's authorized representative.