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(a) Except as provided herein, every operator shall file with the Commissioner of Finance a return of occupancy and of rents, and of the taxes payable thereon, on the form prescribed by the Commissioner of Finance, for the quarterly periods ending on the last day of February, May, August, and November of each year. Notwithstanding the foregoing, with respect to tax periods beginning on and after the first day of September, 2004, (i) an operator of a hotel having fewer than 10 rooms may file the above return for each such hotel on an annual basis for each twelve-month period ending on the last day of February of each year, and (ii) an operator of fewer than 10 furnished apartments or living units may file the above return on an annual basis for each twelve-month period ending on the last day of February of each year covering all such apartments or living units. Such returns shall be filed within twenty days after the last day of each such period. For the period beginning September 1, 2004 and ending February 28, 2005, an operator of fewer than 10 apartments or living units or of a hotel having fewer than 10 rooms may file the above return for each such hotel or apartments or living units covering that period on or before March 21, 2005. An operator of fewer than 10 rooms or fewer than 10 apartments or living units, after having registered, is required to file a return for each subsequent quarterly or annual period thereafter regardless of whether the rental of rooms or living units falls below the de minimis thresholds set forth in the last paragraph of the definition of "hotel" contained in 19 RCNY § 12-01 during a subsequent quarterly or annual period unless the operator has filed annual reports for each of the immediately preceding three annual periods showing no rooms available for rental to transients (i.e., guests other than permanent residents). An operator who ceased business must file a final return within twenty days from the date such business ceased, covering the period or portion of the period during which he conducted such business subsequent to the period for which a return was last required to be filed. If the business was sold, the purchaser thereof must file a return for the period from the date of purchase to the end of the period of which a return is required to be filed. An operator of fewer than 10 rooms or 10 apartments or living units, after having registered, is not deemed to have ceased business merely because the rental of rooms or living units falls below the de minimis thresholds set forth in the last paragraph of the definition of "hotel" contained in 19 RCNY § 12-01 during a subsequent quarterly or annual period unless the operator has filed annual reports for each of the immediately preceding three annual periods showing no rooms available for rental to transients (i.e., guests other than permanent residents). Whenever an operator is not required to charge or collect the tax, the Commissioner of Finance may, upon application in writing made by such operator, waive the requirement for the filing of returns. All returns must be filed with the Bureau of Tax Operations of the Department of Finance at the address designated on the return form. The return of an individual must be signed by such individual unless he is absent from the City, ill or otherwise incapacitated, in which event the return may be signed by his duly authorized representative or agent. The return of a corporation must be signed by an officer thereof; the return of a partnership must be signed by a general partner thereof. The Commissioner of Finance may, for good cause, extend the time for filing any return for a period not exceeding 30 days.
(b) At the time of filing a return, each operator shall pay to the Commissioner of Finance the tax due, as well as all other monies collected by the operator acting or purporting to act under the law even though it is determined that the tax collected was invalidly imposed. The tax for the period for which a return is required to be filed shall be due from the operator and payable to the Commissioner of Finance on the date prescribed for the filing of such return for such period, without regard to whether a return is filed or whether the return which is filed correctly shows the amount of rent and the tax due thereon. Payment of the tax shall be made in cash, or by check, money order or draft drawn to the order of the City Collector. Cash payments must be made only to cashiers designated for that purpose. Under no circumstances should cash be sent by mail. Postage stamps will not be accepted in payment of tax.
(c) The Commissioner of Finance may require any operator within the City to file an information return, on a form prescribed by the Commissioner of Finance, at such time and containing such information as the Commissioner of Finance deems necessary for the proper administration of the law.
(d) Electronic filing and payment. Pursuant to 19 RCNY § 17-03, the Commissioner may authorize the electronic filing of returns and reports and the electronic payment of tax required by this chapter.
(a) The law requires that upon every taxable occupancy, the operator shall charge and collect the tax from the occupant. The tax to be collected must be charged and stated separately from the rent and shown separately on any record thereof, at the time when the occupancy is contracted and charged for. The tax shall also be stated and separately charged upon every evidence of occupancy or any bill or statement of charge made for said occupancy issued or delivered by the operator. The tax shall be paid by the occupant to the operator as trustee for and on account of the City, and kept separate from all other funds in the possession of the operator and the operator shall be liable for the collection thereof and for the tax. The operator and any officer of any corporate operator shall be personally liable for the tax collected or required to be collected under the law. The operator shall have the same right in respect to collecting the tax from the occupant, or in respect to nonpayment of the tax by the occupant, as if the tax were a part of the rent for the occupancy payable at the time such tax shall become due and owing, including all rights of eviction, dispossession, repossession and enforcement of any innkeeper's lien that he may have in the event of nonpayment of rent by the occupant; provided, however, that the Commissioner of Finance shall be joined as a party in any action or proceeding brought by the operator to collect or enforce collection of the tax.
(b) No operator may absorb the tax required to be collected, or tell the occupant that he will pay such tax, nor may he advertise or hold out to the public in any manner, directly or indirectly, that the tax is not deemed to be an element in the rent. Any operator and any officer of a corporate operator or partner in a partnership which is an operator who willfully fails to charge the tax separately from the rent, or willfully fails to state the tax separately from the rent, or willfully fails to or refuses to collect the tax from the occupant, or refers or causes reference to be made to the tax in any invoice, placard or advertisement in a form other than that required by law, is guilty of a misdemeanor. (See: 19 RCNY § 12-11 for penalties.)
(c) Where the occupant has failed to pay and the operator has failed to collect the tax imposed by law, then, in addition to all other rights, obligations and remedies, such tax shall be payable by the occupant directly to the Commissioner of Finance, and it shall be the duty of the occupant to file a return thereof with the Commissioner of Finance and to pay the tax so imposed to the Commissioner of Finance within 15 days after such tax was due.
(d) All monies collected by the operator or charged by him while acting, or purporting to act, under the law must be paid to the City, even though it is judicially determined that the tax was invalidly imposed.
(a) Where the Commissioner of Finance in his discretion deems it necessary to protect revenues to be obtained under the law, he may require any operator required to collect the tax to file with him a bond, issued by a surety company authorized to transact business in New York State and approved by the Superintendent of Insurance of New York as to solvency and responsibility, in such amount as the Commissioner of Finance may fix, to secure the payment of any tax and/or penalties and interest due or which may become due from such operator. In the event that the Commissioner of Finance determines that an operator is to file such bond he shall give notice to such operator to that effect, specifying the amount of the bond required. The operator shall file such bond within five days after the giving of such notice, unless within such five days the operator shall request in writing a hearing before the Commissioner of Finance at which the necessity, propriety and amount of the bond shall be determined by the Commissioner of Finance. Such determination shall be final and shall be complied with within 15 days after the giving of notice thereof. In lieu of such bond, securities approved by the Commissioner of Finance, or cash in such amount as he may prescribe, may be deposited, and shall be kept in the custody of the Commissioner of Finance, who may at any time without notice to the depositor apply them to any tax and/or interest or penalties due, and for that purpose the securities may be sold by him at public or private sale without notice to the depositor thereof.
(b) As an alternative to filing a surety bond or depositing securities, the Commissioner of Finance may require or permit an operator required to collect the tax to deposit all taxes which become collectible in any banking institution located in the City, the deposits in which are insured by any agency of the federal government. Such deposits shall be made into and kept in a separate account, in trust and payable to the Commissioner of Finance, until payment over to the Commissioner of Finance. Such account shall remain open, and deposits made therein, until a notice of cancellation is given by the Commissioner of Finance.
Except in accordance with judicial order or as otherwise provided by law, it is unlawful for the Commissioner of Finance or any officer or employee of the Department of Finance to divulge or make known in any manner any information relating to the business of a taxpayer contained in any return required under the law. The officers charged with the custody of such returns are not required to produce any of them or evidence of anything contained in them in any action or proceeding in any court, except on behalf of the Commissioner of Finance in an action or proceeding under the provisions of the law, or on behalf of any party to any action or proceeding under the provisions of the law when the returns or facts shown thereby are directly involved in such action or proceeding, in either of which events the court may require the production of and may admit in evidence so much of the returns or of the facts shown thereby as are pertinent to the action or proceeding and no more. A taxpayer may obtain a certified copy of any return filed in connection with his tax upon application in writing to the Commissioner. Where a representative of a taxpayer applies for a certified copy of such return, he must file a power of attorney with the application. A certified copy of a taxpayer's return or of information contained therein or relating thereto may be delivered to the United States of America or any department thereof, the State of New York or any department thereof, any agency or any department of the City of New York provided the same is requested for official business. The Corporation Counsel or other legal representatives of the City or the District Attorney of any county within the City may be permitted to inspect returns for official business. Nothing herein shall be construed to prohibit the publication of statistics so classified as to prevent the identification of particular returns or items thereof.
If any amount of tax is not paid on or before the last day prescribed for payment (without regard to any extension of time granted for payment), interest on such amount at the rate prescribed by the law and the regulations of the Commissioner of Finance shall be paid for the period from such last date to the date of payment. In computing the amount of interest to be paid with respect to taxes which remain or become due on or after July 16, 1985, such interest shall be compounded daily. No interest shall be paid if the amount thereof is less than one dollar.
(a) Civil penalties. Any person failing to file a return or to pay any tax due prior to February 24, 1983 within the time required by law shall be subject to a penalty of five percent of the amount due. If the Commissioner of Finance is satisfied that the delay was excusable he may remit all or any part of such penalty. With respect to returns or payments which become due on or after February 24, 1983, the following penalties apply:
(1) Failure to file return.
(i) In case of failure to file a return on or before the prescribed date (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause (see paragraph (5) of this subdivision) and not due to willful neglect, this is to be added to the amount required to be shown as tax on such return five percent (5%) of the amount of such tax for each month or fraction thereof during which such failure continues, not exceeding twenty-five percent (25%) in the aggregate.
(ii) With respect to returns required to be filed on or after July 16, 1985, in the case of a failure to file a tax return within 60 days of the date prescribed for filing of such return (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, the addition to tax under subparagraph (i) of this paragraph (1) shall not be less than the lesser of one hundred dollars ($100) or one hundred percent (100%) of the amount required to be shown as tax on such return.
(iii) For purposes of subparagraphs (i) and (ii), the amount of the tax required to be shown on the return shall 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 credit against the tax which may be claimed on the return.
(2) Failure to pay tax shown on return. In case of failure to pay the amount shown as tax on a return to be filed on or before the prescribed date (determined with regard to any extension of time for payment), unless it is shown that such failure is due to reasonable cause (see: paragraph (5) of this subdivision (a)) and not due to willful neglect, there shall be added to the amount shown as tax on such return one-half of one percent (1/2%) of the amount of such tax for each month or fraction thereof during which such failure continues, not exceeding twenty-five percent (25%) in the aggregate. For the purpose of computing the addition for any month the amount of tax shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the beginning of such month and by the amount of any credit against the tax which may be claimed on the return. If the amount of tax required to be shown on a return is less than the amount shown as tax on such return, this paragraph shall be applied by substituting such lower amount.
(3) Failure to pay tax required to be shown on return. In case of failure to pay any amount in respect of any tax required to be shown on a return required to be filed which is not so shown (including a determination made pursuant to 19 RCNY § 12-15), within ten (10) days of the date of notice and demand, unless it is shown that such failure is due to reasonable cause (see: paragraph (5) of this subdivision (a)) and not due to willful neglect, there shall be added to the amount of tax stated in such notice and demand one-half of one percent (1/2%) of such tax for each month or fraction thereof during which such failure continues, not exceeding twenty-five percent (25%) in the aggregate. For the purpose of computing the addition for any month, the amount of tax stated in the notice and demand shall be reduced by the amount of any part of the tax which is paid before the beginning of such month.
(4) Limitations on additions:
(i) With respect to any return the amount of the addition to tax is limited to the following:
(A) At no time will the addition for one (1) month be more than five percent (5%).
(B) If paragraphs (1) and (2) of this subdivision (a) are both applicable, the addition under paragraph (1) is reduced by the addition under paragraph (2). Thus, the addition to the charge will be four and one-half percent (4 1/2%) under paragraph (1) and one-half of one percent (1/2%) under paragraph (2) for each month up to and including the first five (5) months. After the first five (5) months, the addition of one-half of one percent (1/2%) per month pursuant to paragraph (2) will apply for the next forty-five (45) months for a maximum aggregate of forty-seven and one-half percent (47 1/2%) addition to tax. However, in any case described in subparagraph (ii) of paragraph (1) of this subdivision (relating to returns filed after 60 days of the due date) the amount of the addition to tax under such paragraph (1) shall not be reduced below the amount provided in such subparagraph (i.e. the lesser of $100 or 100% of tax due).
(C) If paragraphs (1) and (3) of this subdivision (a) are both applicable, the maximum amount of the addition to tax may not exceed twenty-five percent (25%) in the aggregate. The maximum amount of the addition to tax pursuant to paragraph (3) of this subdivision shall be reduced by the amount of the addition to tax pursuant to paragraph (1) of this subdivision (a) (determined without regard to subparagraph (ii) of such paragraph (1), which is attributable to the tax for which the notice and demand is made and which is not paid within ten (10) days of such notice and demand.
(ii) The provisions of this paragraph may be illustrated by the following examples:
Example A: (a) Assume the taxpayer filed his tax return for the quarter ending February, 1983 (due March 20, 1983) on June 25, 1983, and the failure to file on or before the prescribed date is not due to reasonable cause. The tax shown on the return is $800 and a deficiency of $200 is subsequently assessed, making the tax required to be shown on the return, $1,000. The amount shown due on the return of $800 is paid on July 26, 1983. The failure to pay on or before the prescribed date is not due to reasonable cause. There will be imposed, in addition to interest, an additional amount under paragraph (2), of $20.00, which is 2.5 percent (2% for the 4 months from March 21 through July 20, and 0.5% for the fractional part of the month from July 21 through July 26) of the amount shown due on the return of $800. There will also be imposed an additional amount under paragraph (1) of $184, determined as follows:
20 percent (5% per month for the 3 months from March 21 through June 20 and 5% for the fractional part of the month from June 20 through June 25) of the amount due of $1,000 required to be shown on the return | $200 |
Reduced by the amount of the addition imposed under paragraph (2) for those months | $16 |
Addition to tax under paragraph (1) | $184 |
Example A: (b) A notice and demand for the $200 deficiency is issued on January 8, 1984, but the taxpayer does not pay the deficiency until December 23, 1984. In addition to interest there will be imposed an additional amount under paragraph (3) of $10, determined as follows:
Addition computed without regard to limitation: 6 percent (5 1/2% for the 11 months from January 19, 1984, through December 18, 1984, and 0.5% for the fractional part of the month from December 19 through December 23) of the amount stated in the notice and demand ($200) | $12 |
Limitation on addition: 25 percent of the amount stated in the notice and demand ($200) | $50 |
Reduced by the part of the addition under paragraph (1) for failure to file attributable to the $200 deficiency (20% of $200) | $40 |
Maximum amount of the addition under paragraph (3) | $10 |
Example B: (a) A taxpayer files his tax return for the quarter ending February, 1983 on November 7, 1983, and such delinquency is not due to reasonable cause. The balance due, as shown on the return, of $500 is paid when the return is filed on November 7, 1983. In addition to interest and the addition for failure to pay under paragraph (2) of $20 (8 months at 0.5% per month, 4%), there will also be imposed an additional amount under paragraph (1) of $112.50, determined as follows:
Penalty at 5% for maximum of 5 months, 25% of $500 | $125.00 |
Less reduction for the amount of the addition under paragraph (2): | |
Amount imposed under paragraph (2) for failure to pay for the months in which there is also an addition for failure to file – 2 1/2 percent for the 5 months March 16 through August 20 of the net amount due ($500) | $12.50 |
Additional to tax under paragraph (1) | $112.50 |
(5) Reasonable cause as used in paragraphs (1), (2) and (3) of this subdivision (a) must be affirmatively shown in a written statement. The taxpayer's previous compliance record may be taken into account. Grounds for reasonable cause, where clearly established, may include the following:
(i) death or serious illness of the responsible officer or employee of the taxpayer, or his unavoidable absence from his usual place of business;
(ii) destruction of the taxpayer's place of business or business records by fire or other casualty;
(iii) timely prepared reports misplaced by a responsible employee discovered after the due date;
(iv) inability to obtain and assemble essential information required for the preparation of a complete return despite reasonable efforts;
(v) any other cause for delinquency which appears to a person of ordinary prudence and intelligence as a reasonable cause for delay in filing a return and which clearly indicates an absence of gross negligence or willful intent to disobey the taxing statutes. Past performance should be taken into account. Ignorance of the law, however, will not be considered reasonable cause.
(6) Underpayment due to negligence.
(i) If any part of an underpayment is due to negligence or intentional disregard of the law, or rules or regulations thereunder (but without intent to defraud), there shall be added to the tax a penalty in an amount equal to five percent (5%) of the underpayment.
(ii) With respect to taxes required to be paid on or after July 16, 1985, there shall be added to the tax (in addition to the amount determined under subparagraph (i) of this paragraph) an amount equal to fifty percent (50%) of the interest payable under 19 RCNY § 12-11 with respect to the portion of the underpayment described in such subparagraph (i) which is attributable to the negligence or intentional disregard referred to in such subparagraph (i), for the period beginning on the last date prescribed by law for payment of such underpayment (determined without regard to any extension) and ending on the date of the assessment of the tax (or, if earlier, the date of the payment of the tax).
(7) Underpayment due to fraud.
(i) If any part of an underpayment is due to fraud, there shall be added to the tax a penalty in an amount equal to fifty percent (50%) of the underpayment.
(ii) With respect to taxes required to be paid on or after July 16, 1985, there shall be added to the tax (in addition to the penalty determined under subparagraph (i) of this paragraph) an amount equal to fifty percent (50%) of the interest payable under 19 RCNY § 12-11 with respect to the portion of the underpayment described in such subparagraph (i) which is attributable to fraud, for the period beginning on the last day prescribed by law for payment of such underpayment (determined without regard to any extension) and ending on the date of the assessment of the tax (or, if earlier, the date of the payment of the tax).
(iii) The penalty under this paragraph (paragraph (7)) shall be in lieu of the maximum twenty-five percent (25%) penalty due to willful neglect for failure to file a return, five percent (5%) penalty due to negligence and the additional one-half of one percent (1/2%) per month penalty pursuant to paragraphs (2) and (3) of this subdivision (a).
(8) Any person who fails to pay tax, or to make, render, sign or certify any return, or to supply any information within the required time, with fraudulent intent, shall be liable for a penalty of not more than one thousand dollars ($1,000), in addition to any other amounts required under the law to be imposed, assessed and collected by the Commissioner of Finance. The Commissioner of Finance has the power, in his discretion, to waive, reduce or compromise any penalty under this paragraph.
(9) The additions to tax and penalties provided by this subdivision (a) shall be paid and enforced in the same manner as taxes.
(10) Whenever a penalty is assessed for failure to pay the tax when due, an application for the remission thereof may be made to the Commissioner of Finance. Such application must be made by the person against whom the penalty is assessed, and must set forth the grounds upon which the remission is requested.
(b) Criminal penalties.
(1) Any person who willfully fails to file a registration certificate as required by the law and such data in connection therewith as the Commissioner of Finance by regulation or otherwise may require, or willfully fails to display or surrender a certificate of authority as required by the law, or willfully assigns or transfers such certificate of authority, shall be guilty of a misdemeanor, provided, however, that the provisions of this paragraph shall not apply to a failure to surrender a certificate of authority which is required to be surrendered where business never commenced.
(2) Any person who willfully fails to charge separately the tax imposed under the law or willfully fails to state such tax separately on any bill, statement, memorandum or receipt issued or employed by such person upon which the tax is required to be stated separately as provided in the law, or who shall refer or cause reference to be made to this tax in a form or manner other than required by the law, shall be guilty of a mis- demeanor.
(3) Failure to collect tax. Any person who willfully fails to collect any tax required to be collected under the law shall be guilty of a misdemeanor.
(4) Failure to file bond. Any person willfully failing to file a bond where such filing is required under the law shall be guilty of a misdemeanor.
(5) Failure to obey subpoena; false testimony.
(i) Any person who, being duly subpoenaed in connection with a matter arising under the law, to attend as a witness or to produce books, accounts, records, memoranda, documents or other papers,
(A) fails or refuses to attend without lawful excuse,
(B) refuses to be sworn,
(C) refuses to answer any material and proper question, or
(D) refuses, after reasonable notice, to produce books, papers and documents in his possession or under his control which constitute material and proper evidence shall be guilty of a misdemeanor.
(ii) Any person who shall testify falsely in any material matter pending before the Commissioner of Finance shall be guilty of and punishable for perjury.
(6) Willful failure to file a return or report or pay the tax. Any person required to pay any tax or make any return or report, who willfully fails to pay such tax or make such return or report, at the time or times so required, shall be guilty of a misdemeanor.
(7) Fraudulent returns, reports, statements or other documents.
(i) Any person who willfully makes and subscribes any return, report, statement or other document which is required to be filed with or furnished to the Commissioner of Finance or to any person, pursuant to the provisions of the law, which he does not believe to be true and correct as to every material matter shall be guilty of a misdemeanor.
(ii) Any person who willfully delivers or discloses to the Commissioner of Finance or to any person, pursuant to the provisions of the law, any list, return, report, account, statement or other document known by him to be fraudulent or to be false as to any material matter shall be guilty of a misdemeanor.
(iii) For purposes of this paragraph, the omission by any person of any material matter with intent to deceive shall constitute the delivery or disclosure of a document known by him to be fraudulent or to be false as to any material matter.
(8) The penalties provided for in this subdivision (b) shall not preclude prosecution pursuant to the penal law with respect to the willful failure of any person to pay over to the City any hotel room occupancy tax imposed by law, whenever such person has been required to collect and has collected any such tax. In any such prosecution under the penal law, a person who has been required to collect and has collected any such tax shall be deemed to have acted in a fiduciary character with respect to the City, and the tax collected shall be deemed to have been entrusted to such person by the City.
(c) Liability of officers or partners and effect of Certificate of Commissioner.
(1) Officers of a corporate operator and partners in a partnership which is an operator are personally liable for the tax collected or required to be collected by such corporation or partnership, and are subject to the penalties and interest imposed by law.
(2) The certificate of the Commissioner of Finance to the effect that a tax has not been paid, that a return, bond or registration certificate has not been filed, or that information has not been supplied pursuant to the provisions of the law shall be presumptive evidence thereof.
The Commissioner of Finance shall refund or credit, without interest, any tax, penalty or interest erroneously, illegally or unconstitutionally collected or paid, provided:
(a) A written application for refund or credit was made to the Commissioner of Finance within one year from the payment thereof, and
(b) The application is made by the occupant, operator or other person who actually paid the tax, or
(c) The application is made by an operator who collected and paid over such tax to the Commissioner of Finance; however, no refund shall be made until the operator shall first establish to the satisfaction of the Commissioner of Finance that he repaid the occupant the amount for which the application is made. In such case, the period within which application for refund may be made begins when the payment is made by the occupant to the operator. No specific form has been prescribed for refund applications. An application for refund, however, shall be in writing and shall comply with the following requirements:
(d) It must be signed by the applicant or his duly authorized agent. If signed by an agent, the application must be accompanied by a power of attorney acceptable to the Commissioner of Finance.
(e) It must demonstrate that the refund provisions of the law have been complied with.
(f) It must be accompanied by the cancelled check or a photostatic copy thereof, showing both the front and back of the check; or, if paid by cash or money order, by evidence of such payment. Whenever a taxpayer files a claim for refund, such application shall constitute an application for revision of the tax, penalty or interest complained of. The Commissioner of Finance may audit the taxpayer's books and records or may grant the refund subject to future audit. The Commissioner of Finance may determine without resorting to an audit that, based upon the evidence presented, the claim is without merit and, therefore, deny it. The Commissioner of Finance will notify the taxpayer in writing of his determination. Such determination shall become final and irrevocable unless the person to whom it is addressed shall, within 30 days after the date thereof, apply to the Commissioner of Finance for a hearing. A taxpayer shall not be entitled to a refund or credit if he has had a hearing or an opportunity for a hearing in connection with a deficiency assessment as provided by law and by 19 RCNY § 12-15, or has failed to avail himself of the remedies provided thereby, if such refund or credit application is for taxes included in the same period covered by such deficiency assessment.
Every operator is required to keep records of room rentals and of the tax payable thereon. In addition to the general books of account, such records shall also include guests' registration records, rental contracts and leases, banquet records wherever applicable and such other records as will enable the Commissioner of Finance to determine the room rentals and the proportionate part of receipts from sale of food and/or drink which under these regulations constitutes rentals. In addition to the above records, operators must also retain all exemption certificates filed by exempt organizations and by the Federal government, or by the State or City of New York, or by an agency of such governments, and records of all other rentals which are not subject to tax. Exemption certificates from occupants who are not entitled to exemption should not be accepted, and the Commissioner of Finance will reject any exemption certificate obtained from an occupant who is not entitled to exemption. The records hereinabove prescribed are in addition to all other records which must be retained by an operator as provided for in any other State or City tax law. Unless the operator maintains adequate records showing rentals and the tax due thereon, the Commissioner of Finance reserves the right to determine the amount of such rentals and the tax due thereon from such information as may be obtainable and, if necessary, the tax may be estimated on the basis of external indices, such as the number of rooms, location, scale of rents, comparable rents, type of accommodation and service, number of employees and/or other factors. Records of operators are to be open for inspection and examination at any time upon demand by the Commissioner of Finance or his duly authorized agent or employee and must be preserved for a period of three years unless permission in writing is obtained from the Commissioner of Finance to destroy them before the expiration of such period.
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