N.Y. Comp. Codes R. & Regs. tit. 20 § 53.1

Current through Register Vol. 46, No. 50, December 11, 2024

Section 53.1 - Exemptions generally

(a) Various types of transfers are expressly exempted from the tax. Under subdivision 5 of section 270 of the Tax Law some of these transactions are exempt only if accompanied by an exemption certificate.

(b) Transfers of certain types resulting from death, insanity, bankruptcy and similar contingencies, in which change of ownership is effected by operation of law, are exempted from the tax by section 270-c of the Tax Law. No exemption certificate is required for such transfers.

(c) If a fiduciary, having possession of certificates issued in the name of any one other than him, transfers the same into the name of his nominee, such transfer is not exempt from tax under paragraph (d) of subdivision (5) of section 270 of the Tax Law because it is not made "from the name of" the fiduciary. Likewise, no exemptions exist under paragraph (e) or (g), respectively, of subdivision (5) of such section 270 for a transfer by the owner of certificates issued in some name other than his own to his custodian, or for a transfer by a broker of certificates issued in some name other than his own to a customer upon whose order he has purchased them. However, if the applicable tax has been paid upon the transaction in which shares or certificates were acquired by the transferor (fiduciary, owner or broker), and proper evidence of such payment is furnished to the transfer agent (see Part 52 of this Title), it is unnecessary to make a double transfer on the books of the corporation, first to the name of such party, and then to the name of his transferee (the fiduciary's nominee, the owner's custodian or the broker's customer). If such a double transfer were made, no tax would be payable, the tax upon the first step having already been paid, and the second step being exempt. Accordingly, if a proper exemption certificate is submitted in proof of the exempt character of the second step, a short-cut transfer may be made directly to the name of such transferee.

(d) Certain transfers not expressly described in subdivision 5 of section 270 of the Tax Law are exempt because they represent a combination of exempt transfers (e.g., since a transfer from the name of an owner to his custodian is tax-free and a transfer from the custodian to his nominee is tax-free, a transfer directly from the name of the owner to the nominee of his custodian is tax- free). The principle is that where all the transfers in a chain of transfers are exempt from taxation, any of the intermediate links of the chain may be omitted and the transfer will still be exempt.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 53.1