- September 09, 2003
- All New York State Office Counsel, Managers and Agents
- Implementation of Tax Law Section 663
The implementation of Tax Law Section 663 (see Underwriting Bulletin Number 211 dated August 7, 2003) will likely lead to situations where compliance with the terms of the statute has not been accomplished prior to closing. In order to lessen the likelihood (or necessity) of adjourned closings, Stewart Title Insurance Company will allow Agents to assist in the process of compliance under the following guidelines.
FIRST, the seller must either present NYS Department of Taxation and Finance Form IT 2663 (“the Form”) which has been completed prior to closing or the seller (or her attorney) must prepare and complete Form at the closing table. Remember that each non-exempt, non-resident seller must complete her own form. Under no circumstances is a closer, an agent (or any agency employee) to prepare the Form for the seller or offer any substantive advice regarding the preparation of the Form.
SECOND, a check is to be collected from the seller in the amount shown on Line 3 of Part II of the Form (assuming that the amount is greater than zero). The check is made payable to “NYS Income Tax” and must be accompanied by a completed payment voucher which is at the end of Page 3 of the Form.
THIRD, Part IV of the Form must be completed, even if there is no tax due. It is imperative that the name of the agency and the name of an individual employee of the agency (not an independent contractor) be included. If fax authorization is requested, fax and phone numbers are required.
FOURTH, each seller from whom the Form is required must sign an indemnity agreement, in the form provided.
FIFTH, the agent must present the completed Form, completed voucher, and payment (if any) to the NYS Department of Taxation and Finance district office/walk in location no later than forty eight hours after closing and obtain the stamped certification, allowing for the deed to be recorded.
It is the responsibility of the agent, or an employee of the agency, to insure compliance with the above procedure. It is not to be left to an independent contractor to obtain the certification necessary to enable the deed to be recorded. Along those lines, it will be permissible for the agent to charge a fee, reasonable calculated to compensate for the expense involved, for providing the service comtemplated by this procedure. Page four of the Form provides a list of district offices/walk in centers where the certification may be validated by the Department of Taxation and Finance. The distance between the gaents office and these locations may (and probably should) be considered in formulating the charge.
As a reminder, the new Form TP 584, where an individual, estate or trust claims exemption from the provisions of Section 663, must be signed in two separate places, once after Schedule C (the end of the Real Estate Transfer Tax Return portion of the form) and a second time at the end of Schedule D, where the exemption from Section 663 is claimed.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.