Sec. 488.1. Failure to file a return or to pay the tax

Tax Law, § 512(1)(a)

(a) Any person who fails to file a return or fails to pay any tax due on or before the last date prescribed for filing or paying (determined with regard to any valid extension of time for filing or paying), unless it can be shown that such failure was due to reasonable cause and not due to willful neglect, is subject to a penalty:

(1) of 10 percent of the amount of tax determined to be due pursuant to article 21 of the Tax Law, for the first month or any fraction thereof succeeding the last date prescribed for filing or paying; plus

(2) an additional one percent of the amount of tax determined to be due pursuant to such article, for each additional month or fraction thereof during which such failure continues after the expiration of the first month after such return was required to be filed or tax became due.

The initial 10 percent and the additional one percent per month may not exceed 30 percent in the aggregate. Thus this penalty accrues for a period of 21 months. The amount of tax determined to be due will be reduced by any part of the tax which is paid on or before the date prescribed for payment and by the amount of any credits against the tax which may be claimed on the return, whether or not they were in fact claimed. Further, in computing the additional one percent per month, the amount of tax determined to be due will be reduced by the amount of any part of the tax which is paid before the first day of each month. For purposes of this section, a monthconstitutes a period which terminates with the last day of each succeeding calendar month. Where a person fails to both timely file a return and timely pay any tax due, separate penalties for the failure to file and the failure to pay are not imposed.

(b) Where a return is filed later than 60 days after the last date prescribed for filing (determined with regard to any valid extension of time for filing), unless it can be shown that such failure was due to reasonable cause and not due to willful neglect, the penalty imposed by this section for a failure to file may not be less than $100 or 100 percent of the amount of tax required to be shown on the return, whichever is the lower amount. For purposes of this subdivision, the amount of tax required to be shown on the return will be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credits against the tax which may be claimed upon the return, whether or not they were in fact claimed.

Example:

A January combined truck mileage and fuel use tax return, due February 28th, is filed on May 5th. The amount of tax required to be shown on the return in $200, of which $100 was paid on April 15th, and the balance upon filing. The penalty imposed is computed as follows:

March 1st through March 31st—$200 at 10%	$20
April 1st through April 30th—$200 at 1%	2
May 1st through May 5th—$100 at 1%	1
Total	$23

Since the return was not filed within 60 days of the due date, the penalty due may not be less than the smaller of $100 or 100% of $200. Accordingly, a $100 penalty is due.

(c) The penalty pursuant to this section is determined, assessed, collected and paid in the same manner as the taxes imposed by article 21 of the Tax Law.