Charter Ineligible for Tech Co. Tax Break, NY Tribunal Says
Charter Communications Inc. is ineligible for a reduced New York corporate tax rate provided to certain technology companies because not all the entities in its combined group were located in the state, the New York State Tax Appeals Tribunal ruled in a decision released Thursday.
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Mitchell Newmark, a partner at Blank Rome LLP who isn't involved in the case, told Law360 that legislative history should weigh against the department because lawmakers considered adding an explicit requirement that all members of a combined group meet the QETC test but declined to do so in 2015. In the tribunal's 2020 decision in Matter of TransCanada Facility USA Inc. the tribunal said the Legislature's declining to adopt language that it considers passing should play a significant role in determining the law's intent, Newmark said.
As a policy matter, Newmark said the tax agency's reading of the statute would negate the carrot of the favorable QETC tax rate that the Legislature wanted to provide to innovative companies.
"If the department's stilted 'all members' view survives, no company of any moment, certainly not your big innovators, will get the preferred rate, thereby making the legislation one big nullity," Newmark said. "If the Legislature's goal was to give a gift to no one, why not just state that all QETCs located on the Moon can have a preferred New York rate?"
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"Charter Ineligible for Tech Co. Tax Break, NY Tribunal Says," by Paul Williams was published in Law360 Tax Authority on February 1, 2024.